Investing in alternative proteins

Consumer demand for alternatives to traditional protein sources such as meat, seafood and dairy products is increasing worldwide. Drivers are, on the one hand, health aspects such as the increasing desire for a protein-rich diet and, on the other hand, ecological concerns regarding meat consumption. Here, issues such as the large amount of land needed to grow feed, greenhouse gas emissions and animal welfare are worth mentioning.

Four products or technologies are distinguished as alternatives: proteins based on plants, cells, insects and microorganisms (for example yeast fungi). The industry comprises companies that offer technologies for the development and production of protein alternatives as well as end products. 

How is this still young industry developing worldwide? We examine this in the biannual English-language publication "Deal Cosmos Alternative Protein". The new issue analyses the development in the second half of 2022 and focuses on the latest regulatory approvals and global trends in patents.

Companies and investors in the protein alternatives sector are currently operating in a difficult macroeconomic environment. Given the unfavourable general economic situation with both high commodity and energy prices and high uncertainty, investment activity continued to decline in H2 2022:

• The number of deals worldwide fell by 27 per cent in 2022 compared to 2021. The segments of plant-based and cell-based protein alternatives recorded above-average declines. 
• The total financing volume decreased by 37 per cent from €5.1 billion to €3.2 billion in this period, but was still slightly above the level of 2020.
• The number of active investors was still at 839 in 2021 and declined to 553.

Details on financing activities worldwide, the development of the investor market and much more worth knowing can be found in "Deal Cosmos Alternative Protein".

The long-term forecasts inspire confidence: all four segments in the alternative protein sector will continue to grow and record positive growth rates (CAGR) of over 20 percent in some cases in the coming years. Of the four segments, the area of plant-based protein alternatives will form the largest market - a market size of 132,847.4 million euros is expected here by 2029. The other three segments will remain significantly smaller in comparison.

A signal for the great potential are the latest product or technology approvals as well as the numerous patent applications. 

In "Deal Cosmos Alternative Protein, H2 2022", our experts analyse market movements in the second half of 2022 and provide insightful deep dives into deals and financing activities in the four protein alternative fields.