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How Alternative Proteins Disrupt the Food Industry

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April 20th, 2021


Learning, Themes


Carmine Meoli

How Alternative Proteins Disrupt the Food Industry About 13 million tons of plant-based proteins – so-called alternative proteins – were consumed globally in 2020. “We expect that consumption will increase to more than seven times that size over the next decade and a half, to 97 million metric tons by 2035”, a study by the Boston Consulting Group (BCG) states. The Covid pandemic further fuelled the demand for alternative proteins. This blog post provides an overview of the latest developments regarding plant-based meat and other proteins and introduces essential players in the alternative proteins market. Why consumers are opting for meat alternatives “It seems like everyone is getting into the meatless craze”, the technology and startup news platform TechCrunch wrote in 2019. We have summarized the most relevant reasons for this transformation. The traditional meat and animal protein industry has long faced a rising tide of challenges, including environmental, health, and ethical concerns. Livestock is a significant contributor to greenhouse gas emissions, soil erosion, and water pollution. Alternative protein sources can reduce the negative environmental impact associated with meat and other animal proteins such as dairy, eggs, and fish. An article on the technology insights platform CB Insights lists consumers seeking healthier food alternatives as another factor contributing to the popularity of plant-based proteins: “Rising obesity rates across the globe, coupled with consumer interest in healthier food alternatives, are also driving demand for meatless proteins.” Plant-based proteins also have the potential to alleviate ethical questions such as the treatment of animals or working conditions at meat factories. Due to a heightened focus on ethical consumption, alternative proteins attract consumers and investors alike. Plant-based meat can provide “a great increase in food safety” Alternative meat sales have soared since the outbreak of the pandemic. News of meat factories’ concentrated Covid-19 outbreaks such as the so-called “corona scandal” at the German meat producer Tönnies in June 2020, the “corona pool” game at the pork processor Tyson in the US state of Iowa, or the virus sweeping through the US-American National Beef Packing in Kansas City after weekly bonuses for employees who are not taking time off during the pandemic may also have cast traditional meat products in an unappealing light. “There is a greater concern for food safety; there has been a lot more attention to how meat is produced in the media. People are trying to figure out safer ways to find what they are looking for, and plant-based alternatives provide not only a great increase in food safety but also in environmental sustainability” Matt Ball, a senior communications specialist at the international non-profit organization Good Food Institute, told Forbes. Beyond meat with a very successful IPO When talking about meat alternatives, the names Beyond Meat and Impossible Foods will inevitably come up, while Eat JUST is the best-known producer of egg alternatives. The following paragraphs are summarizing the success stories of these three plant-based protein producers. According to the business news platform CNBC, Beyond Meat had “one of the most successful IPOs since the dot-com bubble days in 2000” when going public in 2019. The Beyond Meat shares soared 163 percent, from the 25 USD offering price on the first day of trading. Beyond meat has attracted big investors, including tech billionaire Bill Gates, Twitter co-founder Biz Stone, and actor Leonardo DiCaprio. In January 2021, a joint venture to sell new plant-based snacks and drinks between Beyond Meat and PepsiCo was announced. “Plant-based proteins represent an exciting growth opportunity for us, a new frontier in our efforts to build a more sustainable food system and be a positive force for people and the planet while meeting consumer demand for an expanded portfolio of more nutritious products,” Ram Krishnan, PepsiCo Global Chief Commercial Officer, was quoted in the news release surrounding the joint venture. As of April 2021, Beyond Meat is valued at around 8.5 billion USD. Will Impossible Foods go public through an IPO or a SPAC this year? The Beyond Meat competitor Impossible Foods sells its meat-free burgers and sausages in grocery stores and restaurants and has partnerships with Burger King and Disney. The company’s signature product is the Impossible Burger; it was launched in July 2016, after years of research and development in selecting nutrients from plants to recreate the experience of meat products. Since its founding in 2011, Impossible Foods has raised 1.5 billion USD in funding. The company counts Reddit co-founder Alexis Ohanian, tennis star Serena Williams, and singer Katy Perry among its investors and backers. Impossible Foods is in talks to go public through an IPO or a merger with a special purpose acquisition company (SPAC). The egg-alternative producer Eat JUST quickly received unicorn status Eat JUST develops and markets plant-based substitutes for foods that ordinarily use chicken eggs, with the mayonnaise JUST Mayo and the vegan egg JUST Egg, made from mung beans, being one of the best-known products. The company based in San Francisco was founded in 2011 and is the sole leader in its category (+90% market share) by now, serving a $238 billion market opportunity. Eat JUST became a unicorn in 2016 by surpassing a valuation of $1 billion. In 2020, Eat Just created an Asian subsidiary with the private equity firm Proterra Investment Partners Asia. Through the joint venture, Proterra promised to invest up to $100 million, and an Eat JUST manufacturing facility is currently being built in Singapore. The new subsidiary, called Eat JUST Asia, will create a fully integrated supply chain, working with manufacturers and distributors for one of Eat JUST’s flagship products, the vegan egg substitute JUST Egg. In March 2021, the company announced that it had sold the equivalent of 100 million chicken eggs. Furthermore, Eat JUST is the first company worldwide with governmental approval to sell cultivated cell-based meat, which they are doing at the 1880 restaurant in Singapore. Are you interested in co-investing in a company reshaping the global food industry by offering climate-friendly options to animal proteins? Sign up here to learn more about investment opportunities in the alternative protein market, such as Eat JUST. Innovative startups producing plant-based proteins have received millions in funding “What we see today is only the beginning of the protein transformation”, the BCG study mentioned above states. “By 2035, after alternative proteins reach full parity in taste, texture, and price with conventional animal proteins, 11 percent of all the meat, seafood, eggs, and dairies ate around the globe is very likely to be alternative. With a push from regulators and step changes in technology, that number could reach 22 percent in 2035”, the study authors write. In the last year, innovative startups focusing on plant-based protein such as the B2B food technology company Plantible Foods, Rebellyous Foods offering meatless chicken alternatives, and InnovoPro aiming to start “the chickpea revolution” have secured millions in funding since the outbreak of Covid-19. The meat substitutes of the future are likely to be tech-enabled Technology is to play a crucial role in redefining the global food industry. “Advances in agTech (agriculture tech) and synthetic biology are enabling high-tech meatless products. Cellular agriculture and molecular engineering are fueling tech-enabled meat substitutes that better emulate the flavor and texture of traditional animal meat”, CB Insights predicts. Biotech startups are currently exploring methods for engineering meat-like products from methane. Other startups are leveraging alternative protein sources such as insects or algae. Take advantage of these arising opportunities on the Stableton marketplace for alternative investments At Stableton, our mission is to break down entry barriers to private markets and give access to exclusive late-stage venture deals with investment amounts as low as CHF 10’000. We work with individual investors, institutions, and investment professionals to deliver these outstanding opportunities.

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