Are you ready for the protein transition?

There are an abundance of reasons to embrace the protein transition from animal-based to alternative proteins. 

Whether to meet environmental targets, improve public health, reduce antibiotic resistance, or improve the lives of animals, it’s a multi-problem solution to some of the world’s most pressing problems. 

Just as the automobile industry pivots from gas-powered to electric vehicles and the energy sector from fossil fuels to renewables, the food system is poised for its own transformative shift. 

Crucially, these transitions are motivated not only by an environmental imperative but by a clear economic opportunity. New technologies and innovations lead to job creation, spur economic growth, and open up new markets.

The transition towards alternative proteins is therefore not just a matter of sustainability or ethics. It represents a vast economic frontier. 

This article examines the economic potential of alternative proteins, and shows why investing in alternative proteins is good for our wallets as well as our world.  

Alternative proteins’ growth to date

The alternative proteins industry has experienced impressive growth in its short lifetime. From 2010 to 2022, alternative protein companies raised USD 14.2 billion, nearly doubling the amount invested on average each year.¹ 

In 2022, under challenging macroeconomic and market conditions, this rapid growth slowed: many alternative protein categories experienced modest dollar volume growth alongside unit volume declines, and plant-based meat dollar sales stagnated, falling by 1%.² 

It’s worth noting that the alternative proteins sector is broad and heterogeneous: the fermented proteins market, for example, retained good growth, at over 6% globally.³ 

However, Floor Buitelaar, Managing Partner at Bright Green Partners, puts these trends into a broader food industry perspective. 

What does the alternative protein industry’s growth to date tell us about its economic potential? Firstly, it is clear that alternative proteins are already a strong and increasingly mainstream segment of the food industry, standing today as a multi-billion dollar industry. 

Secondly, short-term economic challenges do not change the basic facts of the industry’s potential. In the context of the wider protein industry, alternative proteins are generally fairing better than their animal product counterparts (see, for example, the closures of meat-packing factories by big meat companies).⁴ 

And, as a report by the Green Alliance notes, it is rare for any novel technology to experience uninterrupted growth. The slowdown in market growth actually follows the S-curve pattern that is typical of new product adoption.⁵ 

The environmental and public health impetus to diversify our protein supply is becoming more, not less, urgent. Potential for growth and innovation remains abundant. 

Public investment in alternative proteins

So far, the majority of investment in alternative proteins has come from private sources, such as venture capitalists and impact investors. Public investments, however, are also critical to the growth of the alternative proteins industry. As Linus Pardoe of GFI Europe notes:

In recent years, alternative proteins have begun to receive considerable public investment from governments worldwide. The GFI estimates the total level of public investment in alternative proteins to be over USD 1 billion, with USD 635 million being invested in 2022.⁶ However, even with these significant and welcome increases, more is needed.

For example, a Global Innovation Needs Assessment commissioned by the UK government found that the alternative protein sector could support 9.8 million jobs and USD 1.1 trillion in economic value by 2050, but only if governments worldwide commit USD 4.4 billion to R&D and USD 5.7 billion to commercialisation on an annual basis.⁷ 

Since the start of this decade alone, governments have allocated over USD 1.34 trillion towards clean energy initiatives.⁸ As with other sustainable technologies, governments must invest now to maximise their economic and environmental potential. 

What economic benefits will alternative proteins bring? 

The alternative proteins industry is projected to experience significant growth in the coming years. 

Even the least optimistic scenarios estimate a global market value of USD 290 billion by 2035.⁹ Moreover, cultivated meat is predicted to hold a 35% market share of the total meat sector by 2040.¹⁰ 

Crucially, alternative proteins are becoming an increasingly valuable investment for conventional meat companies too. For example, Rügenwalder Mühle, a traditional German meat producer, made more revenue from its vegan meats than animal meats in 2021. 

Meat industry giant Cargill now has a dedicated alternative protein division, with its Managing Director Elizabeth Gutschenritter recently stating: 

Direct economic benefits 

Given that alternative proteins are projected to form a sizable chunk of the protein market, their potential to stimulate job creation and economic growth is substantial. The countries and businesses that invest in the sector now will be in a prime position to reap the rewards.

The UK’s cultivated meat industry alone is expected to create approximately 9,200 to 16,500 jobs, potentially generating £266 to £523 million in tax revenues.¹² 

Internationally, a ClimateWorks report predicts that, with scaled-up investment, the alternative proteins sector could support 118 million jobs in the short term, and generate up to 83 million jobs by 2050. The report, focusing on mitigating agricultural methane emissions, also estimates that its recommended investments would generate USD 700 billion in added economic value globally, with alternative protein investment making up 98% of this value.¹³

Indirect economic benefits

When it comes to indirect benefits, alternative proteins could have far-reaching effects. Animal agriculture is associated with increased pandemic risk, increased health problems including obesity and type 2 diabetes, and increased risk of food insecurity and supply chain shocks. There is huge potential to avoid the vast economic costs associated with these risks. 

With regards to climate change, the case is particularly clear. Comparative to its contribution to global greenhouse gas emissions, finding sustainable sources of protein is a neglected climate change innovation strategy. 

That means that alternative proteins are now the most effective investment to achieve climate impact, delivering the highest CO2eq savings per dollar invested of any industry, three times higher than the comparable return in the cement, transport, or aviation industry.

Just a modest increase in the global market share of alternative proteins from today’s 2% to 8% by 2030 could yield an emissions reduction equivalent to the almost total decarbonisation of the aviation industry.¹⁴ 

More broadly, ClimateWorks estimates that food system innovations such as developing alternative sources of protein could collectively reduce the economic cost of achieving 1.5C by USD 100 billion in 2030, and USD 1 trillion in 2050.¹⁵ 

Just as with renewable energy, the environmental benefits of alternative proteins in part motivate its economic potential. They command a growing appeal to sustainably minded consumers, and they stand as a climate investment that will deliver substantial returns. 

Key takeaways

In addition to the compelling social reasons to invest in alternative proteins, embracing the protein transition also makes sound economic sense. The New Food Hub’s key takeaways are: 

For direct support on your alternative protein strategy, please get in touch with our experts at [email protected]. 

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1. There was high variance from year to year, however. 2022 State of the Industry Report: Plant-based meat, seafood, eggs, and dairy (2022). GFI. Available at: https://gfi.org/wp-content/uploads/2023/01/2022-Plant-Based-State-of-the-Industry-Report.pdf. Accessed 2023-12-20.
2. 2022 State of the Industry Report: Plant-based meat, seafood, eggs, and dairy, (2022). GFI. Available at: https://gfi.org/wp-content/uploads/2023/01/2022-Plant-Based-State-of-the-Industry-Report.pdf. Accessed 2023-12-20.
3. Appetite for change: why the UK should lead the emerging alternative proteins market, 2023. Green Alliance. Available at: https://green-alliance.org.uk/publication/appetite-for-change-why-the-uk-should-lead-the-emerging-alternative-proteins-market/. Accessed 2023-12-20.
4. See Tyson Foods to shutter 4 poultry plants, 2023. Food Dive. Available at: https://www.fooddive.com/news/tyson-foods-to-shutter-4-poultry-plants/690076/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Food%20Dive:%20Daily%20Dive%2008-12-2023&utm_term=Food%20Dive%20Weekender. Accessed 2023-12-20, and Smithfield to close North Carolina pork processing plant, 2023. Food Dive. Available at: https://www.fooddive.com/news/smithfield-north-carolina-pork-plant-closure/696130/. Accessed 2023-12-20.
5. Appetite for change: why the UK should lead the emerging alternative proteins market, 2023. Green Alliance. Available at: https://green-alliance.org.uk/publication/appetite-for-change-why-the-uk-should-lead-the-emerging-alternative-proteins-market/. Accessed 2023-12-20.
6. The State of Global Policy on Alternative Proteins, 2022. GFI. Available at: https://gfi.org/resource/alternative-proteins-state-of-global-policy/. Accessed 2023-12-20.​​
7. Global Innovation Needs Assessments: Protein diversity, 2021. Climateworks. Available at: https://www.climateworks.org/wp-content/uploads/2021/11/GINAs-Protein-Diversity.pdf. Accessed 2023-12-20.
8. Governments are continuing to push investment into clean energy amid the global energy crisis, 2023. IEA. Available at: https://www.iea.org/news/governments-are-continuing-to-push-investment-into-clean-energy-amid-the-global-energy-crisis#. Accessed 2023-12-20.
9. Appetite for change: why the UK should lead the emerging alternative proteins market, 2023. Green Alliance. Available at: https://green-alliance.org.uk/publication/appetite-for-change-why-the-uk-should-lead-the-emerging-alternative-proteins-market/. Accessed 2023-12-20.
10. When consumers go vegan, how much meat will be left on the table for agribusiness? 2020. Kearney. Available at: https://www.kearney.com/industry/consumer-retail/article/-/insights/when-consumers-go-vegan-how-much-meat-will-be-left-on-the-table-for-agribusiness. Accessed 2023-12-20.
11. Cargill’s alt-protein chief answers Food Dive’s 8 questions, 2023. Food Dive. Available at: https://www.fooddive.com/news/cargills-alt-protein-chief-answers-food-dives-8-questions/695371/. Accessed 2023-12-20.
12. The socio-economic impact of cultivated meat in the UK, 2021. Oxford Economics. Available at: https://www.oxfordeconomics.com/resource/the-socio-economic-impact-of-cultivated-meat-in-the-uk/. Accessed 2023-12-20.
13. Reduce Methane Emissions in the global Food System, 2023. ClimateWorks. Available at: https://www.climateworks.org/ginas-methane/. Accessed 2023-12-20.
14. Taking Alternative Proteins Mainstream, 2023. Boston Consulting Group. Available at: https://www.bcg.com/publications/2023/taking-alternative-protein-trends-mainstream. Accessed 2023-20-12.
15. Reduce Methane Emissions in the global Food System, 2023. ClimateWorks. Available at: https://www.climateworks.org/ginas-methane/. Accessed 2023-12-20.