Pulses face off with soy in the alternatives market

Meat replacement demand rising but processors need to adopt more pulse crops in place of wheat gluten and soybean

Global demand for plant-based alternative meat products is expected to skyrocket over the next 15 years, according to a recent report prepared by consulting company Ernst and Young.

The report, commissioned by Protein Industries Canada, said the global market for plant-based meat alternatives, such as veggie burgers, plant-based sausages and alternative-meat nuggets, will be valued at between $107 billion and $180 billion annually by 2035.

The current market for plant-based meat alternatives is estimated at $15 to $20 billion annually.

In North America alone, the alternative meat industry is expected to grow by roughly 14 percent per year over each of the next 15 years.

Bill Greuel, chief executive officer of Protein Industries Canada, said Canada is hoping to capture a significant chunk of that growth.

“(This is) a great news story for us here in Western Canada because the bulk of the growth in demand out to 2035 is going to come from peas, wheat, canola, oats, lentils and other pulses that we grow at scale here in Western Canada,” Greuel said.

For the past three years, Protein Industries Canada has been working to build domestic processing capacity and expand markets for Canadian-made plant protein ingredients.

To gain a clearer understanding of the opportunities that exist, PIC commissioned Ernst and Young to prepare a report on alternative meat markets.

“There was a lot of understanding that this was going to be a big market but no one had ever really dug into a couple of important questions,” Greuel explained.

“One question is the correlation between the value of plant-based foods and the volume of crop needed to supply that demand. The second was: what is the crop mix that’s going to be needed to meet that future demand?”

The Ernst and Young report estimates that by 2035, between 41 million and 66 million tonnes of grains, pulses and oilseeds will need to be processed globally and converted into value-added protein ingredients to meet growing demand in the alternative meat sector.

Right now, the bulk of the protein that used in alternative meats comes from two sources — soy and wheat.

“Today, if you look at the alternative meat market, almost 93 percent of the source crop that goes into alternative meat is soy and the rest of it is wheat gluten,” said Greuel.

“But there’s tonnes of upside potential for other crops that we grow at scale here in Western Canada because food manufacturers are looking for choice, they’re looking for functionality and they’re looking to diversify their supplies.”

“And consumers — at least some of them — may have concerns about allergenicity with soy so there’s lots of opportunity for other crops to come in and fill some of that demand….”

PIC thinks Canada has the potential to capture 10 percent of the global market for plant-based alternative meat ingredients — a target that’s viewed as ambitious but achievable.

Conducting research into plant protein functionality will be key to reaching that goal, as will expanding domestic processing capacity.

Greuel conceded that in 15 years, soy will continue to be the dominant source of protein used by the alternative meat industry.

That is related to protein concentration.

The protein content of soy is typically in the neighbourhood of 40 percent. By comparison, field peas offer protein levels in the range of 20 to 25 percent.

Other important considerations include the amount of extractable protein in source crops and the nutritional quality of the extracted protein relative to meat-based proteins.

According to Greuel, alternative meat manufacturers are accustomed to working with soy. They’re familiar with its properties and global production of soy is huge, meaning the risk associated with origination and sourcing is relatively low.

Crops like field peas, canola, oats and lentils have the potential to gain market share in the alternative meat market, but much work needs be done to convince food manufacturers that non-soy ingredients will be competitive in terms of price, taste, texture, functionality and availability.

“Food companies have been using (soy) for a long time so they understand how to use soy protein in their recipes and their formulations, whereas pea protein is fairly new,” Greuel said.

“We’ve got a lot of work to do to make sure that … food manufacturers … understand pea protein and how to use it.”

The use of non-soy ingredients depends largely on three factors — taste, texture and price, Greuel added.

PIC and its member partners are hoping to make improvements in all of those areas through investments in research and processing technology.

On price, PIC believes the expansion of domestic processing and fractionation capacity will make protein from non-soy crops a more competitive alternative, leading to further investment and greater processing efficiencies.

On taste and texture, more research is needed so that protein from peas and other Canadian crops can be presented as viable substitutes that are functional, nutritious and appealing to consumers.

“Consumers care about a lot of things but when you really drive down into it, it’s really about the taste of a food product, the texture and mouth feel, and the price,” Greuel said.

“If we can’t drive pea protein top price parity with soy, or close to it… we won’t have as wide adoption as we’d like to achieve.”

“Scaling up ingredient manufacturing in Western Canada is really critical and key.”

Ultimately, the report and the discussions it generates will provide input for an overall strategy allowing Canada to solidify its position in the market for plant protein ingredients.

“We’ll use the report as a backdrop for a sector-wide strategy around the long-term development of Canada’s plant based food, feed and ingredients sector,” Greuel said.

“We’re hoping that (will help) Canada to achieve … 10 percent of the global market. It’s a significant chunk but we think we can do that in Canada based on the feedstocks that we have and all the other things that we bring.”

Additional comments from Greuel on the Ernst and Young report can be viewed online here.

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