A plant-based diet has been advocated by some groups as a viable option to counter health problems such high cholesterol, coronary disease and diabetes. Scientists have also suggested that consuming less meat in favor of a plant-based diet has the potential to help solve some environmental issues, such as decreasing deforestation and greenhouse gas emissions. Independent of one’s views on diet, it is worth exploring the business opportunities presented by this growing trend.
A recent study by Meticulous Research1, estimates annual market growth rate of 11.9% for the plant-based industry between 2020 and 2027, reaching annual sales of $74.2 billion by 2027. The same study indicates that the COVID-19 pandemic is driving some of the growth of the industry, as consumers are more concerned about the link between animal products and health conditions (such as inflammatory and heart disease) and are looking for plant-based food options. To cite another example of the growing trend, a Washington Post article noted that the Fancy Food Show 2019, one of the most popular food trade shows, exhibited considerably more plant-based snacks and foods than in previous years.
Chia, quinoa and amaranth are some examples of power foods that are gaining more attention as a result of the plant-based industry. These seeds are packed with protein, dietary fiber and omega-3 fatty acids. Traditionally grown in South America, Bolivia and Peru have been the leading exporters from the region. The US is a major export destination, with growing demand for the organic variety of these grains. However, there is growing competition from China and US producers that are now cultivating these crops. As Latin American countries continue to focus exports on commodities and raw materials, this competition presents a real risk for disruption.
The ongoing challenge for Latin America is how to add value to products in the agro-business industry. One opportunity is to invest in certifications, such as organic and sustainable practices. US consumers are generally willing to pay a premium for products with those certifications, for there is a belief that organic foods are relatively healthy and that the company that obtained the certification cares more for the environment and for the labor conditions in the countries of origin. There are well known organization that offer certifications after going through a rigorous process to ensure standards are met. On the other hand, there are also corporations that are opting for “self-certification,” whereby they assure their customers of the superior quality of their products and their company’s sustainability programs via other means.
In conclusion, dietary trends and a growing concern about the safekeeping of the environment present an opportunity for Latin American producers to find markets abroad. Although small companies may find it expensive and burdensome to go through the certification process, doing so can differentiate themselves from the competition and increase access to a client base that is willing to pay more for their products.
sources: https://www.mordorintelligence.com/, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3662288/, https://www.bbc.com/news/science-environment-49238749, https://cornellbotanicgardens.org/wp-content/uploads/2018/11/nutrition-labels.pdf