Seizing the opportunity

Demand for plant protein being driven by rising world population and global middle class

By Kathy Kerr

Western Canada is perfectly positioned to satisfy the world’s steadily growing hunger for protein, say plant-protein sector advocates on the Prairies.

Prairie farmers already produce a wide variety of pulses, hemp and other protein-rich commodities. Alberta alone was seeding close to 2.4-million acres of pulse crops in 2016, according to the provincial government, and the pulse industry dollar value in 2015-2016 was more than $575 million.

Now Western Canada is aiming to dominate the market, not just for bulk commodities but plant-based ingredients and finished products for human consumption and feed for pets, livestock and farmed fish. There are also opportunities with the nutraceutical and pharmaceutical field.

Research outlined in the Canada West Foundation’s December 2017 report Sprouted shows that the global plant-based protein market is estimated at more than $8 billion US now and is expected to reach $14.8 billion by 2023. That demand is being driven by rising world population and a rising global middle class, projected to increase by 160 million people annually for the next five years.

“As people get richer they tend to go after an increased diet, not just of carbs but of protein,” says Carlo Dade, director of the Centre for Trade and Investment Policy at Canada West Foundation and one of the authors of Sprouted.

“Income levels trigger the rise to eat more protein. Even in the established, richer economies the demand for protein remains, but it shifts and it has different manifestations. So in the U.S. you’ll see a shift in the demand of type of protein from animal-based protein to plant-based protein. In places like Vietnam, you’ll see a rise in the demand for animal-based protein that we can supply directly or (with) the feed that’s needed for animals.”

North America was the largest market for plant protein ingredients in 2015, representing 35 per cent of total global demand, according to Sprouted. But the Asia-Pacific market is expected to grow the fastest in future.

“Whatever you want in terms of protein we want to be there to be the supplier of choice, or at least to have the ability to look at each opportunity that comes down and decide if it’s worth our effort,” says Dade.

The Plant Protein Alliance of Alberta (PPAA) and agricultural organizations across the Prairies see the greatest opportunity for growth in value-added processing of bulk commodities such as pulses (dried peas, beans, lentils, chickpeas), canola and hemp to produce ingredients for human or animal consumption, and finished products.

Allison Ammeter, chair of PPAA and a director on Alberta Pulse Growers and Pulse Canada boards, would like to see Alberta pulses and crops being processed close to the farm gate, adding value, increasing the price of the commodity and providing local jobs.

“I’d like to see a whole lot less of what we’re growing leaving Canada in the hold of a Panamax vessel and a whole lot more leaving Alberta in an extremely high-value form. And if that form is a finished product, tremendous; and if that high value is one ingredient that goes into a finished product, terrific; and if it’s some pharmaceutical addition, great; and if it’s some coating for something, great. Any time you add value you’re succeeding.”

The Prairies would reap the rewards of more jobs from those processing plants, rather than providing jobs for workers in other countries. And there is increasing research into providing more profit for farmers.

Research and development is underway to use the whole plant, rather than just the protein in the seed. In a pulse such as yellow peas, the protein portion is about 25 per cent of the seed. Only taking the high-priced protein leaves the starch, 50 per cent of the seed, and the fibre, 15 per cent, unused.

“In China, almost all the starch, including some extra they buy from Canada, is going into vermicelli noodles, which used to always be made with mung beans but mung beans are more expensive and they discovered they can get a pretty good product out of yellow peas,” says Ammeter.

“The idea of whole-plant utilization is ‘let’s not throw away the starch and fibre to get the protein – let’s find valuable usage for the whole plant.’ ”

Those uses are varied and not all involve human food. Pet food is already a big market. And plant protein can be used for products like pharmaceutical capsules. There is research underway to make bioplastic production cost effective.

Dade adds that there are major economic advantages for the Prairies from the production of ingredients, rather than whole bulk commodities.

“We constantly talk about diversification in this country. And this is the path to diversification … you’re selling different product to different people.”

Canada already has a leg up in terms of plant protein thanks to proximity to the world’s biggest market, the U.S., and our trade architecture and agreements, says Dade.

“The U.S. is next door to us. We are always going to have advantages over everyone else in the U.S. simply by being next door, speaking the same language.”

Current trade issues with the U.S. are somewhat overblown just because of that proximity, Dade says. But in the short term, the trade uncertainties created by President Donald Trump’s exit from multilateral trade agreements around the globe can actually work to Canada’s advantage.

“If you look around the Pacific rim, we have the Trans Pacific Partnership and we have the advantage over the Americans. We’re not just selling to Japan or selling to Vietnam or selling to Spain. These are multilateral agreements. If our agreements are cleared in one country that country can use our agreements to sell to the entire bloc.”

That continuing advantage in trade is one of the areas in which the federal government can aid initiatives to boost the Prairie plant-protein initiatives.

Another is providing funding and co-ordination for research and innovation in value-added technologies for the plant-protein industry.

The federal Innovation Supercluster Initiative, designed to encourage large-scale partnerships in areas where Canada has strengths, is investing $153 million into the Protein Industries Canada (PIC) agri-food supercluster for the Prairies. That, in turn, is expected to leverage over $350 million more from industry and venture capital support.

PPAA is a regional partner for PIC.

The funding has been slow to flow from the federal government to the cluster, says Ammeter, but it is raising awareness of agri-foods.

“I would say it’s creating great buzz, but there’s no money changing hands or projects funded yet.”

Kathy Kerr, a former business editor and deputy editor of the Edmonton Journal, is a freelance writer and editor.

UPDATE: Projects announced by Protein Industries Canada: https://www.proteinindustriescanada.ca/projects

Posted September 28, 2018