Thriving plant-based meat trade threatened by inflation

10,000 tons per year. These are the quantities of vegetable meat that will come out of Happyvore’s new production facility from 2023. It will be the largest in France, according to this startup that was founded just three years ago (initially under the name The new farmers ) by two Frenchmen, Guillaume Dubois and Cédric Meston. Located in Cevilly, in Le Loiret, on a 19,000 square meter derelict agri-food site, it should enable the company to increase its production capacity, innovate more and increase the distribution of its products in France

How Happyvore wants to become a heavyweight in vegetable steaks and sausages

An announcement that the boom in the market for imitation meat , not only in France, but all over the world. In Paris, the advertisements of the many companies trying to force themselves on the French market are thriving in the corridors of the metro. From Leclerc to Metro, via Carrefour and Casino, most of the major French distributors partner with the producers of these plant-based substitutes, which are increasingly resembling meat in taste and texture, in order to offer them on their shelves. Horeca follows, with more and more chains with ‘simulated meat products’ in their menus.

Investors attracted by an exuberant market

This effervescence is fueled by more than tempting consumer prospects. In France, driven by consumer health and environmental concerns, the market for plant-based alternatives to animal products as a whole (including drinks, desserts and caterers) grew by 8.7% in supermarkets and supermarkets in 2020 to EUR 356 million , calculate the experts at Xerfi Precepta, quoted by LSA. And theThe ‘simulated meat’ market, which represents the largest category in the ‘catering’ segment, recorded a 16% increase over a year between November 2020 and November 2021, according to AFP. At a global level, theBarclays’ bank estimates that plant-based substitutes will account for 10% of the meat market by 2030, up from 1% today, or $140 billion.

This outlook is attracting investors, who flock to French and European startups. The latter compete with the leader in France, Herta, which has 54% of the market vegetable caterer † To finance its large factory, Happyvore has just raised 35 million euros from the company Artal, advised by the investment fund Invus, as well as from Bpifrance, the co-founder of Sushi Shop, Adrien de Schompré, and Philippe Canter. , the former director of Innocent France.

In April, French startup Umiami announced the closing of a €26.6 million round led by Astanor Ventures. In particular, it should allow the opening of a factory in France of 15,000 square meters before the end of 2023. That same month, Barcelona-based Heura collected more than 4 million euros in 12 hours on the Crowdcube participation platform, for a new research and development lab. And in January, La Vie, another young French shooter, had raised 25 million euros to expand the marketing of its vegetable bacon and bacon. According to PitchBook, $2.1 billion was invested worldwide in plant-based meats in 2020.

The challenges of taste and price

For some time now, a multitude of challenges has partly clouded the projections, to the point that according to Xerfi Precepta, in France, the market, which should peak at 400 million euros in 2022, could then fall to 394 million euros. 2025. The biggest challenge for these manufacturers, whose main competitor remains animal meat production, is taste, which still needs to be improved. The second is to achieve this goal while respecting the health and ecological promises of these products: without too much sugar, salt, animal fats, GMOs, ultra-processed ingredients.

A report published in April by the panel of independent experts IPES-Food just pointed the finger at the industrial and ultra-processed nature of imitation meats, while also highlighting the risk that industry start-ups, often bought up by meat giants – such as Unilever, owner of The Vegetarian Butcher – strengthen their dominance of food systems Not to mention the tough opposition of animal meat producers, who are ramping up advertising campaigns and lobbying against the vegetable meat whose name they dispute and even try to ban.

For several months now, the challenge of inflation has been added to this. Due to the cost of raw materials and industrial processes, producers of plant-based substitutes struggle to lower their prices, which are much higher than those of low- or middle-class meat. Especially since prices inevitably increasingly drive consumption. This is also one of the difficulties pointed out by the American Beyond Meat, which fell below its three-year-old share price on Wall Street in early May after the publication of disappointing quarterly sales. Like its competitor Impossible Foods, it had to cut some of its prices.

Food and Environmental Promises

The startups in the French market are therefore betting on volumes to lower their prices and, from nuggets to chipolatas through merguez sausages and meatballs, they are thus constantly multiplying their proposals to entice refractory consumers. A research and development issue that each has its own strategy. If Happyvore wants to develop a plant-based alternative for any type of low-end or mid-range meat, La Vie has chosen to select the new products to be developed based on the quest for excellent taste. And while Heura aims to produce up to 10 new B2C products by 2022, Umiami is only marketing its vegetable-poultry fillet and only plans to expand its range on behalf of specialist brands, distributor brands or catering players.

The simplification of ingredients and their local origin are now also important competition issues. All multiply the promises on this subject. Happyvore, which already claims to use 40% of the raw materials produced in France, is working with other vegetable protein players to develop French sectors. La Vie hopes to take advantage of the highly processed and poorly rated nature of traditional cured meats from a nutritional point of view, which it proposes to replace. The Swiss Startup planted is committed to using only clean and natural ingredients without any additives in all its products and Umiami brags less than 10 ingredients in composition (compared to an average of thirty in the vegetable meat market)