Animal protein and its traditional and emerging substitutes: Perspectives and issues

This note is an overview of trends in animal proteins and its traditional and emerging substitutes from a consumer point of view. It does not have the ambition of being exhaustive, it should rather be seen as an introduction to the rapidly evolving world of alternative proteins in the background of global warming.

The choice of a protein interacts with numerous attributes that question consumers, as indicated by Figure 1. Some of these attributes are of the public good type (I am doing it for the greater good), such as the impact of the choice of a protein on animal welfare or on the environment. Other attributes are of the private good type (I am doing it mostly for myself), such as health attribute. Note that the types of attributes are not mutually exclusive. For example, an attribute related to animal welfare, such as cage-free eggs, is a public good type attribute. Nevertheless, if one believes that cage-free eggs taste better or are healthier, than this is a private good type attribute. An important variable that also affects the choice of a protein is its price. This is especially true in a period of high food inflation, susceptible to increase consumers' sensitivity to price.

It is important to note that most of the observed consumption increases in plant-based protein is not from fundamental changes in food consumption such as veganism and vegetarianism, but rather from substitution. As Godin (2023) indicates, the transition to a vegetarian or a vegan diet is a complex process initiated by triggers and marked by continuities and fractures.

Although numerous developed countries see a slight decrease in total meat consumption, what is most noticeable is the substitution from meat with the highest environmental footprint to meat or other animal proteins with a lower impact. Figure 2 illustrates the case for Canada, with total meat consumption slightly decreasing (11%) between 1980 and 2019. Similarly, Figure 3 shows a decline in beef and to a lesser extent in pork consumption, while chicken consumption is increasing. Unfortunately, the Statistics Canada series used ended in 2019, but cross references with other statistical sources (Statista 2024) indicate the continuation of these trends after 2019. Other animal protein consumption, such as eggs and dairy, are on the rise in Canada. For instance, egg consumption has increased by 27% from 2011 to 2021 (Statistics Canada, The daily poultry and egg statistics). Similarly, we estimate total dairy consumption increase at roughly 18% for the same period (Canadian dairy information center and Statistics Canada population estimates quarterly).

Thus, the demand for animal protein is on the rise in developed countries, even if meat consumption is reduced. Moreover, world demand for animal protein is rising faster, as developing countries population get richer and world population is increasing. The question of an increasing share of alternative meats (AM)¹ is put into perspective by the FAO. In 2020, according to the FAO, meat consumption was around 325 MT and AM represented 2% of the market. If in 2040, based on rather optimistic prevision, AMs represent 17% of the market (85 MT), meat consumption will still be higher at 415 MT, as illustrated by Figure 4.

We have established that the demand for animal proteins is predicted to keep increasing in the next few decades. However, recent unforeseen world events have demonstrated how fragile predictions can be. Moreover, Figure 4 illustrates that by 2040, AM could account for 17% of meat proteins. Recent developments and speed of substitution have the potential to make that number bigger at the scale of all animal protein. This is what we will explore in this section. In fact, we will distinguish 3 types of substitutes to traditional animal proteins. The first one is the replacement of an animal protein in a meal by a plant-based protein. A beyond meat burger is the perfect example. The consumer is not modifying is eating habits per se, but substituting one type of protein by the other. The second one is to replace a traditional animal protein by an animal protein obtained in the absence of animals slaughtering that we will simply call lab animal protein (LAP). Finally, the third type is (in the absence of fundamental dietary changes), the consumption of plant protein (excluding animal protein imitation). It would be illustrated by a veggie sandwich containing hummus, roasted red peppers and roasted portobellos, instead of one made with a slice of plantbased meat. This note will concentrate on the first two types.

Before going further, we need to position the fight of the proteins in the global context of climate change and the recognized need for more sustainability in the food value chain. To this effect, two goals seem necessary (De Lattre, 2024). 1- Consumers in developed countries must adopt diets less rich in animal proteins. It is estimated that roughly 70% of the total protein intake comes from animal in developed countries. To achieve a sustainable omnivorous diet, this percentage should be reduced to 50% (Rémond, 2019); 2- Farmers must adopt agricultural practices more respectful of the environment (Garnett et al. 2013. MacLaren et al. 2022). If the scientific community seems in agreement on these goals, the means to attain them is still debated (De Lattre, 2024).

Concentrating on the first goal (sustainable omnivorous diet), the fight of the proteins described in this note explores the potential competition between plant-based protein and LAP in replacing traditional animal proteins toward the goal of attaining an omnivorous sustainable consumption.

As illustrated by Figure 5, the main reasons for plant-based food consumption are not necessarily philosophical. Animal welfare and the environment account for only 18% of the reasons why U.S. consumers choose plant-based foods. Private attributes, such as health, are far more important (Figure 5). In such cases, consumers are likely to be more price-sensitive than in the presence of fundamental values (public good type attributes). Figure 6 indicates the lack of price competitiveness of plant-based substitutes relative to their animal protein counterpart, especially in the United States.

Not surprisingly, with significant food price inflation sales of plant-based meat (PBM) have declined by 21% for the period of July 2022-23 according to Food Business News (2023). As a result, Beyond Meat's market capitalization has dropped from $12 billion in 2019 to $560 million in 2023.

Other issues than price also affect the sales of PBM. In a survey of 1400 American adults, the firm Mintel reports that 48% of consumers believe that the taste of PBM is a concern, 35% believe that meat is more nutritious, and 34% believe that PBM is too expensive. Similarly, 24% of respondents have an issue with the texture, and 21% think PBM is too processed. Plant-based companies are reacting to these consumers’ concerns and efforts are being deployed to improve the products and to emphasize health over the environment while combating the image of overly processed products. As an illustration, Impossible Burger and Beyond Meat are working to improve and shorten their list of ingredients (Speed, 2023; Ataman, 2024).

Similarly, in reaction to price sensitivity, it seems that retailers are testing consumers price reactions. For instance, the retailer Lidl sells its vegan product range, Vemondo (100 SKUs), at price parity with equivalent animal protein in its stores in Germany. Moreover, these products are now sold side by side with their animal counterparts. It will be interesting to see the results of this pricing initiative and if it would be reproduced by other stakeholders. Placing PBM next to their counterpart in the meat counter is, however, not new. Data reported by the Vegconomic (2023) indicate that large-scale trials in the U.S. resulted in an increased in PBM sales of 23%, when placed in the meat counter.

One might wonder how serious lab animal proteins (LAP) are. It appears to be a serious phenomenon given that over 60 companies are working intensively on cultured meat and other animal proteins such as dairy and eggs, according to the Good Food Institute. Some notable investors include Tyson and Cargill. Moreover, Switzerland's largest retail supermarket chain and leading meat manufacturer, Migros, has signed a Memorandum of Understanding with SuperMeat to start selling at a large-scale lab meat in their stores by 2025.

While Singapore was the first country to authorize the consumption of lab-grown chicken meat by the company Eat Just in December 2020, the United States followed suit in June 2023, approving the sale of lab-grown chicken meat by companies Upside Foods and Good Meat. Asian countries, such as South Korea and China, are considered by experts as potential candidates for approving lab-grown meat in the near future.

We can regroup LAP technology in two large groups. The first one is through bioreactors and the second one is through molecular agriculture. The bioreactor technology consists of taking stem cells through a biopsy, for example from a beef. The cells are multiplied and differentiated in a phase 1 bioreactor. These cells are then moved to a phase 2 bioreactor for the maturation of the cellular tissues. At the end of the process beef meat is obtained and can be worked in patties and such. This technology is where most of the resources seem to be dedicated as we speak. However, molecular agriculture seems to gain a lot of traction lately. This technology consists in inserting animal DNA into a plant so that the plant produces the desired animal protein. The animal protein obtained then needs to be extracted from the plant product.

In theory, LAPs have significant advantages over traditional animal proteins such as lower environmental impact, given that production can be located near consumption points and most importantly, the elimination of GHG emissions associated with animal feed production. Low impact on animal welfare and no need for slaughter. It has the potential to increase food security by reducing the land needed to produce animal proteins. It has health potential since one can in theory control for less saturated fat. No risk of antibiotic resistance and little to no bacterial contamination. It also has the potential to appeal to vegetarians/vegans with environmental and/or animal welfare motivations, as well as animal protein consumers.

However, in reality LAP face significant challenges such as the fact that their production process is energy intensive. Given that they are likely to be very sensitive to economies of scale, their production is likely to be geographically concentrated, generating important transportation cost and environmental impacts. Consumers’ acceptability is to be tested and although PETA supports cultured meat, some groups strongly denounce LAP, estimating that this is a bad idea for animals and the environment. The Clean Meat Hoax website is a good illustration of this opposition. Finally, the price of LAP is very high at the moment, as illustrated by Figure 7.

MMR Research surveyed 3400 consumers, who indicated making efforts in terms of the environment in the U.S., UK, Netherlands, China, and Singapore regarding lab-grown animal proteins. These consumers are therefore likely to be more sensitive to their impact on the environment than the general population. The results indicate that half of the U.S. participants would be willing to try lab-grown meat and 43% in the UK, compared to 60% in China (Morrison 2022).

The firm SuperMeat conducted a public blind taste test (available on the web) of its lab chicken with 3 professional judges. In the first test, the judges tasted sliced chicken cooked in a pan without seasoning. While two judges incorrectly identified the lab-grown chicken, the 3rd judge indicated that he was unable to make the distinction. Some judges noted differences between the two pieces of chicken, indicating a richer flavor for the SuperMeat chicken. To that extent, the test, although limited, was a success for the lab-grown chicken of SuperMeat. Finally, the judges tasted the SuperMeat chicken in a chicken burger and declared that this was definitely good chicken.

Our first example of molecular agriculture is Piggy Sooy from Moolec Science. The Cie has created, according to its website, GMO soybean that contains up to 26.6% of pig protein. This would, for example, allow to do a soy-based burger patty that taste like pork and has a very high level of protein. Our second example is from the Cie PoLoPo that has developed the technology to grow up egg protein in potatoes. More specifically, the egg white protein (55% of the egg's protein) would be produced by the potato and then extracted for sale. The "over-proteinized" potato can also be sold as food, but the taste could be altered, according to the company PoLoPo website.

If consumers in developed countries move toward a more sustainable omnivorous diet, the consumption of animal proteins should be partially substituted by plant-based proteins, while LAP might also be an option. LAP have the potential to be a better substitute for animal proteins than plant proteins (in the absence of fundamental dietary changes) if they can significantly bring their cost, and thus their price, down. As an economist, I would think that their ability to do so is significant in the long run as (to my understanding) their process (bioreactors) is highly sensitive to economies of scale.

Although the plant-based protein category discussed in this note has seen in some instance lower sales, the industry is reacting by reducing the list of ingredients while improving taste and texture. Initiatives on price seem to have a great potential. It is worth noting, as an illustration, that plantbased "milk" were successfully able to reduce the price gap with milk and occupy currently approximately 15% of the segment in the United States. In Canada, where the price of milk is higher, price parity has already been obtained with ultrafiltered milks.

Reports mentioned earlier discussed consumer sensitivity to prices and lower interest for environmental claims. However studies mention by Speed (2023) indicate that combining a sustainable development claim with personal benefit generates a strong combination that appeals to consumers. LAP might be better positioned to do so than plant-based proteins and are therefore likely to generate appeal to consumers. If LAP can achieve prices slightly higher than animal protein and meet their promise of taste and texture, they will be a significant competitor in niche markets to plant-based proteins. If they can achieve prices lower than animal protein, they then have the potential to take a large share of the market.

Nevertheless, one should keep in mind that animal protein consumption will continue to grow, driven by increasing wealth in developing countries and population growth. However, the share of animal proteins in total protein consumption will decrease in favor of alternative proteins. Among alternative proteins, plant-based proteins (substitution) currently have a significant lead over LAP. However, the potential of lab-grown proteins (bioreactors and molecular agriculture) matches the challenges they face; that is to say that their potential is quite important.

Animal protein producers will not stand still and do have time to improve their practices (environmental impact, animal welfare), to promote the health and nutritional aspects of their products, as well as other factors sought after by consumers (such as local production and an economic presence in rural communities).

In a nutshell, a more sustainable consumption to fight climate change implies a diet with a reduce proportion of traditional animal proteins, although total protein demand will increase, thus the need for more sustainable agricultural practices. It is difficult to predict which type of protein will win the fight of proteins to partially replace traditional animal proteins. Although plant-based proteins are well positioned, LAP potential seems tremendous, but so are their challenges. In the time being, the challenge of animal protein producers is to increase the value added of their product, notably their healthiness, animal welfare and environmental attributes.