First it was the burger patty and meatballs, then tuna, and now the plant-based market has conquered a new frontier: the shrimp market. The Washington Post aptly calls it “alt-shrimp.” Some view it as a disrupter of the industry with huge business potential; others consider it an over-hyped trend that is likely to go away soon. Is there really a market for alternative vegan shrimp?
Before we dive deeper into this market, let’s first take a few steps back and retrace the trends that led to the rise of alternative shrimp. Rethinking meat consumption has become a global trend with events such as “Meatless Mondays,” mainstream media covering vegetarianism, and major fast-food chains offering vegan alternatives. In the U.S., meat alternatives achieved double-digit growth in retail sales - 16.3 percent - in 2018, from a small growth of 2.4 percent in 2016. Despite these impressive stats, looking at the bigger picture, the market for alternative proteins – USD 2.2 billion (EUR 1.9 billion) – is still marginal compared to the global meat market – USD 1.7 trillion (EUR 1.5 trillion).
Even so, the alternative protein trend has trickled down to the seafood industry, where similar discussions have been buzzing around. Shrimp is one of the most-consumed seafoods in the world, and in the U.S. easily it beats out all other kinds of seafood in terms of consumption.
For investors and processors, alternative shrimp is obvious choice to tap into next.
In order to understand this trend, it's important to look at the drivers of the rise of alternative proteins. The growth of alternative protein space is driven by factors at the consumer level such as sustainability, animal welfare, health, novelty, and convenience. For the alternative shrimp market, Rabobank’s seafood specialist, Beyhan de Jong, said the main growth drivers are its uniqueness, novelty, adaptability, and convenience.
“Unlike the meat sector, the seafood industry is seen as much more sustainable,” De Jong said. “Shrimp is also perceived as a healthy protein. Thus, consumers are attracted to alternative shrimp because of its uniqueness. They like to try new products that can easily be adapted to their everyday diet, particularly if it’s vegan or vegetarian.”
Alt-shrimp: A good investment?
The alternative shrimp market may be a new frontier, but it is a growing one. Investments and capital are swimming in the direction of seafood alternatives, which has driven the proliferation of start-ups working on alternative shrimp, or companies branching out and diversifying to the production of plant-based or cultured shrimp.
Aqua-Spark, a global investment fund that invests in sustainable aquaculture businesses, sees the value of investing in alt-shrimp due to increasing demands for protein of the growing world population. By 2050, in fact, the earth’s population could reach 10 billion people, making food security a major concern.
“Our analysis suggests that there is strong market potential for alternative shrimp,” Aqua-Spark Dealflow Manager Isaac Fraynd said. “Cultured shrimp has an interesting role to play by complementing sustainable aquaculture in order to address a growing global shrimp demand.”
Meanwhile, the race for market share in the plant-based shrimp industry is on, with huge investors signing deals on alternative shrimp. In September 2019, the world’s second-largest processor and marketer of chicken, beef, and pork announced that it had invested in New Wave Foods, a start-up based in California that produces algae-based shrimp.
Another major meat trader based in Germany has invested in developing plant-based shrimp and other alternative products, such as plant-based breaded fish and yellowfin tuna. Johannes Biel, managing director at FrostMeat, said the market share of plant-based protein could very well swell by up to 20 percent in the next five years.
“We have never seen a business that could go as fast and become as big as the plant-based industry,” said Biel. “The demand is there and we are looking into developing more plant-based products in the future. With the aquaculture sector taking a hit from all the negative press about antibiotics and issues of sustainability, we take responsibility as a company to search for alternatives.”
Biel said he sees the alternative shrimp category not only as a good business opportunity but also as a way to “push traditional shrimp business to become better in terms of sustainability.”
Asian market for alt-shrimp
While alternative shrimp products become a popular choice because of climate change activism or sustainability concerns in the Western market, the Asian market is a whole different ball game.
Eugene Wang, founder of California-based Sophie’s Kitchen, says a different approach is necessary if his company would bring its plant-based shrimp to the Asian market.
“Eating vegetarian food in the Chinese community is mostly associated with religion,” he said. In China, eating plant-based seafood and other vegetarian meat has long been part of the Buddhist religion. Soy-based imitation meats have already established markets in specialist Buddhist and vegetarian restaurants.
Consuming plant-based shrimp for health and sustainability reasons is not really as pronounced in Asia as it is in the Western market.
“Plant-based products and even mock meats are sold as premium products and are more costly,” Vegans of Shanghai founder Eve Samyuktha said on the disconnect between the two markets. “Developing countries and new economies such as China or India do not have the accessibility or the luxury of buying these products, especially when there are more pressing issues such as poverty and overpopulation. It is hard to teach veganism in a poor community.”
Plant-based shrimp in the U.S. and Europe is usually sold as a premium product with prices ranging from EUR 3.20 to EUR 5.20 (USD 3.54 to EUR 5.76) for a pack of 150 grams to 250 grams. The price range could potentially be a barrier for consumers, particularly those with lower purchasing capacity.
Is lab-grown meat the future of shrimp in Asia?
Another premium product that will be launching in Asia is Shiok Meat’s cell-based shrimp, which uses the cells of an actual shrimp to grow shrimp in the lab. It is one of the only four companies in the world to advance cell-based seafood research. Other companies include Finless Foods, which is focused on culturing Atlantic bluefin tuna (T. thynnus) cells; BlueNalu, which is researching lab-growing several species; and Wild Type, which specializes in cell-based salmon.
Shiok’s founders want to disrupt the aquaculture industry due to food safety and sustainability concerns. They aim to launch their products in premium restaurants in Singapore and Hong Kong in 2021.
“We employ cellular agriculture to grow shrimp meat using stem cells instead of killing animals,” Shiok Meats CEO Sandhya Sriram said.
Culturing crustacean cells is apparently also easier than producing cell-based meat or pork because crustaceans tolerate lower oxygen levels and temperatures. The same is true for other seafood, such as fish.
In a research paper published in January 2019, the authors found that seafood’s high buffering capacity and low-temperature growth conditions make “marine cell aquaculture an attractive opportunity for scale production of cell-based seafood; perhaps even more so than cell cultures of mammals and birds for cell-based meats.”
However, despite this unique advantage over other meats, cost is a huge barrier in viably producing cell-based shrimp for mass production, as it requires a lot of patience and capital. Eight shrimp siew mai (dumplings), containing a small amount of cultured cells, cost around EUR 3,253 (USD 3,603) and a few months to produce.
While cell-based shrimp has yet to enter the commercial market, some industry players already see it as a welcome development – a new untapped frontier that merits support and acknowledgment.
“While this may be expensive, it does not mean that it is not feasible in the future,” Darryl Jory, advisor at Aquaculture Business Development, said. “We tend to be very reactive in this industry, and we should be more proactive, and this means following what’s going on.”
The wave of plant-based seafood products may be in its infancy but it is definitely here to stay. With the growing consumer interest and investments in the product development and commercialization of these products, it is not difficult to imagine more plant-based shrimp being introduced to the market. It is too early to say whether it will positively or negatively affect the aquaculture industry. Some may feel threatened, and some may embrace it and see it as a way to diversify their business.
However, one thing is clear. At the heart of the rise of alternative shrimp are trends the aquaculture sector can also follow - the demand for sustainable, innovative, and healthy products.
Photo courtesy of ShrimpTails Magazine
