In the last month startups plant-based and cellular agriculture startups have raised nearly $1 billion, but there’s still plenty of room for growth and new players in the industry.
Image Credit: Nature’s Fynd
Both companies are pursuing a broad product portfolio with Nature’s Fynd already offering a breakfast patty and a dairy free cream cheese while NotCo has a line of ice cream, mayonnaise, milk, and burger patties it’s selling in Chile, Brazil, and Argentina (the company’s sole product for sale in North America is its milk).
Meanwhile, Aleph Farms, an Israeli-based company using animal cells to manufacture whole cuts of meat like steaks raised $100 million to kick off the month.
The number of private billion dollar businesses being built in the alternative protein space is huge, but investors think there’s still a lot more work to be done to compete with existing industrial food chain — especially when it comes to finding ways to cut cow consumption.
“We are pretty far from ‘peak protein’ and are just scratching the surface,” said FootPrint Coalition’s own director of venture investments, Manuel Waenke. “Yes, we have seen a lot of money deployed in this space and some high valuations both in public and private markets, but the space has decades of runway ahead of us.”
For Waenke, companies like Impossible Foods, Beyond Meat, and Oatly are just the beginning of evolution of the food industry away from animal agriculture to more plant-based products.
“Milk is by far the most developed (and competitive) of the plant-based protein markets - plant based solutions account for about 14% of the market. Why shouldn't that go to 30% over the coming years? As options are expanding, the functionality of plant based alternatives is starting to match that of animal-based products (foaming, etc.), so that seems easily possible.”
Waenke pointed to FootPrint Coalition’s investment in the $75 million funding for Nobell Foods alongside Breakthrough Energy Ventures, Fifty Years, and others as an example of the advances that can still be made.
Overall, plant alternatives represent 5% of the total market for dairy, 1% of the market for meat, and just half a percentage of the egg market.
“There is just so much headroom in categories with huge total addressable markets,” Waenke said.
For Waenke and other members of the FootPrint Coalition team, the next wave of alternative proteins will be about improving the taste and characteristics of these plant-based replacements.
Image Credit: Nobell Foods
“We will see countless other brands entering the market with burgers that actually feel and smell and bleed like beef, with companies like Motif as an enabler,” Waenke said. “We need cheese to stretch and melt like Nobell’s proteins enable — and we're just getting started on chicken, eggs and so many other product categories.”
The beauty of all this is that these plant-based alternatives do keep getting better. Impossible is on their burger 2.0 and other plant based platforms are continuously iterating and improving (beef and cow milk on the other hand will stay what they are), enabled by companies like NotCo or Motif.
When the cultured meat companies come to market, it could presage a transformation of food and the ability to design and produce protein products that taste better, are more environmentally friendly and cheaper than animal based products.
“At that point, only a very small portion of the population will say ‘No, I need an animal to have died for the food on my plate’,” Waenke said.