FoodBytes! Trend Dive: The New Faces of Alternative Protein
It comes as no surprise that alternative protein has been getting extensive news coverage lately. From Impossible Foods bringing in the largest F&A startup capital raise in 2018 at $114M, to Beyond Meat completing one of the most successful IPOs in recent memory, to alternative protein and alternative dairy startups raking in nearly 30 percent of all F&A startup investment in 2018, the plant-fueled trend is here to stay.
Increased environmental pressure and changing health interests have pushed alternative protein over the hurdle into mainstream adoption over the last decade. According to insights from RaboResearch, the plant-based industry is growing at about 20% a year. Yet, according to a report by CB Insights, 30 percent of calories consumed globally still come from meat products. As the population is expected to rise to 10Bn by 2050, and developing nations are diversifying their diets as median incomes rise, the overall demand for meat is increasing as much as 2 percent per year. Increased demand requires more and more resources, and protein producers are answering calls to moderate the adverse effects of their operations.
A string of popularized reports and documentaries detailing common practices in animal protein production have also played a role in shifting consumer perspective on meat. According to a 2018 report by RaboResearch, environmental impact is the number one reason millennials buy meat alternatives, whereas health is the leading factor for older consumers. However, the demand for protein, animal or otherwise, is higher than ever. Higher willingness to pay is not just limited to meat, but extends to protein-rich products as well. Twenty percent of US consumers have paid more for protein-enriched items, with protein bars ranking at the top share of wallet.
Through the FoodBytes! platform, we are able to explore the cutting-edge of alternative protein innovation and have seen 30 early stage startups in the category pitch since 2015. We looked through our application archives and found a diverse set of companies that contextualize some of the rising and falling alternative protein trends. Insect protein, for example, has cooled down this year, with three times as many applications in 2018 as we’ve seen in 2019 so far. Algae and sea green protein on the other hand, are continuing to increase in popularity, comprising 5 percent of total applications in 2019 to date, compared to 3 percent in 2018 and just 1 percent in 2017. From algae, to insects, to pet food, let’s take a look at a few of the FoodBytes! alumni pioneering the alternative protein parade.
The estimated value of plant-based alternatives sits at $4.1Bn USD and is rising rapidly – sales increased 23 percent in 2018 alone. It’s worth calling back to Beyond Meat, which has capitalized on the trend through pea protein, which is expected to reach $32M by 2025. FoodBytes! alumnus InnovoPro is enabling many companies to create their own clean label products by pioneering a chickpea processing technology. With its high-protein chickpea concentrate, InnovoPro has developed various applications from egg-free mayonnaise to vegan ice cream.
Many other innovators aim to offer meat replacements by mimicking classic products like burgers and sausages. FoodBytes! alumnus Akua is developing a jerky made from sea greens, which in addition to having a high protein content, “accumulate minerals like calcium, iron and copper at much higher levels than land-grown foods” (NCBI). Because of its heightened nutritional profile and low resource requirements, algae has been identified by Forbes as a potential disruptor of the current plant-protein market, and is currently valued at over $800MM. Additionally, FoodBytes! alumnus Ocean Hugger Foods is tackling the sushi market with a tomato-based tuna alternative. They are in the process of developing two new products based on eggplant (mimicking eel) and carrots (mimicking salmon) to provide even more alternatives for sushi-lovers.
A sizeable part of the world’s population has relied on insects for protein in their diets, however new technologies are enabling the benefits of insects to reach more people and using ever fewer resources. FoodBytes! alumnus Chapul processes cricket protein and sells in the form of protein bars and powders, and alumnus Hargol Food Tech produces its grasshopper protein powder through a novel farming system allowing cultivation at commercial scale.
Although consumer adoption in the Western market has been slow, there is deep interest in applications as animal feed. Biokind, for example, upcycles agricultural waste by fermenting it into cost-efficient and sustainable aquaculture and animal feed. And consumer hesitation is not dampening the considerable investment in the space, which was 40 percent higher in 2018 than the sum of the last four years, according to an analysis by RaboResearch.
One technology that is quickly developing is cell-cultured meat, where protein is grown from animal cells obtained without slaughter. Part of the complexity stems from “raising” actual muscle tissue, which requires multiple cell types. One workaround is to grow protein from a single cell without trying to replicate the structure of meat. While this does defeat the purpose of creating a near-perfect meat replica, it provides a novel solution where texture holds less weight – pet food.
FoodBytes! alumnus Bond Pet Foods produces pet food through the fermentation of single cells. Although the fermented product is still a few steps from commercialization, they are introducing vegan dog-treats as a first step in normalizing “lab-grown” pet food with consumers. What remains to be seen for the technology is how regulators will react to cultured meat as it moves to the grocery store.
Even with a surge of products and technologies, many people are not quite willing to give up conventional animal protein entirely. One trend that is proliferating, and not just in the animal protein space, is “partial” replacement. FoodBytes! alumnus PLANETARIANS developed a protein flour from discarded sunflower seeds that can be mixed into normal flour and deliver end with a higher protein concentration than meat. Extending the practice into meat products, startups like The Better Meat Co and protein giant Tyson with its new Raised & Rooted line are working to incorporate more vegetables and / or plant protein into processed meats to provide a healthier and more environmentally sustainable product that consumers are seeking.
Interested in reading more? Check out these insights from RaboResearch: