The alternative protein sector has the potential to fundamentally change the global food industry and could become the cornerstone of sustainable nutritional solutions. That's why we take an annual look at the latest deals and trends in this sector in our "Alternative Protein Deal Cosmos" report.
The most important features of the current issue in brief
Despite an increase in deals, the value of investments in alternative proteins declined in 2023, followed by a moderate recovery in the first half of 2024. These figures further reflect the developments seen in the overall deal market for investments globally.
Nevertheless, it is noteworthy that only just under forty percent of companies active in the field of alternative proteins have been involved in transactions since 2015. It appears that venture capital financing is preferentially focused on already established companies.
Despite these developments, all four protein segments can expect further growth in the future. These protein segments include
- plant-based proteins from vegetables and herbs,
- cell-based proteins from animal cells, obtained using biotechnology,
- microorganism-based proteins from algae and other microorganisms and
- insect-based proteins, for example from crickets or black soldier flies.
Stephan Fetsch
Partner, Deal Advisory, EMA und German Head of Retail & Consumer Goods
KPMG AG Wirtschaftsprüfungsgesellschaft
Number of deals in Europe and Asia stable
In terms of the number of companies in the field of alternative proteins, North and South America and Europe are roughly on a par. Nevertheless, our report shows that dynamics in this area are heavily dependent on regional developments. For example, there has been an overall decline in global deal activity since 2021. However, this is primarily due to a decline in venture capital (VC) investments in North and South America, as investors here are increasingly cautious and prefer more mature companies.
In contrast, the number of deals in Europe and Asia has remained stable. In terms of value and number of deals, Europe is leading the way.
Plant-based proteins continue to dominate the market
The plant-based segment remains the largest and most mature in the field of alternative proteins - measured by the number of active companies. However, microorganism-based proteins are catching up:
At least in terms of the number and value of deals, they were ahead in the period from July 2023 to June 2024 and even overtook the plant-based segment in this respect.
Asia: enormous market size and increasing acceptance of meat alternatives
A look at Asia reveals enormous opportunities: A continuing veganism trend and the rising popularity of meat alternatives are driving demand for alternative proteins. This is complemented by the enormous size of the market and the rapid adoption of new technologies, supported by public investment and regulatory reforms.
Deep Dive: Pet food
In this issue of "Alternative Protein Deal Cosmos", we also look at various deep dives, including the pet food sector, which shows strong growth potential with regard to alternative proteins. In 2023, pet food accounted for 12% of all alternative protein deals, with insect-based proteins making up the largest share.