Cargill joins race for alternative protein with eye on China as health crisis boosts market for meat substitutes
- The privately-owned US group plans to roll out four new meatless burger products for F&B outlets and retailers in the US from April
- The African Swine Fever, Avian flu and coronavirus outbreak have given the market for plant-based protein a major boost
Cargill, one of the world’s largest suppliers of meat and grains, is joining the race to develop plant-based protein products as the coronavirus outbreak and other recent health scares spur demand for meat substitutes.
The privately-owned Minnesota-based group plans to roll out four new meatless burger products for food and beverage outlets and retailers in the US from April to kick start its global distribution plan, a company spokesperson said.
This follows its February 24 announcement that it would be developing plant-based protein products, or meat substitutes made from soy or pea protein, with the coronavirus epidemic adding to recent outbreaks of African Swine Fever and Avian flu. Cargill plans to leverage its global supply chains as it attempts to gain market share in plant-based protein.
“We have key advantages in this space,” the company said in an emailed statement to the South China Morning Post. “ This includes our established sourcing and manufacturing strengths in the animal protein sector that transfer well to plant-based protein.”
China plans to restructure meat supply system after triple health scares sparked by animal virus: Jefferies
Cargill recorded US$113.5 billion of revenue in fiscal 2019, according to its annual report published in July of that year, with 29 per cent of that coming from the Asia-Pacific region.
The company is positioning itself to capture a slice of the global demand for protein, which is expected to increase by 70 per cent over the next 30 years. Much of that growth is expected in China, which accounted for 28 per cent of global meat consumption in 2016 based on an estimate by the World Economic Forum.
Last year, McKinsey estimated that the global market for alternative protein was worth about US$2.2 billion, against a global meat market of US$1.7 trillion. Forecasts on the growth of the alternative protein market vary, reaching as much as US$470 billion by 2040 according to a September 2019 report by Jefferies.
Can meat-loving Chinese consumers be convinced to switch to plant-based substitutes?
In China, Cargill already supplies animal feed products and has developed a large poultry supply chain. The African Swine Fever has affected its animal feed business as the disease decimated the pig population in the country. China is responsible for most of the world’s pork production and consumption.
Cargill will enter an arena where US plant-based protein companies such as Beyond Meat and Impossible Foods have started developing the market in Asia and waged a battle to become the main choice of consumers.
Chinese producers including Shuangta Food and Jinzi Ham Company are also launching their own plant-based meat products, said Adam Xu of OC&C Strategy Consultants, citing local media reports.
China’s plant-based alternatives to take on Beyond Meat, Impossible Foods – and the world
“China’s meat substitutes industry, though still nascent, has witnessed significant growth in recent years, with many players exploring opportunities in this sector,” Xu, a Shanghai-based partner at OC&C, said in an interview. “We have observed both increased investor appetite and the emergence of more start-ups in the meat alternatives and vegetarian food space.”
Hong Kong-based Green Common, which distributes Beyond Meat in Greater China, has developed its own plant-based pork-replacement product called Omnipork for Chinese consumers. Its founder David Yeung has said that rising pork prices because of the outbreak of African Swine Fever would help Chinese consumers switch to a plant-based pork product.
“We need to keep all protein options on the table,” said Brian Sikes, leader of Cargill’s global protein and salt business, in the February 24 statement announcing the new meatless products. “Whether you are eating alternative or animal protein, Cargill will be at the centre of the plate.”
