The Market for Plant-Based Meat in Brazil is Gaining Steam
The market for plant-based meat in Brazil, the sixth most populated country in the world, is gaining steam, as shown by the largest meat producer in the world JBS, launching a plant-based burger in Brazil. Companies such as R&S Blumo and GFI Brazil are also getting into the game. So far, these plant-based options have primarily been sold in grocery stores, leaving ample opportunity for QSR competitors to enter. Moreover, Brazil is considered the 5th most important market in the healthy food industry worldwide, growing at a rate of 20% per year, while the global average is 8%. Even though the Brazilian market is relatively new, the number of people who consider themselves vegan or vegetarian is already comparable to the number in countries where the market is long-established. Burger King found in a survey that 69% of Brazilian consumers were likely to buy a plant-based burger if offered at Burger King. Consequently, the first major Latin American QSR to capture this trend could gain market share quickly.
In Brazil, consumers are reaching a higher level of disposable income, the middle class is growing at a fast pace (the country’s middle class increased from 12.5 million households to more than 21 million from 2000 to 2016 and is expected to grow to 22.3 million households by 2021), and consumers have more pervasive access to the internet (the share of Brazilians who have access to the internet rose from 67% of the population in 2018 to 70% in 2019), making nutritional information more accessible.
Furthermore, Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Uruguay have started exploring ways to restrict the way in which QSRs market to children, a large part of their customer base. These laws would restrict the inclusion of children's toys in happy meals based on the nutritional value of the food. The Brazilian government has begun to focus heavily on public health initiatives given the majority of Brazilians are now overweight and around one in seven are obese. All of these factors indicate that consumers will demand healthier menu items going forward and QSRs will have to adapt to remain relevant.
Given these marketplace dynamics and consumer preferences, it would be prudent for QSRs based in Brazil to launch plant-based items on their menus and partner with governments and local communities to create healthier menu items for Brazilians. In doing so, QSRs could potentially pass on price increases while updating their menu composition. Creating healthier menu items will boost the brand’s local reputation, allow it to continue to market and sell to children, and create synergies with other locations in Latin America once it has established supply chain logistics.
A large downside risk could be that QSR competitors in the region such as Burger King, Subway, and Carl’s Jr. have more experience in launching plant-based meat products or have already been “first-movers” in the vegetarian and vegan market space in Brazil. Burger King’s launch of the “Impossible Whopper” in the U.S. was one of its most successful product launches in history and Burger King has already launched a plant-based burger in Brazil, the “Rebel Whopper”. However, Burger King Brazil opened 24 years after McDonald’s in Brazil and has fewer store locations than other QSRs. Therefore, the competitive dynamics are manageable in this $97 billion-dollar fast-food market.
