Well-funded start-ups and major food manufacturers are betting big that alternative seafood – plant-based, fermented and cell-grown – will be the next big new opportunity in alternative protein.
The U.S. market for seafood alternatives is tiny, with plant-based seafood dominating the niche. According to data from market research firm SPINS, plant-based seafood alone accounts for only about 0.1% (or about $12 million in annual sales) of the entire seafood market. US seafood market – and this despite sales growth of 23% in 2020.
Fermented seafood, represented primarily by mycoprotein-focused company Quorn Foods, is currently too small to matter. Cell-cultured seafood, which is produced by culturing marine mammal cells, is still in the pre-launch stage.
Essential taste and texture
Alternative seafood is currently a minnow. However, it’s similar to where alternative dairy was in the 1990s and where alternative meat was a decade ago, so I agree with start-ups, investors and established food companies who dive into space that there are opportunities there. The most important questions concern the size of the opportunity – does the size of the opportunity justify the high level of investment we are seeing? — and what it will take for that opportunity to materialize. What will it take to create and build a market for plant-based, fermented and cultured seafood?
The total seafood market in the United States is huge, accounting for approximately $15 billion in annual sales. If, for example, the alternative seafood segment can cut 5-7% of that total by 2030 – a reasonable goal but not an easy one to achieve – that would be substantial, amounting to nearly $1 billion. of annual sales, and that’s where I think the space needs to be by then to scale properly and be taken seriously.
The two keys to making alternative seafood a viable segment are taste and consumer acceptance, which go hand in hand. These are the main characteristics of any alternative seafood product – plant-based, fermented or cell-cultured. Sustainability issues, overfishing of the oceans, disadvantages of aquaculture, all of which are used to market alternative seafood products and could have a place in the marketing mix, are secondary and tertiary product attributes. Consumers must accept alternative seafood as viable substitutes for wild and farmed seafood. Alternative seafood products must taste good to consumers.
A recent study by consumer insights firm Kelton Global commissioned by nonprofit and alternative protein advocate The Good Food Institute found that nearly three out of four consumers are interested in alternative seafood. According to the study, the majority of those interested are omnivores and flexitarians who do not follow any particular diet.
The study showed that the most important attributes of seafood alternatives for consumers are flavor and texture. A majority cited taste and texture as the top two barriers to choosing products over wild and farmed seafood. Consumers expect to dislike the taste and texture of seafood alternatives, hurdles that can be overcome but can often mean ongoing changes in recipes and formulations.
Lessons from plant-based meat
It is always instructive to apply an analogous product development history when looking at a nascent segment like alternative seafood. Alternative meat, especially plant-based meat, which has been on the market for more than three decades, is a good example.
Historically, taste and texture have always been the limiting factors for plant-based meat brands to gain wide distribution in supermarkets (as well as placement in the case of meat in stores where it was offered for sale). sale), while achieving something close to widespread consumer acceptance. .
Beyond Meat and Impossible Foods have broken that code in a big way, gaining widespread retail distribution, placement in in-store meat cases, and a consumer base that includes meat eaters. The taste and texture of their alternative meat products closely approximate the taste and texture of conventional meat.
Taste and texture are the driving force behind the popularity of these two alternative meat brands, as well as a few others following in their footsteps. All other attributes – including sustainability benefits, being vegan alternatives – follow as secondary and tertiary product attributes that might encourage consumer trials, but not repeat sales.
Limited margin of error
Alternative seafood brands that will succeed, whether plant-based, cell-cultured, or fermented, will do so primarily because they have products that are similar in texture and taste to the real thing. Consumers will accept plant-based tuna or salmon that vary slightly in texture and taste from wild-caught salmon (just as farmed salmon may taste slightly different from wild-caught), but the margin error of the alternatives is very low. Consumers may try an alternative seafood product based on its secondary and tertiary attributes, but repeat sales will only come from product acceptance i.e. taste and texture.
Investment dollars are flowing into alternative seafood, but there is a risk that brands will think that with enough funding and the right marketing, they can build a brand and collectively build a segment based on these secondary attributes. and tertiary.
Negatives rarely, if ever, work in food marketing. Beyond Meat and Impossible Foods both use anti-animal meat messages. But that’s secondary to the product. Texture and taste are at the heart of their proposal. The message is: “We’re an alternative, but we look, feel and taste the ‘real thing’, or even better than this.”
For alternative seafood, we are only in the first quarter of the game. There are currently a handful of brands on the market, mostly all plant-based, but new brands are being created at breakneck speed and a a number of existing brands are improving the quality of their products. In the past two years alone, many plant-based alternatives to seafood have been introduced that taste much better than the products launched just a few years ago.
Retail distribution of alternative seafood brands is uneven, but retailer acceptance is growing rapidly. Wider distribution is essential not only for increased availability, but also because it signals to consumers that retailers find alternative seafood worth selling.
The next iteration of alternative seafood will be cell culture products. Those developing cell-cultured seafood are waiting for FDA approval to hit the market, but they could help the broader alternative seafood segment reach the 5-7% share of the U.S. seafood market. $15 billion seafood that I believe is necessary to make it a real competitor.
However, consumer acceptance will be more difficult for cell-cultured seafood products than for plant-based products due to a lack of knowledge of the vast majority of consumers about new foods. Companies already in the space will have to work hard to convince consumers of the safety qualities of products, even when regulatory guidelines are issued.
Additionally, various industry and consumer groups object to cell-cultured seafood actually being called seafood, which would only add to consumer and retailer confusion. Food products of plant origin, on the other hand, are fully accepted by consumers and retailers.
The keys to the success and consumer acceptance of all alternative seafood brands, whether cell-cultured, plant-based or fermented, are texture and taste. Product first. Everything else is secondary and tertiary.
Just Food columnist Victor Martino is a California-based strategic marketing and business development consultant, analyst, entrepreneur, and writer, specializing in the food and grocery industry. It is available for consultation at: [email protected] and https://twitter.com/VictorMartino01.