Governments, venture capitalists and individual traders around the world are investing in plant-based innovation and alternative proteins. It turns out meat and dairy companies are also getting in on the game.
The Kellogg Company, for example, recently announced that it would split in three with plant-based products set to compromise a stand-alone company by 2023. Kellogg is not alone in their long-term belief in the sector. Danone, Nestle, Smithfield, JBS, Tyson and Hormel already have plant-based products in stores, and the VC arms of many major food companies are all starting to focus on plant-based, cell-based and/or precision and biomass fermentation technologies.
There are at least five compelling reasons to believe that plant-based innovation and alternatives to animal proteins will disrupt the global food supply system and be the next investable megatrend.
Climate change
Animal agriculture contributes 14.5% of all greenhouse gas emissions. Cows produce a whopping 37% of the humanly-induced methane gases. The overall impact is due in part to the gases of animals, but also because of deforestation. Trees that would otherwise sequester carbon are cut down to grow crops for animal feed. It is also due to the transportation of meat around the world as live animals and meat are heavier than grains and vegetables.
A recent Intergovernmental Panel on Climate Change report underscored the critical need to cut emissions. Many companies recognize that we need to do this through our food system in addition to transportation. We won’t sufficiently address climate change without addressing animal agriculture.
By way of comparison, a Beyond Meat plant-based burger uses 99% less water, 93% less land, 46% less energy and has 90% less greenhouse gas emissions than a traditional beef burger. Forthcoming technologies, biomass fermentation and cultivated meat may require even less resources and produce fewer emissions.
Food insecurity and inefficiency
According to Our World In Data, 77% of all agricultural lands are used to graze animals and grow crops for them to eat. There are 80bn farmed animals on the planet for less than 8bn people.
Animals are an inefficient food source. As documented by the World Resources Institute, at best, chicken results in one calorie of food for every seven to nine calories of feed. This equation is much worse for cows, with estimates at 15 to 35 calories of feed for every calorie of food.
In addition, giving food that has fiber and protein to animals, rather than to people, seems to go against the point of trying to feed people in the first place. Cut out the “middle animal” to get the best return.
Using our limited resources of land, water and time to feed animals, while food insecurity around the globe is on the rise, makes no sense. The system is ripe for disruption.
Political instability and a growing population
According to the United Nations, the world population will increase from 7.6bn people to roughly 9.8bn people by 2050. However, we’re not getting more land and water. In fact, with climate change, we are expected to have less habitable and arable land for farming than currently available.
And as access to food and water decreases, geopolitical instability increases, with a cost to both society and global businesses. It would be wise to use our resources more efficiently.
Pandemics and healthcare costs
The packed conditions of animals living, breathing and defecating among one another – hardly social distancing – contribute to the risk of pandemics, according to the United Nations. As we saw during Covid, pandemics devastate job markets, the economy and the global food supply system. Covid left an estimated 14m in Latin America and the Caribbean, and more around the world, with food shortages. It underscored how risky our current system is for effectively feeding the global population.
There is also the skyrocketing incidence of heart disease and diabetes. These lifestyle diseases, costing business by way of heavy healthcare costs, can be controlled by eliminating animal proteins and processed foods from our diet, according to Dr. Kim Williams, head of cardiology at Rush Medical College.
Inflation
Despite the tax subsidies fuel a broken system, meat prices are very inflationary. They use a disproportionate amount of our critical resources, like land and water, and are inefficient, keeping costs high due to the poor calorie conversion rates.
Even without mentioning animal welfare and high antibiotic use in billions of sick animals leading to antibiotic resistance in humans, we see that the cost of animal agriculture is high, and the payout is poor.
This is why many – from country leaders to Wall Street traders to meat companies – have begun planning ahead for more mouths to feed and a more efficient, nutritious, faster and prolific way to feed them. They know that investing in resource-saving technologies: plant-based options and alternative proteins is a chance to solve some of the world’s most pressing issues while capitalizing on building a more efficient food supply system.
Ultimately, we must create more food using fewer resources in a shorter amount of time, leaving less devastation in our wake. Large food corporations know this, and, encouraged by consumer demand, are beginning to turn the Titanic. Will it be fast enough?
Elysabeth Alfano is the CEO of VegTech Invest, advisory to the VegTech Plant-based Innovation & Climate ETF, EATV. She is also the CEO of Plant Powered Consulting and host of The Plantbased Business Hour.
