The Meat Trader’s Journal #33

Plant-based meat innovations and Cultivated Meat Challenges Reshape Protein Landscape

This week, we explore significant developments in plant-based alternatives, cultivated meat production challenges, and strategic moves by industry leaders that are reshaping the protein market.

🧮Market Movers & Shakers Intel

European Pork Consumption Trends

Update: EU Pork Consumption Trends

As of August 2024, there have been some notable shifts in pork consumption across the European Union. Here’s a breakdown of the latest trends and insights:

Overall Consumption

Pork consumption in the EU has been on the decline, with the average per person now at 39.9 kg per year in 2023. This marks a significant 6.1% decrease from previous years.

Regional Differences

While overall consumption is down, certain countries remain heavy consumers of pork:

1. Denmark: Leading the way with 73.6 kg per person annually.

2. Spain: Close behind with 53.8 kg per person.

3. Poland: At 50.7 kg per person.

On the other hand, some countries have seen more pronounced drops:

1. Germany and Italy have kept their consumption relatively stable, with only minor decreases (-0.5% and -0.2%, respectively).

2. The Netherlands saw a sharp decrease, with consumption dropping from 43.9 kg to 32.1 kg per person.

What’s Driving These Changes?

Several factors are influencing these shifts in pork consumption:

1. Food Insecurity: Rising food insecurity is leading more people to cut back on meat, especially as 9.5% of EU consumers are unable to afford a meal containing meat protein every other day.

2. Inflation: Pork prices have risen sharply, with an average increase of 11.7% in 2023—higher than increases seen in other meats like poultry and beef.

3. Consumer Behavior: There’s a noticeable shift towards:

   • Ready-to-eat, healthy, and fresh food options.

   • Continuous snacking instead of traditional meals, particularly among younger people in Western Europe.

   • Flexitarianism, where about a third of consumers in 10 European countries mainly follow a vegetarian diet but occasionally eat meat.

Looking Ahead

The European Commission expects pork consumption to stabilize in 2024, even though it has been declining. Despite these challenges, pork consumption has been more resilient compared to beef, which saw an even steeper decline of 8% from 2019 to 2023.

While the overall trend shows a decline, the rate of decrease in pork consumption is slowing, with signs of stabilization on the horizon. Consumer habits, economic pressures, and dietary preferences will continue to influence the pork market in Europe.

📰3 relevant stories in our Industry

Plant-Based Sectors Seeks Growth Through Innovation

Plant-based meat alternatives focus on replicating animal fats to regain market momentum.

Key Points:

• Industry experts believe mimicking taste, texture, and aroma of real meat is crucial.

• Clean label demands driving reformulation efforts in plant-based products.

• Affordability remains a major barrier to widespread adoption.

Laura's POV: Traders should monitor advancements in plant-based fats closely, as this could significantly impact consumer preferences and market dynamics.

Cultivated Meat Industry Faces Significant Challenges

Lab-grown meat startups struggle with funding and production scale-up despite $1.6B in VC investments.

Key Points:

• Many cultivated meat companies forced to scale back or close due to financial difficulties.

• Producing large quantities at competitive prices remains a major hurdle.

• Regulatory approvals and public perception continue to be significant challenges.

Laura's POV: The cultivated meat sector's struggles highlight the need for traditional meat producers to innovate while maintaining their strong market position.

Weekly Cattle and Sheep Market Wrap

The National Young Lamb Indicator reaches its second-highest price this year.

Key Points:

• Heavy grainfed lambs reached $300/head at Wagga Wagga.

• Lamb slaughter remains low, trending towards a dip in throughput over the third quarter.

• The National Young Cattle Indicator lifted 14¢ to 357¢/kg liveweight.

Laura's POV: The strong performance of lamb prices and the uptick in cattle indicators suggest a robust demand for premium meats, potentially influencing trading strategies across the industry.

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🗺️Strategy Business Moves

👀 The Hedging Strategy: Navigating Uncertainty In the Evolving Meat Market

As a meat trader, you're facing an uncertain future. Plant-based alternatives are gaining traction, cultivated meat is on the horizon, and consumer preferences are shifting. How do you protect your business from potential market disruptions?

Ignoring these changes could leave you vulnerable to sudden market shifts. What if plant-based products suddenly capture a significant market share? What if cultivated meat becomes cost-competitive faster than expected?

Your entire business could be at risk.

Implement a hedging strategy to protect your business while capitalizing on new opportunities.

Here's how:

1. Diversify your product portfolio: Start by incorporating a selection of high-quality plant-based products alongside your traditional meat offerings. This allows you to capture a share of the growing alternative protein market while maintaining your core business.

2. Form strategic partnerships: Collaborate with food tech companies or research institutions working on cultivated meat. This gives you early access to emerging technologies and potential first-mover advantages.

3. Invest in premium, sustainable meat products: Focus on high-quality, sustainably sourced meats that command premium prices. This caters to consumers who are willing to pay more for ethically produced animal products.

4. Develop hybrid products: Create products that blend traditional meat with plant-based ingredients. This appeals to flexitarian consumers and helps you bridge the gap between conventional and alternative proteins.

5. Stay informed and adaptable: Continuously monitor market trends, consumer preferences, and technological advancements in the protein industry. Be prepared to adjust your strategy as the market evolves.

By implementing this hedging strategy, you'll be well-positioned to thrive in the changing meat market. You'll mitigate risks associated with potential disruptions while also capitalizing on new opportunities in the evolving protein landscape.

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Thank you for reading this week's insights!

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See you next week!

Warm regards, Laura.