HOW ASIA’S GROWING DEMAND FOR FOOD DRIVES AGRIFOOD INNOVATION
The food that lands on our table is usually grown in farms. In Asia, these farms are typically labour-intensive. The volume and quality of the vegetables or meat produced is subject to the vagaries of weather and the risk of disease. Once harvested or processed, the food products are typically transported over long distances before landing on the dinner table. Some of the vegetables and meat is further processed in factories and converted into packaged food to make it last longer, and taste and sell better. The whole chain of activities that takes place from the farm to the eventual delivery of food to our tables is termed as the agrifood industry.
As consumers, some of us might not be aware that the traditional agrifood industry contributes 19-29% of global greenhouse gas (GHG) emissions.1 The burden on the environment would only grow more severe given Asia’s growing food demand. Asia will more than double its total spend on food over the next decade, from USD4 trillion in 2019 to over USD8 trillion by 2030.2 This is driven by Asia’s growing population, which is expected to increase by 250 million by 20302, as well as by the region’s rising incomes.
Land use for foods
A research by Our World in Data suggests that if everyone shifted to a plant-based diet, we would reduce global land use for agriculture by 75% as a result of a reduction in land used for grazing and a smaller need for land to grow crops to feed the animals. Photo: iStock
While this might be seen as a challenge, there is growing interest to re-imagine the future of food and identify opportunities to transform the sector through introducing technologies and business innovation. Some of these agrifood innovations have shown promise as commercially viable options to produce more with fewer resources, or offer more sustainable options that can address the increased demand and aspirations of the Asian consumer.
SOME AGRIFOOD SEGMENTS POISED FOR SCALE
Among the wide range of agrifood innovations, three areas are relatively well positioned for expansion in the near future: plant-based proteins, plant-based milk alternatives as well as controlled environment aquaculture systems. These agrifood innovations use a range of technologies to deliver better outcomes. Some focus on delivering an equivalent if not better product while others enhance the productivity and yield of the overall production systems.
For these agrifood innovations to scale, they have to address consumer preferences, especially taste, texture and cost. Taste and texture or ‘mouth-feel’ makes or breaks a product. Cost, though, would eventually determine the scalability and perhaps even the longevity of a product. Given the relative price sensitivity of the consumer, agrifood companies would need to establish production pathways that eventually allow them to be price-competitive.
PLANT-BASED PROTEINS
A plethora of plant-based proteins or meat alternatives have emerged that offer the experience of consuming meat, beef, chicken, pork or eggs but are actually made from beans such as pea or soy. One of the reasons for the emergence of plant-based proteins is that its taste and texture compares well with the minced meat segment. Going by how many quick service restaurants are putting such products on their menus as well as how other traditional meat and food companies are distributing plant-based products, there is a growing acceptance that plant based products such as Let’s Plant Meat and Hungry Planet can offer the taste and texture to qualify as alternatives to meat, especially in the minced ‘meat’ category.
The ‘product innovation’ in this area involves the application of food science and process technologies. To appeal to consumers, companies need to know how to create a product that has the taste and texture to appeal to consumers. Achieving this requires a strong understanding of the taste profiles of a range of ingredients. For example, companies have identified heme as a key ingredient that makes beef taste like beef. They use plant fat to mimic the aroma and taste produced from the cooking or caramelisation of the fats in meat. Some companies use jackfruit while others use binders to re-produce the ‘mouth feel’ of meat. Given the wide range of ingredients involved as well as the need to know how the ingredients might react to each other during the preparation process, other companies have developed software tools that help the user shortlist the appropriate ingredients. Finally, to produce the final product in sufficient quantities, process technologies are applied to blend or extrude the ingredients at the appropriate temperature and speed, to ensure a consistent product that can mimic the taste and texture of meat.
PLANT-BASED MILK ALTERNATIVES
Another agrifood innovation that is gaining popularity among consumers is plant-based milk alternatives. Global Market Insights3 projected that the global plant milk market will grow 11% annually from 2020 to 2026. Almond and oat milk are the key growing areas. Other choices include cashew, hazelnut and coconut milk. While lactose intolerance is often cited as a key reason for the growth, growing consumer awareness of the nutritional benefits as well as environment sustainability considerations are also key drivers. Taste and texture-wise, plant-based milk alternatives are at least comparable to milk and some consumers are willing to pay more to pair their coffee with oat milk.
Plant-based burger vs beef burger
The University of Michigan’s Center for Sustainable Systems conducted a Life Cycle Analysis Study and found that making one plant-based burger consumed 99% less water, 93% less land, 46% less energy than that of a real beef burger, and led to 90% fewer green house gas emissions. Photo: iStock
The real artificial meat
In collaboration with Nissin Foods, the team led by Shoji Takeuchi at the University of Tokyo has found a new way to grow cow muscle cells in culture. The cells arrange themselves into long strands, resembling real muscle fibres. Takeuchi wants to grow larger chunks and introduce other tissues such as fat and blood vessels to make the meat more realistic. Source: www.nissin.com
Most plant-based milk alternatives are produced through the traditional processes of milling, filtration, sterilisation and homogenisation. The innovation lies in the fine-tuning of the processes and the application of food science to obtain a product that delivers the desired customer experience. Other plant-based milk alternatives are produced through fermentation, where the innovation involves the design of microbes that are cost-effective in producing the desired products in large volumes.
Since plant-based proteins and milk alternatives do not require the rearing of animals, it removes the associated greenhouse gases that are produced over the lifespan of the animals. Furthermore, compared to meat, the storage of these products usually does not require freezing temperatures and are therefore more energy-efficient. The combination of these two factors makes plant- based products a more sustainable alternative.
CONTROLLED ENVIRONMENT AQUACULTURE
Asia’s aquaculture farms are highly fragmented and largely still follow very traditional farming practices, with survival rates as low as 20%. Disease management is one of the key issues, as fish and shrimp are reared at higher densities and dead infected creatures are not removed as promptly. Diseases such as white spot and Early Mortality Syndrome have caused considerable reduction in shrimp production in ASEAN. Increasing survival rates especially in the early juvenile growth stage of the creatures would greatly address this issue. Innovations in the aquaculture sector focus on the development and application of sensors, machines and software controls to achieve outcomes that help farmers expand their production and manage the cost of feeding the aquaculture species. One way for farmers to do so is to use sensors to monitor the water quality. If there are conditions such as diseases or water pollution that might be harmful to the fish, the farmer is alerted and action can be taken. In some instances, water purification systems are activated to treat the water. This leads to lower mortality rates and higher yields in the farmers’ output.
Plant-based milk market
The Asia-Pacific is the largest market for dairy alternatives, and the fastest growing region, according to Mordor Intelligence. While almond milk is the fastest-growing segment of the alternative milk market in Asia, potato milk is said to be the next food trend in 2022 and a more sustainable choice for its production takes less land and water. Photo: 123rf
Other innovations seek to help farmers improve the feed conversion ratio which measures the amount of feed used to grow the fish. For some farms, feed can make up 50-70% of production costs, and managing the cost of feed without compromising on the growth of the fish is of equal, if not greater, importance than disease management. Sensors and software are used to determine what might be the optimal time to feed the fish, and machines are used to dispense the required amount of feed in a controlled manner so that the feed is consumed rather than falling to the bottom and wasted.
Beyond solutions that support traditional farmers, there are also innovations such as re-circulatory aquaculture systems that ensure production consistency in the quantity and quality of premium aquaculture. Tanks are used to create self-contained systems with their own sensors and attached water treatment systems to create a controlled environment. Besides applying automation to feeding, these systems also use automation to move the fish to larger tanks as they grow, to reduce over-crowding and reduce mortality. Given the disruptions in food supply chains caused by COVID-19, there is new interest in these systems as a means to bolster food security, since these systems can be sited closer to urban centres.
The crawfish boom
Singapore Crawfish’s proprietary Auto Birthing System eliminates the problem of fetal cannibalism which causes the deaths of up to 80% of the crawfish babies per breeding cycle. This technology promotes both sustainable farming and positive economic growth, and could change the face of global aquaculture. Source: www.hatchhives.com
The world’s appetite for aquaculture products shows no sign of abating especially given Asia’s growing middle class population. Globally, wild catch production has largely flattened out.
Production growth to meet this demand would have to come primarily from farmed aquaculture. The Food and Agriculture Organization of the United Nations indicated that farmed aquaculture was projected to reach 109 million tonnes in 2030, an increase of 32% (26 million tonnes) over 2018. Asia will continue to dominate the aquaculture sector, and will be responsible for more than 89% of the increase in production by 2030. The technologies described above would help address this demand growth by enhancing the output and productivity of the aquaculture sector.
A VIEW ON THE FUTURE AGRIFOOD INDUSTRY
The increased adoption of such innovations will usher in a transformation of the agrifood industry. It would enhance the sustainability of the sector by introducing options that produce more with less while reducing the carbon footprint in the process. With greater productivity, farmer livelihoods could be uplifted and they would also become more resilient, as their produce could be better shielded from the vagaries of weather and disease.
Different stakeholders could play various roles to support the continued transformation of the sector. Food industry executives who are producing or distributing food-related products and solutions could explore whether these products or ingredients could be incorporated into their offerings. The sector needs investors with patient capital who are willing to incorporate agrifood innovation companies in their portfolio and give more time for these innovations to scale up and gain broad adoption. Consumers could taste test or incorporate these agrifood nnovations into their diet. They could advise others on how best to prepare and serve these new products and help encourage consumption growth. Collectively, such efforts would contribute to the development of a more sustainable agrifood industry.
The views expressed here are the author’s personal opinions and do not necessarily represent the position of the author’s employer.
LEE ENG KEAT
Lee Eng Kiat has been helping companies translate trends into strategy for execution over a diverse range of industries in Asia’s emerging markets, in particular Southeast Asia and India, over the last 22 years, initially at the Singapore Economic Development Board (EDB) and now with United Overseas Bank Limited (UOB). Two of his focused sectors are logistics and agrifood, which he oversaw while he was at EDB. Due to the growth, environment and social impact of the agrifood sector, he is particularly passionate about it and helps agrifood companies connect with business partners to support their scale-up in Asia.
DECEMBER 2021 | ISSUE 9
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