Demand for protein alternatives looks set to increase

Growing consumer awareness about cruelty-free products, venture capital (VC) investor interest, new business models, and novel source availability are driving the protein alternatives market globally. 

Pranjali Mujumdar, disruptive tech analyst at GlobalData, said: “The emergence of alternative proteins, which include plant proteins, dairy alternatives, meat, and seafood substitutes, is attracting VC investors' attention. Plant-based proteins constitute around 50% of investors’ deals and is the most funded category, with a significant volume of funding going into a small group of startups.”

Manish Dixit, practice dead of disruptive tech at GlobalData, added: “Since the protein alternatives sector is still in its infancy compared to the many established categories, any investment now will have a major knock-on effect on how the industry moves and grows in the upcoming years. VC activity in the alternative protein space is already picking up very rapidly. For instance, alternative protein companies raised $1.05 billion from VC investors in the first half of 2022, representing a staggering 173.8% growth over H1 2021's $384.13 million.”

An analysis of GlobalData’s Disruptor Intelligence Center reveals that organisations are penetrating the nascent alternative protein market and view this as the next growth opportunity.

In April 2022, Upside Foods Inc, a US-based company involved in the cultivated meat, poultry, and seafood industry, secured $400 million in funding which will be used for product innovation, partnerships, and the infrastructure needed to make cultivated meat at scale.

In September 2022, Innovafeed, a French biotech company producing insect-based protein for the feed industry, raised $250 million in funding to expand its manufacturing capabilities, speed up worldwide expansion, particularly in the US, plan the global roll-out of its technology, including development in Asia, and maintain its investment in research and development (R&D).

Mujumdar concludes: “Technology investors, sensing an opportunity to capitalise on the increasing globalisation and industrialisation of food, are investing heavily in startup companies, which pitch alternative methods of growing, manufacturing, processing, and distributing food. The scale of interest and investment in alternate proteins seems to have intensified and there is a growing consensus that this trend is here to stay.”