All plant crops contain protein. Some contain little (protein in spuds is scant) whilst others, like lupin, are chock-a-block. The fact that crops with plant protein have been grown for millennia hasn’t stopped the zeitgeist that is “plant-based protein” from spreading through the media like a virus in a kindergarten.
The reason is that plant-based protein has been touted as an alternative to meat protein (hence the term ‘alt-protein’). Huge amounts of capital from global quantitative easing was pumped into technology and marketing to create alt-protein products that look and taste like meat products.
But now that the cheap money has been mopped up faster than a home kitchen Enjo demo, let’s have a look at where we stand.
The poster kids of the movement were the Californian based Impossible Foods and Beyond Meat. Impossible Foods is privately held and, as such, does not have a public valuation, but Beyond Meat listed in 2019 and, even if its products don’t bleed, its share price certainly does. The current valuation is 3% of its peak. Yikes!
Closer to home, Victorian protein isolates manufacturer, Australian Plant Proteins, stepped up to the plate to take a big swing for the alt-protein fence, announcing significant Federal and South Australian support to build a fractionation facility processing 25kt of pulses such as faba beans and peas (reportedly involving $113m from the Feds and $65m from the Croweaters.) The fact that this venture involved Thomas Foods International and Bunge made it seem that this wasn’t just a hit in hope. The Feds pulling their support in 2023 was the first strike, followed by a second when SA withdrew shortly after and, given that APP has recently entered voluntary administration, it’s reasonable to surmise it's three strikes and they are out.
Even closer to home for West Australian readers is Wide Open Agriculture. As a publicly listed company, their journey is well documented. Ostensibly, they are now a purely plant-protein ingredient company, having divested their branded food products and invested in a German isolates facility. Their Buntine protein was developed with a focus on lupin but a recent ASX announcement states that WOA are using their technology to branch out into faba beans and peas. What does the market think of their all-in protein strategy? Their share price peaked at $1.39 in 2020 and at the time of writing is less than $0.02.
So why are these companies not thriving? At the simplest level, sales of alt-protein products are not exactly going gang busters and there is lots of competition. Whereas some markets (e.g. mainland Europe) and specific product offerings are washing their face, others have been abandoned. The highest profile is McDonalds dropping the Beyond Meat McPlant burger in the US. Instead, they see chicken as the next protein movement to latch on to.
The reasons cited range from consumers baulking at price, shying away from the ‘ultra’ processed nature of meat mimicry, or just not liking the taste and texture. (Interestingly, in markets where product sales have increased, the product prices have been lowered to equal or lower than meat – it's not so much about the burger being better, just cheaper.)
But there is one alt-protein category that is not all doom and gloom, plant-based milks. Every brand and their dog are expanding in this market. In Australia, the big brands like Vitasoy, Sanitarium and Pure Harvest are well established, with international entrants such as Oatly adding a millennial flavoured dynamic. However, when WA’s oldest dairy, Brownes, moves into plant milk, as they did earlier this year, you know that times are ‘a changing. Brownes’ is quoted as saying that, "Overall, Australian cafes now make about 30 percent of coffees with almond, soy or oat milk”, and, as Brownes reportedly supplies 80% of the milk to WA cafes, you can work out the maths pretty quickly.
Unlike alt-meat, alt-dairy has one big thing going for it and it has nothing to do with protein, which is minimal, but a carbohydrate of the sugary type, lactose. For a decent proportion of the populace, lactose found in milk can be hard to digest, causing bloating and cramps, whereas plant-based sugars (such as sucrose, fructose & glucose) cause no such concern. It’s this factor which is driving growth into Asia. As Western milk-based coffee culture cross-breeds with traditional Eastern tea culture, the upside for a product that doesn’t cause half the population to flatulate their way into social purgatory, is large.
If you are a farmer with meat cattle and sheep, alt-protein remains distant in the rearview mirror but, for dairy, the competition in white liquid is looming larger.
