The report highlights the growth of Impossible Foods, which uses plant-based ingredients to produce sustainable foods that emulate meat
A new report titled Plant-Based Profits, backed by a coalition of 57 investors, has urged global food companies to diversify their protein sourcing away 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 coalition is coordinated by the Farm Animal Investment Risk and Return (FAIRR) initiative and includes investors such as Aegon, Aviva Investors, Coller Capital and Nordea.
The report highlights projections that the market for alternative proteins, including 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 investors including Singaporean sovereign wealth fund Temasek.
Meanwhile, 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 all the companies market at least one own-brand alternative protein product, but they all lack a coherent strategy for how to market and promote alternative protein products on supermarket shelves to drive sales.
Sasja Beslik, head of group sustainable finance at Nordea, said: “Sustainable protein is a fast-emerging issue for the food industry, and it is important for long-term investors to know if the companies they invest in understand the related risks and opportunities.
“FAIRR’s sustainable protein engagement offers practical guidance to companies to ensure they have a business strategy that is robust enough to respond to a changing food supply chain.
“For us as investors, this engagement also helps us to be on top of the developments in this space as well as to identify food companies that proactively invest in innovative solutions.”
FAIRR founder Jeremy Coller added: “Today’s Plant-Based Profits report shows that alternative proteins are rapidly going mainstream. From meat packers 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.”
© FoodBev Media Ltd 2018