Current world protein consumption is 500 million tonnes. We know the population story of 2050. Protein consumption could double by 2050, if we have enough protein. What will the mix of proteins look like in 2050? What sector sees the most growth? Are we to assume the world ends in 2050; I never see anyone talking about what happens beyond 2050?
The feight for the middle of the plate has a long history. Anyone remember: “The Other Red Meat”? Before the 80’s, fish for dinner in middle America was as likely as an alien. The US meat industry thought the rest of the world would move toward the US per capita consumption of red meat and poultry. The reality is US protein consumption is moving toward more balance – closer to Mediterranean and Asian diets. The American and European diets have become more diverse, and that trend will continue. In most developed countries.
In most of the world’s population, diets have excess protein. We are consuming more protein than our bodies require. That is not a great scenario for organic growth in the current population. We may change the form of protein we consume, but it will have to be cost effective – AKA: cheap. One guarantee – diets are in a constant flux, aided by changes in current thinking as to what’s healthy, affordable, and socially acceptable (often as defined in social media).
US diets are moving away from animal proteins faster than the rest of the world is moving toward it. Population growth in the next 30 years will be centered in Africa and Asia. These diets, especially Africa, aren’t centered around animal protein. I understand protein consumption growth is not just a factor of population growth, but also the growth of the world’s “middle class”.
We are seeing India move toward poultry. Poultry in India works because it is an efficient converter of feed to protein, has low GHG production, a small footprint, and they have local grain and protein meals. It is likely some small-scale poultry production could grow in Africa where feed is available, but it is hampered by lack of supply chains on both sides of the bird. Animal proteins will battle the cultural issue in Africa and India where the incumbent is plant protein, and much of the population is vegetarian.
New alternatives to animal protein are seemingly being created daily. Each one diluting the market, leaving less room for the constituents. Rather than measure the impact of each alternative separately, look at the cumulative impact. Adding up the cumulative market share of the alternatives, it could easily reach ten percent of the protein market in the next 10 years. Today it is around 1%. More importantly, what is the mix as protein consumption grows by 60-100% in the next 30 years? Animal protein will continue to have the majority of the market leaning on cost, digestibility, and culture. Animal protein is not going away – I will do my part to support it… But, look at the trends. It will be a tough battle to defend its turf. The battleground will have a multitude of fronts. It is possible the animal share of the growth in protein consumption in the next 30 years is closer to 50%.
ASF and Craft Beer:
ASF allows meat alternatives an opportunity to gain a larger foothold. If the estimates of losses due to ASF are even close, prices for all animal proteins are headed higher. The issue also amplifies the risk of relying on one source of protein. Pork provides 60% of the Chinese protein – risky penetration. The risk is reduced with a more diverse protein menu. Inherently, forced by prices and availability someone will eat less pork than they would like over the next two years. Will they eat less in China, the US, the EU, Mexico, Canada, the UK (just in case they are not EU) or somewhere else? It really doesn’t matter; they may get a taste of something new that they enjoy and ASF was the cause. It could be chicken or beef, but it could be Beyond Meat, an Impossible Burger, something from Mosa Meat, or pea protein. The choices are unlimited. This is great news for the consumer - they want choices. We need the right protein to go with our Hefeweizen, IPA, or just a Bud. Seriously, proteins are starting to look like craft beer, each one diluting the market and creating havoc for the stalwarts. Meat producers may have something to learn from AB Inbev and Heineken. I say meat producers because companies like Tyson and JBS can diversify their protein offerings. The producer may look for alternatives as well. I’m not saying there won’t be demand for animal protein, but there may be better opportunities for investment in varied protein forms and diversification.
International Agribusiness Group, LLC.
33533 West Twelve Mile, Suite 145
Farmington Hills, MI 48331
Find us on the Web:
© Copyright 2020 International Agribusiness Group, LLC. All Rights Reserved.