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Emerging Opportunities in the Alternative Proteins Space

Harini Venkataraman, Ph.D., Analyst
February 4, 2019

The alternative proteins space has garnered a lot of attention in recent years. The consumption of traditional protein sources like meat and seafood has declined, and multiple drivers are encouraging the development of alternative protein sources. A convergence of several factors such as growing population, supply concerns, and the environmental impacts of livestock production, have created changes in global protein demand, leading to opportunities for several alternative protein sources in the agricultural and food markets.

Novel alternative protein sources have emerged via several new technology developers. We divide these alternative proteins into four distinct categories: plant proteins, insects, algae, and cellular agriculture, which includes both lab-grown meat and synthetic biology-derived products like animal-free dairy proteins, egg white, and other proteins.

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Opportunities in the alternative proteins space

A survey of the funding landscape shows that since 2017, a whopping $540 million in funding has gone into this space. Plant proteins have emerged as the most funded category within the alternative protein space, raising more than $350 million.

Although a number of opportunities lie within this multi-billion-dollar alternative protein space, the near-term opportunities and timeline for commercialization vary widely. Plant proteins are currently leading the race; however, with technology improvements to tackle scale-up issues related to other alternative protein options, these categories will also contribute a significant chunk of the market in the coming decades. For instance, the fast-growing cellular agriculture space will open up partnership and investment opportunities. However, when looking to invest in this landscape, industry players should carefully weigh their options, especially when staking a claim with an early-stage investment, which will carry more technology execution risks. For sustained success, companies should consider prioritizing near-term possibilities as well as be open to other long-term opportunities within the alternative proteins space.

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The future of alternative proteins will be intertwined with consumer preferences; those preferences will have a strong impact on the entire food value chain, all the way upstream to the production of high-protein crops and individual inputs. We encourage industry players to look for partnership opportunities with technology developers both upstream and downstream the value chain to innovate and stay ahead in this space.