Alt-Protein Investments Hit All-Time High in 2021

Investment in alternative protein foods surged last year to $5 billion, setting a record high that represented a 60% increase over the previous year, according to a new report published Wednesday by the Good Food Institute (GFI).

Analyzing information from the PitchBook Data platform, GFI found $5 billion in disclosed investments last year, up from the $3.1 million in 2020. Plant-based meat, seafood, egg, and dairy companies secured the lion’s share of funding, bringing in $1.9 billion in 2021, according to the organization’s research. $1.7 billion was injected into fermentation firms. Cultivated meat and seafood suppliers received investments of $1.4 billion during the period.

“The investor community is beginning to see the huge potential of alternative proteins to transform our food system, as well as the strong potential to meet their target returns. With more and more investors acknowledging that climate risk is investment risk, alternative proteins offer a scalable solution that gets the world closer to a secure, carbon-neutral food system,” said CFI senior investor engagement specialist Sharyn Murray in the report. “Managing climate risks is impossible without addressing food and agriculture, and alternative proteins offers us a tool to do that."

GFI said the increase in investment activity in the alt-proteins space is “driven by multiple factors,” the report’s authors note that a need to drive carbon reductions in the traditional protein industry and reduce the transmission of diseases in livestock are playing a major role in the uptick.

“Considering the scale of emissions reductions that would occur with a shift to alternative proteins, this is a critical moment to invest in the technologies and innovations that can move our food system to net zero, and fast,” Caroline Bushnell, vice president of corporate engagement for GFI, said in a statement. “Ramping up investments in sustainable alternative proteins will allow companies to fund critical R&D, scale production, and bring down costs to effectively compete with conventionally produced animal protein and ultimately bring alternative proteins to more plates.”

As food manufacturers increase production of alternative protein products, companies will also look for opportunities to lower costs for consumers.

“Currently, one of the biggest goals of the plant-based meat market is to bring down the cost of these products to consumers so they are closer in price or lower than traditional meats. One way to do this is to increase through-put rates, so I think you will see equipment providers coming out with higher through-put machines,” John Sheehy, global key industry manager, Plant Proteins for Coperion and Coperion K-Tron, told Powder & Bulk Solids in an interview.