A $2.4 trillion coalition of investors have backed a report urging global food companies to diversify their protein sourcing way from a reliance on animal proteins.
An analysis of 16 multinationals concluded that Nestlé and Tesco were best positioned to benefit from a transition to alternative plant-based proteins. Other companies engaged included Kraft Heinz, General Mills and Unilever.
The investor coalition is coordinated by the FAIRR initiative, founded by private equity pioneer Jeremy Coller, and includes institutional investors such as Aegon, Aviva Investors, Coller Capital and Nordea.
The report – Plant-based profits – highlights projections that the market for alternative proteins, including innovative foods such as the ‘Impossible Burger’, which use plant-based ingredients to produce more sustainable, healthy foods that emulate meat, is set to expand at a compound annual growth rate of 8.29% in the next four years, and could reach $5.2 billion by 2020.
Just 18 months after launch, the Impossible Burger is now available in over 500 US restaurants and has received funding of over $250 million from mainstream investors.
Prominent meat industry players Cargill and Tyson Foods recently announced investments in cultured meat start-up, Memphis Meats.
The 16 multinationals were evaluated on areas such as business strategy, monitoring processes, R&D investment levels and consumer engagement to understand how companies are positioned to capitalise on the rising demand for alternative proteins.
The report found that Nestlé and Tesco are best prepared, while all companies market at least one own-brand alternative protein product.
Only three companies have set some type of goals to increase their portfolio of alternative proteins, being M&S, Nestlé and Unilever.
And all companies lack a coherent strategy for how to market and promote alternative protein products on supermarket shelves to drive sales.
Jeremy Coller, Founder of the FAIRR Initiative and CIO of Coller Capital, said: “Today’s Plant-Based Profits report shows that alternative proteins are rapidly going mainstream.
“From meatpackers to supermarket stackers the global food sector is rapidly taking notice of plant-based alternatives to animal protein products, and that is driving 8% annual growth in the alternative proteins market.
“It’s significant that all of the food producers and retailers engaged by investors now market at least one own-brand alternative protein product.
“Ultimately, this trend is driven by the inability of the global meat industry to manage the environmental, public health and animal welfare challenges that the world’s current demand for animal protein creates; and that is generating remarkable opportunities for food companies and their shareholders.”