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UK risks falling behind EU and China on making and selling meat substitutes

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·5-min read
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meat substitutes SAN RAFAEL, CALIFORNIA - FEBRUARY 14: In this photo illustration, a McDonald's McPlant Beyond Meat burger is displayed with french fries at a McDonald's restaurant on February 14, 2022 in San Rafael, California. Nearly three years after Burger King and Carl's Jr. rolled out meat-free burgers, McDonald's has debuted its McPlant burger made with a Beyond Meat vegetarian patty. For a limited time the burger is being offered at 600 McDonald's restaurants across the country. (Photo illustration by Justin Sullivan/Getty Images)
A new report has found that the UK risks falling behind the EU and China on making and selling meat substitutes. Photo: Justin Sullivan/Getty

As plant-based diets and the trend of eating less meat continue to grow in popularity in the UK, consumer appetite for alternatives to conventional meat, dairy and seafood is also on the rise.

But a new report has found that the UK risks falling behind the EU and China on making and selling meat substitutes.

The UK is one of the largest consumer markets for plant-based foods, valued at $1.5bn (£1.2bn) in 2020 having doubled since 2016, according to the report by the Social Market Foundation.

Alternative proteins — food products that derive their protein content from non-animal or non-traditional sources — are better for the environment as animal agriculture is responsible for at least 14.5% of global greenhouse gas emissions, according to the report.

However, diet has not been included in the UK government’s net zero strategy.

The report is calling on the government to adopt a policy position that expands consumer choice and the market for alternative proteins in order to prevent the UK falling behind international competitors, missing its net zero targets and to support opportunities for British businesses in the transition to greener diets.

Read more: How to save money at the supermarket with picky kids

Current policy for alternative proteins is underdeveloped in the UK — other counties are further ahead, with France, the Netherlands, Germany, Denmark and Finland amongst the European countries who have already set out protein strategies.

In recent months, Denmark has earmarked $168m of research & development (R&D) for plant-based foods and China has signalled a move towards cultivated meat in its latest five-year agricultural plan, the report found.

The report is calling on the government to task the Department for Business, Energy & Industrial Strategy (BEIS) with developing a UK alternative protein strategy with cross-departmental input within the next 12 months.

The volume of plant-based food sales increased by 67% between 2018-2020 in the UK, the second fastest growth in Europe, according to data from Nielsen, while retail sales of plant-based meat in western Europe grew by 19% to $2.6bn in 2021.

In the US, the value of the meat and dairy alternatives market doubled between 2016 and 2020, according to US Department of Agriculture research, the report said.

Quorn products, a brand owned by Monde Nissin Corporation, is seen for sale in a store in Manhattan, New York City, U.S., December 1, 2021. REUTERS/Andrew Kelly
Most meat substitute products for sale in the UK are domestically produced and the market includes established UK firms such as Quorn. Photo: Andrew Kelly/Reuters

Most meat substitute products for sale in the UK are domestically produced and the market includes established UK firms such as Marlow Foods and Quorn, mid-sized brands like Moving Mountains and Meatless Farm, and supermarket own-brand ranges such as Sainsbury’s (SBRY.L) Plant Pioneers.

"Traditional" meat companies are also diversifying and investing in alternatives. UK-based red meat producer ABP recently launched a plant-based subsidiary and a number of brands.

Last year British alternative protein businesses attracted more than £150m of capital investment.

However, the report highlighted the need for "clear policy direction" from the UK in order to incentivise private investment and persuade international brands to produce in Britain, whilst supporting British businesses to export their products and technologies and positively impacting green job creation and economic growth.

Read more: What is the cost of living and how you can manage yours

The report also calls for government funding for R&D and innovation as "the pace is quickening in the international race to meet this demand for innovation" and the UK risks losing out to other countries funding protein innovation clusters, such as Netherlands and Canada, and those directly supporting alternative protein start-ups, such as Israel.

"A strong partnership between research funders, universities, entrepreneurs, investors and government is required if the UK is to reduce fragmentation in the R&D ecosystem and maximise the likelihood of growing leading AP companies and the domestic market," said the report.

The report calls on the government to "commission an innovation needs assessment for alternative proteins to better understand the scale of R&D required and where money could be spent most effectively".

SAN RAFAEL, CALIFORNIA - FEBRUARY 14: In this photo illustration, packaging for the McDonald's McPlant Beyond Meat burger is displayed with French Fries at a McDonald's restaurant on February 14, 2022 in San Rafael, California. Nearly three years after Burger King and Carl's Jr. rolled out meat-free burgers, McDonald's has debuted its McPlant burger made with a Beyond Meat vegetarian patty. For a limited time the burger is being offered at 600 McDonald's restaurants across the country. (Photo illustration by Justin Sullivan/Getty Images)
Beyond Meat’s deal to supply patties for McDonald’s McPlant burger illustrates the potential that global food service brands have, the report found. Photo: Justin Sullivan/Getty

Otherwise, the UK risks missing out on global export opportunities. "Beyond Meat’s (BYND) deal to supply patties for McDonald’s McPlant burger illustrates the potential that global food service brands have to carry alternative proteins to new markets at a huge scale," the report found.

Cost is also an issue as some current production processes — particularly those using cellular technologies — are either commercially uncompetitive or unviable.

Some producers are making a premium from ethical consumers who are willing and able to pay extra for meat-free alternatives with some products retailing at almost triple the price of the animal-based equivalent.

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But there are signs that more products are achieving price parity. Tesco’s (TSCO.L) plant-based beef burgers now retail at 13% cheaper than the meat equivalent while Quorn's frozen chicken pieces are 26.2% cheaper, according to the report.

Competition amongst own-label supermarket ranges is likely to be an important step towards price parity, according to the report, so the Social Market Foundation is calling on supermarkets to publicly disclose what proportion of protein sales come from plant-based products. Supermarkets should strive for this to reach 30% by 2030, the report said.

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