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The plant-based meat market could experience be a growth

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In 2022, Beyond Meat lowered its revenue projections for the second time and announced it would cut 200 jobs, or 19% of its total workforce .

The Canadian Press

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Despite its recent setbacks, the plant-based meat market could experience growth, experts believe. However, this will require investment.

Protein Industries Canada CEO Bill Greuel says these investments are needed in domestic processing capacity, which would reduce the price difference between regular and plant-based meats. One priority is attracting private sector investors to build facilities that can process plant-based meat.

The plant-based meat market was booming before the pandemic. For example, in the United States, sales related to plant-based meats increased by 42% from March 2016 to March 2019, according to Nielsen. In Canada, sales grew by 7% for the year 2016-2017, according to a report from the National Research Council of Canada published in 2019.

Another example: In the second quarter of 2020, Canadian company Maple Leaf reported rising revenues, driven by 41% gains in its plant-based protein business. In 2018, it launched a subsidiary, GreenLeaf Foods, and announced investments in processing plants.

The interest of large companies like Maple Leaf in plant-based meats also signaled growing consumer interest.

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The start of the COVID-19 pandemic did not slow down sales, mentions Bill Greuel.

Several consumers have changed their habits. They had to stop going to restaurants to cook at home. They were looking for new products and new experiences, he explains.

But, according to Mr. Greuel, this growth was unsustainable.

Demand subsequently slowed down sharply, to the point that some companies like Beyond Meat had to recently announce layoffs. Maple Leafs Foods had previously announced its intention to reassess its place in the plant-based protein market, as the expected growth never materialized.

To establish itself, the plant-based meat market will need to make some improvements to its products.

Ellen Goddard, an economist at the University of Alberta, judges that too many products do not meet consumer tastes. Another problem: price, which has become the main concern of consumers in recent years.

Unfortunately, the sector began to take off in the midst of a highly inflationary period, she emphasizes.

Canada is the world's largest exporter of pulses, according to Pulse Canada. Despite the advantage of growing some of the fundamental ingredients for preparing plant-based meats, the country is struggling to keep up with the growth in demand due to its low processing capacities, says Mr. Gueuel.

As Canadian pulse production is largely exported, new Canadian processing companies have the opportunity to expand their operations nationally and the Canadian economy to increase its exports and diversification, wrote the National Research Council.

Getting investors interested in the plant-based meat market could be a difficult challenge, agrees Mr. Greuel. Building a processing plant can cost several hundred million dollars and represents a long-term risk.

In September 2023, a report from the firm Ernst & Young for Protein Industries Canada gave a less gloomy outlook. As the world's population grows, protein-based plant-based meats could become a promising, more sustainable food source, the report said.

This market could see revenues reach US$88.3 billion to US$139.4 billion by 2035 globally, the report added. In 2021, they amounted to US$16.5 billion.

According to the National Research Council report, more than 40% of the population is actively trying to incorporate more plant-based meats into their diet.

People still want to reduce their consumption of animal meat, says Robert Carter of the StratonHunter Group. According to him, interest in plant-based meat will experience a new boom as soon as economic conditions improve.

The market continues to expand growth, but not at the expected rate, he says. It is in a period of stabilization.

The younger generations who would like to eat more plant-based meats could be the main source of growth in this market, predicts Ellen Goddard.

The environmental message really matters for younger generals, she emphasizes.

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