Booming veganism and rising meat prices are a growing threat to the domestic meat and dairy industries, says IBISWorld.
According to the industry research company, sales of vegan food products have soared over the past five years in Australia.
Intensifying the trend is the fact that the vegan boom has coincided with higher meat prices in Australia. All of this could lead to a ‘perfect storm’ for its meat and dairy industries.
Surging demand – and quality
According to IBISWorld research, demand for plant-based products has surged in recent years, as has their quality.
“The quality of these products is increasing at a rapid pace,” IBISWorld Senior Industry Analyst James Caldwell said.
“Plant-based alternatives to meat and dairy foods are continuously being launched. Unilever recently launched a plant-based alternative to its Magnum ice-cream products. And popular food chains Hungry Jacks, Schnitz and Grill’d have all recently added plant-based options to their menus, in an attempt to take advantage of rising demand.”
Rising cost of meat
The rising price of meat products has weakened local demand and forced the meat sector to turn to overseas markets. In fact, the sector’s very viability is now under threat, says IBISWorld.
“This surging demand for plant-based alternatives … will in turn affect the long-term viability of the Australian meat processing, beef cattle farming, cheese manufacturing, butter and dairy product manufacturing, and milk and cream processing industries,” Mr Caldwell said. “The Australian meat processing industry now generates over 60 per cent of its revenue from overseas. We expect this number to rise over the next five years.”
Why is veganism booming?
So what’s behind the boom in meat-free products? Aside from animal-welfare motivations, there are two standout drivers, according to IBISWorld: environmental awareness and health consciousness.
Environmental awareness
Australians are increasingly concerned about their impact on the environment – and the meat and dairy sectors have a reputation for large carbon footprints.
“Raising animals for slaughter is a very water and land intensive process,” Mr Caldwell said. “Both meat and dairy … produce more emissions per kilogram of food than plant-based alternatives.
“This rings particularly true for Australian consumers in light of the recent droughts in Queensland and NSW. Australia is the driest continent on earth.”
Health consciousness
Rising health consciousness is another major driver behind the trend towards greater consumption of plant-based foods, says IBISWorld.
“Australia is currently experiencing a rising fitness culture,” Mr Caldwell said. “This is encouraging consumers to reduce their meat intake, and to move to low-calorie diets.
“Plant-based food manufacturers have been acutely aware of this trend. They have increasingly produced foods with few calories and low levels of saturated fat.”
What future for the meat and dairy sectors?
According to IBISWorld, the number of people following a vegan diet in Australia will rise over the next five years. This trend will only increase the strain on the country’s meat and dairy sectors.
On the other hand, rising prices and stagnant domestic demand have driven Australia’s meat and dairy sectors to look overseas in search of revenue growth. This strategy has paid off in the form of higher exports of meat and dairy products over the past five years.