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2020 will be ‘watershed year’ for plant-based foods, investor coalition predicts

2020 will be 'watershed year' for plant-based foods, investor coalition predicts

Investor coalition FAIRR has documented a tenfold increase in the plant-based-food-related assets its cohort manages over the past four years and found that four in ten food giants now have dedicated teams for plant-based products.

Launched on Monday (27 July), the coalition’s new online hub on sustainable proteins provides data for corporates, investors, researchers and campaigners seeking to track and accelerate the transition to plant-based diets.

It ranks 25 consumer goods producers and 15 food retailers on the ways in which they are approaching plant-based foods, in terms of their offerings, R&D spend and where responsibility for alternative proteins sits within the business.

Of the firms, 40% now have dedicated plant-based food teams. Among them are Nestle and Unilever from the consumer goods sector and Coles, Kroger, Sainsbury’s, Marks and Spencer and Tesco from the supermarket sector. Unilever is notably aiming to increase the amount of so-called ‘Future 50 Foods’ – plant-based ingredients which are proven to have a lower environmental impact – used to make products for several of its most recognisable brands, including Knorr.

Moreover, almost half (seven in 15) of the retailers are now positioning or planning to position plant-based meat alternatives in the meat aisle – a move which proponents claim can make them easier to find and more appealing to those not yet committed to plant-based diets.

These findings aligned with research conducted into FAIRR’s own members, which found that the value of the coalition’s plant-based-food-related assets under management (AUM) had reached $13trn (£10.1trn) as of June 2020. In comparison, the figure stood at less than $1.3trn (£1trn) in 2016. As such, FAIRR is now predicting that the global alternative proteins market will grow to $17.9bn (£13.9bn) by 2025, attracting more than $1bn (£780m) in venture capital annually, up from $500,000 in venture capital in 2019.

Leaders and laggards in the time of Coronavirus

FAIRR, led by Coller Capital, claims that the Covid-19 pandemic has accelerated the shift towards plant-based foods, often attributed to concerns over health and wellbeing, animal welfare and the environment. Aside from fears regarding diseases passing the species border, meat processing plants have been linked to localised virus outbreaksPrevious analysis from FAIRR concluded that 44 of the world’s largest meat, fish and dairy companies are considered “high-risk” in regards to pandemic vulnerabilities.

Sales of plant-based meat alternatives were up 200% year on year in April in the US, and shares of Beyond Meat have risen over 80% this year.

Nonetheless, FAIRR fears that many of the world’s largest businesses are failing to match the pace of changing consumer demand or rise to the scale of the climate crisis. Among them are Costco, Amazon and Kraft Heinz.

Costco was the only retailer analysed that is yet to demonstrate how it is engaging consumers to choose plant-based options. Amazon was marked down for failing to detail how it is delivering a protein transition in line with climate science. Kraft Heinz did not produce adequate information on innovation within its portfolio and has not grown its plant-based offering in the past four years.

All three of these firms have previously come under fire for their failure to address animal-protein-related issues in their business models or supply chains.

“Our engagement shows which food companies are putting in place the infrastructure and innovation to benefit from this seismic shift in the ways we shop and eat; and those that will lose out,” FAIRR Founder Jeremy Coller said. “Investors are watching closely.” 

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