Predictions for the global alternative protein market share during the next 10-15 years vary widely depending on research methodologies and sources. However, Tom Mastrobuoni, chief investment officer at Big Idea ventures, a company engaged in the alternative protein space, stated “Predicting the future size of the alternative protein market is impossible. I get asked this question all the time and my answer is, ‘I don’t know.’ No one does. But here’s what I do know. Consumers are driving demand at an expanding CAGR and companies of all stages and sizes are responding. FMCGs are developing products and messaging to satisfy consumers making purchasing decisions based on a mix of personal health, animal welfare and sustainability motivations.”
In addition to changing consumer behavior and demand, there is the other and perhaps more pressing issue of tackling global hunger. According to the Global Hunger Index, rates of undernourishment began increasing in 2020 for the first time since 1998 and the combination of conflict, climate change and COVID-19 may completely eradicate twelve years of progress in the global fight against hunger.
While alternative protein can help mitigate undernourishment, it is not immune to challenges such as regulatory approval of novel ingredients, taste, competitive pricing and overcoming (or reality) that many are overly processed. However, alternative proteins raised an impressive $3.1B in 2020, which was half of what the industry earned over the past decade. Coupled with increasing investments is the fact that nearly all of the top meat producers have invested in, acquired or launched alternative protein companies or products.
What is Alternative Protein?
Alternative proteins generally fall into three categories: plant-based, cultivated meat and fermented.
Cultivated (or cultured) meat is genuine animal, seafood or organ meat that is produced by cultivating animal cells, therefore eliminating the need to raise and farm animals for food. It contains the same cell types and the same or similar structure as animal tissue and therefore maintains the organoleptic and nutritional value of conventional meat. In 2020, a record 23 new cultivated meat companies were launched bringing the total to 76, a 43% increase from 2019.
Plant-based meats are made entirely from plants and are designed to mimic the flavor, texture and experience of eating animal-based meat. A total of 1205 plant-based meat brands sold in 2020, which included 112 new retail launches and was an increase of 10 percent vs. 2019.
Fermentation uses microorganisms to produce alternative proteins like kefir, tofu and tempeh. There are currently 51 companies developing fermentation-enabled alternative proteins, which includes 13 new companies that launched in 2020, a 34% increase from 2019.
While the growth rates for alternative protein sources differ between the three main alternative protein technologies, they all have the an advantage when it comes to utilizing automation in manufactuging for several reasons. First and foremost, the industry has been using automation since its inception, which means it is ahead in terms of technical understanding and expertise in ingredient storage and handling is established. The learning curve for conventional meat processing companies entering the alternative protein space is much higher. Because alternative protein products generally have more uniform shapes and sizes applying robotics, AI, digital and IoT technologies is easier and also supports operating with a smaller workforce.
When alternative protein packaging structures, companies will have to ensure they understand the unique needs of the products, which utilize new ingredient combinations of up to 20 ingredients or more needed to mimic the experience of eating conventional meat. MAP packaging can help prevent spoilage and contamination and some companies are developing packaging that imparts additional flavor. Shelf appeal and product presentation can be challenging for alternative protein as can ensuring the packaging messaging communicates product information, benefits and ingredients in an appealing way that satisfies consumers’ information needs.
As we close on the second of two difficult, challenging and unpredictable years, it is reasonable to be cautiously optomistic about anything. However, based on the benefits, consumer demands, continuing investment and expanding technologies in alternative protein production, it is definitely an industry for packaging companies to track and take seriously.