Share

Why the fake meat market could reach R3.5trn in 20 years

The alternative meat market is poised to rise to $240bn (around R3.5trn at current rates) over the next two decades as new technologies gain ground and consumers change their diets, according to financial services company Jefferies.

The great "protein shake-up" could see faux meat reach 9% share of the estimated $2.7trn global meat market by 2040, analyst Simon Powell forecasts, from less than 1% now.

The size of the plant-based meat market has been one of the biggest debates in the food industry recently, with estimates ranging from between $10bn (R146bn) and $40bn (R585bn) to as high as $140bn (over R2trn).

Plant-based meats, like the one produced by Beyond Meat, are currently leading the category but lab-created "cellular" meat could overtake its plant-based counterpart, Powell said.

"The cellular-based alternative industry has the potential to grow fast off a small base and could quickly start mass producing real meat if it can reduce costs and industrialise the current lab-based approach," he wrote.

Eye-popping valuations

Rising estimates for the faux-meat market are one way to justify the eye-popping valuations for its producers. Beyond Meat, for example, commands a valuation of $9.7bn, or 110 times its 2018 sales. Its closely-held peer, Impossible Foods, is valued at $1.52bn, with revenues estimated at $110m in 2018, according to data compiled by PrivCo.

Investments in lab-created meat companies have trailed their plant-based peers as commercial products have yet to emerge. Private cell-based meat firms received $50m in new investments last year, according to data compiled by Good Food Institute, compared to more than $500m for plant-based food producers.

Meat tax?

While taste, costs and ingredients will ultimately differentiate the products, both categories stand to disrupt the large global meat market, Jefferies’ Powell said. Other catalysts for alternative meat’s rise includes a potential meat tax, now being discussed in some countries, and the pork crisis in China, he noted.

So far, existing products enjoy broad support from consumers, separate research by Bank of America showed. "There is strong interest and repeat purchase intent for plant based proteins," analysts led by Bryan Spillane wrote. "Established food companies will need to ramp product development and build brand authenticity to catch up to ‘Beyond’ and ‘Impossible’."

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.9%
Rand - Pound
24.10
-0.9%
Rand - Euro
20.59
-0.7%
Rand - Aus dollar
12.42
-0.9%
Rand - Yen
0.13
-0.8%
Platinum
915.75
-0.8%
Palladium
1,028.36
-3.5%
Gold
2,159.96
+0.2%
Silver
25.03
-0.6%
Brent Crude
85.34
-0.1%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders