Alt Protein, Electric Cars, and Industry Disruptions

Photo by Carlo Verso on Unsplash

I’ve been involved with plant-based foods for more than twenty years. Talking to others, I often compare the growth of the industry with the business of selling electric cars. Both started slowly, with innovators mostly remaining on the fringes and large companies hesitating to go in new directions. Worse yet, the traditional players — Bigs Ag, Auto, and Oil — have actively opposed the development of more sustainable cars and food. 

But the external pressures have become too much. For car companies, air quality and climate change have led to stricter fuel economy standards. This is in addition to an erratic and ever-diminishing supply of oil and gas. For meat, dairy, and egg companies, there is similar pressure to not only reduce greenhouse gas emissions, but also reduce pandemic risks, provide healthier food, and reduce animal cruelty. For both industries, consumer pressure is mounting for better, more sustainable options. 

There are differences too, of course, but overall the challenges and trajectories of businesses making alternative proteins and electric cars are remarkably similar. This article takes a closer look at the past, present, and future of both industries. 

Hurry Up and Wait

The first electric car in the U.S. was built by William Morrison in Iowa in 1890. Its top speed was slower than a reasonably fit person on a bicycle. By the early 20th century, electric cars were having a moment, representing 38% of cars on U.S. roads. But the reign of the electric car would be short-lived: an unreliable electricity infrastructure combined with limited range and speed left a gap that gasoline-based engines were eager to fill. Cheap gas and affordable, mass-produced cars with internal combustion engines would doom electric alternatives for many decades to come. 

It wasn’t until 1996 that General Motors launched the EV1, the first all-electric vehicle mass-produced by an automaker. Once again, however, it wouldn’t last long. GM produced a limited run of just over 1,000 EV1s and made them available only through a lease. In 2002, General Motors unceremoniously cancelled the EV1 program, recalling all of the leased cars. A few were donated to museums, the rest were destroyed by the company. The story was captured in the documentary, Who Killed the Electric Car? 

General Motors EV1, from Wikimedia Commons

The CEO of General Motors at the time, Rick Wagoner, reportedly lists ending the EV1 program as his biggest regret. On a gut level, that makes sense, but hybrids and electrics still make up a tiny proportion of total car sales. In 2019, fully electric cars were just 1.5% of light vehicle sales in the United States, according to data produced for the US Department of Energy. Hybrids (including plug-ins) represent another 3% of vehicle sales. Electrics and hybrids are taking market share, but they still represent a tiny proportion of the overall market. 

Hundred Years’ War 

It’s a similar story for plant-based foods, which date at least as far back as the 1930s in the US. That’s when George Harding III founded Worthington Foods to provide meat alternatives in response to domestic food shortages and meat rationing during the second world war. The Loma Linda company started by Seventh Day Adventists came even earlier. These and other plant-based pioneers had loyal, but miniscule followings. It took nearly a century for plant-based foods to begin capturing substantial market share. 

Today, changing consumer preferences, global pandemics, and meat supply shortages have led to skyrocketing interest in plant-based foods from consumers, investors, and the media. But the reality is that plant-based meat still represents only about 1.5% of all meat sold in the US, by dollar value (by weight, it’s even less). Big challenges remain for plant-based foods to gain traction, but also big opportunities for a growing market that may not be new, but has certainly been revitalized. 

Disruption, Denied

Disruptive technologies and ideas are the darlings of Silicon Valley and venture capitalists. On the other hand, industries that are dominated by a handful of big players — like cars and food — will strongly oppose any disruptions that threaten their bottom lines. In the case of electric vehicles, despite GM being one of the electric car pioneers, an alliance of big auto companies sued to loosen fuel economy regulations that would have led to more electric vehicles. The oil and gas industries got involved too, and they’re still opposing electric cars today

Again, we see parallels with the plant-based meat industry. Probably the biggest push from traditional meat and dairy companies has involved product labelling. Attempts to prohibit the use of terms like “milk” for soy or almonds and “beef” for pea protein have largely failed, but the agriculture industry keeps trying. All of this is happening while some of the industry’s biggest players are developing and introducing their own lines of plant-based meat products. The goal, it seems, is to deny the disruptors just long enough to steal their thunder. 

Crisis = Possibility

I’m optimistic about the long-term future of plant-based foods and electric cars partly because I’m pessimistic about the future in general. The climate crisis grows more serious every day and is putting pressure on human behavior, with food and transportation leading the list of greenhouse gas contributors. Despite rollbacks of fuel economy standards under the Trump administration, the overall trend is toward stricter standards that will lead to more hybrid and electric cars. Even as legislation is slow or stalled, consumers are increasingly demanding more fuel efficient vehicles, and specifically electric cars. 

63 percent of Americans are interested in electric vehicles, and that 31 percent would consider one for their next purchase.

Union of Concerned Scientists

While climate change (and air quality) is the major crisis for automakers, traditional meat companies arguably have even more problems. In the US, meat is known to contribute to public health issues like obesity and antibiotic resistance. Because of Covid-19, people are now understanding that meat companies represent the treacherous nexus between mass animal confinement and contact with humans that could lead to future pandemics. They’re also seeing the culling of farmed animals by the billions as the result of a broken food system. 

It’s a cliche that crisis equals opportunity. But some cliches have a grain of truth and some crises do spark more rapid adoption of new technologies and more sustainable products. The climate crisis is undoubtedly leading to a change in what we drive and how we eat. As alternatives like electric cars and plant-based foods become more necessary and popular, they move from the fringe to center stage. That’s a green light for hundreds of startups and disruptors, putting the traditional auto and food industries on notice. 

Back to the Future

So hybrid-electric vehicles and plant-based meat represent tiny segments of their respective markets despite the fact that both “technologies” have been around for a century. But the real question is, where are they going to be ten or twenty years from now? 

As noted earlier, electric cars currently represent 1.5% of the light vehicle industry and plant-based meat accounts for about 1.5% of all meat sales (US figures). When starting from such a small base, any positive trend will likely result in growth rates that outpace the industry at large. Even allowing for that, however, electric cars and especially plant-based foods are experiencing huge growth rates and appear poised to grab substantial market share in the next ten to twenty years. And the two industries are tracking remarkably closely. 

For example, consulting firm AT Kearney predicts (PDF) that plant-based meat will be 18% of global meat sales by 2030 (cultivated meat will be another 10%). Also by 2030, Boston Consulting Group predicts that 18% of cars sold in the US will be fully electric (another 33% will be hybrids). Of course, these predictions are just educated guesses and there are many factors that distinguish the two industries and may affect growth rates. But the confluence of environmental and social pressures is propelling both segments.

Both electric cars and plant-based foods are currently 1.5% of their respective markets and are expected to grow to 18% in the next ten years. Personally, I look forward to driving my electric car to a nearby vegan restaurant while I tell my passengers about the similarities between plant-based foods and electric cars. 

Header photo by Carlo Verso on Unsplash.

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