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    Nordsip (Stockholm) – The global population is projected to grow to 10 billion by 2050. Billions will join the middle class by 2030. Alongside these developments, the average protein intake and the proportion of resource-demanding foods will increase on top of the current global overconsumption and strained food system, according to the Food and Agricultural Organization of the United Nations (FAO). Animal livestock accounts for 14% of global greenhouse gas emissions, vast amounts of deforestation, and biodiversity loss and shows no sign of slowing down.

    The question on many people’s minds is whether current food systems can meet humanity’s future nutritional demands. People can be fed, but whether they can be fed sustainably and maintain a healthy lifestyle depends on a major transformation of the food industry. Some companies have begun developing protein alternatives meant to compete with conventional meat in terms of price and taste. Proponents of these products claim that we are on the precipice of a new protein transition. Some ambiguity remains, however, regarding the role of protein alternatives. How feasible is a protein transition? And are the alternatives healthier and more sustainable than animal-based proteins?

    What are ‘alternative proteins’?

    According to the Good Food Institute (GFI), a non-profit whose mission is to accelerate the growth of the alternative protein industry, alternative proteins are designed to replace conventional meat, seafood, and dairy by competing on taste and price. They envision alternative proteins “winning the marketplace” by creating products that taste “the same or better” and “cost the same or less.” Currently, however, protein alternatives are more expensive and not as tasty as conventional meat, according to consumer reports.

    Most literature on the topic refers to three main alternatives, i.e., plant-based, fermented, and lab-grown meat alternatives.

    Plant-based alternative protein products are directly derived from plants, mixed with a variety of additives through extrusion[1] to create a believable product. Recently, plant-based alternatives have been mimicking animal products. The Impossible Burger, for instance, is made to feel and taste like meat by mixing wheat, coconut oil, potatoes and heme, a yeast compound rich in iron that allows the patty to ‘bleed’ and imbues the burger with an iron or ‘meat-like’ aftertaste.

    Aside from replicating beef patties, plant-based products can mimic an expansive portfolio of alternatives, such as chicken, turkey, seafood, cheese, yoghurt, milk, and a variety of snacks.

    Fermented protein is produced by growing microbial organisms such as bacteria, yeast, algae, or fungi, which are then textured and flavoured into an edible product. Fermentation has been around for millennia, used for food preservation, making alcohol, and increasing the nutritional value of foods such as kimchi and tempeh. Since the early use of the technique, the fermentation product portfolio has also expanded. According to FAIRR[2], the alternative protein industry today applies fermentation mainly in three ways. Traditional fermentation uses microbes to improve the flavour of alternative proteins and more accurately replicate the texture and flavour of meat by producing heme, for example. Biomass fermentation is used to grow large volumes of protein, such as the well-known fungi-based product Quorn.  Precision fermentation is used to produce specific proteins, enzymes, flavours, fats, and minerals. Precision fermentation also has medical applications, such as producing insulin for diabetics.

    Cultivated or lab-grown meats are meat on a molecular level, made from cultivating animal cells in bioreactors that replicate cell tissue and the structure of different cuts of meat. Since 2020, cultivated meats have been on the menu of restaurants in Singapore (1800) and Israel (The Chicken). Cultivated meat appeals to sustainable and ethical consumers as it is de-facto meat yet reduces animal captivity and the carbon footprint.

    To sum it up, alternative proteins target the whole consumer spectrum, not just vegans and vegetarians, by creating tasty, affordable, and sustainable options meant to compete with the conventional meat industry.

    State of innovation

    Currently, plant-based protein alternatives are the most mature products, being close to price parity with conventional meat. According to GFI, 2020 marked a significant year for plant-based alternative protein companies, which received a total of $3.1 billion in investments, three times more than in 2019. Fermentation companies attracted $590 million, a two-fold increase in investments and cultivation companies saw a six-fold increase, $360 million. As a result of increased consumer demand, companies can lower prices. Impossible Foods, for instance, has been able to slash the price of two of their burger patties from $7 to $5.5 in 2021. Boston Consulting Group (BCG) predicts that by 2035 between 11 and 22% of conventional animal proteins will be alternative products.

    While 2020 was a successful year for the alternative protein industry, and some projections paint an optimistic picture, far more public and private investments are needed to mitigate the food industry’s environmental impact and feed the world’s billions of people. The two biggest hurdles for alternative protein manufacturers are reaching sensory and cost parity with conventional meats, which requires developing the current state of innovation, writes Boston Consulting Group. Let us, therefore, explore each of these hurdles in turn.

    ‘Sensory parity’ refers to the taste, texture and overall feel of alternative protein products compared to conventional meat. If they are to replace meats, alternative proteins need to meet consumer expectations. Alas, so far, few alternatives do. Generally, plant-based alternatives have a low ‘acceptance level’ compared to conventional meat amongst European consumers, writes Onwezen et al.[5] in a recent paper. Familiarity and taste are crucial to the success of a product, according to them. Consumers tend to prefer what they know and like. Making alternative proteins more available and appealing to ‘meat eaters’ is, therefore, vital for a protein transition.

    According to another academic paper[6], cultivated meats do not taste as good as regular meat because they are not processed the same way. “There are a series of events including glycolysis, calcium release, energy utilization, rigor onset, oxidation and denaturation, and enzyme effects, which all impact on the ultimate eating quality,” write Henchion et al. A similar criticism could be raised against plant-based and fermented products. Heme, however, can be used as a tool for reaching sensory parity. As mentioned earlier, it replicates the ‘feel’ of meat through its red colouration and iron taste properties, thus increasing the sense of familiarity amongst consumers.

    Another threshold to reaching sensory parity is that most plant-based and fermented alternatives are based on soy, wheat, and peas, as these are more widely available in industrial agriculture. This makes the products hard to vary in terms of ingredients. “Some plant-based products exhibit a lack of versatility: consumers will often use animal proteins such as chicken in dozens of different ways, while plant-based products are often formulated for highly-specific applications, such as nuggets,” writes GFI.

    ‘Cost parity’ refers to the fact that alternative proteins are still more expensive to produce than conventional animal proteins. Cultivated meat, for one, is much more costly than regular meat. Current production cost estimates are $36 per kilogram of meat. Cultivated seafood is even more expensive, at $50 per kilogram. Due to the complexities of creating cultivated meat, especially cell-cultured media, production costs are hard to cut down. Yet manufacturers have already managed to do so significantly. In 2019, the cost for cultivated meat was $112 per kilogram and $5,000 for cultivated seafood.

    Some plant-based alternative retailers, such as Impossible Foods, have managed to curtail the prices of their products, successfully reaching price parity.  “You’ll buy the product once based on novelty, you’ll come back if the taste was good and if there are benefits such as nutrition and sustainability, and you’ll buy it in the long run if the value is right,” says Nick Halla, Senior Vice-president at Impossible Foods.

    According to Boston Consulting Group and Blue Horizon, cost parity is not that far on the horizon, however. Their estimates show that provided alternative proteins achieve sensory parity with conventional meats, cost parity will soon follow.

    From innovation to mass production

    To feed billions of people with tasty, affordable, and sustainable alternatives, industrial techniques and technologies need to be improved significantly in all industry sectors. “The extrusion capacity needed for plant-based proteins, for example, will require up to $11 billion to reach the baseline case of 11% adoption by 2035 and as much as $28 billion if the greatest upside scenario happens,” states BCG’s report. “Almost 30 million tons of bioreactor capacity for microorganisms and animal cells [fermented and cultivated alternatives] will also be needed in the base case, requiring up to $30 billion in investment capital—and far more in either of the upside scenarios.”

    These are only two of the necessary technologies, yet they provide an inkling as to how expensive a protein transition would be in the current state of innovation. For protein alternatives to reach price parity, many more large-scale industrial technologies must be developed. According to GFI, there are several areas of innovation that need to be prioritised for each alternative protein industry to be able to compete with conventional meats in terms of price and sensory parity.

    According to GFI, another inherent issue with scaling-up plant-based proteins is their variability. There is inconsistency in the manufacturing process wherein two companies using the same plant protein – soy, for instance – can get two very different products due to the variation in treatment and extraction. What is more, a single company may experience sensory differences between two different batches of the same product. To stomp out this issue, experts suggest optimising crops by breeding and utilising specific plants. Due to the limited access to protein sources, however, manufacturers are often stuck between a soybean and a peapod. Soybeans are one of the main drivers of global biodiversity loss and deforestation. Problematically, soybeans are a staple ingredient in plant-based alternatives as well as an ingredient on their own and for animal feedstock.

    There are plenty of sceptics, too. Cultivated meat has been criticised by some as a ‘pie in the sky’ that is far too expensive and ambitious to feed billions of people. According to Paul Wood, immunologist and the former Executive Director of Global Discovery for Pfizer Animal Health, some news outlets and non-profits are overstating the capacity of cultivated meat. Wood used to create vaccines which use identical bioreactors as cultivation manufacturers. He claims that these technologies are highly specialised and require extensive resources and questions the ability of bioreactors to create ‘cheap and abundant food for human consumption’.

    In a recent report, David Humbird, Chemical Engineering consultant and Techno-Economic Analyst at the National Renewable Energy Laboratory, suggests that the cultivated meat industry will never reach price parity because of the unfathomable scale requirement and engineering challenges associated with large-scale production. Humbird writes that protein cultivations are incredibly sensitive to bacteria since they have no immune system. Thus, a single contaminant can result in the elimination of an entire batch. The extreme cleanliness requirements also result in costly and complicated procedures because the larger the facility, the harder it is to maintain a sterile environment.

    Proponents of cultivated meat often state that once the industry is scaled up, it will cut costs, but Humbird points out that these reports – like the one written by GFI – fail to mention how costs will drop. Essential ingredients, such as amino acids, do not come cheap nor exist in abundance. Even some of the large industry actors, such as Eat Just and Wildtype, express certain scepticism. According to them, unless bioreactors and technology, in general, become highly efficient and safe, there is no reason to believe that cultivated meats are ever going to replace the conventional kind.

    GFI considers fermented protein as the cornerstone of the growing alternative protein industry due to its versatile areas of application. It is already [7]

    Alternative proteins’ raison d’être

    Even if we could overcome the product development and industrialisation hurdles described above, the question remains: Are protein alternatives better for the environment and our health?

    According to the International Food Information Council, there is not enough data to support the statement that plant-based meats are ‘healthy’, especially considering that the most popular products currently are those classified as fast-food. What is known, on the other hand, is that consuming high amounts of red and processed meats is associated with type-2 diabetes, cancer, and cardiovascular disease. Replacing them with plants has proven to reduce mortality rates. Whether plant-based alternatives have the same benefit is unclear at this point.

    In terms of environmental impact, plant-based products have significantly lower carbon footprints and a reduced use of land and water. However, this does not mean that the supply chain is void of environmental perils. It requires closer scientific and regulatory scrutiny. According to a report by the EU Commission, Europe has a plant protein deficit. European soil is not ideal for large-scale production of plant protein, which means that Europe imports most of those. Transporting them, of course, has a substantial carbon footprint.

    Emerging evidence linking processed meats to disease and environmental impact has resulted in some countries changing their dietary guidelines to include less meat, encouraging more plant-based and plant-rich diets. Denmark, the UK, and France saw national guidelines reduce the daily recommended intake of red meats by 30% between 2016 and 2021. Other countries, like the US, Ireland, and Germany, meanwhile, have yet to update their dietary guidelines. “Dietary choices are key determinants of environmental sustainability and human health. Urgent change is needed to ensure more balanced and diversified eating habits, with a greater focus on plant-based foods,” writes FAIRR in a recent report.

    A just transition needed

    Meanwhile, for billions across the globe, producing animal protein such as milk, meat, and eggs is how they make a living and access essential nutrients. It provides opportunities for poverty reduction. In low- and middle-income countries especially, livelihoods rely on livestock farming. Animal protein is a source of food security as it contains vital micronutrients important for children, adults, and elderly people.

    “Meat, dairy, eggs and fish provide 40% of the world’s protein and 18% of its calories,” writes The World Economic Forum (We Forum).  Animal protein provides more than simply proteins, however. These products contain vital micronutrients not present or less available in their plant-based counterparts. Vegans, for instance, often combine their diets with a variety of plants and supplements to maintain a balanced diet. The availability of protein products varies significantly between regions, and growing economies have a bigger dependence on meat to meet the requirements of a balanced diet since there are no other widespread alternatives yet. People in the EU and the USA, on the contrary, have a wider array of alternatives at their disposal.

    According to the We Forum, two billion people worldwide are malnourished, and livestock farming is essential for their food security since animal meat is a dense and available nutrient. Without it, people – especially young children – risk suffering from physical and cognitive impairments.

    We need, therefore, to consider the question of whether a global protein transition aimed at stomping out protein overconsumption by reducing the amount of animal protein consumed is feasible when two billion people are suffering from underconsumption.

    If a protein transition is to be done justly, low- and middle-income households reliant on animal livestock will need policy, technical, and institutional support, undoubtfully an expensive and precarious endeavour for many people. Projections concerning the global consumption of meat all indicate an increase of less than 70% because of increasing incomes, ages, and health consciousness. Animal proteins will continue to play a key role in food security in the future.

    A shift in trends

    Alternative proteins have yet to demonstrate their sustainable advantages. Nevertheless, many consumers seem to be onboard. Western countries are still suffering from overconsumption of animal proteins. European and American adults consume twice the daily recommended value, according to the World Resource Institute[8]. In 2016 alone, Europeans spent $550 billion on animal protein products. Yet FAIRR reports that the US, the UK and European consumers are eating less meat, seeking protein substitutes more appeasable to the carnivorous pallet. Between 50 and 60% of Europeans are “meat reducers”, according to a study by Protein2Food. And 66% of Americans have swapped out one meat dish for a meatless one.

    We are witnessing a global shift away from traditional protein sources, particularly true for western economies[9]. In 2020, the sales of plant-based foods rose by $4.3 and $7 billion in Europe and the US, respectively, where plant-based milk represents the largest sales category. The UK also saw an increase of $887 million, dominated by plant-based meats, according to FAIRR.

    Given the increasing demand, it is hardly surprising that alternative proteins are an area that attracts a lot of capital. Combined investments in these alternatives increased by over three hundred per cent in 2020 compared to 2019, and plant-based sales, particularly alternative milk, are growing 27% on average in Europe, the USA, and the UK, according to FAIRR.

    In 2020, 13.000 tonnes of alternative proteins were consumed, according to BCG. This corresponds to 2% of the animal protein market. They estimate an increase to 97.000 tonnes by 2035. Amongst consumers in the UK, the US, and Germany, attitudes are evolving, too. BCG’s survey shows that 66% of consumers are somewhat interested, indifferent, or somewhat not interested. Only 23% are not interested at all in alternative proteins.

    A more recent development, reported by the Financial Times, saw plant-based sales drop 1.8 per cent, leading investors to wonder whether they have ‘lost their sizzle’ on the US market. The drop might be partly due to lifting the Covid19 restrictions, which allowed people to eat out more regularly and re-assess their lock-down habits. The isolation proved to be beneficial for the protein alternative industry. Manufacturers saw their market shares and sales skyrocket amidst the early stages of the pandemic. The current downturn is expected to be temporary, however.

    Governments are supporting developments in alternative proteins through strategic investments in innovation hubs and by updating regulatory frameworks. Investments are lagging compared to those in other industry sectors, however. As a comparison, consider the Biden administrations’ Electrical Vehicles initiative, which has received $174 billion in funding. Nonetheless, a transition is unfolding before our eyes wherein western countries are incrementally decreasing the number of animal products consumed while growing economies are consuming more.

    What’s next?

    The future of protein transition will largely depend on three factors; the availability of tasty and cheap alternatives, the continued public and private support for the developing alternative industry, and the ability to adapt to a growing global protein demand. Either way, before a protein transition can occur, major changes in the food system and consumer attitudes need to happen. For now, fermentation seems to be the strongest competitor, while plant-based and cultivated products are yet to prove their physiological and environmental benefits. Regardless, all these options will struggle to scale up and compete with conventional meat.

    Whether a protein transition is feasible and whether the alternatives are healthier and more sustainable once scaled up remains to be seen. However, one thing is certain; even though the current food system and our reliance on animal protein provide many people with nutrients, food security, and employment opportunity, it is inherently unsustainable.

    [1] Extrusion is a processing technique during which proteins undergo thermal and mechanical stresses which alter their structure, texture, and form.

    [2] FAIRR is a collaborative investor network that raises awareness of the environmental, social and governance (ESG) risks and opportunities brought about by intensive livestock production.

    [5] M.C. Onwezen, E.P. Bouwman, M.J. Reinders, H. Dagevos (2021), A systematic review on consumer acceptance of alternative proteins: Pulses, algae, insects, plant-based meat alternatives, and cultured meat, Appetite, Volume 159, ISSN 0195-6663, https://doi.org/10.1016/j.appet.2020.105058.

    [6] Henchion, M., Hayes, M., Mullen, A. M., Fenelon, M., & Tiwari, B. (2017). Future Protein Supply and Demand: Strategies and Factors Influencing a Sustainable Equilibrium. Foods (Basel, Switzerland), 6(7), 53. https://doi.org/10.3390/foods6070053.

    [7] Fataneh Hashempour-Baltork, Kianoush Khosravi-Darani, Hedayat Hosseini, Parastou Farshi, S. Fatemeh S. Reihani, Mycoproteins as safe meat substitutes, Journal of Cleaner Production, Volume 253, 2020, https://doi.org/10.1016/j.jclepro.2020.119958.

    [8] The World Resource Institute is a global non-profit organization that works with leaders in government, business and civil society to research, design, and carry out practical solutions that aim to improve people’s lives and the natural environment.

    [9] Most consumer studies focus on European countries or the USA, unfortunately not much data is found regarding trends in growing economies (Paloviita 2020): Paloviita, A. (2021), “Developing a matrix framework for protein transition towards more sustainable diets”, British Food Journal, Vol. 123 No. 13, pp. 73-87. https://doi.org/10.1108/BFJ-09-2020-0816

    Protein Transition: Can Science & the Business of Food Solve our Consumption Equation?