Could Fake Meat Really Become A Bigger Market Than Electric Vehicles?
The share of the population that follows a vegetarian or vegan diet is unlikely to ever make up the majority. It's estimated only about 3% of the U.S. population is vegetarian. In Europe, the percentage ranges from 2% to 10%. India, the world's second-most populous country, counts about 40% of its population as vegetarian.
Regardless, alternatives to meat, often called "fake meat," are becoming increasingly commonplace. Some of the largest fast-food chains have either introduced or are testing these alternatives. Burger King and Dunkin' have already added meat alternative items to their menus. McDonald's, the world's largest restaurant chain by revenue, has been slower to enter the market but has finally begun testing the P.L.T. (Plant, Lettuce, Tomato) sandwich.
So with such a small percentage of the population following a vegetarian diet, why are so many restaurants rushing to add meat alternatives to their menus? Like any corporation, it all comes down to profits.
According to Barclay's, the meat industry is a $1.4 trillion global market. They believe meat alternatives could rise from a current share of 1% to 10% by 2029. They went as far as saying "that there is a bigger market opportunity for plant-based (and maybe even lab-grown) protein than was projected for electric vehicles ten years ago."
Barclay's cites three main drivers for the increasing popularity of meat alternatives. Consumers are cognizant of inhumane treatment and the slaughtering of animals, which causes some to not want to consume meat. Barclay's believes a second driving factor is health and wellness. High blood cholesterol and heart diseases as a result of red meat consumption as well as concerns over the use of antibiotics and hormones on animals may influence consumers. Finally, the environmental impact of eating meat may lead to consumers' decision to switch to meat alternatives. For example, Barclay's notes cattle produce more greenhouse gas (GHG) emissions than cars.
While the health benefits and environmental impact of eating meat compared to not eating meat are well beyond the scope of this post, some of the largest corporations believe they can't ignore this segment any longer.
Earlier this year, investors went hog wild for anything that had to do with fake meat. Beyond Meat rose 163% on its first day of trading, the best IPO in nearly two decades. The stock ultimately rose more than 500% before subsequently crashing more than 65%. The success of Beyond Meat even led investors to bid shares of privately held Impossible Meat on the secondary market to a valuation as high as $5 billion, more than double its last funding round.
It remains to be seen how consumers will adapt to a rapidly expanding variety of meat alternative options. Either way, it appears the world's largest restaurant chains and corporations in the food industry are set on continuing to roll out these items.
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