New Zealand's red meat sector must respond to the threat of the alternative protein market with a clear strategy, a new report commissioned by Beef + Lamb New Zealand says.
The aim of the report was to understand how the industry should respond to potential future disruption relating to alternative food sources such as plant-based proteins and cellular, lab-grown meat.
It found large-scale production of burger patties and mince was likely to be a reality within five years.
Various forces were combining to drive governments, investors and consumers to look for alternatives to red meat.
They included environmental concerns relating to climate change and the ability to feed the growing world population in a sustainable way, the use of animals in food production, and the place of meat in a modern diet.
Despite those challenges, the research demonstrated there was still a strong future for New Zealand's red meat sector.
There was untapped demand for naturally raised, grass-fed, hormone and antibiotic-free red meat, with consumers prepared to pay a premium for such products.
Red meat consumption was becoming more specialised and niche, but opportunities still existed.
In the US, retail sales of fresh grass-fed beef had been doubling every year, reaching $US272 million ($NZ376 million) in 2016, up from $US17 million in 2012, the report said.
According to the study, New Zealand's beef exports faced the greatest challenge from alternative proteins, particularly to the United States.
The report identified seven emerging ''forces'' that made it increasingly likely alternative proteins would gain traction in the future.
Global meat consumption was on the agenda of governments as they grappled with managing the environment, population growth and the health of their citizens.
While change would be slow, regulatory measures by governments were expected which might affect red meat consumption or production.
Data from the international medical community was starting to highlight the health risks of red meat, while promoting the benefits of plant-based protein.
Athletes and other mainstream influencers were starting to push the performance benefits of plant protein diets.
Many of the investors in alternative protein products were wealthy and were creating and marketing consumer brands.
Millennials' eating patterns were starting to reshape the food industry. Their social values, holistic wellness goals, prioritisation of experience over product, new eating patterns and their sheer size were driving change.
The technology to produce a consumer-ready alternative protein burger was here and pushing for commercial scale. There were multiple competitors with more likely to enter the market, pushing the race to achieve mass production and distribution.
There had been a dramatic increase in the mainstream availability of alternative protein products, in the grocery aisle, at quick service restaurants, and via niche business models.
However, a range of counter forces such as an economic slowdown stifling investment or regulatory barriers might hinder the progress of alternative proteins.
There was now a better understanding of the technologies, business models and consumer trends and how quickly advancements were being made that could impact on the New Zealand red meat sector, B+LNZ chief executive Sam McIvor said.
"Far from it being a crisis for red meat, we see these trends as a tremendous opportunity and we want to focus on raising the value of our exports and on gaining higher premiums.
"I believe we have a window of opportunity to position ourselves globally as leaders in that naturally raised grass-fed space, and we must grab it with two hands,'' Mr McIvor said in a statement.
B+LNZ would be discussing the report's findings with its partners over the coming months to determine what actions the industry needed to take and B+LNZ's role in that, he said.