The Meat Market Makes Way for Plant-Based Proteins

Protein Industries Canada
Written by Allison Dempsey

The desire for healthier, cleaner eating has surged during the pandemic, with lockdowns meaning not only working from home, but cooking there, too. Climate change has raised questions about meat production and interest in a plant-based diet has sprouted across Canada.

One of the country’s five innovation Superclusters in this field is Protein Industries Canada (PIC), an industry-led, not-for-profit organization determined to position Canada as a global source of high-quality plant protein and plant-based co-products.

So if you think the alternative meat market is a flash in the pan, think again.

“We did some work recently with Ernst & Young, and we asked them a broad question about what the size of the global plant-based food market is going to be out to 2035,” says Bill Greuel, CEO of Protein Industries Canada. “What they calculated is based on a number of factors; the global alternative meat market will be about $180 billion Canadian by 2035.”

While alternative meat includes ground meat applications and innovation around whole cuts of meat, such as chicken breast, there’s also the alternative dairy market of plant-based cheeses, plant-based milks, protein-enriched beverages, and a burgeoning market around alternative seafood.

Then there’s the fortification sector – adding protein to the flours of various kinds of baked goods and using plant-based products in substitutes for wheat flours and pasta. It’s pretty clear that the conservative estimate of global plant-based food market will surpass $250 billion CDN by 2035, says Greuel.

“In Canada, we’re striving for 10 percent market share of the global plant-based food sector,” he adds. “Just for context, Canada today is about 3.3 percent of the global agri-food market across all product categories globally. We really believe we can punch well above our weight in terms of our contribution to the global plant-based food sector.”

What’s driving the plant-based food market to such heights? Greuel believes there are a couple of underlying trends concerning consumer habits and diet decision-making: One is certainly a better understanding of the impact of meat production on greenhouse gas emissions.

“That’s a huge factor in terms of people’s decisions. In addition to that, there’s animal welfare concern. I think there’s also a health and nutrition component to this. Plant-based foods generally have lower saturated fat and so there are health-conscious decisions.”

The other is based around convenience, Greuel says. People are eating differently than they did 20 years ago – and even eighteen months ago – because of COVID.

“We’re eating more food on the go, and plant-based foods and snack foods are just lending themselves to a different way of eating. It’s a combination of those four factors that are really leading to the growth of plant-based foods, and what’s really interesting is that those aren’t fads; those are structural changes in people’s approach to diet.”

The growth trajectory of plant-based foods – a 10 to 15 percent compound annual growth rate – that’s showing the way to a $250 billion market is not a bubble that’s going to burst, he says.

“These are underlying fundamental changes in how people are consuming food that are not going to go away.”

Younger generations are thinking more broadly about their food choices, including animal welfare, Greuel notes. For some, the idea of raising animals for human consumption is losing appeal in favour of plant-based alternatives.

PIC works with companies to create pathways to customers, markets and partnerships that they could not access on their own, providing them with the opportunity to leverage their expertise and innovations with that of large and multinational enterprises, public sector organizations and academia.

And Canada has an advantage in that it produces unique, high-protein crops – specifically canola and pulses – and it could quickly adapt and scale new high-protein crops. Canada’s sustained advantage comes in continued access to the global market with products that come from these crops.

“When Protein Industries Canada makes investments in large-scale science and technology projects, we require at least two for-profit private-sector companies to collaborate, and one of those must be a small-and-medium-sized enterprise,” says Greuel.

“The whole concept behind this is that the issues, the challenges and opportunities that we’re facing in the growth of the plant-based food sector require an approach to innovation that’s very difficult for any one company to solve on their own.”

That does a couple of things, he says. When you involve an SME, it helps the large “anchor” firm, some of them multinationals, from an innovation perspective. As companies grow in scale and become large organizations, they don’t innovate as quickly as they used to.

The tech sector in particular is a good model for this, where big companies are always acquiring smaller companies because they innovate at a fast cycle. There’s a benefit for the large anchor firm to have these highly innovative SMEs involved in research, and from the SME perspective it gives them access to business mentorship, global supply chains, and global customers.

“There’s this real synergistic outcome of collaborative R&D and the SME and the larger anchor firm and it’s helping these small and medium-sized companies grow in scale at a rate and a pace that they never could do on their own.”

The other dimension to collaboration is putting research projects together that work across different verticals of the value chain.

For PIC, the value chain extends from plant breeding to production at the farm level, to the grain handler, to the ingredient processor, to the food manufacturer and then onto to food distribution and retail. Most of the company’s projects are putting together people who are working in different verticals of that value chain.

There’s a real benefit of putting a company that’s working in plant breeding together with an ingredient manufacturer, and putting both together with somebody who’s developing consumer packaged goods and food products, says Greuel, because changes made from a plant breeding perspective – to drive up protein content – has downstream impacts on the efficiency of processing.

“We create immediate feedback from the consumer packaged goods company to the ingredient manufacturer who can then change the process or the formulation of the ingredients,” says Greuel. “We can push that back to the plant breeder and say the protein content could be higher or the amino acid balance needs to change from a nutritional perspective.”

Plant-based diets have long been criticized for the frequent absence of complete protein: this is where Greuel believes Canada has a real competitive advantage globally with its vast array of crops produced in the western part of the country.

“We produce cereals, canola, pulses like peas and fava beans as well as a myriad of other crops like hemp. We’ve got an ability to create different blends of protein that have the right amino acid balance. We can create complete proteins so vegetarians and vegans can actually get the full nutritional requirements.”

Are people concerned about nutritional value? Yes, says Greuel, and it’s one of the reasons why PIC works with companies like Lovingly Made Ingredients, which is creating plant-based proteins from Canadian crops with an eye on sustainable processing, Griffith Foods, Persall Fine Foods, k2Milling, Sightline, DLSeeds and Seednet. The organization has also worked with Avena Foods, Big Mountain Foods, Daiya Foods, Bakenology and the Village Bakery, who are all working to better understand and take advantage of the functional whole plant-based ingredients.

Big Mountain Foods and Daiya Foods, both based in Vancouver, BC, utilize flours in the development of new products for the growing vegan and flexitarian markets here and abroad, while Bakenology and The Village Bakery, from the United Kingdom, utilize Canadian plant-protein ingredients in food products shipped across Europe.

Avena Foods’ tempered pulse products undergo a process that improves flavour and functionality, a system that will be used in the development of a pulse-based egg replacement, and could be applied in bakery products, extruded snacks, confectionery products, noodles and pasta, plant-based meat analogues, soups, sauces and dressings, and even baby food. Big Mountain Foods is focused on innovating clean label and allergen-free products to provide consumers with a healthy plant-based lifestyle.

Investments like these help create strong supply chains and innovation. “We have a whole other side of the business that works on the creation of a highly competitive business environment in Canada. We know it’s one thing to invest in companies and to create new knowledge in technology, new products and services, and it’s another to make those Investments and ensure that we’re creating a highly competitive business environment in which to launch those products,” says Greuel.

PIC is also working on areas like regulatory modernization and how to ensure there’s a system in Canada that balances food, feed and environmental safety with creating an environment where companies can innovate. How does PIC ensure a regulatory system is keeping up with the pace of innovation, when innovation is moving at lightning speed in the plant-based food sector?

“We’re working with Health Canada on labelling, protein content, measuring and fortification,” he says. “We’re establishing a regulatory Centre of Excellence where we’re conducting research work related to providing the science that Health Canada needs to make regulatory change.”

With the plant-based foods sector projected to have a 15 percent compound annual growth rate for the next 15 years, PIC is also developing a capital growth strategy.

“We really need to help our companies develop the business acumen so they are ready to accept capital, and we need to educate the capital community about the opportunity that plant-based foods represent,” says Greuel. “We’re exploring the establishment of a specific venture capital fund aimed at work for ingredient manufacturing, and then working with the debt finance community about providing debt financing to be used to these organizations.”

While the pandemic has negatively affected many areas of business, food processing, ingredient processing, and commodity manufacturing remained strong, which translates to a growth opportunity for Canada during an economic recovery post-COVID.

“In Canada we really need to think about doubling down in investments in food processing, because one might argue that it’s a recession proof industry and more countries are thinking about food security and strategic alliances around the production of food,” says Greuel.

“Canada is one of five jurisdictions that’s a global net exporter of food. We have an economic opportunity to add value to what we’re producing and provide high-value ingredients and food products to the world. We can’t let this opportunity pass us by.”

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