Poised for a plant-based future

‘Veganism’ and ‘plant-based’ are the most discussed diets in the US today. The global market for plant-based foods is expected to grow fivefold by 2030. Therefore, the industry is rife with investments, and the momentum behind plant-based and vegan diets is gathering pace.  

The burgeoning industry of plant-based food 

The growing presence of plant-based foods, dishes, and diets is undeniable. In 2020, in the United States, 83% more restaurants added plant-based dishes to their menu. The word itself is also increasing in popularity, set to surpass the phrase ‘veganism’, which tends to have more restrictive connotations. Investment-wise, the industry is booming. Venture investors raised over $1 billion for start-ups focused on alternative proteins in 2020. More specifically, within the first seven months of 2020, more than 20 faux meat start-ups raised about $1.4 billion from investors, according to Farm Animal Investment Risk & Return. These investors span a wide range of entities, from food giants such as Cargill and General Mills to traditional venture capital firms as well.  

There are a number of drivers for this trend, but the biggest ones are primarily health and environment related. Food production currently accounts for approximately a quarter of the entire world’s greenhouse gas emissions and takes up half of the planet’s habitable surface. In particular, consumers’ penchant for meat has had a profound impact on land usage. Meat and dairy specifically account for about 15% of global greenhouse gas emissions, according to the UN’s Food and Agricultural Organization. The mass of animals raised for slaughter – and therefore, human consumption – on Earth now outweighs wildlife by a factor of 15:1. To put that in comparable terms, for every person on the planet, there are approximately three chickens being raised for sustenance.  

Who’s leading the change? 

A number of companies are leading this change, reflecting the growing necessity for businesses to adapt to this trend and re-evaluate their product offerings. For example, Louis Dreyfus – a leading merchant of agricultural goods – has recently announced their expansion to plant-based products. The same goes for Archer-Daniels-Midland Company, which announced their acquisition of plant-based company Sojaprotein in July.  

Companies with existing plant-based portfolios are poised to reap the benefits of investments in this sector as well. Nepra Foods – whose UPS is an offering of products entirely allergen and gluten-free – are set for major growth following their recent IPO. Nepra has many foods to offer, including plant-based dairy products as well as meat alternatives that are renowned for being higher in protein and fiber than others.  

Where do we go from here? 

So what can be learned from all these investments and expansions? Food companies that don’t currently have any plant-based options may find themselves needing to jump on the bandwagon, and quickly. But even then, it’s not enough to just offer a range of plant-based alternatives; companies need to get creative with their products as well. Meat and dairy alternatives are increasingly easy to find, but such products need to be versatile, appealing, and unique. Nepra, for example, boasts a range of hemp-based protein products and tout themselves as “more than just another meat analog producer.” The company is targeted to hit $6-8 million in revenue this year.  

To discuss the plant-based food industry further, feel free to connect with me on LinkedIn or get in touch with Proco Commodities here. For more insights from Proco Commodities, be sure to follow us to stay up to date with all the latest trends and developments across the commodities supply chain space.