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Over the last five or so years, novel proteins and agri-food technology have become a hot trend in the investment industry. Food is now firmly on the radar as the next big industry ripe for ‘disruptive’ innovation. A wide range of agri-food technology start-up companies or novel food producers, have emerged in recent years. These companies provide products designed to replace, or at least reduce, the volume of animal based products consumed by humans.

A recently-published report sheds light on the state of the novel foods landscape while profiling 14 leading companies operating in the novel food space. Informa reports publisher, Alan Bullion, spoke to report author, Andrew McLay, to find out more about novel proteins.

The report is now available to purchase online: Novel, Alternative And New Foods - Analysis And Opportunities



Why are novel proteins such a hot topic?
At a macro level, global protein demand is expected to grow by at least 50% by 2030. Most of this growth in demand is likely to come from low-income and emerging economies.

In high-income countries, demand for proteins is expected to grow, but consumers are becoming increasingly choosy about the types of proteins they consume and where/how those proteins have been produced.

Consumers are increasingly aware of the negative welfare, environment and potentially social impacts of large-scale animal agriculture. At the same time, entrepreneurs and venture capitalists have sensed the opportunity for large-scale change in the food industry and have allocated significant time and capital to developing new non-animal protein sources.

Collectively these factors make the food industry and particularly protein markets a very exciting and dynamic place.

What are novel proteins?
This report categorises novel proteins into three groups based on their production technology:

1. Modern Replacements are basically plant-based animal product analogues. These are typically enhanced versions of existing analogues such as soy or my co-protein based meat and dairy products. However this also includes newer products such as not based milks and products based on insect proteins.

2. Acellular proteins, utilise advances in recombinant DNA or genetic engineering to grow specific animal products such as proteins or enzymes, in algae, fungi or yeast cells. Proponents of these technologies suggest it is more like brewing beer then creating a lab-based food. The idea is that the cells produce the desirable proteins and that these proteins and sales are being separated to provide a clean, non-genetically modified protein product.

3. Cellular proteins - Cellular products or in-vitro cultivation of cells has been used in the medical sector on a small scale for a number of years. The aim is now to take this technology and apply it to producing large volumes of animal meat. Proponents of the technology often refer to it as ‘clean meat’ - based on the production process’s lack of bacteria or other contaminants, while detractors use the term ‘lab meat’.

What types of companies are involved are they credible?
The companies involved in this emerging market very considerably but the sector includes some highly credible and well-financed businesses. This report analyses 14 high profile companies that collectively have raised over US$500 million in venture capital over the last few years. Most of this funding has been allocated to a small number of companies such as Hampton Creek (US$120 million) and Beyond Meat (US$87 million), However there are still a number of competent smaller companies with great products and potential.

Are there still commercial opportunities for new products / companies?
The data available today suggests that the demand for plant based foods and novel proteins is very much in a growth phase. Total demand will of course dairy by product and country. The US market for dairy alternatives has grown rapidly and currently accounts for over 10% of the liquid milk market by value. This segment provides some indication of the potential for plant based foods in other traditional animal product segments.

When will these new products be available?

That is the $64 million question. Some novel protein products are already available in the market or at least the United States retail market. Across many countries there is a whole new generation of plant-based alternatives to meat and dairy products. Some of these like almond milk actually contain very little protein, but others are very much focused on providing high quality proteins similar to those found in animal products.

Other products, such as synthetic meat or lab meat are still a number of years away. Although the timeline for these products is changing. One company, Hampton Creek, recently announced that it would have a synthetic meat product in the market as early as 2018. This is significantly faster than other companies looking to produce similar products.

What do consumers think?
The three different categories of technology used to produce novel proteins means that consumer attitudes tend to vary depending on the technology used. Overall there have been relatively few public studies conducted on the topic. With any new or novel food, there are a number of key factors that consumers will consider - safety is of course a key consideration. Increasingly consumers are looking at safety from a short-term and a long-term perspective - what impact will consumption of this product have on me today and over the longer term. Products that are GM based or that have some component of bioactivity are particularly of concern to many consumers.

Consumers are also influenced by the so-called yuck factor - although this can be changed over time it is often a significant barrier to consumers acceptance of food products. Today, many people still consider eating insects as having a high yuck factor. A number of years ago many consumers probably had similar attitudes towards sushi.

Producers of novel protein products need to be particularly aware of these issues and focus heavily on effective communication and marketing to build acceptance amongst their target consumers.

Explore the novel proteins landscape in the recently published Novel, Alternative And New Foods - Analysis And Opportunities report.

Download your free sample report

This report covers the recent developments from innovative companies that have established novel protein based products or production techniques within the food and fibre agricultural sectors.

The analysis focuses on the growth of new companies supplying animal-free meat and dairy products, but also touches on a number of other fibre and food ingredient business. This report profiles 14 leading companies operating in the novel food space.

Novel Foods Report | Agribusiness Intelligence

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