Dive Brief:

The alternative meat market could hit $140 billion during the next 10 years, meaning it could capture about 10% of the total $1.4 trillion global meat industry, Barclays analysts said in a report cited by CNBC.

Although the analysts said some "inherent barriers" remain for lab-based products — such as successfully replicating a T-bone steak — some meatless products in the marketplace now, including ground beef and sausage, have garnered favorable initial consumer response.

Alternative meat is not merely a fad, the analysts said. "While lab-based meat is still likely several years away from hitting supermarket shelves, plant-based protein continues to gain ground vs. its animal-based counterpart, and we expect this trend to continue for the foreseeable future," they wrote in the report.

Dive Insight:

Optimism shown by Barclays analysts and others observing the plant- and lab-based meat sectors likely stems in part from Beyond Foods' recent IPO performance. The maker of the Beyond Burger and other plant-based products ended its first trading day May 2 with stock soaring 160% above its initial price, and MarketWatch reported it was about 218% higher as of last week. The company's stock was up more than 7% in Tuesday morning trading, at more that $85 per share.

Beyond Foods was the first plant-based food maker to go public on a major exchange, but probably won't be the last. One of its competitors, Impossible Foods, recently raised another $300 million — for a total of about $775 million in five funding rounds — and could announce an IPO at some point.

The plant-based meat market has expanded at an impressive pace. Sales climbed 42% between March 2016 and March 2019 to $888 million, according to Nielsen figures. At the same time, sales of conventional meat were only up 1% to $85 billion.

When compared to the global conventional meat industry, plant-based alternatives resemble David much more than Goliath. However, they're growing at a much faster pace. While Grand View Research expects the global beef market to reach $383.5 billion by 2025, its compound annual growth rate is projected at 3.1%, or less than half that of meat substitutes.

This scenario is giving the conventional meat industry the jitters, which is why it's trying to limit use of the terms "beef" and "meat" to products made "from cattle born, raised and harvested in the traditional manner." The meat industry is also playing up recent sustainability efforts, since consumers are increasingly expecting more from companies they patronize.

Plant-based and cell-cultured meat companies often point out production of their products uses far less water and land, and either involves cells taken from animals or no animals at all. Impossible Foods recently had a science-based life cycle assessment done on the latest formulation of its Impossible Burger. It showed the plant-based burger's carbon footprint is 89% smaller than one made from beef, and the product reduced environmental impacts in every category studied.

To get a piece of this action, some traditional meat companies have invested in the alt meat space, or launched their own products. One is Tyson Foods, which sold its share in Beyond Meat and plans to launch meatless protein products this summer. Nestlé will roll out its plant-based Garden Gourmet Incredible Burger in Europe this spring and in the U.S. by summer. And that trend will likely continue.

According to recent reports from The Good Food Institute, investors have put more than $16 billion into U.S. plant-based and cell-based meat companies in the past 10 years — $13 billion of it in 2017 and 2018. And global cell-based meat companies saw a flurry of activity last year, the institute found, with 12 firms raising $50 million in 14 deals.

Cell-based products are coming much more slowly than plant-based ones. A handful of companies are racing to be first to market with affordable beef, chicken, fish or crustacean products. Israeli startup Aleph Farms recently announced it had developed a cell-grown minute steak, Memphis Meats is working on lab-cultured meat and poultry — in which both Tyson Foods and Cargill have invested — while Finless Foods is producing algae-based shrimp using genetically engineered algae. Just is working to develop lab-grown chicken and has partnered with Japanese meat producer Toriyama to produce lab-grown wagyu beef. CEO Josh Tetrick has told Food Dive since 2017 that he eventually plans to take the company formerly known as Hampton Creek public.

Because of high production costs and potential consumer reluctance, these companies may have to work harder to market the new lab-grown products, since they could take longer to catch on. But all these moves from plant-based and cell-based firms indicate that more alternative products will be coming to the marketplace in the near future, pressuring more global meat companies to consider getting into the category.