LONDON — The future for protein alternatives is bright, according to GlobalData, estimating the market will continue to build on its current growth over the next few years as alternatives close the price, taste and texture gap with conventional proteins.
In addition to factors like increased consumer awareness of cruelty-free products, novel source availability and newly developed business models, the UK-based data and analytics company cited interest from venture capital investors as the primary driver of the market’s rapid growth in 2022.
“The emergence of alternative proteins, which include plant proteins, dairy alternatives, meat and seafood substitutes, is attracting VC investors’ attention,” said Pranjali Mujumdar, a disruptive tech analyst at GlobalData. “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.”
Venture capital groups invested $1.05 billion into alternative protein producers in the first half of 2022, a 174% increase from $384.13 million during the same period last year, according to the company.
The market shows no signs of slowing in the second half of 2022, with companies like Meati Foods raising $150 million in Series C funding for its meat alternatives. Meati’s product line, including plant-based steak fillets and chicken-style cutlets, is made using mycelium, the root structure of a fungi.
Early Impossible Foods investor Khosla Ventures also joined the trend in September, investing $6 million in seed funding for Equii, a food technology startup that developed high-protein grain flours using microbial proteins.
A few weeks prior, Nestle SA announced it had developed an animal-free dairy product with a whey protein alterative from Perfect Day, a startup that specializes in alternative protein development using precision fermentation.
Additionally, food technology developer Motif FoodWorks partnered with Vectron Biosolutions in October to develop alternative dairy proteins, building on Motif’s alternative protein portfolio that includes a heme replacement derived from yeast.
“Technology investors, sensing an opportunity to capitalize on the increasing globalization and industrialization of food, are investing heavily in startup companies,” Ms. Mujumdar said. “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.”