Quick – which do you think is doing better in the market? Plant-based meat or non-alcoholic beer? It may not be the one you read about more often these days...
In recent times, companies like Beyond Meat have brought plant-based meat substitutes into the public eye considerably.
However, when examining some facts and figures about meat and meat substitutes, an OECD (data.oecd.org) study shows a volume of 323 million metric tons of consumption in 2020 for all types of meat, while meat substitutes of all types accounted for 470 million kilograms in 2020 – converted to metric tons that’s only 470,000 tons. That’s a share of 0.145% – absolutely miniscule.
By contrast, non-alcoholic beer seems to be doing much better. While there isn’t a single global volume share number available as easily, total global revenue is estimated at 25 billion USD out of a total beer market of 528 billion USD – a share of 4.7%. That’s pretty significant and shows that non-alcoholic beer has made a niche for itself that somehow, plant-based meat has not.
So, based on the numbers, non-alcoholic beer is doing about 30 times better than meat-substitutes – plant-based meat being only a small part of that latter category.
The question becomes, why is it this way? And the answer, as always, lies in what consumers really want and whether or not brands are able to truly satisfy those wants.
While there doesn’t seem to be one comprehensive survey asking the same questions, surveys about why consumers choose non-alcoholic beers show a few key reasons popping up consistently. Across South-East Asian countries, reasons around “cutting down alcohol consumption” or “cutting down calories from drinking” are big reasons – suggesting that people who regularly consume alcohol choose non-alcoholic beer to control their intake. Reasons cited in European countries are similar, though usually expressed as wanting to avoid the side-effects of drinking too much alcohol (hangovers, mostly). Consistently across markets, non-alcoholic beers rate as refreshing, good-tasting, satisfying, and often even healthier than traditional soft drinks.
Surveys around why people consume plant-based meat cite two key reasons consistently – a perception that meat-substitutes / plant or soya based meat is healthier, and a perception that it is better for the planet. A US survey shows a per capita consumption of 0.3 kg of meat-substitutes a year, out of a total per capita meat consumption in excess of 98 kg. That’s a share of less than 0.03% – which suggests that even the people who cite these reasons for eating meat-substitutes aren’t eating a lot of it. Also, comparisons of the nutritional value of several different brands of plant-based burgers show that they often fail the two fundamental premises on which consumers choose them – being healthier than meat and tasting similar to meat.
Perhaps the core problem is that meat-substitutes don’t really have a clear target segment. Non-alcoholic beers aim at people who normally drink beer, but for a variety of reasons don’t want to do so. Which leaves plenty of room for something that tastes and feels like a beer but isn’t alcoholic.
Last of all, while a lot of non-alcoholic beers taste like the real thing and cost a lot less, the better tasting meat-substitutes are usually much more expensive than the real thing.
Interestingly, China is the largest market in the world for meat-substitutes, at USD 2.24 billion in 2022 (estimated) out of an estimated global total of around USD 7 billion. Also, while per capita consumption of meat-substitutes is low at 0.1 kg, it is a larger percentage of the per capita meat consumption of around 40kg, which is a signal for potential growth as meat consumption in the market grows.
All of which would seem to point to China being a better place to focus on meat-substitutes than most other markets, but doesn’t take away the challenge of segmenting consumers based on their needs and picking a segment that you can actually win in.
For deeper data and insights on how you might go about doing this in China, get in touch with us at enquiries@searchlightchina.com
Hi Sriram,
It would also be interesting to map the trajectory of the non-alcoholic beer versus the meat-substitute industry over time. Non-alcoholic beer has been around for a much longer time, at least 2 decades? Whereas meat-substitutes perhaps 3 or not more than 5 years? What was the global share and speed of growth of non-alcoholic beer within the same timeframe?
The other piece of examination might be interesting would be the impact of brands and distribution. Non-alcoholic beer I believe were launched with existing known brands by established manufacturers willing to disrupt their own business. Furthermore, margins might have been even better given the absence of excise taxes on the category. Distribution network was already fully established. Meat-substitute industry is literally building from scratch – brand awareness and distribution, although having said that injecting the meat-substitute brands like “Impossible” into established F&B like Shake Shack has helped to start build the profile such brands and given it somewhat of a headstart..
Hi Adam, thanks for commenting. All good points, but I think the core of my thesis still is that there is a far clearer consumer need and segment for non-alcoholic beer than there is for meat-substitutes. For any brand to succeed in this space, there needs to be far greater clarity on identifying the core segment and need, then meeting it and being consistent with it. My observation is that meat-substitute brands are all over the place, offering “health” benefits (often not really delivered), environmental benefits (also often not real) and generally costing as much or more than meat both in money and resources. There are exceptions, they are the ones who need to think sharper and position themselves better against competitors to succeed in what, I believe, is fundamentally a smaller and more competitive niche than NABs. Happy to continue the discussion if you want to have a chat sometime.
Fair perspective Sriram.. thought a bit more about your point on consumer needs and it’s occurred to me that in my mind there are actually two different product sub-categories here when it comes to meat-substitutes, hence consumer needs indeed has to be clear.. on one hand, the buzz in Singapore recently has been about the lab cultivated meat industry and on the other would be plant-based meat like Impossible and Omni.. “Plant-based” does in fact have an existing market if you think about all those vegetarian Chinese restaurants that have for decades offered dishes like mock chicken or mock BBQ pork etc.. taps into a segment of people who want to try being “vegetarian” but still feel like they’re eating meat.. psychological benefit more than anything else! “Cultivated meat” on the other hand is really the new kid and is more of a sustainability proposition (if can be proven longer term) that would ideally appeal to meat eaters.. Costs/ money/ resources could hopefully lower down over the years with increased scale and demand.. we’re connected on LinkedIn now, happy to further brainstorm.. this has been fun and intellectually stimulating!