Food Frontier, an independent think tank on alternative proteins in Australia and New Zealand, has released its 2023 State of the Industry report. It reveals the growth of the plant-based meat sector, an increase in per-capita consumption and foodservice sales, and positive developments regarding price parity.
“It’s evident that the industry is here to stay”
Looking at the general landscape, the analysis shows that the plant-based meat industry is growing despite navigating the challenges of a new food category, economic difficulties, inflation, and the dried investment environment.
The figures show that plant-based meat sales increased by 47% between 2020 and 2023, and per-capita consumption increased by 28%.
Dr Simon Eassom, CEO of Food Frontier, commented on the report, “Despite the economic challenges faced by plant-based meat companies here and overseas it’s evident that the industry is here to stay, and that Australia is performing better than overseas markets in the face of these pressures.”
Retail vs foodservice
According to industry data from Deloitte Access Economics, in fiscal year 2023, $272.5 million worth of plant-based meat products—148.9 for retail and 123.6 for foodservice—were sold in Australia. A compound average growth rate (CAGR) of 14% since 2020.
In this environment, foodservice operations experienced a significant increase in demand for plant-based meat products, and the wholesale market has experienced a consistent annual growth rate of 59% since 2020. Still, most sales of plant-based meats are in quick-service restaurants, so there is potential for growth if manufacturers expand and explore other segments beyond burgers.
However, according to the report, despite the overall growth, there was a slight decrease in retail sales (-1% CAGR from 2020) in domestic production, manufacturing revenue, and employment.
Dr Eassom commented, “While there is likely to be ongoing expansion in the plant-based meat industry, success within the sector varies among businesses. With the market adjusting during an economic downturn, we can anticipate further consolidation in retail offerings.”
Reaching price-parity
Food Frontier notes that some plant-based meat products are now much closer to traditional meat prices: the average price premium for plant-based meats has decreased from 49% in 2020 to 33% in 2023.
Specifically, beef-style strips/chunks and mince products have seen average price reductions of -10.0% and -5.3%, respectively. Crumbed chicken-style products also experienced a price reduction of -0.6%, while snacking category products saw the most significant price drop at -21.1%.
Furthermore, on average, Australian-made plant-based meat products are $3.72 cheaper per kilo than imported products. Conversely, imported products are 15% more expensive than their Australian counterparts due to exchange rates and cold-chain logistics.
Brands and format trends
In fiscal year 2023, 23 Australian businesses operated in the plant-based meat industry, collectively manufacturing products under 28 different brands. However, following a merger in late 2023, the number of companies decreased to 22. Australian brands made up 63% of the retail category in 2023.
The majority of Australian plant-based meat companies produce their products within the country. Some companies follow a mixed approach by importing certain products while manufacturing others locally, while a small portion of companies import all of their products from overseas.
Regarding format trends, there has been a decrease in traditional formats like burgers and mince in favor of newer options such as strips, chunks, and whole-cut products. The trend has also shifted towards convenience products like deli meats, ready meals, and snacking items since 2021. Notably, the number of plant-based seafood products has decreased significantly.
Allen Zelden, APAC expert and co-founder of Boldly Foods and PlantForm Partners, Allen Zelden, believes that the “monumental growth in foodservice sales is particularly encouraging as the foodservice channel is often the first place many plant-curious consumers ‘experience’ meat alternatives, thereby triggering future purchase motivations too.”
He further shared: “What excites me most about this data – alongside many other key findings from the report – is that it’s still such early days for the Australian plant-based meat industry as consumers increasingly seek alternatives to conventional meat and dairy products.”
Centre-of-plate protein
Lastly, Deloitte Access Economics has revised its forecast for the market size to be $1.65 billion by 2033, a decrease from the previous estimate of $2.9 billion by 2030 due to current economic factors and market dynamics.
Dr Eassom adds, “We’re interested to watch how the growing awareness of food systems’ role in climate change will influence the adoption of plant-based diets, including the consumption of plant-based meats as centre-of-plate protein.”
