It is no longer a far-fetched vision for alternative protein such as plant-based or cultured meat to be normalized as an everyday food choice. They are increasingly disrupting our food landscape and have been met with much media attention as the future of protein.
In the wake of a looming environmental crisis and expanding awareness on the state of factory farming, alternative protein is the response for a more sustainable, humane and cleaner source of meat.
The upstarts Beyond Meat and Impossible Foods led the movement with the introduction of plant-based meat that are close replicas of animal meat. Consumers have in turn reciprocated positively to such fluent innovations.
The global market for plant-based protein is estimated at US$4.6 billion in 2018, and is expected to grow annually at a CAGR of 6.8% to reach US$6.4 billion by 2023 (Markets and Markets). There is much more potential for growth as this figure only represents a small portion of the trillion-dollar meat industry. In particular, Asia presents ample opportunities for meat consumption is estimated to grow by an overwhelming 78% by 2050 (Asia Research and Engagement). Currently, it is also the fastest growing region for the alternative protein market (Reuters).
Such developments are not lost on the animal meat industry. Tyson Foods, one of the world’s largest meat producers, announced recently that it is launching its own line of plant-based meat alternatives. In a statement, CEO Noel White shared hopes that its alternative protein products would be an eventual billion-dollar business for them.
With the development of alternative protein only at its infancy stage, there are tremendous opportunities for innovators to shape the future of meat. Both plant-based and cultured meat are projected to take a substantial size of global meat consumption. According to consultancy firm A.T.Kearney, their market share have the potential to surpass conventional animal meat in the next 30 years due to improvements in taste and production systems.
As a result, the alternative protein industry is drawing large investment interests. Beyond Meat’s trailblazing IPO is an example of the market’s strong sentiments towards the category. The commercial potential has also seen ventures coming onboard with significant funds.
In the latest development, New York- and Singapore-based venture firm Big Ideas Venture launched a US$50 million New Protein Fund to support such alternative protein companies. According to Managing GP Andrew Ive, a quarter to half of the 100 companies slated for the first round of investment (worth US$250,000) would be located in Asia (e27).
Notably, Singapore-based start-up Shiok Meats is one of the fund’s recipients. Its recent US$4.6 million seed fund for furthering research on cultured shrimp meat was also led by Monde Nissin CEO (owner of the meat substitute brand, Quorn) and other pristine line-up of investors including Y Combinator (their first cultured meat investment) (Forbes).
At Centre for a Responsible Future’s recent panel discussion on the alternative protein investment landscape in Singapore and the region, Shiok Meats’s CEO Sandhya Sriram shared that in the lead-up to secure those funds, she had pitched to approximately 150 investors over a 6 months period. This intensity allowed her to refine and craft her pitch such that she was ready when the right investors came.
Apart from securing investments, a challenge for the alternative protein brands is to overcome consumer resistance towards a new product type in order to gain mass market acceptance. Andy Kusumo, Director of Science and Technology at Monde Nissin, shared that their challenge lies in the markets’ unfamiliarity with mycoprotein and its fungi roots. The crux is for innovators to find their own unique way of addressing such issues, said Kusumo.
As the alternative protein industry continues to improvise its production systems, the lower costs of such meats will mean a greater accessibility for the mass market in the future. The current higher price of alternative protein largely comes from production inefficiencies due to inexperience. Christian Cadeo, Managing Partner at Big Idea Ventures, shared that this was an issue that Just (previously known as Hampton Creek) encountered. However, moving forward, the industry’s progress will ultimately lower costs across the category.
A bright future thus beckons for the alternative protein industry as refinement of both the production process and end product could ultimately meet meat demand for the same taste at a lower price. With the revolution only just beginning, exciting times are ahead for consumers and producers alike to witness and partake in the disruption of the trillion dollar meat industry!