“The dairy industry’s plight is a cautionary tale for other industries whose core product falls out of favor or is under attack by activists. It illustrates the dangers of focusing on just one highly commoditized product, ignoring market trends, and trying valiantly to sell what you make rather than to make what people want. The industry has nobody to blame but itself. It’s in trouble because it has focused on cows instead of consumers. ”
— Hank Cardello, Forbes
For many kiwi food producers, the future of meat is hard to stomach.
The inspiration for this post comes from two places — the reaction to Air New Zealand’s decision to serve the plant-based Impossible Burger on select flights and the release of Beef + Lamb NZ’s excellent report on the rise of alternative proteins.
Air New Zealand’s decision is a watershed moment for the alternative protein debate in New Zealand. In a matter of days it brought the challenge of this disruptive technology home for all to see. Where before we felt a little removed from the reach of alternative proteins, now each of us are compelled to ‘pick a side’ — support the farmers or embrace a new force that challenges their livelihoods. It is a wake-up call for every Kiwi, and it’s only the beginning.
The Beef + Lamb report on the other hand asks hard questions about the future of meat as we know it. The report covers shifting consumer tastes, mounting health trends, environmental challenges and the rise of alternative proteins. It acknowledges that, to some degree, the NZ animal agriculture industry must diversify, innovate or premiumise to withstand disruption.
That said, I share Rod Oram’s thoughts about Beef + Lamb’s four future scenario’s:
1) Market domination of alternative proteins
2) The premiumisation of red meat
3) Alternative protein’s fail to launch
4) Customer’s demand real meat
We are too far down the alternative protein rabbit hole now to suggest that scenarios 3 or 4 are plausible. There is simply too much venture capital enthusiasm, product innovation and consumer demand to suggest business as usual might see us through. The time for change is undoubtedly now.
This post is about scenarios 1 and 2 and the mega trend driving the challenges that lie ahead.
In it, we’ll discuss arguably the most powerful of Beef + Lamb’s seven forces of disruption — the rise of veganism, the redefinition of meat and the morality of farming in the age of alternatives. This post will attempt to answer a simple question — is there an end to meat as we know it?
The following chapter looks at how the rise of another mega trend, the experience economy, represents a path forward for telling the New Zealand food story and serves as a playbook for transformative, sustainable and profitable land-use.
“Each and every one of us has been born into a given historical reality, ruled by particular norms and values, and managed by a unique economic and political system. We take this reality for granted, thinking it is natural, inevitable and immutable.
The cold hand of the past emerges from the grave of our ancestors, grips us by the neck and directs our gaze towards a single future. We have felt that grip from the moment we were born, so we assume that it is a natural and inescapable part of who we are. Therefore we seldom try to shake ourselves free, and envision alternative futures. ”
— Yuval Noah Harari
In his books — Sapiens and Homo Deus — Yuval Noah Harari introduces the intersubjective. Shared narratives that bind societies together, encouraging co-operation and ultimately progress.
Intersubjectives built the human world. Examples include mass reverence of the Greek Gods, the authority of the nation state and trust in the liberal democratic order. Intersubjectives are incredible forces, capable of starting wars and forging empires. At the same time malleable and destined to change over time.
In our time, we can see intersubjective core beliefs transformed in mere decades — usually for the better. When Martin Luther King said that the arc of history is long, but it bends toward justice, he was talking about our propensity to shape and shift our own intersubjectives based on the fierce urgency of the right thing to do.
Take gay marriage. Inconceivable 15 years ago, now a reversal is unthinkable. Closer to the farm is the rise of free-range eggs. The category, practically non-existent a few decades ago, now dominates consumer tastes. By the late 2020’s, when New Zealand’s supermarkets phase out all caged products, a new egg intersubjective will reign. Free range or bust.
Pushed by activists, propelled by media and pulled by the changing nature of our morality — it’s important to understand that the core beliefs we accept as right, just and normal might not always be that way.
As a farm boy and a rural professional, this is hard for me to say, but I think the longest standing intersubjective of all — animal agriculture — is destined for a dramatic redefinition.
Animal agriculture is the backbone of rural NZ and central to everything from our economic system, to our landscape and national identity. Despite recent tussles over the non-existent urban-rural divide, water use and the like, we are all inextricably tied to the humble dairy cow, cattle beast and sheep.
It’s hard to imagine losing all that.
But we have to.
We have to accept that our agricultural model now has fundamental weaknesses in the face of rapid social and technological change. When I hear things like “there will always be a market for real meat”, I hear an assumption based on personal experience. I hear denial because the alternative just doesn’t seem feasible. I don’t know what the future of meat will be, but I know that we can’t ignore the worst-case scenario just because it doesn’t feel right.
And that’s the funny thing about the intersubjective, it often feels like something you can bet the farm on.
The Vegans are Coming
To understand the rise of veganism — this incredible force of food chain change — we need to strip away all the pre-conceptions, hyperbole and stereotypes we may have for the movement and those who follow it.
What’s more important, and arguably more interesting, is this movement’s meteoric rise from cultural obscurity to mainstream lifestyle.
Firstly, the numbers. The British Vegan society cites a 360% rise in the number of self-identified vegans in the UK over the last decade, now at 542,000. More recent polling suggests that number could be as high as 3.5 million. Further afield, reports suggest up to 6% of the US consumer base self-identify as Vegan and 40% of German’s follow a low-meat diet… the Germans! Perhaps the best indicator, Google search trend data for the term ‘vegan’ shows a 5-fold increase in the last decade.
More compelling is the culture current powering this mega-trend. The world of vegan & plant-based media can be generalised as a mash-up of activist culture, urban chic, mega-influencers and celebrity endorsement, all with increasingly mainstream traction. Each of these pillars warrants a post of their own, but together they form a growing echo chamber that encourages mass awareness of Veganism’s core values — environmentalism, personal health & animal welfare.
Understanding the rise of veganism through a media lens helps us understand the flow of this social current. When we see the BBC reporting on the explosion of popular vegan-inspired Instagram stars, it’s indicative that the young are the driving force behind the plant-based food movement.
When thinking about the future of food, our eyes should be firmly fixed on the Millennials and Generation Z. In NZ, 13% of 14–34 year olds self-describe as vegetarian, up 50% between 2011 and 2015 (set against a population wide increase of 27%). In the US, research indicates that Gen Z college students are re-defining food on campus, consume several times more iconic plant-based food and beverages than their older counterparts and subscribe to flexitarian diets at higher rates. Gen Z are on track to be the largest generation of consumers in the US by 2020. Understand the implications of those trend lines — an increasingly plant-based demographic is growing in purchasing power by the day.
On a mass media scale, the mainstreaming of veganism through film is booming. In late 2018 Titanic Director James Cameron will release The Game Changers, a film that charts vegan transformation through the stories of elite athletes. This follows the popular 2017 documentary Cowspiracy, produced by Leonardo Di Caprio. The effect of activist cinema should not be minimised, just ask Seaworld.
We also need to accept that the term ‘vegan’ only accounts for the tip of the spear. The real force of the movement will be diet change in the masses who follow. The rise of the flexitarian diet (one of Whole Foods top diet trends of 2017) and the marked decrease in red meat consumption in NZ are case in point. In the same way that social media and smartphones only came of age when their user base hit critical mass, it’s the actions of those who come behind the trailblazers who really change history.
Enabling these rising consumer trends — an increasingly committed youth and an increasingly vegetarian-ish mainstream, are fast expanding plant-based commercial interests.
The numbers tell a story of sustained category growth in most western markets. The UK for example is slated to see vegan foods grow 48% between 2015 and 2020. But the real story is behind the scenes — the explosion of Vegan venture capital. As covered by NZ’s own Future Food strategist Dr Rosie Bosworth, from start-ups, to conglomerates backing plant-based foods, the next wave of plant-based innovation is being bankrolled by some of the smartest minds and the deepest pockets in the world.
From whichever angle you look at this movement — from influencers, to mass awareness to R&D investment — the writing is on the wall. Veganism is not just here to stay, it’s destined to grow.
“We plan to do to animal agriculture what the car did to the horse and buggy. Cultured meat will completely replace the status quo and make raising animals to eat them simply unthinkable. ”
— Uma Valeti, CEO, Memphis Meats
Transformational shifts — be it political, social or technological — don’t occur in isolation. Veganism will be no exception.
The rise of affordable, healthy, environmentally friendly and animal free alternatives to meat and milk will catapult veganism from social trend to social norm.
As it stands, there’s a sense of apprehension running through NZ Ag when it comes to alternative proteins. Much of it is warranted, understandable and timely. Beef + Lamb’s report pulls no punches and recognises alternatives for what they are — a fundamental challenge to the industry.
I understand this challenge through two lenses.
1) The maths of disruption
2) The morality of meat
The maths of disruption
“Every time you have a 10X factor of improvement in an important product dimension you have a potential disruption.”
— Tony Seba, Stanford University
In his exceptional video on why electric cars are the future and how oil will become obsolete by 2030, Tony Seba explains that disruption is all about efficiency.
Using the example of the Tesla Model 3, he describes how the $35,000 car buys you 90% fuel efficiency, 10X cheaper fuel and 99% less potential for maintenance issues. To buy a new petrol vehicle in 2018 over a Tesla Model 3, is to violate one’s own economic interests.
It’s common knowledge that alternative proteins outmatch traditional farming on almost every key metric — up to 45% less energy, 96% less greenhouse gas emissions and 96% less water according to Oxford University researchers.
These numbers and the costs, infrastructure and regulatory compliance savings they represent are staggering. In less than a decade, alternative proteins have developed system efficiencies that modern animal agriculture took more than half a century to achieve. Even today’s world of drone powered, IOT enabled, smart farm Agtech represent only marginal on-farm operational efficiencies in comparison.
In the case of GHG emissions, early signs indicate that New Zealand’s nascent anti-flatulence vaccine for cows might deliver a 1/3 reduction in methane. Okay… That’s still a 60% shortfall on an increasingly crucial metric.
The differences are even more profound when you consider the cost and R&D trajectory of alternative proteins. Clean meat has decreased in price from $325,000 per quarter pound to $11.60 — that’s a 30,000X reduction in 4 years! Imagine the potential for further cost cutting, R&D and product line expansion to come — it will probably look a lot like Hampton Creek using machine learning to make perfect vegan mayonnaise.
Critics might point to a somewhat lacklustre consumer reception to the plant-based Impossible Burger (if you call 30% of people saying they would ‘definitely’ eat it again a lacklustre reception) as an indication that alternatives might be over-hyped. Maybe, for now. But the industry’s ability to enhance, refine and optimise its product has been on display since its inception. Conversely, how many generations of specific breeding objectives does it take to produce a new variety of lamb or beef?
Animal agriculture will be disrupted for a simple reason — we’re pitting millennia-old systems that take decades to evolve against technology that’s optimising by the minute.
The Morality of Meat
“Being vegan isn’t the most we can do, it’s the least we can do. ”
— Earthling Ed
Alternative proteins will give customers a shortcut to veganism. Enabling the minimum of change to shopping, cooking and eating habits in order for the right to wear the vegan badge.
The presence of affordable, comparable tasting alternative proteins will present a fundamental ethical dilemma. All things being equal, is my preference for ‘normal meat’ enough to warrant an animal’s suffering or death? That’s a very hard question to answer.
Animal welfare, the same reason that’s driving caged eggs from supermarket shelves and one of the unique selling points that NZ Ag is betting its future on, could well be the undoing of animal agriculture.
Alternative proteins will shift the goalposts on animal welfare. We have come to accept a degree of institutionalized cruelty in the current system, practices that we’ve always felt were morally dubious yet accepted as the norm. The waste of 1.7 million bobby calves each year, castration, docking, weaning, the 2–7 km daily round trip by the average dairy cow all come to mind. How will future consumers view these practices when confronted with cruelty free alternatives — necessary evils or out-dated barbarity?
Taking the argument to it’s logical conclusion, we cannot innovate our way out of the fact that a chicken, lamb, pig or cow needs to die so that we can eat its flesh. Maybe we can innovate our way around footprint issues like water use and greenhouse gas emissions, but slaughter is the cold, hard reality of our model.
To see the bluntness of this argument in real life — watch an episode of Earthling Ed, a Vegan who challenges farmers and hunters on their right to slaughter animals. To put it yet another way, imagine the kind of marketing campaign an aggressive clean meat start-up would be prepared to run to muscle market share away from traditional producers — which of the aforementioned examples of institutionalised cruelty would they focus on?
What we have come to accept as the natural way of things — it’s okay for animals to suffer and die so that we can eat — will be fundamentally challenged by the arrival of comparable alternative proteins.
Of course, first to go in this new marketplace will rightly be the inhumane feed-lots, indoor pigpens and battery cages. But this redefinition of ethical animal treatment won’t stop there. In a world where clean-meat looks, tastes, smells and bleeds like the real thing, will grass-fed and free-range matter when one product involves the captivity, suffering and death of an animal, and the other does not?
In that world, how can you call yourself an ethical consumer, with respect for the rights of animals, and ignore cruelty-free alternatives? How can you buy free range eggs but stop at cruelty-free chicken?
So, where to from here?
I wish this was a more positive piece. I’m a farm boy. l eat meat. I love rural NZ. But the facts are the facts. We need to accept that the only constant now is change, and it’s happening ever faster — be it tech or social.
We need to be objective and acknowledge our industry is up against massive technological and social disruption.
We can’t plan on gut feel anymore.
I applaud Beef + Lamb’s recent actions as strong first-steps in very much the right direction. On the back of the Alternative Proteins report, they launched Taste Pure New Zealand and set an ambitious goal of a carbon free sector by 2050. This is forward thinking leadership that the industry desperately needs. I would strongly encourage Fonterra and Federated Farmers to follow suit.
The accepted wisdom is that the safe-haven for NZ Ag is in the premium end of a diminishing, niche global market for real meat. That may be right, it certainly will be for some time to come.
I’m on board with this strategy. Not because I think it necessarily offers the best long-term prospects for NZ Ag (more on that in part 2), but because it will inspire the sustainability, transparency and customer-focussed initiatives that we’ll need in a very uncertain future.
It won’t be easy though.
If a portion of the world’s economy forever reject alternative proteins, we’ll have to compete against every other agriculture nation’s own race to fill this premium niche. Do we really think that Canada, the USA, the UK, France and Argentina aren’t going to double down on their protein producing heritage and aim for a slice of an ever-diminishing, real meat market? Will American and Chinese consumers not prefer to support their own farmers and buy local in the face of industry collapse? If we are to premiumise, we best do it fast and best — arguably we are already behind the likes of Bord Bia’s Origin Green sustainable farming framework and national food brand campaign.
In a broader sense, we need to recognise that there are fundamental weaknesses in our system, and by extension the resiliency of rural NZ, in the face of disruption to the animal agriculture model. More than 40% of land use in New Zealand is dedicated to sheep & beef (32%) or diary (10%) production. Yes, that land produces some of the highest quality food in the world with one of the lowest environmental footprints, but the vulnerability of this monoculture-esque approach in a rapidly changing food system is undeniable.
In-line with Beef + Lamb’s scenario 1, we need a pivot plan if the ground shifts underneath us. We need to start building a picture of what rural NZ could look like if the worst-case scenario happens and the bottom really does fall out of animal agriculture.
In the next part of this series, I’ll explore one strategy for moving on from meat. Leveraging another brewing mega trend called the experience economy.
Originally published at www.dirtroadcomms.com.