Government and industry investment could seed a new plant-based protein industry important to New Zealand's survival on the global food market, according to a PwC report today
Jade Gray describes himself as a fourth-generation grocer. He's worked on beef farms and in meat processing plants and butchers' stores in Canterbury and China. He's run a pizza restaurant. He knows about food – and he's convinced there's no real future in meat.
"I speak with a lot of farmers, I get heckled by mates and by strangers. It's all good, it's part of a good, fair and democratic society. But we've seen what happened to the wool sector in the past three decades, and we can't allow that to happen to meat or dairy. We need to learn from that very harsh lesson."
He argues we need to start turning over our paddocks to high-protein plants such as peas and fava beans. "We can create a whole new revenue stream for protein. The bonus is that brings more resilience. Or we can pitch ourselves against a major disruption that's looking more and more likely in the next 10 to 20 years."
Gray is the founder of Off-Piste Provisions, a new Kiwi plant-based meat alternative company that is expanding its pea-protein biltong and jerky snack foods into supermarkets. Off-Piste won funding from the Ministry for Primary Industries and the Foundation for Arable Research to commission a report into the feasibility of pea and fava bean protein growth and extraction in New Zealand.
That report, published today, shows that the environmental footprint of farming peas and fava beans compares favourably with other proteins. Their greenhouse gas emissions, land use intensity and water use intensity are lower than beef, poultry, dairy and grains. Their emissions are lower than soybeans, used to make tofu, though their land and water use are slightly higher.
Growers are likely to need a financial incentive to scale up production of peas and fava beans, the report finds, and New Zealand needs a protein extraction factory that will cost about $50 million to build.
“Establishing an extraction facility in New Zealand would involve large costs and associated risks for would-be investors.” – Dr Victoria Hatton, PwC NZ
That could be set up by a grower cooperative, or as a hybrid processing facility with other types of plant producers – or it could be wholly or partly funded by government, as in Canada and Australia.
“Establishing an extraction facility in New Zealand would involve large costs and associated risks for would-be investors,” says PwC NZ’s sustainability director, Dr Victoria Hatton. “Although New Zealand is well-positioned to scale up some aspects of the value chain, including growing and some aspects of go-to-market, more work is necessary to understand the costs and market conditions.”
The Ministry of Primary Industries had faced criticism for joining up with other agricultural nations to scrub "plant-based foods" from the latest IPCC summary of solutions climate emissions.
But it has stepped up with $205,829 to investigate the potential of pea and fava bean protein, a spokesperson says, which bolsters $411,744 from the arable research growers' foundation and other industry players.
The ministry's Sustainable Food and Fibre Futures fund has also contributed $147,000 to develop foods made from fungi, $260,000 to scale up algae-based spirulina, and $95,890 to develop a 'kabochamilk' beverage for export to Asian markets, using lower-grade buttercup squash.
The biggest grant has been $8m to complement $22m of private capital to set up a Canterbury plant extracting Rubisco protein from leafy greens.
The pea probe is its newest grant. Critically, rather than requiring high-emissions nitrogen fertiliser like most crops, peas and fava beans are nitrogen-fixing crops that can improve soil quality and reduce the need for fertiliser use.
“People are looking for other solutions – but it's a big step to suddenly go from having your steak and three veg to a meal of chickpeas and salads.” – Jade Gray, Off-Piste Provisions
And food producers such as Jade Gray believe that the pea and fava bean industry will need similar support to what the Government has provided the leafy greens.
"A lot of people appreciate more and more the impacts that an intensive red meat diet has on their own health as well as the ecology," Gray says. "And I think people are looking for other solutions – but it's a big step to suddenly go from having your steak and three veg to a meal of chickpeas and salads."
There is one big hurdle: the financial return farming peas and fava beans in New Zealand is rock-bottom. Pea and fava beans cost a little less to produce than crops such as ryegrass, let alone meat, but they earn a lot less.
At current commodity prices of NZ$480 a tonne for fava beans and $960 a tonne for peas, they offer relatively low margins. That works out at $452 a hectare for fava beans, and $1,546 a hectare for peas. By contrast, ryegrass seed currently returns $2,471 a hectare.
Farmers supply companies such as Wattie's with 81,000 tonnes of peas for the dinner table, earning $25m in domestic sales and $115m in exports. Another 52,000 tonnes of white peas were dried and sold as seed in 2020 – some years that's as low as 20,000 tonnes. The strong fluctuations reflect climate variability, crop rotations and changing contract values.
"Globally, regulations that aim to shift farming to more sustainable practices are being implemented. It is likely this trend will gather momentum over the next decade as countries aim to reduce greenhouse gas emissions and protect biodiversity," the report says. "This is likely to be a key motivator for some farmers, but stakeholder feedback suggested that the environmental story still remains a secondary consideration compared to the financial impacts of their crop choices."
"It's relying on fossil fuel powered machinery instead of a permaculture type approach that employs many people in meaningful jobs in beautiful environments." – Dr Mike Joy, Victoria University of Wellington
The global market for plant-based protein is growing apace, with one recent report predicting a compound annual growth rate of 14.1 percent over the next five years to reach an estimated US$40.58 billion (NZ$64b) by 2027. That's taking a small but increasing cut out of the US$1.5 trillion (NZ$2.5t) conventional protein market.
But for now, local plant-based protein food producers such as Off-Piste and Sunfed are importing their peas, at great cost to their foods' emissions footprint, because there's not enough affordable supply from New Zealand growers. That's what prompted Gray to seek funding for the feasibility study. "A high quality, New Zealand-grown and processed product would be our preference," he says.
He cites examples of both the Leaft Foods Rubisco extraction plant and a Southland public-private partnership to develop a carbon-neutral, plant-based beverage factory in Makarewa. “That’s a $60 million investment in the future of plant-based food in New Zealand, and it could be just the beginning, given New Zealand’s abundant natural resources and ideal growing conditions.”
Gray believes New Zealand must also unlock a premium value for its peas and fava beans, to boost its commodity rate. It's simply not cost-effective for small-scale New Zealand producers to compete with cheap overseas pea protein, otherwise.
The potential to add value may lie with New Zealand’s proven record in genetic improvement, as seen with the successful introduction of gold and red kiwifruit by Zespri, he says. “A huge value add would come through breeding crop cultivars that are optimised exclusively for extrusion (the key production process used in manufacturing plant-based meats)."
Certainly, the high-powered team behind Leaft Foods has shown how to get a protein extraction facility off the ground. That company is set up by John Penno, who also founded Synlait Milk, and Maury Leyland Penno, an engineer who was on the executive at Fonterra.
"We're not 'anti' any food. We're not trying to end any industry. But diets are changing, and New Zealand needs to move with it." – Maury Leyland Penno, Leaft Foods
Leyland Penno agrees there is a move away from meat and dairy. "Anybody you talk to, even if they are passionate carnivores, in their family will be people who are vegans or flexitarians, or trying to eat less meat or trying to eat less dairy. And that is true in nearly every family.
"In our family, we eat a lot less meat. We're in our 50s, so we're thinking about our health and our kids. And I'm thinking about the environment.
"We're not 'anti' any food. We're not trying to end any industry. But diets are changing, and New Zealand needs to move with it."
That said, she is somewhat dubious about peas and fava beans. "We want everybody to do well," she emphasis. "But we're not known for our growing peas, or soy, or the traditional plant proteins. But we are known for growing leafy green crops. That's what the strength of our dairy and sheep and beef industries have been built on – it's because we grow fabulous feed with our lovely climate and great soils and farmers."
The 12 staff at Leaft Foods' Canterbury processing facility are well on track to extracting the Rubisco protein at commercial levels, she says. They are working their way gradually up to 50 tonnes a year, and plan to go direct to consumers next year with nutritional protein powders that can be used in smoothies and shakes.
"You would use it to make a smoothie in your kitchen, whether it's supplementing your sports activity, or trying to get a bit more protein into your diet, or you're a university student trying to cram in some food in a convenient manner.
"There's now huge demand for plant protein. And there's been huge advances in food production technology. So those two things make it feasible and possible now. And they make it a good opportunity for New Zealand, where we grow green leafy crops particularly well."
Ivan Lawrie, the general manager for business operations at the Foundation for Arable Research, says Kiwi farmers are already using pulses such as peas and beans as part of a health crop rotation. But they want to get involved beyond the farm gate and participate in the value chain of plant protein-based products.
He rejects concerns that by using rotational pea crops, farmers are simply substituting one monoculture for a new one.
Victoria University of Wellington ecologist Dr Mike Joy says the lower greenhouse gas emissions and water use are good, as is the fact that legumes fix nitrogen, so won't need nitrogen fertiliser. They will likely leach less, though he notes there is no mention of nitrate leaching to freshwater, which would likely be an issue with scale. .
But he is concerned that peas are being farmed as a monoculture, so require lots of herbicide and pesticide use.
"I fear they miss the need to have diverse land use operations," he says. "Simply switching from rye-grass monoculture to run cows, to pea and fava bean monocultures, while a step in the right direction, is still industrial.
Ultimately, he says, there will still be one person driving a colossal harvester. "It's relying on fossil fuel powered machinery instead of a permaculture type approach that employs many people in meaningful jobs in beautiful environments."
The environmental footprint of farmed protein sources
