Plant-based chicken or cellular beef?

The alternative meat market is poised to rise to $240bn over the next two decades as new technologies gain ground and consumers change their diets, says investment banking company Jefferies.

The great “protein shake-up” could give faux meat a 9% share of the estimated $2.7-trillion global meat market by 2040, analyst Simon Powell forecasts, from less than 1% now.

The estimated size of the plant-based meat market ranges from $10bn to $40bn, and perhaps as high as $140bn.

Plant protein, such as that produced by Beyond Meat, leads the alternative meat market, but lab-created “cellular” meat could eventually overtake it, Powell said. “The cellular-based alternative industry has the potential to grow fast off a small base and could quickly start mass producing real meat if it can reduce costs and industrialise the current lab-based approach.”

Rising estimates for the fauxmeat market are one way to justify the eye-popping valuations for its producers. Beyond Meat, for example, commands a valuation of $9.7bn, or 110 times its 2018 sales. Its closely held peer, Impossible Foods, is valued at $1.52bn, with revenue estimated at $110m in 2018, according to data compiled by PrivCo.

Investments in lab-created meat companies have trailed their plant-based peers as commercial products have yet to emerge. Private cell-based meat firms received $50m in new investments in 2018, according to data compiled by Good Food Institute, compared with more than $500m for plant-based food producers.

While taste, costs and ingredients will ultimately differentiate the products, both categories stand to disrupt the large global meat market, Powell said.

Other catalysts for alternative meat’s rise include a potential meat tax now being discussed in some countries and the pork crisis in China, he noted.

Existing products enjoy broad support from consumers, research by Bank of America shows. “There is strong … repeat purchase intent for plant-based proteins,” analysts led by Bryan Spillane wrote. “Established food companies will need to ramp product development and build brand authenticity to catch up to ‘Beyond’ and ‘Impossible’.”