The changing proteins landscape

Dr Samuel Admassu

Plenty of attention has been given to the protein market in recent years, with emphasis on the rise of alternative proteins. Investments in and production of alternative proteins such as insect proteins, plant-based meat, dairy, egg and fish alternatives are showing increasing growth, albeit with a very small market share. 

The Australian Farm Institute is undertaking a research project, funded by AgriFutures, which will investigate the implications of the growth in alternative proteins to Australian agriculture and assess the opportunities and challenges inherent in the changing protein market landscape. Whilst the continued rise of middle-income global population implies a stable demand for traditional protein sources, questions have been asked about whether the simultaneous growth trend of the vegetarian and flexitarian consumer segment could offset these gains. 

Preliminary findings of this research demonstrate that alternative protein demand will result in additional opportunity for Australian agriculture and will not detract from traditional animal protein production. Due to projected population growth coupled with changes in socio-economic factors such as rising incomes, increased urbanisation, and ageing populations, the demand for protein will be strong enough to accommodate both the traditional and alternative protein sources. 

Although issues such as sustainability concerns tend to decrease consumption of meat, the established customer’s product familiarity will be a key factor in animal protein continuing to dominate the protein market. (1) The low retail price of chicken and pork means that per capita consumption of these proteins is likely to continue to grow. Red meat consumption may continue to decline per capita in Australia however growth in global markets for red meat as well as population growth in Australia is likely to continue to see growth in the red meat sector overall. Changing protein consumption patterns also present a significant opportunity for seafood. 

The expanding market for plant-based protein will also provide additional opportunity for the grains sector. This opportunity will be small initially as the plant-based protein market builds from a very small base. Plant-based protein is a globally traded commodity, just as animal-based protein is, so opportunities for differentiation will be important if the Australian grains sector is to capture a share of this global market. 

AFI’s economic analysis is consistent with other recent studies (2 & 3) which have estimated that the alternative protein sector will add around $3 billion of additional opportunity to Australian agriculture by 2030.  

In a total projected protein market of A$67 billion to A$122 billion, the projected market value of alternative proteins (A$3–6.6 billion) will remain a minor component. (4) This is in line with the conclusion from McGill et al. (5) who found that the largest challenge for the future of animal protein will not be the lack of demand but rather the production of sufficient protein to meet that demand.

However, the rise of alternative protein may pose an alternative threat to animal agriculture beyond fundamental supply and demand. The messages that some alternative protein companies are using in the marketing of their products are adding to community trust issues about animal agriculture. Potential disruptive regulatory change impacting on animal agriculture and driven by a lack of community trust could be more of a threat to the animal protein sector in Australia than the number of people eating alternative protein products.

1.  Bashi, Z, McCullough, R, Ong, L & Ramirez, M (2019), Alternative proteins: the race for market share is on, McKinsey & Company.

2.  CSIRO (2019), Growth opportunities for Australian food and agribusiness.

3.  Lawrence, S & King, T (2019), Meat the alternative: Australia’s $3 billion dollar opportunity, Melbourne: Food Frontier.

4.  Food Innovation Australia Limited (2019), Protein market: size of the prize analysis for Australia, Food Innovation Australia Limited.

5.  McGill, J, Moss, A, Swick, R, Jackson, D & Todd, M (2019), The future protein decade: perspectives on global pressure to agriculture, Animal Production Science, 59, 11, 1951, https://doi.org/10.1071/AN19308