Should you invest in Alt Proteins? The Good Food Institute
Jan 16, 2024
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Laine Clark from the Good Food Institute discusses investment trends in alt protein sectors, including precision fermentation, plant-based, and cultivated meat. They explore the impact of cultivated meat on consumer perception and highlight the funding and donors of GFI. The chapter also covers the decline in venture funding, the growing ecosystem of alt protein companies, and the optimism among investors in the industry.
Investment trends in the alternative protein industry show a decline overall, with the majority of investment going into fermentation, followed by plant-based and cultivated meat.
Cultivated meat faces obstacles such as high production costs, regulatory approval, taste parity, and limited capacity for commercialization, but advancements in technology and government support are expected to expedite its progress.
Deep dives
Overview of the Good Food Institute
The Good Food Institute (GFI) is a nonprofit think tank and international network that aims to build a more sustainable food system by transforming meat production. With over 200 team members across six economies, GFI focuses on policy, site tech, and corporate engagement. They are primarily funded by philanthropists and private grant-making foundations. GFI provides open access research and advisory services in the field of alternative proteins.
Investment Trends in the Alternative Protein Industry
Investment trends in the alternative protein industry show a decline overall, reflecting a correction after the initial exuberance around the sector. In 2022, the industry raised about $2.9 billion, while this year, the sector has raised $682 million so far. The majority of the investment is going into fermentation ($312 million), followed by plant-based ($201 million), and then cultivated meat ($169 million). However, it's important to note that a few large deals can skew these numbers, and smaller deals in the sector are also significant.
Challenges and Opportunities in Cultivated Meat
Cultivated meat, although an emerging area, faces obstacles such as high production costs, regulatory approval, taste parity, and limited capacity for commercialization. However, advancements in technology and reduction in production costs are expected to expedite the path to obtaining cost parity and improving taste. Government support, investment, and infrastructure development are crucial to overcoming these challenges. Cultivated meat is still in its early stages and commercial availability in local grocery stores may take years to achieve.
Global Investment and Government Support
Most of the investment in alternative proteins is coming from North America, followed by Asia Pacific, Australia, and the Middle East. Countries like Singapore, Denmark, Canada, Australia, the Netherlands, and Israel are actively involved in supporting the industry. While the US leads in terms of private investments, government support in countries like Singapore and Israel is more developed. The US government is showing interest, but greater government funding and support for research and infrastructure are needed to scale up the sector globally.
Laine Clark from the GFI speaks to Alex from the Future of Foods Interviews about trends in investments across the different sectors of alt' protein (precision fermentation, plant based, and cultivated meat). Laine sees a positive future for the sector because it, "has to succeed".
If 2023 was a year of consolidation - what will 2024 bring?