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The War on Meat – How Low-Meat and No-Meat Diets are Impacting Consumer Markets

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August 16th, 2011

Today, meat-free or meat-reduced diets, once the choice of a very small minority of consumers, are more commonplace. This new Strategy Briefing documents how the more complex contemporary consumer relationship to meat embraces a list of consumer types from “flexitarians” to vegetarians. These consumers include the health-conscious and green-aware, those who support animal welfare – often boosted by celebrity-led campaigns, religious consumers and thrifty consumers. Today, those excluding or cutting down on meat in North America and Western Europe in particular can choose from an array of table-ready appetising meat substitutes in shops and restaurants including private label offerings. This report also zooms in on the following key markets: China, France, Germany, India, Japan, the UK and the USA.

Factors affecting meat consumption

  • Over the last few years, a growing number of consumers have either adopted a meat-free diet by becoming vegetarian or vegan, or have significantly reduced their meat intake. The latter are sometimes known as “flexitarians”, meat-reducers or meat-avoiders;
  • Meat is traditionally shunned by certain religious groups (notably Hindus), but the modern vegetarian movement grew up after World War II as a result of world hunger issues and animal welfare concerns;
  • More recently, people have begun reducing their red meat intake on the grounds of health, safety and sustainability/environmental issues, as well as a need to reduce costs since the start of the global economic recession;
  • The reduction in meat consumption is offering unprecedented opportunities for manufacturers of a variety of meat substitutes, vegetarian packaged foods, nuts and pulses, vitamins and dietary supplements and other meat-free products;
  • Up-to-date figures relating to the number of non meat-eaters are scant, with estimates and definitions of vegetarianism varying from study to study. The generally consensus, however, is that that the number of vegetarians and meat-reducers worldwide is steadily rising;
  • India has the largest non meat-eating community in the world. It is estimated that 31% of India’s largely Hindu population are lacto-vegetarian (consuming milk and honey but no other animal-derived products) while a further 9% consume eggs but no meat.
  • Vegetarianism also appears to be fairly common in Taiwan, where 10% of the population does not eat meat; as well as Brazil, Germany, Switzerland and Italy, Israel and the UK;
  • By contrast, vegetarianism is still negligible in China and Japan, two of the world’s biggest consumer markets. Vegetarianism has been practised for centuries by devout Buddhists in these countries, but is rarely practiced by those who adhere to Buddhism today;
  • In China, most consumers could not afford meat in the past and consumption has grown massively as the nation has become richer. However, a nascent vegetarian movement is emerging in China’s cities as the urban middle classes are influenced by Western habits;
  • In the USA, vegetarianism has grown strongly over the last four decades. Back in 1971, only 1% of US citizens described themselves as vegetarians, but in 2009 a Harris Interactive study revealed that 3.4% of consumers were vegetarian and around 0.8% were vegan;
  • Recent years have seen improvements in labelling regulations for vegetarian foods, which has made it easier for non meat-eaters to identify foods compatible with their diets. In the EU, for example, a vegetarian and vegan labelling amendment was approved in June 2010;
  • India has a system of marking edible products made from only vegetarian ingredients with a green spot in a green square. A mark of a brown spot in a brown square conveys that some animal-based ingredients were used;
  • Celebrity-led campaigns – often run in conjunction with NGOs such as PETA (People for the Ethical Treatment of Animals) – have been a key factor in encouraging consumers to switch to a low meat or meat-free diet. These include the global Meatless Mondays movement;
  • In the UK, celebrity chefs such as Jamie Oliver and Hugh Fearnley-Whittingstall wield significant power with regard to changing consumers’ eating habits, for example by raising consumer awareness of animal welfare issues;
  • Animal welfare is usually high on the agenda for vegetarians, and also for many non-vegetarians who will only eat free-range meat. Ethical consumers may either be opposed to the act of killing in general, or to the process of factory farming and industrialised animal slaughter;
  • As a result of pressure from consumers, animal rights groups and celebrities, retailers have been forced to orient their supply chains towards more animal-friendly sourcing;
  • Religious influences play a large part in meat consumption. While Hindus avoid meat altogether, Muslim and Jewish consumers do not eat pork meat. Most Muslims will only eat chicken or lamb slaughtered by the Halal method, and Jewish people seek Kosher products;
  • Lately the market for red meat has been hampered by adverse publicity surrounding its high content of saturated fat, a major cause of cardiovascular disease; and its association with increased risk of cancers of the esophagus, liver, colon and lungs;
  • Lower meat consumption is being supported by government-led public initiatives, both on a national and local level. The meat industry has responded by stressing the importance of a high protein diet and the beneficial effects of meat on brain function;
  • Many believe that the production of animal products for mass consumption is environmentally unsustainable. A United Nations (UN) report claimed that such methods contribute to air and water pollution, land degradation, climate change and loss of biodiversity;
  • The fish market has also been affected by sustainability issues, such as depleting fish stocks, overfishing in the EU, the Gulf of Mexico oil spill and Japan’s nuclear disaster. These have prompted a number of pescetarians and meat-eaters to adopt a purely vegetarian diet;
  • Partly linked to issues of sustainability and health is that of food safety. After a series of health scares in recent years, including H5N1 (“avian flu”), H1N1 (“swine flu”) and various e.coli and salmonella outbreaks, consumers are increasingly wary of eating meat (and vegetables) that may be contaminated;
  • Some experts are also concerned that the common practice of raising beef cattle with the use of hormone growth promotants (HGPs) may be linked to incidents of early onset puberty in young children, as well as to the development of certain types of cancer;
  • With meat and fish being relatively expensive food sources, consumption is very much linked to income levels. Therefore, while demand in developing markets is rising as incomes grow, the recession and rising food prices have impacted consumption in industrialised markets;
  • In response to growing demand, supermarkets have increased the amount of non meat-based items they stock and many have introduced their own private label products; while foodservice operators have introduced more meat-free options;
  • In order to widen the appeal of non-meat products beyond the core vegetarian and vegan consumer base, retailers have begun to place them together with other ready meals rather than in a niche “vegetarian” section, and to use the term “meat-free” rather than vegetarian.

Consumer market trends

  • An analysis of volume trends of fresh foods in Euromonitor International’s database shows that meat was one of the worst performers over the 2005-2010 period. Sales of meat grew by less than 14% over the six year period, ahead only of vegetables, at just under 11%;
  • Fish and seafood fared slightly better than meat, with period volume growth of just under 16%. It has benefited from its healthier image, being rich in omega-3 fatty acids, and this has helped it withstand high prices and environmental issues facing the fish industry;
  • Far more dynamic were pulses, which form an integral part of the vegetarian diet but are also becoming increasingly common among meat eaters due to their health properties. Nuts and fruits also performed relatively well, with respective volume growth of 19% and 18%;
  • With busier and more fragmented lifestyles, over the long term consumers in developed markets have been increasingly choosing processed foods such as ready meals and snacks over fresh foods which require a large amount of preparation;
  • Nevertheless, fresh foods have been boosted since the start of the recession by factors such as the need to cut costs, trends towards cocooning, the celebrity chef phenomenon and a greater awareness of the health benefits of non-processed food;
  • Healthy eating is becoming more important for many and is encouraged by governments who are keen to improve the nation’s health. This includes reducing sodium intake, reducing consumption of saturated fats and sugars and increasing intake of fruit, vegetables and pulses;
  • Pulses contribute heavily to the diet of millions, particularly in developing countries where meat is expensive. Moreoever, for meat reducers or vegetarians, nuts and pulses form a very important part of the diet as they are a source of protein and energy, as well as essential vitamins and minerals;
  • Within the meat sector there was a prominent trend in most markets away from red meat and towards leaner meats such as poultry over the review period. Consumer concerns with red meat and its reported links to cancer and heart disease led many to trade in beef for chicken and turkey;
  • The BRIC markets experienced particularly strong growth in meat consumption over the 2005-2010 period, driven by increased prosperity and rising populations. However, the market for fresh foods in these countries continues to be hindered by inadequate cold storage facilities;
  • Sales of fruit and vegetables were boosted by the “5 a Day” worldwide programme, launched in 1991 in the USA. Its goal is to improve people’s health by having a more balanced diet and particularly encouraging the consumption of five portions of fruit and vegetables per day;
  • In parts of North America and Western Europe – especially the USA and UK – the market for meat substitutes such as soy-based meat analogues has boomed over the past decade, in line with the move away from meat-centred diets. However, elsewhere these are still relatively undeveloped;
  • Non meat-based meals are nevertheless still commonly consumed in developing markets, with tofu widely used in dishes throughout Asia, and local specialities such as bean-based congees remaining popular in China;
  • According to Euromonitor International’s Health and Wellness date, the strongest growth in meat substitutes occurred in the ready meals segment, which high profile manufacturers such as Kellogg (via its Morningstar Farm, Kashi and Gardenburger subsidiaries) and the UK’s Quorn Foods are developing strongly;
  • Manufacturers are also stepping up their promotional efforts to raise awareness of the quality of meat substitutes. For example, in the USA, Garden Protein International joined with the Meatless Monday organisation to convince meat-lovers to try a “flexitarian” diet in summer 2011;
  • The market for vegetarian foods, which goes beyond meat substitutes to encompass a wide range of meat-free dishes, such as macaroni cheese, vegetable curries and tofu-based dishes, has grown more strongly in many countries;
  • A significant consequence of the declining importance of meat in Western diets is the rising demand for vitamins and dietary supplements, as consumers look to compensate for nutrients they may otherwise have obtained from meat or fish;
  • Nutrients typically found in animal and fish products that are sometimes lacking in a vegetarian diet include iron and zinc, calcium, vitamin D, vitamin B12, protein and fish oils. These are often purchased as dietary supplements by vegetarians, vegans and meat-reducers.

Outlook

  • Euromonitor International predicts that a gradually growing population of vegetarians, semi-vegetarians, meat-reducers and “vegivores” is set to consume more meat-free foods than ever before over the forecast period, and become increasingly adventurous in their tastes;
  • With vegetables touted as being “the new meat” and “veganomics” being one of the key emerging trends of 2010 while most of the population remains staunchly carnivorous, the vegetable divide is expected to widen over the forecast period;
  • Overall demand for meat is forecast to continue to rise steadily, fuelled mainly by growth from the poultry sector. Much of the demand for fresh meat will stem from emerging markets such as China and Brazil, where meat is becoming a staple rather than a luxury;
  • Fresh fish/seafood is forecast to perform slightly better than meat as a whole, benefiting from its healthier image, as well as improvements to cold chain facilities in emerging markets. However, the focus will be on purchasing local, seasonal fish and more plentiful varieties;
  • Governments’ healthy eating campaigns, reduced meat consumption and industry’s marketing efforts will underpin increased consumption of fresh fruits, vegetables and nuts over the forecast period, with a focus on locally-grown produce, “super foods” and fair trade items;
  • The rising number of consumers looking to consume less meat on ethical or health grounds will offer an opportunity for manufacturers of vegetarian ready meals and meat alternatives to broaden their appeal to all consumers;
  • In the longer term, one of the key trends of the future will be the development of artificially produced (or in vitro) meat (animal flesh products that have never been part of a complete, living animal, but are grown in a laboratory) as intensive factory farming methods are unable to meet future demand. These products will bridge the gap between farmed meat and meat substitutes;
  • On a global level, according to Euromonitor International’s Health and Wellness database, sales of meat alternatives are predicted to increase by 15% in value from 2010-2015, but there is additional massive potential for non meat-based foods of all types;
  • Competition among vegetarian food manufacturers will intensify over the forecast period as meat free foods enter the mainstream. The most successful brands will be those that are tasty, convenient, offer health benefits, are free of animal products and are environmentally-friendly;
  • Meat substitutes are currently largely limited to Western markets. However, while the Chinese seem set on increasing their meat consumption, other emerging markets such as Malaysia and India may provide significant growth opportunities for vegetarian packaged food manufacturers.
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Euromonitor Research