Canada / Analyst Insights
Winners & Losers (Part 1): Meat Substitutes’ Effect on Industries

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by Olivia Ross, Industry Research Analyst
Jul 11 2019

Across the globe, plant-based meats are gaining popularity for their health benefits and reduced environmental impact. In Canada, several companies are racing to conquer the expanding market for plant-based meat, including US-based Impossible Foods Inc. and Beyond Meat Inc., as well as Lightlife Foods, a fully owned subsidiary of the Canadian meat conglomerate Maple Leaf Foods Inc.

Encouraged by rising disposable income and growing health-consciousness among Canadians, companies have rapidly expanded their distribution of substitutes for chicken, pork and beef over the five years to 2019. Made with ingredients such as peas, mung beans and rice, popular meat substitutes such as Beyond Meat’s Beyond Burger can now be found across the country at a variety of restaurants and grocery stores.

However, not every industry is happy about Canadians’ increased appetite for fake meat. While grocery stores and fast food restaurants have jumped at the chance to boost sales and expand their product offerings, industries reliant on fulfilling Canadians’ appetite for beef have been less thrilled.



Winner: Fast Food Restaurants          

Though plant-based options are not yet offered at all 31,897 establishments in Canada’s Fast Food Restaurants industry (IBISWorld report 72221aCA), many have incorporated such alternatives into their menus, giving many Canadians their first taste of a plant-based meat substitute. Industry operators have capitalized on the evolution of consumer preferences toward healthier, gourmet options by shifting menus away from fatty foods and focusing instead on quality products with nutritional value, including plant-based meat substitutes.

A&W Food Services of Canada Inc., which accounted for 5.7% of the industry’s $26.4-billion revenue in 2019, added Beyond Meat’s Beyond Burger to its Canadian menu in 2018 to widespread acclaim. A&W outpaced industry revenue growth over the five years to 2019 by making aggressive menu changes toward healthier offerings, including the Beyond Burger. Likewise, Tim Hortons Inc. announced in June that its line of Beyond Meat-filled breakfast sandwiches are available at all of its 4,000 Canadian locations. As plant-based meat substitutes take over Canadian menus and win diners’ hearts, many operators will seek to expand revenue and profit margins by continuing to offer alternatives to red meat products. Accordingly, industry revenue is anticipated to grow an annualized 1.6% to $28.6 billion over the five years to 2024.

Loser: Beef Cattle Production

According to the Canadian Cattlemen’s Association, Canadian beef production represents the second-largest single source of farm cash receipts, contributing $18.0 billion to Canada’s GDP annually and generating over 225,000 domestic jobs. The Beef Cattle Production industry in Canada (11211CA) experienced volatility over the five years to 2019 amid declining herd numbers and fluctuations of input costs and sales prices.

During the current five-year period, industry revenue has decreased at an annualized rate of 1.4% to total $14.8 billion. Operators have contended with a rising vegetarian and vegan population and promotional campaigns designed by environmental groups and alternative food processors to disparage the beef industry. Concerns about the use of antibiotics and chemicals in meat production have also led some consumers to shift either to certified organic meat or avoid beef consumption altogether.

Furthermore, per capita meat consumption is anticipated to remain stagnant over the five years to 2024, increasing at an annualized rate of just 0.1%. As consumption of meat stagnates and plant-based substitutes become readily available, the industry is likely to contend with increased volatility and challenging changes to consumer preferences over the five years to 2024.



Winner: Supermarkets & Grocery Stores

As the largest food retail channel in the country, Canada’s Supermarkets & Grocery Stores industry (44511CA) has benefited from increased sales of high-end food products over the five years to 2019. The introduction and rising popularity of meat substitutes will likely boost revenue for operators in this $91.6-billion industry that has long been defined by narrow profit margins and intense price-based competition.

In April, Beyond Meat Inc. announced that it will start selling its plant-based burgers in 3,000 Canadian grocery stores, including Loblaw Companies Limited, Longo Brothers Fruit Markets Inc., Sobeys Inc. and Whole Foods Market Inc.­­, among others. According to IBISWorld estimates, Loblaw and Sobeys accounted for a collective 62.8% market share in 2018 (latest data available), boasting industry-relevant revenues of $32.9 and $24.0 billion, respectively. Sobeys was first to introduce the Beyond Burger, rolling out the product to its nearly 1,600 stores nationwide at the end of April.

Other industry competitors soon followed suit, adding the burger, which retails from $7.49 to $7.99 per package, to stores in May. Despite intensifying competition from alternative retailers over the five years to 2024, grocery stores are expected to benefit from rising health concerns, which will entice more consumers to purchase organic, all-natural and value-added products at industry establishments. As a result, IBISWorld anticipates industry revenue will increase at a modest annualized rate of 1.1% to $96.6 billion over the five years to 2024.


Want to learn more about this new fad? Check out our latest podcast on Meat Substitutes



Edited by Kieran Newton
Infographic Design by Alexandria Valenti