Veganism is on the rise. The phenomenon has spawned a burgeoning industry in alternatives to animal-derived products that’s already worth billions of dollars. It includes nondairy milk and cheese, imitation beef, chicken, fish and pork, and leather made from pineapple leaves or apple peel. A sizzling initial public offering by meat substitute maker Beyond Meat Inc. underscored optimism about a new “vegan economy.” The promise is rooted not just in consumers who choose to cut out meat and dairy for ethical reasons but also from the growing ranks of non-vegans concerned about their health — and that of the planet.

The Situation

Many meateaters are cutting back on burgers, steaks and sausages, or say they’re trying. A U.S. survey found 31% of respondents labeled themselves “flexitarians” — people who regularly substitute other foods for meat. In other polls, one-third of Britons said they had scaled back or stopped meat purchases, while half of Australians reported eating less red meat. The change is happening even as global meat consumption rises, including in the U.S. and developing countries such as China with traditionally plant-heavy diets. It’s especially marked among younger people and has led to soaring demand for a new category of products with taste and texture similar to meat, milk and cheese. There’s the Beyond Burger and the Impossible Burger, vegan parmesan or ricotta, and milk alternatives derived from nuts, oats, rice and soy, to name a few. The fervor for Impossible Burgers (now on Burger King menus) and the oat milk drink Oatly led to shortages of both across the U.S. in 2019. While early funders included Microsoft Corp. co-founder Bill Gates, regular investors are now getting a taste: Beyond Meat’s shares surged 600% in the three months after its IPO in May 2019. Barclays Plc expects the meat-alternative industry to grow to $140 billion in the next decade, or 10% of the global meat market. More U.S. consumers are also shunning leather footwear and car interiors. 

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The Background

In 1944, an Englishman named Donald Watson coined a term for vegetarians who shun dairy when he co-founded the Vegan Society. While the number of vegans has jumped in the past few years, they still represent a small minority; some 6% of Americans described themselves as vegan in 2017, up from 1% just three years earlier, according to research firm GlobalData. One survey found that concern for animal welfare was a key driver for reducing meat intake among Britons, while personal health ranks among the most often cited reasons in many countries. Numerous studies point to the benefits of a flexitarian or plant-based diet, including reduced risk of heart disease and some cancers. Concern for the planet is an increasingly strong motivation. Avoiding meat and dairy is one of the most effective ways to reduce one’s environmental impact, according to the author of a 2018 study in Science magazine. That’s because livestock farming produces an estimated 14.5% of the world’s greenhouse gas emissions that stoke global warming. Rearing farm animals is also a massive contributor to deforestation, which curtails the Earth’s ability to absorb carbon dioxide. 

The Argument

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Nutritionists question the health credentials of some processed meat alternatives, noting their high sodium and calorie counts. The environmental group Friends of the Earth has warned that genetically engineered ingredients — such as the iron-rich molecule heme that makes Impossible Burgers taste meaty — require more rigorous testing to determine their safety. There’s also concern that much of the industry’s innovation is coming from Silicon Valley startups backed by venture capitalists whose focus on maximizing consumption might override public safety worries. Bullish signs for the future of the vegan economy include the huge investments in plant-based foods by traditional meat and dairy companies. Surveys highlight a key breakthrough since the days when bland-sounding vegan fare was consigned to natural-food stores: Half the consumers in one U.S. survey said the main reason they choose plant-based foods is the taste. Advocates for meat replacement argue that like it or not, humans will have to radically change their diets to avert climate change. They cite research such as a paper in the journal Nature estimating that meat consumption in Western nations must fall by 90% to keep global temperatures under control. They note that the pressure on food systems is exacerbated by forecasts that there will be 2 billion more mouths to feed within three decades.

To contact the authors of this QuickTake: Lydia Mulvany in Chicago at lmulvany2@bloomberg.netDeena Shanker in New York at dshanker@bloomberg.net

To contact the editor responsible for this QuickTake: Grant Clark at gclark@bloomberg.net, Anne Riley Moffat

First published Sept. 24, 2019

©2019 Bloomberg L.P.

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