If one market craze stood out in 2019, in Australia and abroad, it was plant-based meat.

The catalyst for attention was the mid-year IPO of Beyond Meat (NDQ:BYND) and its near ten-fold rise in just a few months.

Who’ll be next to win from this sector’s growth? Agribusiness bank Rabobank believes it could be Australia’s grain, oilseeds and pulse sector.

Currently, around 50 per cent of plant-based meat products imported into Australia are in a ready-to-eat state.

Meanwhile, Australia has a cereal grains, oilseeds and pulses industry that is a net exporter.

Currently, most plant-protein offerings include soy and wheat, while niche products comprise just 7 per cent of the market. But Rabobank analyst Dr Kalisch Gordon thinks could rise as consumers become more picky about what they eat.

“Underpinning our expectations of continuing demand growth in the plant-based meat substitute segment over the next decade is that consumers will be more discerning in the choice of products that meet and hold their interest,” Dr Gordon said.

“And so manufacturers will need to expand the range of plant protein ingredients they use.”


The plant-based meat opportunity in Asia

While demand in Australia is expected to grow, it will be small fry compared to anticipated demand in Asia.

While North America and Europe currently lead global growth, Asia’s demand will grow in conjunction with incomes.

Dr Gordon thinks it’s an ideal opportunity but one that wouldn’t be handed to Australia on a silver platter.

She said Australia has to ramp up manufacturing capacity, particularly commercial pulse fractionation – which breaks down protein, starch and fibre components for use as ingredients in food processing.

“To realise this opportunity, Australia will have to follow Canada’s lead, where several pulse-fractioning plants and substantial canola-fractionation capacity are coming online to support both local and export demand,” Dr Gordon said.

“The industry will need to work with manufacturers who can achieve superior retail margins by capitalising on the Australian provenance and non-GM (genetically-modified) plant proteins that Australia can produce at volume.”


ASX stocks that may benefit

Australia for the most part missed out on 2019’s plant-based craze. It finished the year with just a handful of stocks in it and only as an afterthought.

Arguably things are looking better than 12 months ago with the ASX that little bit closer to a pure play stock.

Back in August Maggie Beer Holdings (ASX:MBH) launched a plant-based food range although it is not in the meat sector like Beyond Meat is.

Jatenergy (ASX:JAT), the only ASX player with an Asia-specific focus, is just over a year on from revealing its ambitions.

Its primary focus is in infant formula exporting. But recently it told shareholders in its annual report the first batch of products were introduced to China in 2020.

If the dream of Australia as a plant-based meat maker comes to fruition, one beneficiary might be Bio-Gene Technology (ASX: BGT).

This company has various pest-control solutions including one aimed at crops, which are particularly vulnerable to insects.