Drivers of Alternative Protein Adoption

“A strategic inflection point is a time in the life of business when its fundamentals are about to change.”

Andy Grove, CEO — Intel Corporation

Andy Grove, the legendary CEO of Intel Corporation, used the concept of an inflection point to signal fundamental change in the life of a business. He went on to say that inflection points are difficult to identify, even as they are taking place, and that the decisions a company makes during an inflection point have a disproportionate impact on its future. It is interesting to consider that an inflection point can occur not just with a business, but an entire industry. We have seen this occur with industries such as energy and transportation in recent decades with the advent of renewable energy sources and sustainable transportation alternatives, respectively. Our food system is poised to be next, and animal agriculture is at the centre of this disruption with the emergence of alternative proteins. Inflection points don’t come around often, so this trend is not yet universally acknowledged. Yet, it is clear that upcoming innovations in this sector over the next several years will shape it for decades to come.

Alternative proteins offer the first compelling opportunity to move away from animal husbandry since the practice started over 10,000 years ago. From relative nonexistence a decade ago, start-ups in the sector raised $5 billion in 2021, up 60% from the previous year.¹ Plant-based milk, with a 15% share in the U.S. market, leads the way. Beyond Meat is now sold in over 130,000 outlets across 90 countries.² U.S. regulatory approval for cultivated meat is widely expected in the next 1-2 years, which will unleash a tidal wave of new products along with regulatory approvals elsewhere. It will be a watershed moment signalling that the sector has come of age. Three trends have been the central drivers of this shift.

Trend #1: The Global ‘Flexitarian’ Movement

The term ‘flexitarian’ was popularised by nutritionist Dawn Jackson Blatner in her book The Flexitarian Diet published in 2008³ to describe consumers that lean vegetarian, but eat animal products periodically as they desire. In the United States, the most advanced market for alternative proteins, this number is now at a staggering 47%. For younger populations such as millennials, a majority now consider themselves flexitarians.⁴ More than half of consumers now feel their nutritional needs can be met with plant-based foods. It’s no wonder that over 90% of Impossible Foods customers are meat eaters.⁵

Consumers cite taste and price as the top drivers keeping them from adopting from plant-based meat. Given comparable taste, texture, price and nutritional value, all of which the alternative protein industry is focused on addressing, over 60% of U.S. consumers say they would switch to plant-based meat.⁶ With each successive product iteration toward these goals, alternative protein companies unlock access to additional consumers. This led the Boston Consulting Group to predict that alternative proteins could take 11% of the global protein market by 2035, up from just 2% today.⁷

Trend #2: A Technological (R)evolution

The march of technology is relentless; it is a juggernaut with a life of its own that does not stop until it has subsumed what’s in front of it. Technological disruption is nothing new, already upending major markets such as healthcare, autos and energy. Food just happens to be next. Today, alternative proteins are a niche primarily for two reasons: (1) they haven’t achieved taste parity, and (2) they haven’t achieved price parity. While several years away, taste and price parity are inevitable with ongoing innovation. When Impossible Burger 1.0 came out in 2016, it was considered a good product with favourable reviews. But when Impossible 2.0 came out in 2019, it received rave reviews not just for its taste, but its nutrition profile as well. Compared to its predecessor it has 30% less sodium, 40% less saturated fat yet higher fibre, vitamins and mineral content. In addition, it is gluten-free with as much iron and protein as a beef burger.⁸

Although we’ve been using technology to create food for a long time, the use of biotechnology in food is relatively new. Historically, this has been the domain of the biopharmaceutical industry, but its mandate is to create a relatively small quantity of product at a relatively high cost. The food industry is doing precisely the opposite: creating a high quantity of product at a very low cost. This requires a fundamentally different approach, for a far larger market, where consumers will ingest the product. The industry is investing in not just one, but three technology stacks to make this possible: the use of plant ingredients (plant-based), utilising microorganisms as protein factories (fermentation) and growing animal cells outside the animal (cultivated).

Today’s products are akin to black and white television in the 1930s or dial-up Internet in the 1990s. Fast forward a few years, and we’ll see not just products from one technology stack (e.g. plant-based), but ‘hybrid’ products utilising multiple technology stacks. Imagine a product where plants bring the nutrition, microorganisms deliver the proteins and animal cells (grown outside the animal) provide the taste and texture – priced similar to conventional offerings. Not possible? Dr. Mark Post assembled the first lab-grown burger for $330,000 in 2013. Today, it can be done for under $100.⁹ And the price keeps falling. Looking back, we saw the same with Moore’s Law in the semiconductor industry, and with human genome sequencing years later. Technology has come to the food industry. Foods have version numbers now, and we’ll never look back.

Trend #3: A Sustainability Imperative

Our planet will host 10 billion human beings in 2050 with a substantially larger middle class by percentage.¹⁰ Based on current consumption trends, we will simply not have enough protein to feed the population as the demand for animal products rises by an estimated 70%.¹¹ To meet current demand, the animal agriculture sector already utilises 26% of terrestrial land¹² and 20% of our water¹³, and is a leading cause of deforestation, ocean dead zones and species extinction. Each year, the industry slaughters 80 billion land animals¹⁴ and kills one trillion fish¹⁵, leading experts to predict that we’ll see an ocean without fish in 2048. As the population grows, we simply cannot meet demand without catastrophic implications for the planet.

By utilising technology to create products that taste the same but are sustainable and cruelty-free, consumers have an opportunity to have their cake and eat it too. The implications on human health are also compelling. Animal agriculture is behind recent pandemics, including COVID-19, and utilises 80% of antibiotics¹⁶, creating the potential for antibiotic-resistant superbugs that would leave us without a viable treatment. The sector is also a major contributor to chronic disease. As innovators in the industry formulate healthier products with better ingredient formulations and superior nutrition profiles, consumers will see numerous health benefits by shifting their diet.

The Case for Alternative Proteins

Bennett’s Law¹⁷ suggests that consumers demand more animal products as they become more affluent. As our population increases, we will see escalating demand for animal products. While there is a need to shift direction, consumers are unlikely to change their behaviour. Alternative proteins offer a viable solution that addresses a range of issues from consumer health, animal welfare and sustainability. 

The opportunity in front of us it not just to mimic animal products, but to create better versions of them. The industry will spend the next few years simply trying to mimic animal products, often with highly processed formulations. While these offerings will have certain drawbacks, they will eliminate or significantly reduce antibiotics, hormones, contaminants, and cholesterol. That’s a good start. Ultimately, the hope is that the industry will create products that are indistinguishable from animal products in terms of taste and texture, better in terms of nutrition and health and are priced competitively. This is the point where they will no longer be termed ‘alternative proteins’, but simply as ‘proteins’.

1. Good Food Institute

2. Beyond Meat

3. The Spruce Eats

4. Sprouts Farmers Market & One Poll

5. Impossible Foods

6. Sprouts Farmers Market & One Poll

7. Boston Consulting Group

8. Plant Proteins

9. Forbes

10. Oxford University Press

11. Food and Agriculture Organization

12. Smithsonian Magazine

13. Food and Agriculture Organization

14. Our World in Data

15. Food and Agriculture Organization

16. Food and Drug Administration

17. Wikipedia