Global Growth in Middle Class Will Drive Protein Needs

Recently, I wrote about attending the Soy and Grain Summit in New Orleans, Louisiana, and discussed the topic of Non-GMO crops. The other information from the Summit that struck me as a consistent story is the bright future for high growth in global demand for animal protein. This growth is expected to be well above the population growth of 1-2% per year.

We in the U.S. often hear about the shrinking middle class, but internationally in the underdeveloped and developing countries, there is a huge opportunity for significant growth in the middle class overall. As you can imagine, as a family moves from extreme poverty toward the middle class, their capability and desire for animal proteins increases along with other better foods and products to better their lives.

According to the OECD (Organization for Economic Co-Operation and Development), the global middle class is expected to grow from 1.8 billion people in 2009 to 3.2 billion in 2020. This growth will drive huge increases in the demand of fish, poultry, swine and cattle. This in turn will drive tremendous growth for the feed industry.

Another measurement for growth in demand for protein is on the basis of evaluating GDP per Capita by country. Many studies have shown that as a country’s GDP hits $10,000 per capita, the animal protein demand expands exponentially. After $30,000 per capita, the demand flattens out as the population will only consume so much. So as you can see below, there is a very narrow window where this growth will occur which makes for exciting possibilities as the developing and underdeveloped countries improve their economies and their population’s buying power.

So far, I have only spoken to the benefits to the feed industry and the growth of animal protein. However, there is also opportunity for the food processors. Advancements in Textured Soy Protein (TSP) products and the demand for lower cost meat replacements is also showing signs of significant growth. As people are moving toward the middle class and economies are developing, they still need to keep costs low. By adding TSP to meat products, the meat can be extended and the costs reduced. This TSP has a similar texture to animal protein, so it also can be used as a complete substitute for the animal protein.

The flavor of the TSP processed through Insta-Pro extruders has a tremendous flavor profile and performance. The TSP is also a valuable option for the growing vegetarian market and for those regions with religions requiring fasting from meat. This is a market more of our processors are talking to us about as they look to fill the need for low cost protein options.

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