Plant based meat - fad or here to stay?

Eric Chan, Co-Founder and Managing Director, Aura Ventures

Eric Chan, Co-Founder and Managing Director, Aura Ventures

What’s the problem?

Unless you have just woken up in a time capsule from the past, it is no secret that the way the world is being fed is unsustainable.

But to set the scene, let’s quickly recap some statistical proof points for the non-believers:

  • 16 percent of all man-made greenhouse gas emissions are due to livestock and its related activities such as land use, animal feed and production therefore making animal agriculture one of the largest contributors to climate change
  • 50 percent of habitable land in the world is being used for agriculture of which 77 percent of that land is used for livestock
  • 75 percent of emerging infectious diseases in humans originate in animals and are in part caused by our reliance on animal agriculture
  • global meat production will double by 2050 driven by demand forces such as population growth (world population is forecasted to surge to 9.7 billion by 2050), urbanization (66 percent of world’s population is expected to live in urban settlements by 2050), and a rising global middle class meaning rising income levels which has historically driven meat heavy diets.

So, the problem is simple. How do we prepare to feed the 9.7 billion people of tomorrow with today's knowledge of an increasing demand for food and a food production system that is already near capacity whilst avoid killing the planet?

 

Feeding 9.7 Billion People in 2050

I believe that addressing this "perfect storm" will require both a more sustainable production of existing sources (e.g. livestock) and the development of alternative protein sources for human consumption. Thus, a market for plant-based proteins has emerged from the desire to create a sustainable alternative to conventional animal-based proteins.

Plants are expected to be the largest source of alternative protein due to their limited environmental impact and health perception by consumers.By shifting our diets towards plant-based proteins we can drastically reduce our carbon footprint, free up global cropland, decrease soil erosion, relieve pressure on the world’s water supply, and ensure the risk of zoonotic and antibiotic-resistant pathogens are manageable.

Changing consumption patterns takes time but fortunately we are not starting from scratch. We have come a long way from the veggie burger to what we describe as the second wave of the alternate meat revolution. In the last few years, we’ve seen an explosion of new plant-based meat alternatives providing consumers with increasing freedom of choice.

 

But is it a Fad or here to stay?

But the question is whether this is just a fad or are plant-based meat here to stay. Cause let’s face it, whilst we all understand the problem and want to do good, how many of us can permanently suppress our desire for meat evenif it’s not for the greater good and just for ourselves. I for one have failed many times.

So, in my view, the solution will come down to whether plant-based meat can become a true alternative to meat from a taste and health perspective.

Whilst there is a rising tide of plant-based companies emerging, many of these are focused on investing in processing, brand and distribution rather than innovation and R&D. To create a sustainable plant-based meat industry I believe that there is a need to fill the innovative white space and develop a plant-based meat ingredient system that enables superior taste and health.

There are a few vertically integrated operators such as Beyond Meat and Impossible Foods which are leading this industry, but food is not a winner takes all market and we cannot rely on a few to grow and sustain this new industry.

The industry’s progress towards producing 10x better and 10x cheaper products to animal meat is critical to realising a total addressable market of every single person on the planet and a lifetime value of a human lifetime. The major technological hurdles to achieving this are primarily ones of scale. Therefore, we believe horizontal players specialising in specific parts of the value chain are integral to scaling the technical capabilities of the industry and ultimately to the plant-based industry’s success.

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