The food industry is on the brink of a decade of profound change. Unparalleled growth in plant, micro-organism, and animal-cell based alternatives has the potential to drive this change as consumer tastes evolve, meat intake is being reduced or cut altogether and demand for alternative food types rises.
The COVID-19 pandemic has increased the awareness of the link between food, health, food security and sustainability, leading to a surge in the demand for plant-based products.
Today, alternative protein companies are growing strongly. New entrants are applying disruptive technologies such as synthetic biology, AI, and robotics. They could transform the food industry.
Alternative proteins are penetrating a market – food – that has very low exposure to recession and cyclicality. Demand for alternative proteins is fuelled by powerful forces ranging from health concerns to climate action and the increasing awareness of ethical issues in factory farming.
At present, most investment capital is focused on the companies offering the plant-based products that currently dominate the alternative-protein industry. These companies need to be integrated along the value chain to ensure quality control while they explore new technologies.
Many incumbent meat producers already define themselves as ‘protein’ companies, making and marketing their own alternatives. This makes sense given the size of the prize and the potential for the profits to be distributed throughout the value chain:
- To the start-ups and incumbent food companies producing alternatives
- The upstream players providing the inputs and tools needed to unlock these revenues
- The investors willing to support their efforts.
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