Review of market acceptance and value proposition for 3D printed meat

Summary

​Red meat is currently positioned in the minds of consumers as a good source of protein, iron and zinc, with both a taste and texture benefit over plant-based proteins. In line with this product positioning, this project investigated how red meat could be positioned using three-dimensional printing (3DP) technology to open new market opportunities and further grow the demand for red meat to the benefit of the Australian red meat industry.

3DP food is the technology where food is created (printed) layer by layer in a process called additive manufacturing. Various ingredients can be mixed, deposited and cooked, allowing quick experimentation with food combinations.  The key question at this stage of development of the technology is whether 3DP meat products are feasible (V.RMH.0034). Can it work? The answer is yes, it is possible to successfully develop, market and launch 3DP meat products because others are already doing it. 3DP food is currently served in more than 1,000 German nursing homes to residents who have difficulty chewing. Traditionally pureed food is easier and less expensive to make but 3DP provides a benefit that that the traditional pureed food cannot: meals are more appetising and residents are looking forward to meals.

That is the central message of this report: it is all about consumer benefit or rather perceived consumer benefit. A recent study on genetically modified food has shown that novel food adoption is strongly linked to perceived benefits (Vikan, 2015).

Product implementation aspects were considered around identified consumer benefits that 3DP food can provide. These are:

1. Retail – product healthiness - 3DP links in well with the disease prevention aspect of the current consumer health trend because nutrition can be personalised, for example products high in iron targeted to female consumers or high in protein targeted to kids or athletes. However the 3DP feed material is highly processed and in the case of powdered meat it is unpleasant (sensory) and viewed as not fresh and therefore not healthy. It thus fails to address the 'real benefits without compromised quality' consumer trend. One way to overcome these barriers could be to add healthy ingredients such as fibre or similar plant-based components. It could partially address the trend towards more plant-based products as well. Depending on the degree of personalisation, such a complete meal product or meat product alone could be charged at a premium for the personalisation aspect. Claims can be made that it contains natural amounts of say, iron or zinc, tapping into the naturalness trend. Other technologies can achieve similar products. That doesn't mean 3DP shouldn't try.
2. Retail – product convenience, direct to consumer and snacks for the institutional and commercial sectors - In the retail sector, 3DP products do not stand out more than any other convenience prepared meal except if the supermarket sells raw material, i.e. pureed form or dried powders in various convenient sizes.  This type of implementation could fit in with younger consumers with limited cooking expertise and limited available time using their home food printer. It also leverages the minimal mental effort need of some consumers as well as the single life needs. In the commercial sector, the quick service restaurants channel presents an opportunity for convenience, but 3DP cannot overcome the cost and preparation time needed to compete against existing products. 3DP has to compete on other aspects, such as appearance below or healthiness as per the retail case above.
3. Commercial – product appearance - 3DP performs well on product appearance. 3DP products can be sold as upmarket, high-premium items associated with luxury, quality and indulgence. This product positioning can be achieved through the intricacies of shapes and sizes that can be achieved with 3DP technology. The healthiness trend can be employed here to further the impression of quality, healthiness and personalisation. No other technology can offer the complexity, the easiness to create and the personalisation that can be achieved with 3DP.
4. Institutional – aged care - 3DP food specifically addresses dietary malnutrition of the elderly in aged care facilities where food is overcooked due to food safety requirements and therefore tough to eat. Because the competing products (pureed food) has a low score in appearance and texture, 3DP food presents a unique opportunity to overcome the barriers of this segment and offer a real consumer benefit. It can be further promoted on the back of the health trend, providing personal nutrition to aged care residents.

Other technologies can also offer the softer texture, but only 3DP can offer the personal nutrition, which is a real benefit over the consumer perception of processed foods being unhealthy.

Processing benefits are different from consumer benefits considered above, in that it is from the viewpoint of the Australian meat industry. These producer benefits do not stand in isolation. The driver behind them is the estimated market volumes and is influenced by a range of factors, including consumer benefits. Thus processing benefits were matched to consumer benefits to quantify the final market opportunities and market volumes in the modelling section.

As the project did not assume a certain fixed process in general, four 3DP processing benefit groups were identified from a red meat industry perspective by considering strategic opportunities introduced by the nature of 3DP products and processes. Where a fixed process was assumed it is clearly stated in this report.

The processing benefits are:

• Less waste per carcase – this benefit group is about using more of the lower value offcuts, remains or waste of a carcase. This is possible due to the requirement that the feed material into a 3D printer should be small or fine.
• Additional volume of meat sold – this benefit group is about not cannibalising other products in a specific channel or market of the supply chain.
• Additional value per carcase – this benefit group is about increasing the value of a carcase by increasing the value of certain products by changing or marketing certain features.
• Reduced cost of processing, capital and running cost – this benefit group is about inferring specific processing impacts based on what is known about 3DP technology at this stage and estimating the cost impacts as a result. The four processing benefit areas formed the basis of the modelling process and the value of each benefit group was quantified.

Considering the strategic benefits of 3DP technology (at present capability) for meat products, several market opportunities stand out based on consumer benefits:

• Healthy, premium prepared meals or 3DP raw material offered in the retail sector promoted for aspects related to disease prevention and personalised health.
• Direct to consumer promoted for aspects related to convenience.
• Personalised meals in the commercial sector promoted for aspects related to appearance and personalisation.
• Personalised food for the aged care market promoted for aspects related to texture and personal nutrition.

Opportunities that stand out based on market benefit, volume, risk are:

• Institutional aged care segment – this segment performs well on an industry benefit against risk index.
• Retail in total (convenience and healthiness and snacks) – this segment performs well on a volume against risk index but specifically snacks do not compete well with existing ready-meal snack products available in the retail segment.

On an international level, the aged care segment show promise in terms of volume in countries like USA and China. However, the volume figures used in the model is highly dependent on the final execution and implementation of the product and consumer adoption depends on the perceived benefit. Applying the lessons learnt to the identified market opportunities new product combinations can be discovered. For example, within the age care segment, consumers can be further segmented and oatmeal used to further enhance the "health" positioning of the product. Depending on the raw material used, special care should be taken to develop products most suited to the technology but not at the risk of quality. To be specific, adding salt or flavouring to try to overcome the sensory barrier of powdered meat may not work as it is at the expense of the healthiness of the product in the mind of the consumer.

The following steps are recommended to further the development of the technology, not in order of importance:

• Experimentation with final products is needed in each of the market opportunities highlighted above: retail (healthy), direct to consumer (convenience), commercial (appearance), aged care (sensory).
• Consumer testing and adoption research is needed to assess potential market volumes.
• Focus should be kept on risk and consumer benefit as opposed to the quantification of potential opportunity, because potential opportunity is highly dependent on the specific product implementation and that is the part that needs experimentation to get it right.
• Ways to experiment while minimising risk is what is needed as a next step. Fortunately, 3DP is modular and cheap and thus easy experimentation is exactly what makes it such an appealing technology.

3DP presents a real opportunity for the Australian meat industry provided the time and effort and resources are invested to experiment and learn the technology and develop innovative products. The opportunity for beef is estimated in total at $3,900,000 per annum for beef, and for lamb the estimate is in the same range, based on the current level of skill and product opportunities and assuming the consumer adoption volumes as per the model.

As mentioned above, the consumer adoption volume is the strongest, most sensitive driver and is all dependent on the particular implementation of the product. The consumer volumes can potentially be 10 or 20 or 100 fold, depending on the user benefit offered, the product execution and the market positioning of the product, to name a few of the key aspects. Therefore the opportunity to the Australian red meat industry can potentially be 10 or 20 or 100 fold the estimated value, depending on the specific product offering.

Deloitte predicted that 3DP is the technology of the future, and that it is here to stay. Consumers will own more units than enterprises, but the bulk value will be generated by enterprises (Deloitte, 2015). The technology is still in its infancy, and the meat industry will be left behind if it doesn't put in the effort to experiment and develop products suited to the technology.

Bill Gates, together with other investors, pumped $108 million into Impossible Foods, a company making meat substitutes from plants with the health statement that it contains no cholesterol, no antibiotics, no hormones and no meat. It is very tasty and meat lovers cannot even tell the difference, as plant ingredients are specially selected and combined to create the meat taste (King, 2015). However, the concept is directly in contrast with the food trend of "naturally functional". Further, meat still has a lot to compete with, particularly, animal proteins are naturally satiating. Consumers will try and test and make their own conclusions. 3DP meat products can offer the Australian meat industry the opportunity to compete and if current consumer trends are applied, it can help the Australian meat industry to develop a distinctive competitive advantage.

Key messages

Raw material:

• Using dried powdered meat requires a capital intensive, expensive process that delivers final products at a low rate and with low texture qualities and thus limits the potential markets to aged care facilities or similar where consumers have difficulty swallowing or chewing.
• Using a liquid form of raw material is not as expensive but the ability to control the liquid coming out of the extruder does not exist yet. However, the production rate and product texture quality that could be achieved is significantly higher – a complete fully cooked roast complete with fibres and fat seams could be printed within 5 minutes. The higher production rate also makes this solution more acceptable to major processors.

Broad risk categories for 3DP printing include:

• The development time and cost to develop the technology from current state to a fully commercial solution.
• The technology risk to enable textured products and thus for access to bigger markets.
• A development path that reduces investment risk all the way. One solution could be to reduce market acceptance risk and volume uncertainty by developing in collaboration with the end-consumer market. For example, development in collaboration with an aged care facility.