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In a new industry report published by nonprofit the Good Food Institute (GFI), experts predict that there are plenty of reasons to be optimistic about the future of the alternative protein sector in the post-Covid-19 world. Even amidst the ongoing pandemic that has rocked the foodservice industry and the wider global economy, plant-based meat sales have been skyrocketing, investors have been funding startups left and right, and consumer interest in the benefits of cultivated proteins has never been higher.
Plant-based meat will keep growing
GFI’s latest State of the Industry reports are bullish on alternative protein, particularly as we begin to rebuild from the coronavirus pandemic. Whilst many product launches by plant-based food companies have been put on hold temporarily due to the crisis, industry experts believe that these companies hold the advantage of adaptability, which will allow them to flourish despite the economic recession.
“These nimble companies are well positioned to sell their products direct-to-consumer through e-commerce channels (about 10% of all grocery sales pre-Covid-19) and delivery. Many restaurants and cloud kitchens are experiencing robust pickup and delivery demand,” GFI said in a statement.
Apart from the ability to meet the surging demand for food sales and stay-at-home consumption, plant-based meat will also benefit from a drastic coronavirus-induced shift amongst mainstream consumers towards prioritising concerns of practicality, food safety and shelf-stability.
The report cited China as a key example of where consumer understanding about the lower risk of pathogens in plant-based substitutes have boded well for vegan food techs, with a number of major food service companies launching plant-based meat products as the country begins to recover from the pandemic, including Starbucks, KFC and Papa John’s.
In addition, with investor sentiment for traditional animal agriculture companies going awry due to the pandemic, plant-based food techs have attracted major capital in recent months, which will provide them with the funding necessary to funnel into further product research and development, production capacity and boost its supply chain resiliency at a time of a global meat supply chain shock.
In just this first quarter of 2020 alone, plant-based protein companies in the United States have raised a total of US$741 million in investment – nearly matching a record $747 million raised in the whole of 2019.
Bright future for cultivated meat
In the cultivated meat realm, the GFI believes that the coronavirus has made apparent that traditional animal agriculture is vulnerable, inadequate and its supply chain is inefficient and lacks resilience to battle future public health crises.
Before the pandemic, the cultivated meat sector had already raised new record levels of venture capital. In particular, Memphis Meats’ US$186 million Series B round earlier this year exceeded all past investments in the history of the cell-based sector.
With this already-invested capital, GFI believes that there is enough buffer or “dry powder” necessary to keep innovation on the right track despite the gloomy economic outlook given the pandemic.
Events such as the shutdowns of meat processing facilities across global slaughterhouse workers, risking a major meat shortage, will be a further driver of consumer demand for a more efficient and crisis-resilient way to produce meat. This is happening alongside ongoing livestock diseases such as avian flu and African swine fever, which had already been devastating supplies of chicken and pork. Fears about a resurgence of Div1, which threatens to decimate shrimp farms in China, will only propel alternative proteins further.
“[And] as it becomes clearer that cellular agriculture is the future of animal meat production, increasingly more investors, governments, scientists, and entrepreneurs are diving in,” said the report, citing the Singaporean government as an example of authorities beginning to mobilise unprecedented funds into the emerging cultivated industry.
When combining investment into both plant-based and cultivated protein companies in the first quarter of this year, the alternative protein sector as a whole raised a record US$824 million, said the report.
“The trillion-dollar-plus meat market is poised to fundamentally transform. Consumer demand is proven and growing. In this “new normal,” we must shift to alternative proteins to improve public health and enhance food security…The future of food is plant-based and cultivated.”
Want to know more about Asia’s alternative protein space? Download the first in-depth Asia Alternative Protein Industry Report: New Protein New Decade by Green Queen Media here.
Lead image courtesy of Memphis Meats.