Agricultural production and food supply are facing unprecedented pressures. Decreasing per-capita arable land and extreme weather conditions are adversely impacting agricultural output. Disruptions in food supply chains, including pandemics and wars, exacerbate the existing stress placed on the global food system. A growing population, rapid urbanization, and changing consumption patterns will continue to increase pressure on food systems going forward. The combined impact of land degradation and rising food demand is driving a food security crisis.

In such a scenario, alternative meat can play an important role in serving the protein needs of the world. Alternative proteins can help reduce agricultural emissions. This sector, which includes artificial meat made from plants, proteins fermented using live microorganisms, and lab-grown meat, promises to eliminate a large share of agricultural emissions by replacing livestock.

In the past few years alone, the plant-based food industry has expanded exponentially, driven by consumer demand for foods that align with their values and interest in lowering their impact on the planet. Alternative proteins have graduated from a niche product to a mainstream phenomenon. Plant-based meats are now a fixture at fast food restaurants around the world. Plant-based milk is a household staple, and meat grown from animal cells is now sold in restaurants in Singapore and Israel. As per the Boston Consulting Group report on the alternative protein market, by 2035, every tenth portion of meat, eggs, and dairy eaten around the globe is very likely to be alternative protein.

In Singapore, where lab-grown meat is available for consumers to try, acceptance has been relatively high. Governments worldwide will play a critical role in promoting the global adoption of these alternatives through supportive regulations and by educating consumers about the products. Where these alternatives are accepted, more investment in infrastructure will be required since there is currently no cost-effective solution to scale up these meat alternatives.

Key drivers of alternate proteins

1. Growing concern for climate and sustainability

Consumers are increasingly looking to reduce animal protein in their diets, especially if they can do so without sacrificing taste or cost. Plant-based meats are well-positioned to meet these value-driven demands. The popularity of plant-based meats is fueled by the growing influence of Millennials and Gen Z, who are more aware of the environmental and social impacts of traditional meat-based diets. According to a 2020 report from Mattson in the USA, while 30% of Boomers cite environmental concerns as a top reason for choosing plant-based proteins, approximately 70% of Millennials and 100% of Gen Z consider it a primary motivation for their dietary choices.

2. The growing role of ESG criteria in investment strategies

Nearly 85% of investors now integrate environmental, social, and corporate governance (ESG) criteria into their investment strategies. Alternative proteins contribute to reducing the environmental footprint of our food system by conserving land and water resources and lowering greenhouse gas emissions and other pollutants.

3. Refinement and scaling of technologies to unlock parity in taste, texture, and price

Startups have significantly advanced technology in plant-based meat, helping the industry approach parity with traditional meat. As alternative proteins match animal proteins in taste, texture, and price, they can replace animal protein in 90% of the world’s ten favorite dishes. Additionally, every 1% reduction in the price of plant-based patties results in a 3% increase in market share.

4. Public and private investment in incumbent companies and startups

Most leading food companies have either invested in alternative meat startups or established their own in-house units. Increased public and private investment is essential to advance the alternative meat market further. Additionally, the state needs to create incentive structures for farmers and the entire value chain to drive scalability.

5. Regulatory hurdles transforming into support structures

Increasing carbon prices and providing support for farmers shifting from animal agriculture to alternative protein production could enhance consumption.

Drivers for Increasing Acceptance of Plant-Based Meat

1. Integrated Merchandising

Shoppers expect to find plant-based items alongside their animal-based counterparts. It is important for retailers to place plant-based products near their animal-based alternatives where shoppers can easily find and purchase them.

2. Prominent role of e-commerce

E-commerce has multiple levers for product discovery, as the unlimited range can give potential customers an opportunity. The plant-based meat industry needs to invest in e-commerce to meet consumer demand and make it easier to find plant-based foods online.

3. Increase availability with range expansion

Plant-based meats are becoming easier to find in retail chain stores but also in restaurants, with a majority of fast-food chains serving a plant-based meat option as consumer demand is rising. The discovery of products in food service will lead to recruitment at the retail chain. Product innovation and penetration in the retail channel will drive category growth.

In conclusion, the rapid growth of alternative proteins, especially plant-based meats, marks a significant shift in addressing global food system challenges. Fueled by sustainability concerns, consumer demand for healthier choices, and technological advancements, this sector shows promising potential to reduce agricultural emissions and meet increasing protein needs sustainably. With ongoing support from governments, investors, and consumers, the path towards mainstream adoption of these innovations looks optimistic, ushering in a transformative era for the future of food.