Rod Oram looks at the challenges for New Zealand's red meat farmers in a world where plant-based meat imitations are already being rolled out through US fast foot chains and lab-grown meat is five to 10 years away from mass production.
A revolution in food production and consumption is underway worldwide. Our farmers will find ways to respond profitably, but life for them will never be quite the same again.
The three biggest drivers of change are:
- Demand: the UN estimates food production will need to rise by some 70 percent by 2050, thanks to a one-third increase in the human population and the demand for more and better nutrition from the existing population.
- Environment: many food production practices worldwide damage land, freshwater, oceans and the atmosphere. For example, farming is the second largest source of greenhouse gases after electricity production; and ocean fishing is rapidly depleting stocks.
- Health: An increasing number of scientific studies are advocating more plant-based food and less animal-based food.
In response to these great pressures, more consumers are changing their diet; and more scientists, backed strongly by venture capitalists, are devising new foods such as lab-grown meat and plant-based imitations of meat, and new technologies such as large-scale indoor growing of plants.
The best research yet on the threats and opportunities for us in New Zealand has just been published by Beef + Lamb, the red meat organisation which brings together farmers, processors and retailers.
Its summary document captures the main issues and offers four scenarios to help the sector strategise its response. The full report, though, sheds more light on how intense the challenges are to conventional agriculture.
Among its conclusions, the report says:
- “Reputable sources of medical information and health data are promoting a diet of less meat and more plant protein.”
- “Alternative protein technologies are likely to further disrupt the protein category and encroach on the red meat market.”
- “The alternative protein conversation is gaining momentum and becoming mass market.”
- “Mainstream adoption proves there is consumer demand for reducing meat, getting protein from other sources and changing the way we eat.”
In the US, plant-based imitations of meat are becoming cost-competitive with conventional meats, attracting consumer support and gaining distribution in some retail and fast-food chains. The report estimates they will be available on a large scale in three to five years. Meanwhile, lab-grown meat, a much more complex technology, is three to five years away from pilot production and some five to 10 years away from large scale production.
In US grocery stores, alternative proteins across all food categories already account for some 10-20 percent of the display space of conventional proteins and are growing four to 10 times faster.
The enormous technology challenge and market potential has attracted Silicon Valley. Last year, for example, Eric Schmidt, one of Google’s founders, said lab-grown meat was the number one tech trend, ahead of self-driving cars and 3-D printing. Likewise, Bill Gates has invested in Memphis Meats, one of the sector’s pioneers; and Europe has similar venture capitalists in this field.
Finless Foods is an example in the fish sector. It is growing fish flesh from cells of bluefin tuna, and it plans to go into commercial production next year. It has some advances over similar start-ups in the red meat sector, Mike Selden, its founder and chief executive, said when I interviewed him in January at the company, which is based in a tech start-up complex close to the University of California, Berkeley.
First, fish cells grow at low temperatures, whereas red meat cells need a high and carefully-controlled temperature. Second, “we’re shaping our technology to fit off the shelf manufacturing.” This will allow Finless Foods to contract out manufacturing to established biotech companies. Third, bluefin stocks are endangered so some restaurants won’t offer them, or some consumers won’t eat them. Thus, cultured bluefin flesh will be a premium, sustainable product that will attract them.
There is also an increasing push for farming and food reform by institutional investors. One example is Farm Animal Investment Risk and Return, whose members have some US$4.8 trillion of assets under management.
Major conventional protein companies, such as Tyson, the US’s largest meat processor, are investing heavily too. Most notably, Danone paid US$10 bn ($13.5 bn) last year to acquire WhiteWave, a US producer of plant-based dairy products, which is the fastest growing company in the US food and beverage sector.
The French-based multinational subsequently has created its DanoneWave division to help apply the lessons of such radical technology change widely across its dairy portfolio.
“This is really about resilience, over all, and therefore the long-term adaptation of models of agriculture and eating and drinking practices,” says Emmanuel Faber, Danone’s chief executive.
Given the great pressures for change in the food sector and the great potential of the new technologies, it’s hard to predict how rapidly or profoundly the sector will shift. Looking at just the red meat sector, Beef + Lamb’s report offers four scenarios as a way of encapsulating changes in demand and supply of red meat.
Scenario 1: “Red meat is pushed to the side of the table” by new technologies, environmental and health issues, and government and consumer responses to them.
Scenario 2: “Red meat is the speciality choice” for particular consumers and / or for particular occasions. While new meat technologies would provide “everyday meat” for many consumers, demand for premium, conventional meat could still grow.
Scenario 3: “Red meat is the reluctant choice” of many consumers because it represents value for money as a source of protein, although more expensive protein choices are available.
Scenario 4: “Red meat is the everyday choice” because environmental and health issues have either been solved or become less important to consumers and governments, and new technologies have failed to deliver on their cost, quality and other promises.
Rightly with all such scenarios, Beef + Lamb suggests the future most likely lies somewhere in the middle of those four quadrants, with elements of them all.
However, in the view of this columnist, we can largely ignore Scenario 4. The technological, environmental, health and social drivers of change are so strong that farm-raised meat will become less dominant in diets, even in traditional meat-eating western cultures. Likewise, Scenario 3 underestimates the power of new protein technologies and the benefits they will deliver.
While Beef + Lamb is not majoring on any one scenario, it is clearly favouring Scenario 2. It believes that our high quality, relatively natural, farm-raised meat will largely escape the rising backlash against industrial farming characterised by feedlots, harsh animal treatment, and heavy use of antibiotics and chemicals. Thus, there are plenty of opportunities for our farmers to produce high quality, high value meat.
I offer three caveats to that view:
- The whole range of proteins and consumer responses to them will shift markedly over the next few decades. Many consumers might lose their taste, literally and metaphorically, for farm-raised meat, even for special occasions.
- Our farm practices do less damage to the environment than the worst of industrial farming. But they still can impair water, land and biodiversity; and ruminant animals are our largest single source of climate-changing greenhouse gas emissions.
I discussed those issues in this column last September about New Zealand farming facing bankruptcy of its natural capital.
We must, and will, improve on all those factors. But practising one of the least polluting forms of farming may not be enough of a social licence to operate in a world with escalating environmental pressures and proteins with minimal environmental impact.
- New food technologies will be crucial to human well-being. We can’t ignore that and cling to being “natural”. There is no such thing except in hyper local, hyper niche forms. Our farming is already highly modified. It’s big business, especially for our tiny economy.
So, we have to remain vigorous contributors to rapid technological evolution, as we long have. Hopefully we can help lead those new food technologies in ways that work with the ecosystem not against it, thereby taking the pressure off the ecosystem that current farming and food practices inflict.
It will be some years before we begin to see what those opportunities are for us. But they will emerge from the discussion that has begun, to which Beef + Lamb is contributing with its report.
The next urgent step, though, is to learn how to reduce the environmental impact of our current farming practices, particularly their greenhouse gas emissions. The science, economics and systems involved will enhance our knowledge and reputation, and our rewards from farming, and help prepare us for even bolder food and farming futures.
Through all these big changes, though, one thing is certain: land will always be valuable because farmers will learn how to put it to more productive, more nutritious and more environmentally compatible purposes.