As the demand for plant-based meat grows, we’re gonna need a whole lotta infrastructure investment to serve up all those patties and nuggets according to a new report from the Good Food Institute.
The report, titled, Plant-Based Meat: Anticipating 2030 Production Requirements, breaks down how much money is needed for plant-based meat production over the next decade. GFI estimates the plant-based meat industry will require $27 billion in cumulative capital spending by 2030 for new plant-based meat manufacturing infrastructure and will require another $17 billion in annual operating costs.
So how do they come up with these numbers? It all starts with their assumption that the plant-based meat industry will account for 6% of all meat consumption by the end of this decade, translating to about 25 million metric tons (MMT) of plant-based meat consumed annually by 2030. That 6% estimate and the corresponding 25 MMTs are based on an assumed 18% year-over-year growth rate for plant-based meat consumption. While one could quibble with that growth rate given the recent slow down from the 2020 surge in plant-based meat growth, I don’t think it’s unreasonable over a longer time horizon.
According to GFI, the bulk of this CAPEX will go into facilities that can pump out the required amount of plant-based proteins to serve the overall demand. These ingredients will be made using modern ingredient extrusion technologies, which are used to process raw materials into structured plant-based proteins. The analysis factors in the building of facilities that employ modern extrusion technologies such as low moisture extrusion (LME), a production technique which results in products like minced and flaked plant-based meat, and high-moisture extrusion (HME), which makes more realistic products that mimic real meat cuts. It also factors in the addition of newer production techniques such as 3D printing.
GFI forecasts the industry will need to build a total of 810 new structured plant-protein extrusion facilities by 2030. They peg the price of operating these new facilities at $17 billion annually, a cost that includes labor, utilities, and the raw materials that go into making structured plant proteins.
While it goes without saying this is a lot of money, it isn’t out of line with infrastructure investments seen by other new and fast-growing industries. The GFI points to the renewable energy industry as an indication of what we should expect in terms of required capital for plant-based meats: It’s important to note that there is ample precedent for this level of infrastructure investment expansion. Global renewable energy capacity investments grew from $40 billion in 2004 to $282 billion in 2019, a 14% compounded annual growth rate.
Finally, it should be noted that all this new capital is only for plant-based meats, which is only one segment of the emerging alternative meat industry. Other alt-protein categories such as precision fermentation or cell-cultivated meat will require additional billions of dollars invested in infrastructure to meet expected demand.
Leave a Reply