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Global investors are showing greater interest in alternative proteins as the climate impact of agriculture and food production comes under the spotlight. The world's food system, including agriculture and land use, accounted for 25 per cent to 30 per cent of emissions from 2007 to 2016. Demand for food protein is also being driven by population growth. By 2050 the world's population is expected to be close to 10bn.
Alternative protein comes from a variety of sources, including plant protein, cultured meat, and insects. Start-ups are also turning to high-tech fermentation to transform micro-organisms into proteins. But despite its potential, alternative proteins are by no means a sure-fire investment success. Beyond Meat, the company behind plant-based burgers, launched one of the most successful public offerings in the US this year. However, the stock has been on a rollercoaster with market sentiment affected by low barriers to entry and large food and meat companies moving into the sector.
Last year, investment in plant-based start-ups totalled around $315m. And the increasing competition has led to concerns among some market watchers. Also, alternative meat products may not be as healthy as claimed thanks to additives designed to appeal to consumer tastes. Potential regulatory restrictions on labelling and branding could also constrain marketing strategy. But despite these concerns, some forecasters predict substitutes will account for 10 per cent of the $1.4tn global meat industry over the next decade.
