$3.1B invested in alternative proteins in 2020, report says

Dive Brief:

  • A record-setting $3.1 billion was invested in alternative proteins in 2020, according to an analysis by The Good Food Institute. This is more than half of the total $5.9 billion invested in this sector during the last decade — and three times more than in 2019.
  • Plant-based meat, egg and dairy companies got $2.1 billion of this investment total, which was more than three times the amount the plant-based segment raised in 2019. Companies using fermentation to make alternative proteins got $590 million last year, which was more than twice what it received the year before. And cell-based meat companies received more than $360 million in 2020 — 72% of all of the funding the segment has ever received.
  • The growth of alternatives comes as investors put more money toward helping secure cutting edge food tech companies, as well as helped fund companies focused on more sustainable food. Last year also saw the world’s first regulatory approval granted for cell-based meat.

Dive Insight:

While the dollar amounts and growth in alternative protein investment in this report are big, they are not surprising.

Several reports throughout 2020 hinted at the fact that it was turning out to be a huge year for investment. In just the first quarter of 2020, funding for alternative protein had already exceeded the total amount invested in the segment in 2019, according to a GFI study released last summer.

The first nine months of the year saw $8.37 billion invested in the broader food tech space, according to a study from Finistere Ventures. And in all of 2020, the agrifood sector — which also includes food production, supply chain and restaurant tech — received at least $26.1 billion, according to a study from AgFunder.

Many companies in the sector received their biggest ever investments in 2020. Several have already paid off in terms of expansions, facilities, products and new advancements. Leading the pack was Impossible Foods, which had two enormous funding rounds close last year: $500 million that closed in March and $200 million that closed in August. That money helped Impossible Foods make a large retail expansion, going from having its products sold in a small handful of grocery stores in 2019 to about 17,000 nationwide in February, plus a direct-to-consumer website. Impossible Foods has also cut prices to both foodservice and grocery customers, and plans to double its R&D department this year to launch more disruptive plant-based products.

On the fermentation side, Perfect Day brought in the most cash, topping off a $300 million Series C funding round with $160 million in July. Its fermented animal-free dairy proteins are being used in several brands of ice cream, including SmittenGraeter’s and Nick’s, as well as in Brave Robot, a launch from affiliated CPG The Urgent Company.

And for cell-based meat, Memphis Meats received the largest funding haul with a $161 million investment which increased its total funding eight-fold. Cargill and Tyson participated in the round, which the company will use to build a plant to produce beef, chicken and duck that should be operational this year. While no cell-based meat has received regulatory approval in the United States yet, industry watchers say it could happen later this year, and Memphis Meats has been working with regulators to be one of the first to sell it here.

While analysts have said the health halo of plant-based products has helped the segment grow during the pandemic, consumers’ increasing awareness of sustainability issues has also pushed both sales and investments. High profile reports projecting the eventual collapse of conventional meat and dairy, as well as assessments showing superior sustainability scores for cell-based meat and plantbased options are giving both consumers and investors much to think about.

“This is yet another signal of the significant potential the private sector sees in this rapidly growing global industry,” GFI Director of Corporate Engagement Caroline Bushnell said in a blog post. “While the amount is record-breaking, more investment is needed — from both the public and the private sectors — to meet the urgency of this moment. A large-scale shift toward alternative proteins will be critical to mitigating the environmental impact of food production, meeting the Paris Climate Agreement, and sustainably feeding a growing global population.”

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