Across fast-growing Southeast Asia, Singapore’s push to build itself as a global hub for alternative proteins might have received the most attention, but over the past year, the sector has started to see burgeoning growth in countries like Thailand, Indonesia and the Philippines, exciting market observers.
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Local start-ups have managed to differentiate themselves from competitors by innovating with novel ingredients, and gaining a better understanding of the markets they operate in. This has set them apart from their Western counterparts, which have so far struggled to revive flagging demand and interest among investors and consumers despite initial bullish predictions about the sector’s growth, said regional analysts and venture capitalists keenly watching new trends and developments in the region.
In stark contrast to the dour mood in the United States, where the plant-based meat sector has been plagued by reports of layoffs and stagnant sales, observers tell Eco-Business that they are optimistic about the market in Southeast Asia and wider Asia.
Start-ups and firms have been driving acceptance and growth of their products by focusing more on health, and not just sustainability, which have contributed to consumers being much more willing to try them out, they said.
“There are plenty of opportunities for Asian start-ups and brands,” said Michal Klar, founding partner at Better Bite Ventures, a food technology venture capital firm focused on Asia Pacific opportunities. “Local startups in Asia can be more nimble, offer localised and often customised products, and typically have a price advantage.”
Mirte Gosker, managing director at non-profit Good Food Institute’s Asia Pacific office in Singapore, said: “Asia has a critical role to play in resolving the plant-based meat sector’s current challenges and building a future-proof global food system.”
Under-utilised crops
A widening range of Southeast Asian-flavoured products has been appearing on the market and on supermarket shelves. These include offerings like meatless rendang (which is the Bahasa Indonesia word for a dish of meat slow cooked and braised with spices) by Jakarta-based start-up Green Rebel Foods, vegan bagoong alamang, a type of shrimp paste commonly used in local cooking sold by Philippine start-up The Good Choices, as well as minced jackfruit meat meant as a substitute for any minced meat dish – a flagship product of Singapore’s Karana.
What is interesting is that these start-ups are also looking at using ingredients vastly different from what global fake-meat pioneers like Beyond Meat and Impossible Foods have focused on, which are mainly pea protein and soy, said Gosker. Instead, they are investing in innovation and securing mushrooms, jackfruit, mung beans and konjac as protein sources.
A farmer harvests mung beans in Cambodia’s northern province. After harvest season, farmers like her move from the lowlands to the highlands to get better value for their crops. Photo: Chhor Sokunthea / World Bank
Gosker shared that leveraging on Asia’s vast range of underutilised crops including familiar staples like mung beans as raw materials for plant-based meat will open up new market opportunities for local farmers. “It would also shorten the distance from supplier to end product, as well as reduce the risk of ingredient shortages since the sources are diversified,” he said.
The challenge will be ensuring access to reliable supplies of these goods. Mung bean or mushroom supplies in Asia are largely still reliant on smallholder farmers, many of whom are struggling due to underinvestment in the agricultural sector. In the United States and elsewhere, companies like Impossible Foods usually source their ingredients from big trading companies.
“Asia is undergoing an agricultural transformation characterised by labour transition, sector upgrading and climate change,” said Gosker. “Building novel supply chains is a long-term investment and effort. It will require collaboration and more alignment across the value chain.”
Globally, the plant-based meat industry has seen rapid growth in global sales from 2016 to 2021. According to Euromonitor statistics, sales reached US$6.1 billion in 2022, although in the United States, these sales are only a tiny fraction of the nearly US$1 trillion meat market. Last year, as money dried up and consumer demand slowed, the sector saw a sudden marked shift. Sales of refrigerated plant-based meat fell by 11.6 per cent, surprising many.
Catherine Tubb, director of research at US-based investment firm Synthesis Capital said that product offerings in the West have not been able to satisfy expectations so that once-lofty goals to achieve a breakthrough for the sector can be achieved. “Current plant-based products are mostly early versions of what future alternative protein products could look like,” she said.
Innovation key to becoming mainstream
A key driver of the plant-based meat sector has been its potential climate benefits. Meat production is a major producer of greenhouse gas emissions, and studies show that a single serving of a plant-based meat burger can produce 91 per cent less emissions and consume 99 per cent less water than an equivalent beef product. There is also evidence that the same holds true for other plant-based alternatives.
This is a particular concern in Asia, where meat consumption has grown dramatically as countries across the continent have seen massive economic growth over the past few decades. If it can reduce the rise in meat consumption, observers say there is a real potential for plant-based meat to reduce Asia’s greenhouse gas emissions.
For the sector to grow, creating new products that not only better mimic meat but also adapt to their common uses in regional cuisine will also be essential to making plant-based meat more mainstream.
Another challenge is cost. Many Asian markets are price-sensitive, and once the novelty of trying a new product wears off, consumers may not be willing to pay more for a plant-based product if it costs more than meat. This will be a bigger problem if the sector wants to expand away from its high-income consumer niche.
“If taste and cost are equal, more than half of consumers in major markets like China, India, Vietnam and Thailand want their meat to come from plants instead of animals,” said Gosker.
Innovation and effective supply chains can reduce costs, but the government also has a role to play. If Asian countries really want to support alternative proteins, perhaps they should rethink how we define the environmental impacts of meat, suggested Tubb.
“Does the price of meat actually reflect its true cost?” asks Tubb. “There are so many subsidies and externalities that are simply not currently reflected in the price to the consumer, and this will be an interesting dynamic to watch over the coming years, as financial incentives such as carbon taxes inevitably come into play.”
