Corporate Profiles - 2023 - 50

GRAIN-BASED FOODS
Alternative Protein
G
aining mainstream adoption remains a significant challenge for
alternative protein companies.
Demand for plant-based meat has cooled, and while cultivated
meat is moving closer to commercialization in the United States,
the nascent industry must address issues including product quality, cost,
consumer reluctance, infrastructure and scalability.
INVESTING IN ALTERNATIVE PROTEIN
Investor appetite for alternative protein is healthy, according to the
Good Food Institute (GFI), Washington. The global sector has drawn
$14.2 billion in private capital over the past decade, with annual investments
doubling on average every year.
Amid market turmoil, alternative protein companies raised $2.9 billion
in 2022, marking a significant deceleration from the prior year.
Still, a GFI survey of more than 100 investors active or interested in the
category found that 99% of respondents expressed optimism about the
alternative protein industry over the long term.
Alternative proteins include plant-based meat, seafood, eggs
and dairy; cultivated meat and seafood; and proteins derived from
fermentation. The GFI analyzed investment activity in a series of
state-of-the-industry reports. Citing Pitchbook data, the GFI said
total funding in alternative protein companies declined 42% last
year, in line with broad-based declines in global private funding,
which fell 35%.
" Alternative proteins are a scalable solution that, with proper levels
of public and private support, can transform our global food system
for the better, " said Caroline Bushnell, vice president of corporate engagement
at GFI. " The growth opportunities for this nascent industry
ANNUAL INVESTMENT IN
alternative proteins
Fermentation
Cultivated
Plant-based
Deal count
5
2010
$24
$0
$0
5
2011
$5
$0
$0
10
2012
$11
$0
$0
17
2013
$48
$0
$6
TOTAL 2022 INVESTED CAPITAL: $2.9 billion
266
192
143
55
25
2014
$177
$0
$2
33
2015
$306
$0
millions
$18
2016
$166
$5
$66
2017
$271
$31
$72
2018
$626
$41
$82
Note: Data has not been reviewed by PitchBook analysts. The total deal count includes deals with undisclosed amounts.
Source: GFI Analysis of data from PitchBook Data, Inc.; 2022 State of the Industry Report
50 \ October 2023
Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Dairy Processing * Pet Food Processing
Corporate Profiles
2019
2020
2021
2022
$703 $2.2 billion $2.0 $1.2 billion
$91 $379 million $1.3 $896 million
$331 $611 million $1.7 $842 million
billions
76
80
379
311
160
240
320
400
As demand for plant-based meat cools, cultivated meat edges forward
are significant. With further investment and continued innovation to
improve the taste and affordability of products, the industry will accelerate
and be poised to capture sizable market share. "
PLANT-BASED MEAT DEMAND RECEDES
The plant-based meat alternative market will need to expand, diversify
and solidify its target audience in order to steady itself, according to a report
from the financial service provider CoBank, Denver, released in August.
Following a peak in 2020, CoBank found plant-based meat sales
have continued to decrease since 2021, citing data from market researcher
Circana that showed a nearly 21% drop in volume sales for
the 52-week period ended July 2, 2023.
Billy Roberts, senior food and beverage economist at CoBank and
author of the report, pointed to the high prices of plant-based meats
as one reason behind the decrease in sales. With inflationary pressures
forcing consumers to stretch every dollar, the higher price tags for plant
protein have become an easy cost-cutting target.
Additional difficulties come from issues with the taste, texture and quality
of plant-based meat. Research from 84.51° and the Plant Based Food Association
identified the factors as " primary pain points " for consumers, and
data from the Food Quality and Preference journal showed mouthfeel and
flavor were persistent issues even among staunch plant-based consumers.
Some of the decrease also may be fueled by changes in consumers'
motivations for purchasing plant-based meat. The novelty that initially
drove some consumer trial has likely waned, with market researcher
Mintel reporting that less than half of Americans who tried plant-based
meats made subsequent purchases.
Additionally, many consumers sought plant-based meats for perceived
Deal count
INDUSTRY REVIEW: alternative protein
©NATALIA KLENOVA - STOCK.ADOBE.COM
Corporate Profiles - 2023

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