Australian meat consumption per capita remains near its lowest point since 1996-97, at 99.5 kilograms per capita, as Australians increasingly adopt ethically and environmentally-conscious dietary habits. The rising popularity of ‘flexitarian’ diets, which reduce but not eliminate meat consumption, represents a threat to the Meat Processing industry, which is expected to contract by 10.0% in 2020-21, to $22.2 billion.
‘The domestic price of meat has risen at an annualised 3.1% over the past five years, driving more consumers to seek vegetarian alternatives. This has expanded target markets for plant-based products beyond vegans and vegetarians,’ said IBISWorld Senior Industry Analyst Suzy Oo.
Grocery expansion
The COVID-19 pandemic has accelerated the uptake of low-meat diets, as lockdowns have provided consumers with time to focus on healthy cooking and cheap meal ideas. A survey by the CSIRO in June 2020 found that 24.6% of respondents had increased their vegetable consumption through the course of the pandemic lockdown period.
‘Changes in consumer purchasing patterns amid the COVID-19 pandemic created new avenues for plant-based food products, while the shift to homemade meals drove consumers’ willingness to try new products,’ explained Ms Oo.
Capitalising on this trend, plant-based meat producers promptly changed gears to place a greater focus on retailing their products at supermarkets and grocery stores. In September 2020, v2food announced the launch of its plant-based meat products v2burger and v2mince at over 600 Woolworths outlets across the country.
According to Food Frontier, grocery sales of plant-based meat alternatives rose by 46.0% over 2019-20, with more than 200 plant-based products, such as burgers, sausages and mince, being made available across local grocery stores and food service establishments.
‘The uptake of low-meat diets is expected to accelerate over the next five years. This expansion is expected to continue driving growth in the Supermarkets and Grocery Stores industry over 2020-21, with revenue anticipated to rise by 5.1%, to $121.6 billion,’ said Ms Oo.
Health, environmental sustainability and animal welfare
Public concern over environmental issues has risen by an average of 1.2% per year over the past five years, reflecting greater awareness of unsustainable farming and forestry practices. Cattle, sheep and other livestock account for close to 70% of greenhouse gas emissions by the Agribusiness industry. In the year to September 2020, agriculture accounted for 14.1% of Australia’s national greenhouse gas emissions.
‘Rising health consciousness, particularly increased awareness of the adverse relationship between red meat consumption and coronary heart disease, diabetes, and other chronic health issues, is further spurring the transition to plant proteins,’ said Ms Oo.
In August 2019, the Australian Heart Foundation updated their dietary guidelines, recommending that Australian consumers reduce their red meat consumption and proposing a limit of less than three servings, or 350 grams, of lean, unprocessed beef, pork, lamb or veal per week.
Outlook
As Australians increasingly seek to reduce their meat intake, and the plant-based meat category continues to expand, an increasing number of consumers are projected to join the plant-based meat movement.
‘Producers in the Fruit and Vegetable Processing industry are set to benefit from this trend, with major player Simplot Australia already tapping into the market with its 100% NOT meat-free range. Food service outlets Mad Mex and Pie Face have been using these products since July 2019 and February 2020, respectively,’ said Ms Oo.
The Restaurants and Fast Food and Takeaway Food Services industries are likely to integrate more ‘fake meat’ alternatives into their menus, with these menu items commanding higher prices due to the level of R&D that goes into creating plant-based proteins. Revenue across these industries is expected to rise at an annualised 2.1% and 1.0% over the five years through 2025-26, respectively.
The expansion of plant-based meats is anticipated to constrain meat and meat product manufacturing activity over the next five years. The Meat Processing, Poultry Processing and Cured Meat and Smallgoods Manufacturing industries will likely struggle to retain consumer interest, with meat substitutes becoming increasingly sophisticated, and closely replicating the taste and texture of meat. However, Australia’s meat industries are forecast to benefit from continued growth in demand from export markets, driving revenue growth. In the Meat Processing industry, exports are expected to account for 71.6% of industry revenue in 2020-21.
‘The introduction of these plant-based protein products will likely be targeted at the growing flexitarian market, where an individual predominantly consumes plant foods and occasionally eats conventional meat products. The rising popularity of this trend represents a significant opportunity for food producers that can adapt,’ concluded Ms Oo.
IBISWorld reports used to develop this release:
- Supermarkets and Grocery Stores in Australia
- Fast Food and Takeaway Food Services in Australia
- Restaurants in Australia
- Fruit and Vegetable Processing in Australia
- Meat Processing in Australia
- Poultry Processing in Australia
- Cured Meat and Smallgoods Manufacturing in Australia
- Agribusiness in Australia
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647
Email: mediarelations@ibisworld.com
