PROTEIN FORECAST
MEAT SECTOR ON ALERT OVER
ALTERNATIVE PROTEIN
Alternative proteins are likely to become a major competitor to some of New
Zealand’s red meat products and the sector must respond with a clear strategy,
says Beef + Lamb New Zealand chief executive Sam McIvor.
A report commissioned
by Beef + Lamb New
Zealand (B+LNZ) has found
that although alternative
proteins are currently manufactured in
small volumes, large scale production
of burger patties and mince is likely
to be a reality within five years. The
study has concluded a number of
forces are coming together that are
driving governments, investors and
consumers to looks for alternatives to
red meat. These include environmental
concerns relating to climate change
and the ability to feed the growing
world population in a sustainable way;
the use of animals in food production;
and the place of meat in a modern
diet. Despite these challenges, the
research demonstrates there is still
a strong future for the New Zealand
red meat sector. The report reveals
an untapped demand for naturally
raised, grass-fed, hormonefree
and antibiotic-free red
meat with consumers
prepared to pay
a premium
for such
products. B+LNZ commissioned
the research to better understand
the shifts in food, food production
technology and consumer trends, and
distinguish the hype from reality. The
technology to produce a consumer
ready alternative protein burger is
here and is pushing for commercial
scale. We have seen an increase in the
mainstream availability of alternative
protein products in grocery aisles and
quick service restaurants. However,
the research also clearly articulates the
significant opportunities and prospects
for the New Zealand sheep and beef
sector if we respond effectively to
the rise of alternative proteins. That’s
because the same forces driving the
significant investment and demand
for manufacturing alternative proteins,
including concerns about industrial
farming, health and the environment,
offer us a chance to differentiate New
Zealand red meat internationally. Freerange
natural sheep and beef farming
in New Zealand is a world away from
intensive factory farming practices
(feedlots) and ‘big food’, which has
tarnished the reputation of red meat.
It’s vital we leverage our competitive
advantage and rigorously protect it
- grass-fed, hormone-free, antibioticfree
natural protein - to capture
higher premiums and
raise the value
of our
exports. In the US alone, retail sales of
labelled fresh grass-fed beef including
domestic and imports reached US$272
million in 2016, up from US$17 million
in 2012. Sales are doubling every
year. Yes, we do have some way to
go. A significant proportion of our red
meat is not currently commanding a
premium compared to competitors
in a number of global markets, and
there is low consumer awareness
of New Zealand’s natural farming
systems. That’s why the work that
B+LNZ and the sector is already doing
to develop and activate the global
origin brand and red meat story and
develop a National Farm Assurance
Programme is so important. The
sector is also continuing to improve
its environmental performance. We
recognise that agriculture has an
environmental impact and we are
working to minimise this. We’ve
made some headway as the carbon
emissions from sheep and beef
farming are actually 19% lower
than 1990 levels. We are perhaps
the only sector currently meeting
New Zealand’s 2030 target, but we
know we need to do more. New
Zealand is in a prime position to take
advantage of the unprecedented global
demand for quality protein. The global
population is swelling, with a forecast
one billion extra people to feed by
2030. New Zealand’s total agricultural
production can only feed about 40
million people.
We can’t and don’t want to try to feed
the world. Alternative proteins will
have a place in this growing market,
as will red meat. According to the
study, New Zealand’s beef exports
face the greatest challenge from
alternative proteins, particularly to
the United States. Currently, the US
takes 50% of New Zealand’s beef
exports and a large proportion of this
goes into burger manufacturing. The
development of alternative protein
beef muscle cuts is much further
behind and sheep meat is not yet
being explored. The report identifies
seven emerging ‘forces’ that make
it increasingly likely alternative
proteins will gain traction in the future.
However, a range of counter forces
such as an economic slowdown
stifling investment, or regulatory
barriers, may also hinder the progress
of alternative proteins. They include
four scenarios and potential strategic
responses aimed at challenging the
red meat sector’s thinking and helping
it to consider how to respond to
these challenges. These scenarios
range from red meat being pushed
to the side of the plate or becoming
a speciality, a reluctant choice or
the everyday preferred choice for
consumers. We now have a better
understanding of the technologies,
business models and consumer trends
and how quickly advancements are
being made that could impact the
New Zealand red meat sector. Far
22 APRIL 2018