A plant-based diet — the road to sustainability

  • Around 320m tonnes of meat are consumed annually across the globe
  • The world’s population is estimated to reach 9.7bn by 2050, when global demand for meat is expected to reach 557m tonnes
  • Ruminant animals such as cows and goats emit methane (GHG) as they digest animal feed, grass or plants
  • Nitrous oxide, another GHG, is released from the chemical fertilisers used for crops produced for cattle feed and also from ruminant animal waste
  • Raising livestock accounts for c.14.5% of all GHG emissions. “Livestock production is the most prominent methane contributor in the world and is responsible for the emission of more greenhouse gases than all the world’s transportation systems combined”, according to the Down to Earth Organization
  • By 2050, food-related GHG emissions are expected to reach 11.4 gigatons of CO2-equivalents (GtCO2-eq), of which c.7.3 GtCO2-eq, almost two-thirds, would come from meat
  • Beef needs c.20x more land and emits 20x more GHG emissions per gram of edible protein than plant-based proteins
  • As the global population increases, demand for beef increases, requiring more land and pastureland, usually created by deforestation, which releases CO2 stored in forests
  • Most of the world’s grasslands are already heavily used for livestock production; increased beef demand will increase the pressure on forests
  • A report from the World Wildlife Fund (WWF) finds that 60% of global biodiversity loss is caused by meat-based diets
  • Half of all water consumed in the US is used to grow grain for cattle feed
  • Meat consumption also leads to a global food crisis, as almost half of the global harvest is fed to animals; this could instead be used to feed the growing population, expected to reach c.9.7bn by 2050
  • Two to three calories of fossil fuel are required to produce 1 calorie of protein from soybeans, corn or wheat, whereas, for beef, it takes 54 calories of fuel to produce 1 calorie of beef protein
  • Sales of plant-based food exceeded USD7bn in the US in 2020; the US vegan food market was up by 27%, growing almost two times as fast as the total US retail food market, which increased by 15%
  • Sales of plant-based milk (the largest plant-based food category) reached USD2.5bn in 2020 and accounted for 35% of the total plant-based food market in the US
  • The value of plant-based meat (the second-largest plant-based food category) reached USD1.4bn in the US in 2020, growing twice as fast as the value of traditional meat
  • The global plant-based food market was valued at USD29.4bn in 2020 and is expected to reach USD162bn within the next decade, a 451% increase
  • Rising intolerance of cruelty to animals: 72bn animals are slaughtered every year for consumption; 95% of them are chickens, over 300m cattle and 1.5bn pigs
  • Increasing health consciousness: The pandemic has made people more health conscious and aware of how their food habits impact their health as well as the environment. Plant-based diets are said to be more nutritious and gut-friendly, increase fibre, help maintain weight and reduce the risk of cancer
  • Increasing vegan and flexitarian population: Around 5% of the world’s population is vegan, and the numbers are rising. In addition to vegans and vegetarians, there are flexitarians, referring to those who mostly consume plant-based foods but also animal products, adding to the demand
  • Increase in alternative food options with venture investments: Venture investments in plant-based food companies grew almost 3x — from USD660m in 2019 to USD2.1bn in 2020. Companies such as Impossible Foods, Oatly, Meatless Farms and Green Monday had notable rounds of investment in 2020
  • 2020 saw the launch of venture funds focused on and supporting alternative protein and the food tech/innovation segment, including Lever VC, Veg Capital and Rich’s Corporate Venture
  • Some companies had successful IPOs, including Else Nutrition, Oatly, Impossible Foods, The Very Good Butchers and SavorEat
  • Liquidity events or exits in the form of M&A, buyouts or IPOs in the plant-based food market have also gained momentum in recent years
  • Growing availability of alternative options: Companies such as Beyond Meat, Impossible Foods, Else Nutrition and Oatly are leaders in the plant-based food market. Their offerings are becoming increasingly competitive with animal products on key attributes such as taste, price and accessibility
  • These companies have also formed partnerships with stores, restaurants and large retail chains to make their products available and popular. It is interesting that with proven demand for plant-based options, food giants such as Kraft Heinz, Tyson Foods, Kroger and Nestlé are also establishing and expanding their plant-based food offerings in this fast-growing market
  • The rise of foodtech and alternative protein options: Also complementing growth in this market is innovation in the foodtech segment, paving the way for better plant-based options and alternative proteins. With technologies such as 3D printing, shear-cell technology, cellular agriculture and fermentation, companies are progressing towards developing animal-free protein. These companies are also gaining the support of corporate venture arms such as Rich Products’ Rich’s Corporate Venture Group, Tyson Ventures and Kellogg’s corporate venture capital arm

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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