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May 14, 2020

Investment in US alternative-protein companies hits “record” high – report

Research from the US has revealed that investment cash is flooding into alternative-protein companies.

By Leonie Barrie

Research from the US has revealed that investment cash is flooding into alternative-protein manufacturers.

The Good Food Institute (GFI) said that in 2019 some US$824m was pumped into companies creating alternatives to conventional animal-based foods, including plant-based meat, egg, dairy and global cultivated-meat firms. 

But that figure has been surpassed in the first quarter of 2020 with $930m already invested in such businesses.

Of the 2019 total, US plant-based meat, egg, and dairy companies received more than $747m in investment – the most capital raised in any single year in the industry’s history, surpassing the amount raised in 2018 by 11%, or $74m.

This figure includes $457m in venture capital and the $290m raised by Beyond Meat in its IPO and subsequent public offering. 

Investment in US plant-based meat, egg, and dairy companies in Q1 2020 was almost as much as 2019’s full-year total, with $741m invested in the first three months of the year. 

Global cultivated-meat companies, meanwhile, raised more than $77m in 2019, which is 63% more than in 2018 and more than double the capital raised in 2016 and 2017 combined. In the first quarter of 2020, cultivated-meat companies raised $189m, more than the amount invested in the cultivated-meat industry’s prior history. The total includes Memphis Meats’ $186m Series B funding round

GFI associate director of corporate engagement Caroline Bushnell said: “There’s been a surge in investor confidence fuelled by durable and increasing consumer interest in alternative proteins. Investors have seen the market opportunity and are moving to capitalise on a global shift in the way meat is produced.

“This record-level investment will bolster the industry and support continued growth and innovation for the long term, ensuring that alternative protein companies have the resources to grow and thrive, particularly during times of short-term market volatility. 

“The Covid-19 crisis has made bolstering our global protein supply more critical than ever, given the inherent – and now very apparent – vulnerability of supply chains dependent on industrial animal agriculture.”

Data compiled by GFI shows that US retail sales of plant-based meat grew 18% in 2019, which is more than six times faster than sales of conventional meat and nine times faster than total US retail food sales.

Analysts at Swiss financial services giant UBS have said the US plant-based meat market could grow 28% a year to $85bn by 2030.

According to US data provider Nielsen, plant-based meat sales have soared as Americans continue to stock up on food supplies amid Covid-19 lockdowns. Plant-based meat sales increased 265% over the eight-week period ended 18 April, six times faster than conventional meat sales, it said.

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