Producers ride plant protein market boom
The plant-based protein market has been among the fastest growing segments of the food industry globally. Demand for products such as meat-free burgers and dairy alternatives has surged in the past few years, attracting food majors like Nestle, Unilever, and Cargill.
The trend towards healthier eating has been just as evident in Australia. A survey by Roy Morgan last year found 2.5 million Australians, or 12 per cent of the population, were either entirely or mostly vegetarian. A separate survey found a third of Australians are actively limiting their meat intake.
In 2020, Australian supermarket chains reported over 50 per cent growth in sales of plant-based protein products, as production and investment in the sector nearly doubled.
In a recent report, Deloitte Access Economics estimates Australia's plant-based meat segment would grow to $3 billion by 2030. Separate research projects the country's plant-based protein sector to be valued at $6 billion by 2030, up from $185 million last year.
That growth trajectory has been underlined in a major deal this month, with US agribusiness major Bunge agreeing to invest $45.7 million in local producer Australian Plant Proteins (APP).
The Australian firm is a leading producer of protein isolate powders that are extracted from pulses such as faba beans, yellow peas, mung beans, chickpeas and lentils. It currently operates a 2,500-tonne processing facility in Horsham, Victoria.
"Securing investment with a major multinational such as Bunge ... is testament to the value and ongoing growth in demand for quality, plant-based protein options," says Brendan McKeegan, a co-founder and director at APP.
Under the deal, Bunge will get a minority stake in APP as well as exclusive distribution rights in the Americas. In turn, the Aussie producer will more than double processing capacity to 6,000 tonnes by March 2022 and be able to easily direct its products to food and beverage manufacturers in the US, Japan and Europe.
Currently, three fourths of its produce is sold domestically. But given the strong overseas demand and potential for using its protein powders in a wide range of foods such as meat/milk alternatives, baked goods, protein bars and supplements, APP expects to reverse the proportion in coming years, with just a quarter of its production going to the local market.
The Deloitte report highlighted the scope for high-value plant protein exports, leveraging Australia's reputation as a source of high-quality food and agriculture. The opportunity has sharpened in a world more conscious of sudden food insecurity and the fragility of global supply chains amidst the pandemic.
It's a market potential other companies are also keen on developing. Commodities giant GrainCorp, for one, believes it has a natural advantage in the burgeoning plant-based food industry.
The company is planning to supply the plant protein market by capitalising on its status as a trader and downstream processor of grain and oilseeds, particularly canola.
It's a win-win situation for local growers, Mr McKeegan says.
"We're giving the farmers an opportunity to redirect some of their produce to a local value-added chain"
"What it gives the farmers is access to a direct market that's not subject to the cycles of the commodity market."
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