The NZ Foreign Affairs & Trade have released a report on the Netherlands and Spain, showing opportunities for New Zealand's plant based sector. Both countries are showing steady growth in the plant-based and meat alternatives market and are working to accelerate the switch to plant-based proteins to align with their domestic climate targets. The report provides an overview of market developments in the Netherlands and Spain and opportunities for New Zealand Plant Based sector.
The European Union (EU) wants to become less dependent on the import of protein-rich crops, such as soybeans, and become more self-sufficient. To this end, in 2018, the European Commission called on EU Member States to develop a national protein strategy for strategic food sovereignty.
The Netherlands' alternative proteins market
The Netherlands is an agro-food powerhouse with a large agricultural sector and sophisticated greenhouse infrastructure. It is the world's second-largest exporter of agricultural products, and Wageningen University and Research is the key Dutch knowledge and innovation hub for food production.
The Dutch National Protein Strategy, launched in 2020, aims to improve food security and address large agricultural sector greenhouse gas emissions. It has five tracks to reach the goal of self-sufficiency and sustainability in new and existing plant proteins:
- Commitment to growing protein-rich crops for human consumption;
- Innovation and development of alternative protein sources;
- Increasing the use of insects as food and in utilising waste streams;
- Greater utilisation of residual flows;
- A shift in consumer diet towards more plant-based protein.
The Strategy aligns with the Netherlands' goal to accelerate the switch to plant-based proteins to help meet its 2030 climate targets. In its strategy update in June 2022, the Netherlands outlined a 50-50 goal ratio of animal to vegetable proteins across the Dutch diet. In addition, protein-rich raw materials in Dutch animal feed must primarily come from the EU by 2025 rather than third countries.
In February 2023, a public-private partnership launched a master plan for the protein transition in response to slow progress. The partnership aims to double the consumption of legumes in the Netherlands by 2030.
The Netherlands also aims to increase the uptake of plant-based alternatives through non-tech solutions such as packaging plant-based alternatives similarly to standard products. The food ingredients sector is also shifting to alternative plant-based proteins in food production, such as the 'animal-free' dairy ingredients ß-lactoglobulin and Lactoferrin.
Spain's Alternative Proteins Market
Spain is Europe's fourth-largest plant-based proteins market and second-largest plant-based drinks market. The Spanish alternative proteins market experienced a 4 percent growth in 2022 and a 58 percent increase in investment compared to 2021.
Plant-based dairy products are the most consolidated segment of the Spanish alternative proteins market. Plant-based beverages are common in Spanish supermarkets, and the main brands (Pascual, Nestlé, Chufy, Alpro and PANACH) offer oat, soy and almond milk products.
The use of fermentation for mycoprotein production is increasing and attracting foreign companies. Spanish start-ups Libre Foods and ODS Protein use precision fermentation to create fungi meat alternatives.
In 2024, Basque company Biotech Foods plans to open one of the world's first industrial lab-grown meat plants in San Sebastian to commercialise lab-grown beef.
Spain is also at the vanguard of the emerging alternative seafood market. For example, two leading start-ups are Isauki, which commercialises algae-based seafood, and Mimmic Foods, which produces tomato-based tuna. This sector is still at an early stage with €1.7 million in market value, but it experienced 442% growth in 2022.
Insect-based protein
Both Spain and the Netherlands have embraced insect-based protein. In September 2021, the EU approved the use of insect proteins in animal feed and allowed four different insects for human consumption.
The Dutch National Protein Strategy aims to increase the use of insects as a food and feed source, as well as the role of insects in converting organic waste streams and manure into high-quality proteins.
Spain's insect industry primarily focuses on commercialising insect-based animal feed products. However, companies such as Iberinsect, Just Bugs, and Tebrio have insect farms where they have started processing insects into protein-rich flour suitable for potential human consumption. Tebrio plans to open the world's largest insect farm in Salamanca in late 2024, creating up to 250 jobs.
Consumer trends
The Spanish Ministry of Agriculture, Fisheries and Food noted that the consumption of meat products has decreased by 5.6 percent since 2012, while the consumption of fruit and vegetables has grown by 10.5 percent. In 2022, 13 percent of the Spanish population stated that they were either vegetarians, vegans, or "flexitarians", a 34 percent increase compared to 2017.
In the Netherlands, the number of people who label themselves "vegan" or "vegetarian" seems to be stabilising at around 20 percent. However, many stakeholders believe there is scope to increase plant-based proteins in the general diet by marketing them to the broader population. This will happen through changes in price signals, improvements in product development, and changes to packaging and marketing. The opportunities for precision fermentation for dairy proteins are promising, including as an ingredient to improve plant-based products' performance or augment "real" dairy products.
Market growth
In the Netherlands, the price difference between meat and plant-based substitutes has reduced significantly, stimulating consumer uptake, product options, and availability. Market analysts expect prices for meat and dairy to rise over the next 20 years once the full environmental costs of animal livestock farming are built into the price. This will occur once farmers are required to pay for the true costs of their methane, nitrous oxide and nitrogen emissions, a policy change that many in the sector see as inevitable.
In Spain, plant-based beverages enjoyed 5 percent growth together with a 4 percent volume increase in 2022, reaching €352.8 million in market value, while plant-based cheese grew by 22 percent in value and 26 percent in volume, reaching a total value of €6.2 million, and dairy-free yoghurt reached €80 million in market value. Many Spanish people regard plant-based dairy as healthier and more suitable for those prone to milk intolerance and allergies. 63.5 percent of Spanish consumers consume plant-based dairy products; 33 percent say it is easier to digest than cows' milk; 30 percent say they consume it because it has fewer calories; and 29 percent say they choose it because it is healthier.
Meat alternatives continue to enjoy steady growth in the Spanish market. In 2022, meat alternatives grew by 8.3 percent in volume and 13.2 percent in value, accelerating to 17.6 percent and 21.98 percent, respectively, for new-generation products (beyond tofu, soya, and seitan). However, the Spanish meat alternatives market ranks only seventh in Europe with €84.7 million in market value, so it still has the potential to grow.
Challenges
In Spain, high inflation has meant slower growth of alternative proteins, which command higher average prices than their animal counterparts. For example, plant-based beverages ended 2022 with a contained average price rise of less than 1 percent but were still 40 percent more expensive than cows' milk, which suffered a 25 percent price increase due to inflation.
The 2022-2023 drought that impacted Spain has also affected plant-based alternatives. In 2023, almond production was 60% lower than the previous year, while hazelnut production was the second lowest registered in Spain this century. Consequently, many nuts used as alternative proteins have suffered shortages and increased production costs.
In the Netherlands, some consumers are wary of the highly processed nature of many meat-replacement products: the "e-numbers and hydrochloride perception". Evidence suggests that only a limited number of consumers are motivated by ethical, animal welfare, or environmental concerns when making their shopping choices, despite their stated intentions when asked more generally. On the other hand, concerns about perceived health benefits tend to influence actual shopping choices.
Opportunities and Challenges for New Zealand
The Netherlands has established a Food Valley(external link) Network, a "triple-helix" structure that involves businesses, academic institutions, and government agencies to foster innovation in agriculture and develop new business models. The Food Valley is noted in the 2019 Joint Climate Cooperation Statement(external link) between New Zealand and the Netherlands. There remain opportunities for partnerships in this area.
Spain's growing alternative protein market could present potential opportunities for New Zealand exporters. One strategy is to partner with or invest in innovative Spanish companies that are at the forefront of research, particularly on plant-based seafood.
While European government strategies promoting alternative proteins may be achieved slower than some policymakers hope, the market share of plant-based alternatives in Spain and the Netherlands is expected to grow. It offers potential opportunities for New Zealand exporters. There is room for expanding the more consolidated plant-based beverages market and the rising plant-based yoghurt, cheese, and alternative meat market segments. In addition to developing innovative new products, exporters should pay careful attention to packaging, product placement, and marketing that makes sense to European consumers and fits their shopping and consumer habits.
Read more about plant based foods here.
