Plant-based protein market booming

With consumers becoming more health-conscious, the demand for protein sources is increasing, but so are concerns for animal welfare and food transparency. All of these factors are contributing to the expanding plant-based meats market, which is predicted to reach $5.2 billion by 2020 according to a Farm Animal Investment Risk and Return (FAIRR) Initiative report.

In collaboration with 57 investors, FAIRR’s engagement report encouraged the food industry to diversify their protein offerings and analysed how 16 global food companies were responding to this growing demand.

Entitled ‘Plant-Based Profits’, it found that although all companies offer own-brand meat and dairy substitutions, Tesco and Nestlé were recognised in particular for embracing this change. Tesco has set specific targets to reduce its livestock emissions by 15% by 2030, had good communication with its investors and introduced a range of plant-based options at the beginning of 2018. Similar to Tesco, Nestlé had strong investor engagement, as well as a research and development network which concentrates on protein innovation, and it organises an annual protein summit.

Duncan Pollard, AVP of Stakeholders Engagement in Sustainability at Nestlé, stated: “We recognise that for a business like ours to be successful, we must take a long-term view. As a global food company, we have the responsibility and the opportunity to shape the sustainable production and consumption of food to preserve our planet for future generations.”

Costco, on the other hand, was highlighted for its inadequate response to alternative proteins. Despite being one of the world’s largest meat sellers, the company had poor protein diversification strategies, is facing opposition to its farming expansion and has not acknowledged its environmental impact.

Nestlé was also praised for its acquisition of Sweet Earth in 2017, making it one of three companies that have made acquisitions or investments to expand its plant-based product portfolio. The other two were Unilever, which is helping to develop plant-based steak, and General Mills, which is investing in food start-ups such as Kite Hill and Rhythm Foods.

Innovations such as advanced plant-based protein, fermentation and cell culture are receiving more investment and fuelling product development. Created using wheat and potato protein and heme, the ‘Impossible Burger’ has received at least $258 million funding so far and is available in over 500 restaurants across the US.

The report suggested that other companies could do more to develop protein diversification strategies and ensure the long-term sustainability of protein.

M&S, Tesco, Walmart, General Mills, Nestlé and Unilever were the only six companies to have targets to reduce supply-chain emissions from agriculture, while the other companies in the engagement failed to discuss the impact of their supply chains. The report suggested targets are needed for several areas in agriculture, including reducing emissions, improving animal welfare and preventing forest loss.

Jeremy Coller, founder of the FAIRR Initiative and CIO of Coller Capital, stated: “Today’s Plant-Based Profits report shows that alternative proteins are rapidly going mainstream”, which will result in an 8% annual growth in the market.

Therefore, it is crucial that the food industry can adapt to these changes. The report revealed that although some companies are well prepared for the rise of alternative proteins, others still have many areas for improvement. It highlighted several weaknesses and suggested the food industry should focus on developing specific strategies that are uniform across the board.

“For food companies and their investors, no roadmap exists to help us navigate the complexity associated with protein diversification. A key first step will be to evolve a shared understanding of what corporate best practice in this area looks like across four strands: strategy, innovation, engagement and metrics,” Pollard explained.

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