PETALING JAYA: Nestle (M) Bhd sees promising growth prospects in the plant-based food business as there is increasing awareness to reduce emissions and people are opting for such diets.
Last April, the world’s largest food and beverage manufacturer announced a RM150mil investment to start a plant-based meal solutions manufacturing facility in Malaysia.
It will be the first plant-based meal solutions manufacturing facility in Asean and one of only two in the whole of Asia.
In an interview with StarBiz, Nestle Malaysia chief executive officer Juan Aranols said that the plant-based segment is still at an early stage and will take awhile to grow.
“We see great prospects for this segment in the Asean region. We will continue to invest in its growth.
“This is a nascent category and the contribution to Nestle Malaysia, while growing fast, will remain a small part of our total sales in the short to medium term,” he said.
The products are targeted to cater to both the local and export markets under its Harvest Gourmet brand that includes burger patties, ground “minced meat” and nuggets using proteins such as soy and wheat.
Nestle has also introduced daily-free beverages for its Milo and Nescafe brands.
“Plant-based is a fairly new market in the region, and our decision to venture into this segment reflects our view about consumers’ making lifestyle choices that help their health and address environmental concerns,” Aranols added.
According to a report from Bloomberg Intelligence titled “Plant-based foods poised for explosive growth”, the global plant-based alternatives market could grow almost five-fold, from US$29.4bil (RM123bil) in 2020 to US$162bil (RM681bil) in 2030.
The report estimates that the Asia-Pacific region is likely to dominate the plant-based protein market reaching US$64.8bil (RM284.99bil) by 2030, up from US$13.5bil (RM59.37bil) in 2020, due to its vulnerability to limited food supply.
Aranols said as income and affluence rises across the Asean region, more consumers are expected to shift towards plant-based options as they grow to prefer healthier and more sustainable products
In Malaysia alone, he pointed out that there has been increasing awareness and consumption of plant-based foods.
“A majority of Malaysians surveyed declare to have consumed plant-based products and they believe that plant-based products are healthier.
“The study also reported that 29% of these Malaysian respondents consumed plant-based alternatives several times a week, compared with only 2% who had never consumed plant-based food,” he said.
Aranols said Nestle expects the plant-based segment is to see continued growth at double digit rates in the Asia Pacific region over the next few years.
“Complementary to our core products, innovation remains an important part of our long-term growth strategy and it’s important for us to capture rapidly shifting consumer trends,” he said.
MIDF Research expects the contribution of Nestle’s plant-based segment to remain modest for the next three to five years before becoming a more significant contributor.
“We estimate that the plant-based and dairy alternatives segment will gain market share, over the years and be accretive to the group’s earnings, given the group’s track record of developing products tailored to the domestic taste buds and relevance,” it said in a report in March.