While the figures and growth in alternative protein investments highlighted in this report are substantial, they are not unexpected. Various reports throughout 2020 suggested that the year was shaping up to be remarkable for investment in this sector. In the first quarter of 2020 alone, funding for alternative protein surpassed the total amount invested in the segment throughout 2019, according to a GFI study released last summer. In the first nine months of that year, approximately $8.37 billion was invested in the broader food tech industry, as noted by a study from Finistere Ventures. Overall, the agrifood sector — which encompasses food production, supply chain, and restaurant technology — attracted at least $26.1 billion in investments during 2020, according to research from AgFunder. Many companies within this sector secured their largest investments to date in 2020, leading to expansions, the establishment of new facilities, and the introduction of innovative products.
A standout example is Impossible Foods, which completed two significant funding rounds last year: one for $500 million in March and another for $200 million in August. These funds facilitated a major retail expansion, allowing Impossible Foods to increase its product availability from a limited number of grocery stores in 2019 to around 17,000 nationwide by February, in addition to launching a direct-to-consumer website. The company also reduced prices for both foodservice and grocery customers and plans to double its R&D department this year to develop more groundbreaking plant-based products.
On the fermentation front, Perfect Day secured the most funding, concluding a $300 million Series C round with an additional $160 million in July. Their fermented animal-free dairy proteins are featured in several ice cream brands, including Smitten, Graeter’s, and Nick’s, as well as in Brave Robot, a product from their affiliated company, The Urgent Company.
When it comes to cell-based meat, Memphis Meats achieved the largest funding milestone with a $161 million investment, effectively increasing its total funding eight-fold. Cargill and Tyson were part of this funding round, which will be used to construct a plant for producing beef, chicken, and duck, expected to become operational this year. Though no cell-based meat has yet received regulatory approval in the United States, industry observers anticipate that this could change later this year, with Memphis Meats actively collaborating with regulators to be among the first to market their products.
Analysts have pointed out that the health appeal of plant-based products has contributed to the segment’s growth during the pandemic, while consumers’ rising awareness of sustainability issues has also driven both sales and investments. High-profile reports predicting the eventual decline of conventional meat and dairy, alongside evaluations indicating better sustainability scores for cell-based and plant-based options, are prompting consumers and investors to reconsider their choices.
“This is yet another indication of the significant potential that the private sector recognizes in this rapidly expanding global industry,” stated Caroline Bushnell, GFI’s Director of Corporate Engagement, in a blog post. “While the investment amounts are record-breaking, further funding is essential — from both public and private sectors — to address the urgency of this moment. A large-scale transition to alternative proteins will be crucial for reducing the environmental impact of food production, achieving the goals of the Paris Climate Agreement, and sustainably feeding a growing global population.”
In this context, even products like calcium citrate gummies for adults are gaining attention as consumers increasingly seek healthier and more sustainable options, further emphasizing the shift towards a more conscious food system. This trend is expected to continue as both investors and consumers look for innovative solutions in the food tech landscape.