INCORPORATING COLD CHAIN
INTERNATIONAL NEWS and potentially more local supply chains . Widespread adoption of alternative proteins can remove the risk of supply chain disruptions and play a critical role tackling climate change , with consumers playing a key part in propelling this transition .”
Bjoern Witte , CEO of Blue Horizon , adds : “ The products consumers are seeing on the shelves today will be followed by a wave of cleaner , healthier , and tastier alternative proteins , as technology allows for increasing innovation . We ' ve seen the fast-paced development of these technologies in our own portfolio as well as the wider foodtech industry , leading to an overall better consumer product range . This is great news for today ' s consumers , but we ' re just at the beginning , really . Future generations will benefit greatly from the demonstrable impact this will have on the environment , as shown through our analysis of climate data . This is the second report from BCG and Blue Horizon confirming that protein transformation is the most capital-efficient way to avoid emissions and deliver Impact of Capital Employed ( IoCE ). If we reach 11 % market penetration by 2035 , which is our goal , we could save more carbon emissions than decarbonising 95 % of the aviation sector . The positive impact is absolutely massive , and secular drivers have never been stronger — the time to invest is now .”
AN ACCELERATION IN FUNDING Capital invested in alternative proteins rose at an annual rate of 124 %, from USD1- billion in 2019 to USD5-billion in 2021 , with investments in fermentation and animal-cell-based companies leading the way . Investment in alternative proteins is increasing globally . Middle East funders , which tend to focus on animal-cell-based investments , made up 11 % of worldwide investment in alternative proteins last year while APAC investment , fuelled by plantbased deals , increased by 92 %.
For investors , a key finding of the report is the fact that investments in plant-based proteins are more CAPEX-efficient with regard to carbon dioxide and methane emission reductions than in any other industry . Plant-based protein market penetration as forecasted in the Food for Thought I base case would save 0.85 gigaton of emissions by 2035 . This savings potential is equivalent to decarbonising a majority of the aviation industry . Investing in plant-based proteins has the highest emission savings per invested capital — at least twice as effective as investments in cement , iron , steel , chemicals , or transport . Blue Horizon developed a proprietary impact framework whereby every investment is assessed via a theoretical impact value , allowing the company to calculate a precise IoCE .
SIGNIFICANT PROGRESS IN THE REGULATION OF ALTERNATIVE PROTEINS Sensible and effective regulation is imperative to ensure that the rapid innovation and growth of the alternative protein market deliver safe , healthy , and transparent food to customers .
There has been an acceleration , around the globe , to provide regulatory approval for fermentation-based and animal-cellbased products . In 2015 , Israel led the way by announcing that its novel framework for regulating food safety would apply to alternative proteins . And in its latest five-year plan released in January 2022 , China acknowledged the need to “ expand beyond traditional crops , livestock , and poultry to more abundant biological resources ” and made animal-cell-based meat and other alternative proteins part of its food security strategy .
A SUSTAINABLE FOOD SYSTEM MEANS BIG CHANGES Given the opportunity , the key question becomes , how can each player make the most of doing well by doing good ? The shift to alternative proteins means big changes — and big opportunities — for all food industry
BCG / BH
Data obtained from the study shows consumer trends around alternative proteins .
players . New processes and approaches will transform multiple long-standing paradigms , and certain steps along the value chain will change radically . Players in all segments — farmers , suppliers , manufacturers , and investors — must assess how quickly the transformation will roll out and what the risks and opportunities are for them .
The biggest shifts will involve value pools migrating upstream toward the production and processing of new protein sources . In each case , the speed and extent of impact will depend on the type of protein ( meat , fish , dairy , or eggs ) and the type of alternative ( plant- , fermentation- , or animalcell-based ) at issue . Value pools will remain dynamic , however . For instance , the value of improved extraction methods for plantbased proteins will likely increase over time .
In fermentation-based and animal-cellbased proteins , further value shifts toward improved strains and cell lines are likely if new techniques can materially reduce the need for costly culture media inputs or enable the shift to cheaper carbon sources . Upstream enablers of new protein sources and products , as well as technologies that remove key bottlenecks , will realise superior returns and act as multipliers enabling higher impact .
Protein sources , ingredients , and processes that contribute to taste and texture parity or to nutritional value will continue to sustain high value shares regardless of where they fall in the chain .
With regard to the stakeholders who will be affected by the changes , the least amount of attention so far has been devoted to the group that will feel the biggest impact . Farmers are key enablers in the move toward a more sustainable food system , but they face some of the greatest risks . Aside from large agribusiness companies , they also have the fewest resources . Other stakeholders must be involved in developing incentives for farmers to make the necessary switch . CLA
The shift to alternative proteins means big changes — and big opportunities — for all food industry players .
More key findings on this subject can be found on the Boston Consulting Group website where the report is freely available .
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