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Panel Weighs Impact of Alternative Proteins on Global Meat Demand

The potential impact of alternative proteins on global demand for red meat was the focus of a panel discussion at the USMEF Strategic Planning Conference in Tucson, Ariz.

“Alternative Proteins – Latest Trends, Threats and Opportunities in International Markets” was moderated by USMEF Economist Erin Borror and included Jihae Yang, USMEF director in South Korea; Yuri Barutkin, USMEF representative in Europe; and Glynn Tonsor, a professor in the Department of Agricultural Economics at Kansas State University.

Borror explained that panelists were selected to provide perspectives from two very different markets, as red meat consumption is growing rapidly in Korea but trending lower among European consumers. Tonsor was chosen because of his extensive research into the factors driving global meat demand.

“There are a lot of components to this discussion,” Tonsor said. “How big is the market for alternative proteins going to be? How are people in various markets going to accept these products? Are they really going to be substitutes for traditional meats? We have some initial insight on these questions, but no firm answers.”

The good news from Tonsor, who maintains demand indices on domestic demand and export demand is for U.S. beef and pork, is that despite ongoing media blitzes for alternative proteins, “The world is not running away from meat. There is strong demand.”

He cautioned, however, that a global dilemma is building.

“This world with a growing protein ‘pie’ is a good thing,” Tonsor explained. “In the short term, if you sell protein, which is what livestock producers do, then it’s good that the pie is getting bigger. But the economist in me has to point out that there is an economic carrot hanging out there. A bigger protein pie is going to bring in new competitors, and that is what we are seeing.”

But Tonsor still anticipates strong growth in U.S. red meat exports.

“And I’m not saying that because I’m standing in front of USMEF – I’ve said that in other circles. The U.S. has a comparative advantage in producing high-quality beef and pork and the entry of these new alternative products doesn’t change that.”

Giving a Korean perspective on alternative proteins, Yang noted that the traditional Korean diet was based on vegetables and rice. Meat consumption began to grow only in the past half-century, when South Korea began lowering barriers for imported beef and pork.

Yang said the target audiences for alternative proteins in Korea include vegetarians, those with religious restrictions and younger generations concerned about animal welfare. But she noted that Korean consumers have long had alternative proteins from which to choose. Periods of high meat prices have led to Korean versions of alternative proteins, mostly based on soy and sesame pulp.

Yang cited the example of Beyond Burger, which has been launched in Korea but has gained little traction because of price. On Korean e-commerce sites, Beyond Burger is priced about 3.5 times higher than U.S. beef.

(from left to right) Yuri Barutkin of USMEF-Europe, Jihae Yang of USMEF-Korea and Glynn Tonsor of Kansas State University examine the impact of alternative proteins in panel discussion moderated by USMEF Economist Erin Borror

(from left to right) Yuri Barutkin of USMEF-Europe, Jihae Yang of USMEF-Korea and Glynn Tonsor of Kansas State University examine the impact of alternative proteins in panel discussion moderated by USMEF Economist Erin Borror

“Alternative meats are having a difficult time because retailers are not confident in the sales potential,” Yang said. “For example, some of these products are labeled as ‘no soy,’ yet soy has been part of the traditional Korean diet for 5,000 years,”

The flavor and texture of the products also have not been well-received by most Korean consumers, Yang said.

Barutkin said conclusions about Europeans’ attitude toward alternative proteins are extremely difficult to draw because of Europe’s vast diversity.

“A good example is my recent trip to Berlin, where I inquired about the attitude of Berliners toward alternative meat,” he said. “I was surprised to discover that there is a huge difference between the way alternative meats are being sold in West Berlin versus East Berlin. West Berlin has more of a traditional crowd that prefers conventional food and does not accept alternative meats. But in East Berlin, a dynamic city with more of an international population, alternative meats are very well-accepted. So you can imagine, if we have such a difference between two sides of one city, how huge those differences are between different parts of Europe.”

Barutkin explained that in lower-income countries, consumers’ sole focus is meeting basic dietary needs. But in more affluent areas, sustainability and environmental concerns tend to be the main drivers behind the success alternative meat products have achieved in Europe. He noted, however, that these issues are more prominent in some than he had anticipated.

“USMEF recently made a U.S. beef roadshow across Europe, and when we went to Stockholm we were well-prepared for questions about animal welfare, sustainability and antibiotic use,” Barutkin said. “But I was surprised when we visited Poland and faced many of the same questions.”

Barutkin added that presence at major trade shows can often reveal shifts in consumer attitudes, and in that respect alternative meats have certainly made strides in the region. Europe’s two largest food shows – SIAL Paris and Anuga (in Cologne, Germany) – are held in alternating years.

“Last year at SIAL, maybe 1% of exhibitors in the meat hall were companies representing alternative meats,” he said. “But this year at Anuga about 10% of exhibitors were offering plant-based alternative meat products. So the market has definitely grown over the past year, but whether that growth can be sustained remains to be seen.”