A fresh view of meat

But consumers these days have taken charge of their diet and sustainability efforts, and have widely supported this trend. Additionally, several of these plant-based meat products offer those with sensitivities or allergies towards meat a chance to enjoy such foods without worrying about negative reactions.

The Covid-19 pandemic has also accelerated the awareness of food safety and security, and sustainability issues, which plant-based meats address.

Credit Suisse notes in its Supertrends. Investing with purpose report that as the world is fighting hard against the pandemic with an end in sight, governments, businesses and citizens are now looking at how to “build back better” in the post-Covid world.

While the pandemic will pass, the world is likely to keep this objective firmly in mind in order to address significant challenges that lie ahead and to steer its economies and societies toward a more inclusive and sustainable future.

According to Credit Suisse, companies that are in sync with the green attitudes of millennials — in fields such as protecting biodiversity and the climate, healthy sustainable food, responsible consumption and production of clean energy — are ones to watch.

In a recent global survey of millennials and Gen Zs, Deloitte found that despite the near-term woes of the pandemic, these two demographics still hold climate change and environmental issues as their top concerns.

The Edge Singapore previously looked into the growing demand of this space as several start-ups in Singapore and around the world are coming up with innovative ways to present meat without harming a single animal.

But sustainable food production goes beyond technology and starts with the end-consumer. A shift in diet toward fewer or alternative animal products can substantially improve the ecological footprint.

More critically, consumers’ values and attitudes — especially the young — are shifting. What might be fads today could be mainstream tomorrow.

Take student Lucas Yee, for example. The 18-year-old is an animal lover and believes that it would be hypocritical to say that he loves animals but yet still consumes them. “When you eat it, you kill it, but you’re ignoring the part of the chain where someone else is killing it for you,” says Yee who is a “flexitarian”.

As a combat sports athlete, Yee also finds that being a flexitarian suits his lifestyle, as it allows him to lose weight more easily, thus placing him in a lower-weight category in competitions. Eventually, he intends to switch his diet to be fully vegan. He understands that this would come with many restrictions, especially when dining out. But he believes that as more people embrace plant-based diets and meals, the friction of change can be reduced.

For 20-year-old Nadine Tan, watching several documentaries online about the cruelty behind the meat industry when she was 14 prompted her to become a vegan. Witnessing such jarring images stuck with her until she decided on a lifestyle change. According to Tan, “small changes that help the animals and environment” should be encouraged.

Now a vegetarian, Tan says: “The most positive aspect of the vegetarian diet is the fact that I’m doing my best to reduce additional cruelty to these animals and it helps to alleviate some feelings of helplessness about the overall state of the industry.” Overall, she still finds it a challenge to eat out, but she is still sticking to this lifestyle as she enjoys the health benefits and impact on sustainability, she says.

Meanwhile, student Cham Jay Yin, 20, is more concerned about the environment. She understands that farming meat can be rather damaging to the environment, as it increases carbon footprint and wastage. “I started my ‘reducetarian’ diet in Secondary 4 when I studied Geography, about how the only way to be more sustainable to reduce carbon footprint on my own is if I eat less meat,” she says.

“I think my decision stems from environmental consciousness; the current industry has a large carbon footprint, and it’s not very good for the environment,” she notes.

When she started on this lifestyle change, Cham was worried that it would be a difficult change, but she found that she did not need that much meat in her diet and it was all a matter of getting used to it. “Now it’s much easier because there is more awareness and more restaurants that have vegetarian options. When I first started out, it was much more difficult to eat out at restaurants,” recalls Cham.

“I would recommend my diet because I am eating minimal meat, so I don’t need to compromise fully on the taste and I don’t have to cut myself out completely from social events,” she says. “It feels good that I know I’m helping in a ‘bigger picture’ sense. I know I am doing what I can for a cause that means a lot to me.”

It is not just the millennials and the Gen Z population that are into this trend. Gautam Godhwani, 49, and Jayesh Parekh, 66, who are both managing partners at venture capital firm Good Startup, are also on mostly plant-based diets.

“I am what I would call a flexible vegan,” says Gautam, explaining that he would normally keep to a strict vegan diet, but allows himself to be somewhat flexible in certain social situations. As for Jayesh, he grew up as a vegetarian and seldom eats meat, especially at home as his wife is also a vegetarian.

But since moving to Singapore from the US, Jayesh has adopted a more flexitarian and reducetarian lifestyle, as he occasionally enjoys seafood. “Once in a while, I do enjoy seafood, like chilli crabs. But I cannot wait for the day that there is cell-based seafood and meat that I can try that will be molecularly the same,” says Jayesh.

Care and support

Even as consumers have shown their interest and support in plant-based alternatives, the local government too has a large part to play in supporting up-and-coming start-ups within this space, as well as overseas players looking to introduce their plant-based products into the Singapore market.

So far, the Singapore government has not merely been supportive, but actively involved in furthering this industry. Fitch Solutions, in a June 3 report on alternative proteins in the regions, says: “We highlight that Singapore has a supportive regulatory framework and landscape in place for aspiring alternative protein start-ups, due to the country’s concern over its food supply, leading to a burgeoning local alternative protein scene.”

Last year, the National Research Foundation committed a total of $144 million to intensify Singapore’s effort to grow the innovation and start-up FoodTech ecosystem, facilitating more investments in the agri-food space. Priority areas highlighted included both urban agriculture and alternative proteins.

This is a key part of Singapore’s “30 by 30” strategy, which has a goal to produce 30% of the nation’s nutritional needs locally by 2030. Currently, the country imports approximately 90% of its total food supply, exposing it to external forces in the exporting countries, such as supply shocks experienced during the beginning of the Covid-19 pandemic.

Notable developments to accelerate the progress in achieving the “30 by 30” goal included the launch of the Singapore Food Bowl, a programme that aims to help regional agrifood tech start-ups fast track their growth trajectory and commercialise novel technologies specifically relevant to Singapore’s food security needs, with support from statutory board Enterprise Singapore and Dole Packaged Foods.

Temasek has also entered into a joint venture with SATS and the Economic Development Board (EDB) to kickstart one of the first plant-based protein distribution channels in Southeast Asia.

Similarly, a $50 million fund was raised by Big Idea Ventures, a FoodTech-focused venture capital backed by Singapore’s sovereign wealth fund Temasek, Tyson Foods and Buhler — to invest in innovative start-ups working on alternative protein.

Temasek has been seen taking bites into several plant-based protein companies around the world, some of its such investments include US-based Impossible Foods and Eat Just; Australia-based v2food; as well as several local start-ups such as Next Gen Foods, Float Foods, Growthwell and more.

Rohit Bhattacharya, director of enterprise development at Temasek, mentions in a Temasek Review 2020 article titled Leaving the Sea Out of Seafood: Beefing Up Asia’s Food Supply: “Asia will be home to more than half of the world’s middle-class population by the end of this decade, and there is a strong positive relationship between income levels and demand for animal protein.”

“But the way animal protein is produced today is very resource-intensive,” he adds. “The world needs to innovate and become more efficient at food production if we want this planet to continue sustaining our children and their children.”

The way Bhattacharya sees it, Temasek is more than just a provider of capital for these companies. It will also actively connect portfolio companies with fellow industry partners across the agrifood value chain in different markets to unlock new opportunities. “We aim to create a more resilient and sustainable agrifood ecosystem for consumers and producers alike,” he adds.

Meanwhile, the private sector is also seeing the potential in investing within the plantbased protein space.

Although there already are several venture capital firms focused on investing in vegan companies, more are zooming in on companies that are only in the plant-based protein business. For instance, Big Idea Ventures has its New Protein Fund I worth US$50 million ($67.57 million) that also has an accelerator programme; Lever VC has deployed over US$1.5 billion in investments; while Good Startup has just launched its US$25 million Good Protein Fund I.

These investments helped contribute to the hundreds of millions that have already been invested last year and thus far this year. According to consultancy McKinsey, dozens of start-ups, backed by deep-pocketed investors such as Softbank and Temasek, are all jostling for a piece of the pie. Last year, some US$350 million had been invested in these start-ups, and as of June this year, US$250 million chipped in. The prize: a US$25 billion market come 2030.

New on the menu

Given the massive potential, even public-listed companies are also riding on this trend by introducing plant-based offerings into their portfolio.

Japanese cuisine restaurant operator RE&S has in 2019 introduced plant-based meat offerings into its menu as the group noticed the demand. It worked with chickpea-based chicken meat alternative brand Quorn to cater to customers with dietary restrictions in its Ichiban Bento outlets. The group also has meat-free options in Idaten Udon outlets, while Ichiban Boshi and Ichiban Sushi will be rolling out similar sorts of offerings in late July.

Fenton Foo, CEO of RE&S, tells The Edge Singapore that back in 2018, the awareness for meat-free products was still new. “Locals were just starting to discover meat-free products and there weren’t many suppliers. Over the past few years, the number of plant-based meat suppliers have grown and we also see a constant stream of supporters for plant-based products since its launch,” says Foo.

“Such new offerings are part of RE&S’ continuous efforts in evolving our menu offerings to adapt and cater to the evolving tastes and needs of consumers,” he adds.

Furthermore, the F&B manufacturers are hopping on the bandwagon and launching plant-based products for sale. One example is newly listed OTS Holdings, which is primarily in the business of manufacturing Chinese waxed sausages and canned meat products. But in a recent interview with OTS, the company’s directors mentioned that the plant-based meat trend is booming in this region and it will be launching a new brand to house its plant-based meat products to cater to a new consumer market.

Part of the proceeds from its listing will go into the R&D and launch of this new product. OTS says that its first product will be a ready-to-eat plant-based luncheon meat that will be close in taste and texture to the real thing.

Similarly, local beverage giant Yeo Hiap Seng (Yeo’s) on March 29 announced that as part of its long-term partnership with Swedish-based, Nasdaq-listed plant-based milk alternative player Oatly, both companies will produce Oatly’s popular enzyme-treated oat milk at Yeo’s Senoko Way manufacturing site, marking the first time Oatly’s products are being produced outside of Europe and North America. Both companies will contribute to the investment of equipment and the facility.

At this point, the listed companies do not expect their plant-based business segments to contribute higher revenue or profits compared to their existing products, but there may be a possibility that these companies will decide to expand their plant-based offerings and eventually restructure their business.

Although plant-based products are widely accepted in the consumer market and gaining popularity, the price of these products are higher than their meat-based counterparts.

However, Fitch Solutions believes that the price of alternative protein products will continue to decrease as growth and economies of scale are achieved. One such example is Impossible Foods, which has slashed the prices of its Impossible Meat in supermarkets at least thrice since it was introduced in Singapore in October 2020. The company has cited “economies of scale” as a factor for the price cut, and that it intends to keep lowering prices until it undercuts those of ground beef.

On the other hand, large F&B manufacturer Nestle has recently come up with the new motto “Good food, Good life”, as it aims to introduce healthier products into the market. It notes that the majority of 60% of its mainstream food and drink products do not fall under the “healthy food” category, but no matter how these products can be renovated, they will never be “healthy” without compromising what consumers love so much about the products.

Hence, Nestle is likely to keep these brands around, but introduce other healthy new products to cater to the large market of health-conscious and sustainable-conscious consumers. Already, it has its vegan tuna brand Vuna and its upcoming pea-based milk alternative Wunda.

With governments, venture capital firms and even listed companies hopping on this trend, this does not look like just a fad that is about to fade anytime soon. While it is still in its early phase, investors should take a bite out of this space and expect more to come.

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