Alternative proteins, such as plants-based food, were initially targeted only vegans and vegetarians. However, as technology improves in this area experts predict that there will be delicious options for all, including die-hard meat eaters. This creates a huge market for investing.
“The field is just 7-10 years old when it first started We have seen rapid advancement over the last few decades,” stated Amy Huang the university innovation manager for the think tank that is a nonprofit Good Food Institute, which helps in the creation of sustainable and safe alternatives to protein sources.
“And the product is now focused on the 97 percent of people who eat meat,” she said. “As as a result there is plenty of space for further innovation.”
People who are concerned about the current meat-producing methods, and the growing trend to eat healthierare now seeking alternatives to meat. This is despite the negative impression of their texture and taste experts claim. The market for alternatives to meat eggs, dairy, and seafood products is expected to be at least $290 billion in 2035, according to research conducted by Boston Consulting Group and Blue Horizon Corp.
Although it might seem that alternative proteins are popular, Decker Walker, Boston Consulting Group’s head of agriculture but isn’t quite ready to label it a bubble yet.
“It is happening in certain areas because some of the technologies are decades off,” Walker said. “Investment-wise it’s difficult to determine since it was a quiet industry until 5 years ago. But, it is clear that our future will be filled with more alternatives to protein.”
Huang describes alternatives proteins in terms of direct substitutes for eggs, meat and dairy products that are produced from three different ways that include cell-culture, plant-based or by fermentation.
She believes that the future success for these protein will be contingent on synergies between all three of the platforms. She anticipates that the breakthroughs will be in waves, with the first being proteins made from plants and the next being those produced by Microbial fermentation, which is the most recent platform. The third category will be those made by cell culture which is a more sophisticated technology she explained.
“There is also a lot of research whitespace,” she said. “If you take a look at the entire space, there are a lot of fundamental questions to determine: What are the most suitable raw substances? Wheat, soy and peas are the main proteins in plants however, wheat and soy are byproducts that are not designed for human consumption. Are there ways to diversify the plant protein portfolio to include more than three?”
Traditional fermentation employs intact living microorganisms that process plants, whereas biomass and precision fermentation, which are the areas Huang predicted are likely to fuel the next wave of innovative alternative protein employ microorganisms in a different way. Cultured meat is derived from cells derived from animals in a method which, according to advocates, doesn’t harm the animals. Cells are heated and fed nutrients to build muscles and fat.
The effects of microbial fermentation can be seen already as leghemoglobin, which is in Impossible Foods’ flagship burger. These technologies allow the meat industry based on plants to create products made to closely resemble the meat of animals in terms of the texture, smell and flavor, Huang said. Additionally, there’s researchers at the forefront of academic research and startups developing sophisticated cuts of chicken and meat alternatives and alternatives to fish.
To allow the industry to grow certain aspects of technology is still in need of improvement for example, in the production techniques for extruding and texturing proteins. However, there are other promising techniques. Redefine Meat, for example utilizes 3D printing technologies, and Rival Foods is experimenting with shear-cell technology that can produce whole meat cuts from plants-based proteins, she said.
Despite the growth of the market for cultured meat as well as the supply chain for food, industrial-scale facilities and lower prices for these techniques is in the next 10-15 years away, Huang said.
“Progress has been made, and there is evidence that these areas are acclimateable,” she added.
A solid investment
A lot of investors are eager to take a bite of the alternative protein-based startups. In 2016, venture capitalists invested around $4.2 million into 363 ventures in this sector as per Crunchbase information.
In 2020, less than $2 billion was poured into international venture-backed startups in this sector, led by Impossible Foods’ total raise of $700 million through the Series F as well as Series G rounds in the last year. This was an increase of 101 percent in the amount of money raised from 2019 to 2020 according to the database.
The year is already busy with $602 million of venture capital distributed in 39 deals, including two separate rounds of $200 million for LIVEKINDLY as well as Eat Just in March.
While big players received huge amounts of capital, Sean O’Sullivan, managing general partner of early-stage investment firm SOSV stated that 2020 was a great year for businesses that raise funds at this stage and for companies that haven’t yet hit the market yet with their products. There are also plenty of 100 million-dollar deals in the pipeline for the year ahead according to him.
Cellular meat is still at the “birthing phase,” he said, however, other alternatives to protein are commercially feasible.
“Plant-based products are already available is in your fridge and in your pantry are food products crafted around specific proteins like milk protein” the man said. “With meat products made from cells, Memphis Meats is going for the entire burger and will be selling it in restaurants and in stores, with the exception of to address regulatory issues.”
SOSV has invested in Memphis Meats at its pre-seed stage. The firm is working closely with U.S. Food and Drug Administration as well as the U.S. Department of Agriculture to figure out how to label its food products to ensure they are safe to sell commercially.
Additionally, O’Sullivan expects more capital to be invested in infrastructure to enable the scale needed to achieve the massive amount of food production needed to feed the hungry people of the globe, but it will require time.
“Billions will be put in by alternative proteins investors in the next five years to increase the capacity across all three capabilities. A new set of infrastructure companies will be created to create the products,” he added. “Food is a multitrillion-dollar business and to revamp it will take years.”
Food manufacturers
The new round of funding for Eat Just was announced just a few months ago. It made public its announcement in the month of December about it was using the chicken that it has grown, and which it believes to be authentic chicken meat as an ingredient in chicken bites was accepted to offer in Singapore -the first nation in the world to market products made from cells, co-founder as well as CEO Josh Tetrick said in an interview.
“It’s real chicken, not a plant-based product and it’s the first time that the technology has been developed and made commercially available,” he said. “There is no distinction from a taste or nutritional standpoint. In fact, studies of people who have tried it in Singapore find it tastes superior or even better than the conventional chicken that they are familiar with, and the majority of people report feeling better after having it.”
This San Francisco-based business’s products Egg alternative Just Egg, and the chicken brand Good Meat, are available at over 20,000 retail distribution centers across Canada and the U.S. and Canada.
The origins of Eat Just’s name began in 2011, when the company was renamed Hampton Creek and had launched its first vegan food products, such as Just Mayo, an egg-free mayonnaise substitute, and Just Cookie Dough, an egg-free, dairy-free and egg-free edible cookie dough.
The company began with the egg, and then discovered an egg-like plant that scrambled as an egg. The company then attempted to create several products using the plant, but its research was focused on getting to the point that consumers can put egg-like products from the plant into a fry pan and consume it without cholesterol, and use less water and land, Tetrick said in an interview.
“We realized there are over 350,000 plants across the globe, but did not know if any could produce an egg,” said the scientist. “We discovered the mung bean which functions as an egg and developed the business model and technology around it. This was the first hurdle to overcome, the next was commercializing.”
However, Eat Just’s success wasn’t without a few hiccups throughout the process There were mislabeling accusations in 2015and in 2017it faced product safety concerns prompted Target to take its products from the shelves. The FDA has since removed the company from those allegations and Tetrick did not discuss past problems.
In the meantime, Berkeley, California-based Climax Foods has secured an $7.5 million round of seed capital in September, is using its own data science to develop food products made of plants, beginning with alternative plant-based versions of seven most popular cheeses, which aim to replicate the taste, texture, flavor and nutritional value of dairy-based alternatives.
Climax Foods CEO Oliver Zahn said to Crunchbase News that the company had conducted about 100 tastings of its cheese products. the reaction was favorable with some consumers unable to differentiate between Climax Foods products and dairy-based cheeses.
“If we are able to control the flavor and texture of this cheese well and we are able to control the texture, flavor and taste of this well, then we,” he added. “Once you know the process of fermentation in one particular brand of cheese it is possible that you only need to make small optimizations to improve the other brands.”
Based on the positive results, Zahn stated that the company plans to raise a modest bridge round prior to seeking an A Series round that is targeted for its primary market.
Future of food
Tetrick anticipates more multinational and startup companies developing technology to create alternative proteins, as well as the capital needed to help them follow.
“My goal is to have when my niece is finished with the high school — she’s two years old at present We will be able to have eggs every morning and chickens at night , and beef, without having to slaughter animals,” said the man. “The problem is growing. We cannot make enough to meet the needs of only the U.S., but for all over the world. We must keep reducing the price to ensure that everyone can afford it.”
It’s also a matter of perception. Although consumers are open to new flavors and tastes food items have to be something people want to eat, according to the Boston Consulting Group’s Walker.
Alternatives to meat are gaining popularity particularly in foods that aren’t their main action, like lasagna, where the tiny amount of meat does not alter the overall flavor of the dish. But in the case of steak, where dining is about the texture and mouthfeel as well as the taste, there remain a variety of technical issues the food industry must overcome, such as the price and the fact that a lot of products are processed, Walker said.
“You do not have to address the issues in one go to make adoption possible however, for rapid adoption, you’ll need to improve the quality of protein production,” he said. “Heme is what provides meat with the bloody taste is a fairly expensive process. This will require coming down in price. Texturization is possible on a per-person basis, however, the technology isn’t enough to allow it in a speedy method.”
