Daily Management Review

It Is Not Possible To Ignore The Growing Alternative Protein Industry


The market for alternative proteins – known by different names such as "plant-based" and "alternative” proteins, is seemingly immense and is slowly turning out to be a growing movement in large parts of the world. . 
According to GreenBiz ally Andrew Beebe of Obvious Ventures: "Alternative protein companies are inherently world-positive." While invoking the go-to descriptor of breakthrough companies and technologies of his firm, Beebe further said: "They create profits because of purpose — and that’s what makes them absolutely massive opportunities."
A host of analysts are now paying close attention to the growth prospect of this market for alternative proteins. Apart from health considerations of consuming high amounts of conventional protein sources such as meat, what is driving the market for alternative proteins is also the negative environmental impacts because of conventional protein production and consumption.
Analysts are also looking closely at the movement and possible success of the initial public offering of alt-protein company Beyond Meat that was issued earlier this month in the United States. This is the first such company to go public and there was an astounding 163 per cent increase in its share price in the first day itself – rising from an initial offer price of $25 a share to about $65. It finally more than tripled within a period of just two weeks. Analysts have also identified the stock to be among the best-performing IPO by a major U.S. company in almost two decades and for a startup, its market valuation of $5 billion is quite impressive considering the fact that the company is yet to make any profits.
According to Bernstein, a leading investment research and management firm, the alternative met industry is set to touch a whopping $40.5 billion in the next decade in the United States alone, and companies like Beyond Meat and its major competitor - Impossible Foods are set to be the leaders of this disrupting industry segment. Impossible Foods raised as much as $300 million in a Series E round as last reported. But according to Grand View Research, the estimated worth of the alternative meat industry would just be a fraction of the estimated value of the $383 billion for the conventional beef market by 2025, .
One of the major drivers of the growth of the alternative meat industry – the environmental impact, is a very timely one.  According to the most conservative estimates, the act of raising livestock accounts for about 15 per cent of the total global greenhouse gas emissions which is more than the combined emissions from ships, planes, trucks, cars and all other modes of transportation. Further, according to Project Drawdown’s list of 80 solutions to reverse global warming, consuming a plant-rich diet is ranked No. 4. And according to Project Drawdown’s research, it is estimated that the total green house emissions because of raising livestock reaches as much as 50 percent of global GHGs when accounted for direct and indirect emissions for this sector.
The bright prospect of growth for the alternative meat industry segment is inducing investments both from VCs and large corporate. According to data available from the Good Food Institute, total investments of $13 billion in the plant-based meat, egg and dairy companies was made in 2017 alone against an overall investment of $16 billion made in the past decade.