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The market for alternative protein, including meat, eggs, dairy, and seafood products, could reach at least $290 billion by 2035, according to a new report from Boston Consulting Group (BCG) and Blue Horizon Corporation (BHC). The report, entitled “Food for Thought: The Protein Transformation,” was released this week and finds that the market for alternative proteins — including plant-, microorganism-, and cell-based analogues — will grow from its current 13 million metric tons per year to 97 million metric tons by 2035.
In a best case scenario, the report also said alt-protein will make up 11 percent of the overall protein market by that time. However, to hit that point, and to realistically compete with the multi-trillion-dollar traditional meat market, alt-protein sectors have more work to do when it comes to reaching parity, and not just around price, either.
Parity, both in terms of price and in the taste and texture of the products, is essential for alt-protein gaining wider acceptance among mainstream consumers, and “Food for Thought” sees the sector achieving it in three different stages:
- Plant-based alternatives, including meat, dairy, and egg substitutes, will achieve parity in 2023 or possibly sooner.
- Alt-proteins made from microorganisms, such as fungi, yeast, and algae, will reach parity by 2025.
- Cultured proteins are slated to reach parity by 2032.
Price parity comes up a lot in conversation these days. The plant-based protein sector, for example, is well on its way to achieving it, as evidenced by Impossible’s recent price slashing of its products and its chief rival Beyond Meat doing something similar last year.
For cultured meat, too, many are saying products will reach price parity with traditional meat sooner rather than later. Longtime investor and entrepreneur Jim Mellon, for example, recently told The Spoon he believes cultured meat will achieve price parity with traditional meat within five years. And we have seen a few announcements from cultured meat makers in the recent past about bringing production costs down. At the beginning of this month, Hong Kong-based Avant Meats said it had achieved a 90 percent reduction in the cost of producing cultured functional proteins. Earlier this year, Future Meat’s CEO Rom Kshuk told me his company has decreased production costs “by 1,000 times over the last three years,” with a quarter-pound serving of its cultured chicken breast now costing $7.50 to produce.
Lower production costs can lead to lower prices for consumers, but it’s important to reiterate that in the context of BCG and BHC’s new report, parity encompasses more than price. Speaking of the report, in it BCG managing director and partner Benjamin Morach referenced taste and texture in addition to price when discussing parity. “Alternative proteins must taste and feel as good as the conventional foods they replace and cost either the same or less,” he said.
Hence, cultured meat not reaching full parity until 2032, according to the report’s predictions. While this is definitely longer than five years, it’s actually shorter than the “north of 15 years” figure Eat Just CEO Josh Tetrick offered up last year when talking about the time frame for cultured meat being available everywhere and for a low cost.
Expect more, not fewer, predictions around parity as investment in alt-protein, and especially cultured protein, continues and more companies bring products out of the lab and into the consumer realm.
As to why we need all this alternative protein, the BCG/BHC report highlights some important factors, including its role around more environmentally responsible production and consumption. According to information provided to The Spoon by BCG/BHC, a $290 billion alt-protein market will free up 240,000 square kilometers of land, decrease the number of chickens in factory farms by 50 billion, reduce water use by 38 billion tons, and drop CO2 emissions by 1 billion tons. Producing more alternative protein is also in alignment with multiple of the United Nation’s Sustainable Development Goals.
The BCG/BHC report comes on the heels of recent numbers from The Good Food Institute, which found that $3.1 billion was invested in the entire alternative protein sector in 2020. That’s triple the amount invested in 2019, and an encouraging sign for a sector whose role in the global food system is no longer a nice-to-have but a must-have in order to feed 10 billion people while attaining net-zero emissions by 2050.
In Other Alt Protein News . . .
Netherlands-based cultured meat startup Meatable raised $47 million in Series A funding this week. It will use its new funds to advance small scale production at the Biotech Campus Delft and diversify its product lineup.
Eat Just closed a $200 million funding round and will use the new funds to build out its cultured meat products as well as accelerate research and development while expanding internationally.
Alt-protein investment firm Big Idea Ventures is taking applications for Cohort Four of its startup accelerator program. Companies developing either alternative proteins or supporting technologies and ingredients are encouraged to apply.
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