Investment in alternative protein for the first half of 2020 is almost double what it was for the whole of 2019, according to a new report by investor network FAIRR. Between January and the beginning of July of 2020, over $907 million was invested into plant-based foods, compared to $457 for the whole of 2019. More than $290 million has been invested into cell-based meat so far in 2020. The entire market for alternative protein is expected to grow to $17.9 billion by 2025.
The U.S. is still the largest market for alt-protein, reaching almost $5 billion in sales in 2019, $1 billion of those for meat alternatives. China’s is also a huge market for alternative proteins, particularly when it comes to meat replacements.
We’ve noted this growth frequently over the last few months, and FAIRR’s report lays out some of the main drivers behind consumers’ insatiable appetites for non-animal protein. There’s the aforementioned uptick in investment, a point supported by a recent slew of news announcements. In the last week alone, Better Meat Co. raised $1 million, Joywell Foods raised $6.9 million, and plant-based cheese company Grounded raised $1.74 million.
FAIRR also calls out the rise of plant-based seafood products and a decrease in production costs for manufacturers as market drivers, along with an increase in companies using alt-protein to diversify their product lines. Last year saw a number of major milestones that brought these issues further into the light and helped alt-protein go mainstream. For instance, Nestlé opened its own production facility for plant-based meat in May of this year. UK grocer Sainsbury’s launched its own line of plant-based products in early 2020. Meanwhile, Starbucks, KFC, and a host of other QSRs have rushed to add plant-based offerings to their menus.
Then, of course, we have the pandemic to thank for this massive uptick in demand for alternative protein. “Consumers worldwide are rethinking how they eat and what they eat amidst supply chain disruptions and public concern over the link between meat production and viral diseases,” the report states.
Across the board, investment in food tech is up since the start of the pandemic, having reached $4.8 billion in the first half of 2020 according to a report from Finistere. This too is in response to the current global health crisis.
But FAIRR also calls COVID-19 “only the latest straw on the camel’s back” when it comes to alt-proteins. Pre-pandemic, our heavy reliance on animal-based proteins was already under scrutiny because of animal supply chains’ negative impact on the environment, not to mention human health. Throw a zoonotic pathogen in there (which COVID-19 is widely believed to be), and it’s easy to see why the pandemic has accelerated the demand for animal-free protein sources.
What’s next? Cell-based protein, probably. While that sector has made up a much smaller portion of investments in the first half of 2020, those dollars are nonetheless pouring in. As the pandemic wrecks more havoc on our food system and sheds light on the importance of finding new sources of protein, expect the interest in cell-based proteins to continue its acceleration.