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Growth of Plant-Based Meat Market in Australia: Innovations, Trends, and Future Outlook

Despite facing a downturn in investment and economic contributions, the plant-based meat market in Australia has experienced notable growth since pre-pandemic levels. This expansion is fueled by an increase in brands and a narrowing price gap with conventional proteins. Food Frontier CEO Simon Eassom and report author Klara Kalocsay provide insights into the dynamics behind this growth.

plant based meat

Closer to Cost Parity with Conventional Meat

Plant-based meat is inching closer to the cost of its conventional counterparts in Australia, driven by a proliferation of brands and significant growth in the foodservice sector. According to Food Frontier’s 2023 State of the Industry report, industry data and insights from Deloitte Access Economics reveal both the challenges and opportunities faced by the sector over the past few years.


Foodservice Boom Offsets Retail Slide

Since the onset of the pandemic, the plant-based meat industry in Australia has been propelled by its performance in the foodservice sector. In 2023, combined sales from foodservice and retail reached AU$272.5 million, marking a 47% increase from 2020. Per capita consumption also rose by 28% since 2020. However, while retail sales dipped by 1.1% annually, foodservice demand surged by 59%, now accounting for 45% of the sector’s sales, up from 17% in 2020. Quick-service restaurants (QSRs) are the primary drivers of this growth, contributing 80% of these sales.


“The foodservice sector has immense potential for growth, given Australians' cultural inclination to dine out. With plant-based meats becoming more popular, QSRs and other outlets have easily integrated non-meat alternatives into their menus,” explains Simon Eassom. He highlights the example of Hungry Jacks, which successfully introduced the ‘Rebel Whopper’ as a plant-based alternative to its meat offerings.


Economic Contribution Decline

Despite the market's positive performance, the economic contribution of the plant-based meat manufacturing sector has decreased by 9%, from AU$50.4 million in 2020 to AU$45.8 million last year. This reduction is attributed to factors such as reduced investment and grant funding, rising manufacturing and labour costs, and decreased consumer expenditure.


“The agricultural potential remains largely untapped due to insufficient infrastructure for processing domestic plant proteins. Expanding domestic production presents promising economic prospects for Australian farmers,” notes Klara Kalocsay.


Investment Trends and Brand Expansion

Globally, plant-based companies saw a 28% decline in VC investment in 2023, mirroring a larger drop in food tech funding. In Australia, plant-based meat makers have witnessed a 70% decrease in financing since 2020. However, the number of companies producing vegan meat analogues has increased from 10 in 2019 to 22 in 2023, resulting in an explosion of products on the market.


Eassom points out that despite the economic downturn, the industry has seen consolidation and rationalisation of SKUs, with mergers such as The Aussie Plant Based Co. “Manufacturers are seeing greater returns on collaboration, market expansion, mergers, and acquisitions, which bodes well for future investment,” he says.


Technological Innovations

The shift in consumer preference towards plant-based meat has led to technological innovations in product development. Newer formats such as strips, chunks, and whole cuts have gained popularity over traditional burgers and mince. Crumbed chicken, deli meats, ready meals, and snacking SKUs have expanded, indicating a preference for convenience.


Eassom emphasises that technological advancements in taste and texture are crucial. “Technologies that improve the quality and reduce the cost of plant-based products are addressing consumer barriers,” he says.


Closing the Price Gap

The price gap between plant-based and animal-derived meat is narrowing. While plant-based meat carried a 49% premium in 2020, it was just 33% more expensive last year. Domestically produced plant-based meats are universally cheaper than imported products, representing a 14.8% difference.


“Some manufacturers have absorbed price hikes to shield consumers and have improved supply chain efficiencies,” explains Eassom. He also notes the departure of expensive imported plant-based meats, which has further contributed to the price competitiveness of local products.

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