Fake meat sales are growing, but is it really better for you? by Mark Koba @FortuneMagazine May 11, 2015, 11:25 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons The hunger for fake meat — or meatless meat — is getting bigger. So much so that the latest sales numbers of plant-based meat alternatives reached $553 million in 2012, representing a growth spurt of 8 percent from 2010. “We are doubling the business annually,” said Ethan Brown, CEO of Beyond Meat, which makes non-animal food products like the Beast Burger and has an active group of investors that includes Bill Gates and former Twitter execs Biz Stone and Evan Williams. “We’re growing like a weed and expect to keep growing,” said Martha Pincoffs, founder of Minnesota-based Hot Dang Grain Burgers that makes meatless items, such as the “Big Tex,” a grain burger ready made for the barbecue. Her products are sold in many Whole Food stores across the country. Why the increase in meatless meat? Those in the know say better health habits among consumers, along with tastier products, are providing a healthy financial benefit for businesses and investors. Also, there is a growing sense that the meatless meat industry is more environmentally friendly. While only about 7% of U.S. consumers call themselves vegetarian, more people are changing their eating habits along with their environmental consciousness, said Rachel Greenberger, director of Food Sol, an entrepreneurial food program at Babson College. (Vegans avoid all animal products like milk.) “Awareness of the plight of farm animals in our food system is sharply rising,” Greenberger argued. “And people realize that our planet and our bodies cannot support an industry that breeds and slaughters nine billion animals for food every year.” The United Nations and the latest proposed USDA guidelines indicate that a switch to non-animal based proteins is necessary for survival of the planet, contended Dr. Joel Kahn, a cardiologist and vegan café owner. “For those reasons, fake meat is a growing market,” Kahn said. According to the U.S. Department of Agriculture, total cattle and beef consumption in the U.S. was 25.5 billion pounds in 2013, which translated into some $88 billion in retail value. Overall red meat consumption in the country has been declining over the last ten years while chicken consumption has slowly risen. In a survey of 2,000 U.S. adults, 36 percent of those polled said they ate less beef in 2013 than in 2012. Meanwhile, the vegetarian market is a $2.8 billion-a-year industry, and a growing number of Americans–around 22.3 million–say they are inclined to follow a vegetarian diet with events like meatless Mondays. Sweet Earth Natural Foods’ Kelly Swette said the company should be profitable this year. Hot Dang Grain Burgers’ Pincoffs said business has been so good, she’s adding another full time position to her four-person staff. Meat industry fights back While the U.S. meat industry claims not to see plant-based protein products as a threat to sales, it is fighting back against health concerns as well as claims over mistreatment of animals and environmental costs from raising and killing animals for meat. On its website, the North American Meat Institute states that “scientific research affirms that meat and poultry are packed with essential and highly absorbable nutrients and can play a vital role in a healthy diet. Meat and poultry, eaten in combination with other recommended foods, also can optimize the nutrition that people derive from their balanced diets.” The latest battle for the industry revolves around the USDA food guidelines mentioned by Dr.Kahn. They’re updated every five years and due for changes to be announced later this year. However, an advisory committee to the USDA has called for Americans to eat less red and processed meat. That’s spurred an online effort by the American Association of Meat Processors to reject the newer restrictions while saying “meat’s nutrient density helps deliver a unique nutrition bundle, control appetite, aid in weight control and that the B12 in meat helps promote brain development and brain health.” Interestingly, some in the vegetarian community contend that some plant-based alternatives made from ingredients like wheat, rice soy, nuts, spices, beans, vegetables and dairy products have dubious nutritional value. “Many fake meat items are highly processed and include ingredients meant to mimic the texture of meat but don’t carry any nutritional benefits,” said Ryland Engelhart, a partner in two vegan restaurants in Southern California that are expanding throughout the state. “When the industry gets to the point when people can say ‘I can’t believe this isn’t real meat,’ that is when the majority of consumers will make the move,” said Matt Materazo, president of ADF Foods, which has a line of vegetarian offerings that account for half of the India-based firm’s yearly revenues. That kind of appetite is already building, said Dan Gillotte, general manager of Wheatsville Food Co-op in Austin, Texas. “People are tasting these products and are often very pleased and sometimes surprised how good they can be,” Gillotte said. “The sky is the limit for the future.” Mark Koba is a free-lance journalist based in New Jersey.