A plant-based diet — the road to sustainability

Published on December 20, 2021 by Yamini Bhalla

Introduction

“Greenland’s ice summit witnessed rainfall for the first time in history; scientists worry about climate change” — news on 23 August 21

Do such headlines worry you? We have seen extreme weather conditions across the globe in recent months, including record-breaking temperatures, flooded cities, landslides and forest fires. The Intergovernmental Panel on Climate Change (IPCC) released a report confirming that human-induced climate change is extensive and intensifying, and some trends are now irreversible.

Of the human-induced global greenhouse gas (GHG) emissions, more than one-third can be attributed to our food systems, primarily due to agriculture (livestock, soil), land use and forestry [as land areas and forests act as a sink (absorb CO2 from the environment) or a source of GHG emissions], fertiliser use and other processing, refrigeration and downstream activities.

In this note, we understand what a plant-based diet is, why it is a more sustainable choice and how this market has grown during the pandemic.

What is plant-based food?

Plant-based food products are finished products consisting of ingredients such as vegetables, fruits, grains, nuts and seeds, all sourced from plants. Based on product type, the plant-based food market is segmented into dairy alternatives, meat substitutes, egg substitutes, confectionery and others. Based on source, it is segmented into almond protein, soy protein, wheat protein, pea protein and rice protein.

Why is it sustainable?

Simply put, growing food — whether crops or raising livestock for consumption — requires resources, including land, water and manpower. Livestock also requires land for grazing and land to grow animal feed. The chart below shows GHG emissions of and land use for producing various grains, fish, eggs, beef and lamb; it is clear that plant-based food is less resource-intensive.

The following facts about meat consumption further confirm it is resource-inefficient:

  • Around 320m tonnes of meat are consumed annually across the globe

While alternative approaches to farming and raising cattle have reduced the emission of harmful gases, more use of these methods is unlikely to fill the gap between the resources required to produce plant-based food and the resources required to produce beef.

The plant-based food market

Amid this harsh reality, let’s look at the positive trends that emerged in food consumption patterns amid the pandemic:

  • Sales of plant-based food exceeded USD7bn in the US in 2020; the US vegan food market was up by 27%, growing almost two times as fast as the total US retail food market, which increased by 15%

Why demand is increasing

  • Rising intolerance of cruelty to animals: 72bn animals are slaughtered every year for consumption; 95% of them are chickens, over 300m cattle and 1.5bn pigs
  • Liquidity events or exits in the form of M&A, buyouts or IPOs in the plant-based food market have also gained momentum in recent years

Challenges and solutions

While the current situation demands positive steps, the plant-based food industry is still in the initial phase, facing challenges relating to demand/supply, acceptability of plant-based diets, cost to the consumer and plant-based food being highly processed and low on nutritional value compared to traditional proteins.

Food is a personal choice, and although it is not viable to shift entire populations to adopting vegan or vegetarian diets, IPCC reports suggest that a balanced diet comprising plant-based food and sustainably produced animal-sourced food has the potential for adoption while generating significant co-benefits in terms of human health.

Scientists estimate that by 2050, dietary changes could free up several million square kilometres of land and reduce global CO2 emissions by up to 8bn tonnes per year.

Conclusion

The current state of climate emergency demands extreme measures to contain harmful GHG emissions. A shift towards a plant-based diet not only reduces harmful emissions, but also saves other valuable resources such as land, water, forests and wildlife.

How Acuity Knowledge Partners can help

We offer unique and timely insights in the form of market outlook and country reports customised to meet client requirements. We are also experienced in both quantitative and qualitative research analysis. We support clients with deep-dive research on sectors ranging from consumer goods to healthcare, TMT and financial services. In the consumer goods sector, we help clients identify pre-investment opportunities and provide post-investment management services, assisting with financial modelling and valuation analysis.

About the Author

Yamini has been with Acuity for the past ten years and is currently part of the Investment Banking team. With a focus on TMT and Consumer segments, she has supported US and Europe based bulge bracket banks in a range of products, including industry deep dives, comparable analysis, target research, and valuations. She holds a Masters in Commerce from University of Delhi and a Bachelors in Commerce from Shri Ram College of Commerce, University of Delhi.

Originally published at https://www.acuitykp.com.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/