TORONTO -- The plant-based protein industry is focused on improving the price, taste and texture of its products as it weathers a period of consumer wariness brought on by the rising cost of living.
That's according to industry experts, including Bill Greuel, CEO of Protein Industries Canada, who says there's a lot of work being done in Canada to improve things like the meltability of plant-based cheese and the texture of plant-based meat.
There's a lot of work being done in Canada to improve things like the meltability of plant-based cheese and the texture of plant-based meat, said Greuel in an interview at Plant Forward in Toronto, a conference focused on the plant-based food sector.
"Canada's making great strides," Greuel said, calling price, taste and texture the "Holy Trinity of consumer needs."
Inflation and higher interest rates have made consumers more sensitive to price differences, he said, and therefore less willing to try plant-based meat alternatives.
In addition to innovating on the taste and texture side, the industry needs to build up its manufacturing and processing capacity in Canada to help address the price differences between plant-based meat and its conventional counterparts, said Greuel.
"Our belief is that if we create scale in ingredient manufacturing, that's going to provide more options to food manufacturers, more options to consumers," he said.
"And that's our path to relieving some of the inflationary pressures in the plant-based food side, is scaling up ingredient manufacturing in the country."
The economic outlook for the plant-based protein industry was the subject of a presentation at the conference on Wednesday by two speakers from Ernst and Young.
Huzaifa Akhtar, economic advisory vice-president, and Mauricio Zelaya, partner and national economics leader, told conference-goers that businesses in the industry are working on multiple fronts to stay ahead of the curve.
This includes improving existing products and looking into new ones, said Akhtar.
"We're really seeing that huge push for innovation across the board," she said.
It's also important for companies to mitigate potential supply chain disruptions by near-shoring -- meaning seeking suppliers closer to the business -- and diversifying the sources of their input crops, she said.
Over the longer term, Greuel said there's still lots of growth predicted for the industry, though not at the steep rate previously thought.
Companies like Beyond Meat were all over the news when they launched products, including in major fast-food chains, that promised to mimic the taste and texture of a beef burger, but the initial excitement has faded in recent years and resulted in a stock price slide.
Ambitions for growth in the plant-based protein industry have been pared back, Greuel said.
"At the start of COVID, we were seeing compound annual growth rate in the double digits," he said.
"Now, we've had a market correction, and I think rightfully so."
Recent estimates are more conservative at about six to eight per cent, he said.
"That's still significant."
Scaling up manufacturing and processing in Canada is challenging, however, as the projects require a lot of growth capital, said Greuel.
"The cost of an ingredient manufacturing facility is measured in the hundreds of millions of dollars. That's very hard to finance in the traditional (venture capital) models that we have in Canada," he said.
"The other issue is that they can't finance an entire processing facility with debt financing from traditional markets, because the cost of debt servicing becomes too high."
That's why it's important to find ways to incentivize more private-sector investment, said Greuel.
Regulations are also a key concern, he added, as it takes much longer in Canada to get novel foods approved versus the U.S. -- sometimes several years longer.
While the latest federal budget makes mention of "regulatory sandboxes" to help businesses boost innovation, Greuel said "those are all things we've heard before."
This report by The Canadian Press was first published April 18, 2024.
