Alternative protein innovation priorities

As many startups begin to scale up their production, significant investment is needed to finance high capital expenditures.

While venture capital has been instrumental in accelerating the sector to date, the venture capital model is not suited to large infrastructure projects, such as building processing or manufacturing plants. Furthermore, continued venture capital investment dilutes startups. 

The industry therefore needs more debt financing to fund the next stage of growth. The creation of infrastructure loan and leasing funds will help supply to keep up with demand and unlock additional economies of scale.

B2B companies in the sustainable protein sector find it more difficult to find funding as investors tend to favour consumer-facing companies. However, the success of  B2B companies is crucial for accelerating innovation throughout the whole sector.

For example, companies like Motif FoodWorks, who have developed myoglobin, a heme-binding protein, will enable plant-based meat manufacturers to develop better products that replicate the flavour and aroma of conventional meat.

Demand for raw materials, ingredients and inputs is outpacing supply, even for the most widely available plant-based proteins like soy and wheat. However, ingredient suppliers are hesitant to increase supply as it is difficult to predict what demand will look like in the short- and long-term.

Publicly available demand forecasts for novel and existing raw materials, ingredients and inputs would address these key knowledge gaps. These forecasts would be particularly valuable if segmented by product type, region, and consumer demographics. Scenario analyses, influence diagrams, and Monte Carlo calculations would enable more effective second- and nth-order estimates about what will be required from upstream suppliers in the value chain. They would also inform technical, regulatory and consumer demand milestones.

As the industry continues to mature and food manufacturers and startups seek to meet evolving consumer expectations, there is increasing demand for novel, non-GMO, and local ingredients. However, it can be challenging to establish the agricultural infrastructure – from seeds and farm equipment to storage and transportation – necessary to scale novel inputs efficiently and effectively. 

Additionally, in the cultivated meat industry, inputs (such as media and growth factors) are currently being used in small quantities, but there will be a significant uptick in demand for these inputs as the market scales, posing potential supply chain and cost issues.  

To motivate farmers to switch to novel species or cultivars and to de-risk their first few seasons, governments should provide insurance or price guarantees, and tailored technical assistance programmes to ensure that alternative protein inputs can be a profitable and competitive option for growers.

Companies can de-risk operations by exploring either the valorization of side streams from their own processes, or sourcing these secondary materials from external suppliers.

Uses for traditional crop side streams (like husks) or processing fractions (like leftovers from protein isolate extraction) have been identified in some cases – but as demand rises for novel protein sources, finding efficient and valuable ways to commercialise all plant products and byproducts is a major opportunity. 

For cultivated meat and fermentation, the challenge is finding ways to recycle or upcycle spent media – the most significant waste product in terms of volume.

Some fermentation companies are also utilising industrial food waste as an input to create a circular process, although this comes with additional regulatory implications to navigate.

Ingredients from different suppliers exhibit a range of sensory and functional characteristics, leading to undesired variability in end product formulation. Plant-based meat manufacturers would benefit from raw materials processors and farmers working in concert to develop high-quality, homogenous ingredients.

Better analytical tools for predicting plant-based ingredient performance could also improve manufacturing efficiency and create more transparent ingredient markets. Tools are needed to predict how ingredients will perform in final product applications like plant-based meat and dairy and under various processing methods. Companies could commercialise these tools themselves (in the form of assay kits or analytical equipment) or provide ingredient characterisation as a service.

Existing media and growth factor supply chains have largely been developed for the price-inelastic biotech and biopharma industries. Thus, they are too expensive, at too small a scale, and manufactured under certification regimes inappropriate for cultivated meat production.

Research on how to effectively recycle or reuse inputs, such as growth factors, at a low cost and on a larger scale, would help drive down costs.

There is a significant opportunity to improve, optimise and innovate on current processing techniques for plant-based, cultivated and fermentation products. 

Specifically for plant-based, there is an opportunity for equipment companies and researchers to optimise extrusion for plant-based production, as well as to look into novel methods for texturising and structuring plant-based proteins, such as shear cell, 3D printing, and electrospinning. These innovations will help to improve the taste and texture of end products. 

Given the nascent stage of the cultivated meat industry, no company has yet successfully scaled production to industrial levels, so there remains uncertainty around how cells will behave at scale. 

In March 2021, independent researchers CE Delft released the first techno-economic assessment of cultivated meat to be based on industry data. The development of additional techno-economic models that reflect the latest data provided by companies will be essential to reflect growing expertise and experience, and to guide future process improvements.

Currently, there is not enough alternative protein manufacturing capacity, from pilot to demonstration to full-scale, to meet demand.

To meet market expectations for plant-based, cultivated and fermentation products, vast amounts of additional infrastructure will need to be built and existing infrastructure, such as from meat or biopharma, may have to be repurposed.

Finding production partners can be a complex and time-consuming process for food startups and organisations to navigate on their own, whether they are looking for co-manufacturing space or a production partner.

Resources and services that make it easier to locate, filter and prioritise partnership efforts would make this easier for startups and add value to existing companies looking for new partners, customers and trends.

The success of the alternative protein industry rests upon the ability to make food with identical or superior flavours and textures to conventionally produced meat, egg and dairy products.

While we’ve seen significant improvements, few alternative protein products have achieved this to date. A recent study across the US and Europe showed that only 30% of respondents agreed that plant-based meat tasted as good or better than animal-based meat.

As taste is critical to consumer’s trial and acceptance of these products, companies must invest in additional R&D to perfect these products, and governments must fund open-access R&D.

A recent study in the UK showed that four out of every five plant-based products cost more than their animal-based alternatives. This price difference remains a barrier for consumers to try and continue buying these offerings.

This will be especially relevant in the cultivated meat industry, where costs are currently a barrier to commercialisation – but research by CE Delft demonstrates that, with the right investment in innovation and infrastructure, cultivated meat could be cost-competitive by 2030.

It will be incumbent upon companies to demonstrate the environmental benefits of cultivated meat.

Conducting rigorous life cycle assessments will be critical. These analyses should note the potential for increased efficiencies across all stages of the plant, fermentation, and cellular agriculture life cycles, as well as the opportunities for increased efficiency that come with scaling up production.

It will be crucial to continue these sustainability studies as the industry reaches commercial scale to capture the full effect of this shift.

The majority of today’s consumers are unfamiliar with cultivated meat, so companies will need to educate consumers on what their products are and earn brand loyalty in creative ways.

One example is branding their products with a European country of origin, leaning into Europeans’ proud food culture around local sourcing and identity.