Why an $800-M deal between 2 food makers will affect more than your diet

(First in a series)

FROM A business standpoint, the deal attracted a great deal of attention: Philippine-based instant noodle firm giant Monde Nissin shelled out $831 million to buy British meat substitute maker Quorn Foods in 2015, in what had become the third biggest acquisition of a foreign company by a Philippine-based firm.

What the nine-figure sale doesn’t readily reveal, however, is how involved Monde Nissin would be in this sector of the processed food industry, and just how large a role meat substitutes will play not only on our dining tables, but in how humans interact with the Earth’s environment in the next decade.

To reach $5.2B by 2020

Allied Market Research (AMR) recently released a report predicting that the meat-substitute market—vegetable-based protein primarily composed of tofu, soy and mushrooms that look and taste like real meat—would reach $5.2 billion by 2020, citing health, environmental awareness and animal compassion as among the top drivers of the business.

AMR cited in its report: “Increasing health awareness, coupled with increasing consciousness toward environmental sustainability and animal welfare have been the major factors driving the growth of meat substitute market.”

An increasing number of studies have shown the link between animal protein consumption to obesity, atherosclerosis and other lifestyle-related diseases. Global data have shown animal farms and the livestock industry destroying forests and polluting bodies of water. Animal genocide, or the endless cycle of violence and pain inflicted by humans upon billions of cruelly treated livestock, have been increasingly reported in mainstream and social media.

The AMR report mentioned that while Europe and North America remain the biggest markets, Asia-Pacific has been the fastest growing. It sees fast-food companies being more open to meat alternatives. The report also revealed that the per-capita consumption of meat has declined, especially in developed economies. Food products of high nutritional value and have similar taste and texture to meat are gaining preference among consumers.

Threatening food security

An increasing number of studies have also revealed that grain-fed livestock are threatening humanity’s long-term food security. Livestock also exacts heavy tolls on water and energy resources, and plays a role in soil erosion and adds to the import dependency of economies.

Livestock farming accounts for the use of 70 percent of the global freshwater and 38 percent of the world’s land-use conversion. Some 70 percent of the Amazon Rainforest has been cleared for grazing and feed-crop production.

Monde Nissin CEO Henry Soesanto told Inquirer Science/Health that “the trend on health and wellness is, no doubt, global, with many manifestations even in the Philippines.”

Soesanto shared his observation that a growing number of consumers are now aware of the negative effects of excessive meat consumption. “The meat alternatives market is growing, indicating its relevance to an increasing number of consumers. The impressive economic growth in the emerging market provides the opportunity for growing numbers of consumers with increased purchasing power, this makes the trend even more obvious.”

Access to meat-free products

Soesanto stressed that Quorn is “naturally a great fit for Monde Nissin’s strategy of building a global-branded food business, diversifying into categories that are on-trend and better for you.”

He further explained that the acquisition of Quorn would directly address the growing consumer concern for personal health, ethics and the environment by providing easier access to meat-free products.

Kevin Brennan, Quorn Foods CEO, told Inquirer Science/Health, “Currently, 75 percent of sales are in the United Kingdom and in total 90 percent in Europe. In 10 years, (we) would expect a more even spread across Europe, the United States and Asia (thanks to Monde Nissin’s capabilities). We are confident the Philippines can be a big part of this both in terms of sales and in leveraging Monde Nissin capability in the broader region.”

Brennan related, “The development of Quorn started in 1965 as Lord Rank of RHM set a team up to identify how to create a protein without the use of animals and farms. At the time there was a real fear the world was going to run out of food, this did not happen then, but has become a real threat again.”

He added that the company decided to venture into meat-substitute production due to sustainability issues.

“Early consumers were vegetarian, but over time, most consumers were people reducing their meat intake for health reasons.”

Brennan said Quorn has verified the greenhouse gas emissions and water usage of both meat and Quorn products with The Carbon Trust, an independent body. The data showed Quorn products emitted 90 percent less, and reduced water by the same rate, versus beef.