4 MIN READ

10-1-2024

Plant-Powered Profits: The Surge of Alternative Proteins in the Market

Alex Schulze , CEO/Co-Founder

Plant-Powered Profits: The Surge of Alternative Proteins in the Market

Producing a kilogram of beef emits 60 kgCO2e, an estimate of greenhouse gas emissions. In contrast, peas emit just 1 kgCO2e per kilogram. 

With animal-based proteins and foods having a significantly higher carbon footprint than their plant-based counterparts, their contribution to the climate crisis cannot be ignored. Both producers and consumers are gradually shifting their protein consumption offerings and habits, with more alternatives on the market than ever before.

The Rise of Alternative Proteins

In recent years, there has been a significant surge in plant-based and other alternative proteins entering the mainstream market, making these options increasingly accessible to consumers. The global protein alternatives market is estimated to reach USD 15.7 billion by the end of 2024, with a projected growth rate of 9.9% annually, reaching USD 25.2 billion by 2029. These alternative proteins—which include plant-based, fermentation-based, and cultivated options—offer a diverse range of products such as alternative meat, seafood, dairy, and eggs. Among these, plant-based proteins hold the largest market share, valued at approximately USD 14.3 billion, followed by fermented proteins at around USD 1 billion. Popular plant-based protein sources include pulses, tofu, soy, tempeh, seitan, nuts, seeds, various grains, and peas.

In the United States, companies like Beyond Meat and Impossible Foods have been pivotal in bringing alternative proteins into the mainstream, significantly influencing consumer choices. These products are now commonly available at fast-food restaurants nationwide. Similarly, Oatly's expansion into grocery stores and coffee shops has made plant-based milk a staple for many consumers, highlighting the growing acceptance and integration of these alternatives into daily diets.

Looking Forward

Addressing Consumer Barriers Despite the rapid mainstream acceptance of alternative proteins, growth has begun to stagnate in recent years, signaling that significant challenges remain. One of the primary obstacles to mass adoption is the price premium of alternative proteins compared to traditional animal-based products. According to market research from Deloitte, the higher cost is a key deterrent for consumers. If producers can scale up operations and reduce costs, it is likely that demand will increase substantially.

A 2022 survey by BCG involving over 2,900 consumers from the US, Brazil, the EU, India, China, and Japan found that when purchasing fresh food products such as meat and produce, taste and health are the top concerns. This sentiment was echoed in a separate survey of over 300 US consumers, where taste and nutritional value were identified as the top criteria for purchasing alternative proteins. These findings suggest that while sustainability is important, mainstream consumers will not regularly choose alternative protein products unless they also meet the key requirements of taste and health.

Innovations Driving the Future Technological advancements are crucial in overcoming current market challenges and are at the heart of the alternative protein revolution. Companies are continually innovating to enhance the taste, texture, and nutritional profile of alternative proteins. For example, breakthroughs in fermentation technology have enabled the creation of plant-based dairy products that closely resemble traditional dairy in taste and texture. Additionally, the development of plant-based eggs by companies like Migros and Crafty Counter demonstrates the potential for innovation in this space, catering to consumer preferences while significantly reducing the environmental impact of food production.

Across the plant-based meat value chain, collaborations among researchers aim to improve crop development, ingredient production, end-product formulation, and manufacturing processes. In the past two years alone, sector-wide efforts have focused on new farming techniques for optimized plant protein cultivation, innovative uses of artificial intelligence, ingredient upcycling from agricultural by-products, and new solutions for replicating the sensory attributes of conventional meat, seafood, eggs, and dairy products.

One notable initiative is the Tropical Food Innovation Lab in Campinas City, Brazil, a collaborative space developed by a consortium including Cargill, Bühler, Givaudan, Food Tech Hub LATAM, and the Institute of Food Technology. This lab focuses on creating sustainable and accessible food solutions sourced from Brazil’s diverse native plants and crops. Similarly, researchers at Texas A&M AgriLife Research and AgriVentis Technologies are exploring the cultivation of mung beans in Texas—a drought-resistant legume traditionally grown in South Asia. This research is particularly relevant for water-constrained regions, highlighting the potential of mung beans as a scalable source of alternative proteins.

Addressing cost barriers and improving taste and nutritional value through innovation are key to driving further growth in the alternative protein market. As consumer interest in sustainable and healthier food options continues to rise, the potential for alternative proteins to become a mainstay in global diets grows. With continued advancements, this market can play a pivotal role in reducing the environmental impact of food production and fostering a more sustainable future.