With the market fluctuating like a roller coaster these days, it’s hard to pinpoint exactly which areas make sense to grow your earnings going forward. Have you ever thought of investing in plant-based alternatives?
The Boston Consulting Group (BCG), a global consulting firm, has a report who believes that for every dollar, investing in plant-based alternatives yields far more savings on greenhouse gases (GHG) than many other investment opportunities. And there’s more good news: People’s diets are shifting from meat to plants resources less forest is destroyed for grassland and animal feed and less emissions of the powerful greenhouse gas methane produced by cattle and sheep.
BCG surveyed more than 3,700 people in the UK, US, China, France, Germany, Spain and the United Arab Emirates. It found that 30% of consumers would switch to alternative protein products if they had a positive climate impact. About 90% of people said they liked at least some of the alternative protein products they’d tried.
How does improving and scaling up the production of meat and dairy alternatives compare to other green technologies?
- 3 times more greenhouse gas savings compared to investments in green cement technology
- 7 times more than green buildings
- 11 times more than zero-emission cars
What does the report say about the increasing trend to invest in plant-based alternatives?
- Investments in alternative proteins have increased from $1 billion in 2019 to $5 billion in 2021.
- Alternatives account for 2% of meat, egg and dairy products sold, but data indicates they will rise to 11% by 2035 based on current growth trends.
- The protein transformation is part of a broader remodeling of the food system. Every stakeholder in the value chain is likely to feel the impact of the transformation, and many will find great opportunities to help build a sustainable food system.
Why is this trend of investing in plant-based alternatives going on? Overall growth in alternative protein investments is consistent with a broader focus on sustainable investing globally, growing 3 to 5 times faster than traditional investing, with a focus on solutions to the climate crisis.
What emissions do meat and dairy farming produce? Meat and dairy production uses 83% of farmland and causes 60% of agricultural greenhouse gas emissions, but provides only 18% calories and 37% protein.
What are the forecasts for peak meat consumption? Europe and North America will reach the highest levels of meat consumption by 2025, after which consumption of conventional meat will begin to decline.
How does a decision to invest in plant-based alternatives affect global decarbonisation goals? The biggest results are in terms of the market value of avoided CO2e emissions per dollar invested in mitigation efforts. This is called the impact of capital employed (IoCE). Investments in alternative proteins produce IoCE that far exceeds corresponding investments in decarbonization in other high-emission sectors of the economy, such as transportation or buildings.
Which major investments have already been made in plant-based alternatives?
- Venture capital invested in alternative proteins increased 124% year-on-year, from $1 billion in 2019 to $5 billion in 2021, according to the Institute of good food.
- In 2020, housing associations participated in approximately 60% of the financing rounds.
- Investments in fermentation-based and animal cell-based companies, two newer technologies, are booming. From 2019 to 2021, the former increased by more than 137%, from $300 million to $1.7 billion, and the latter increased by more than 425%, from $50 million to $1.4 billion.
Why do investments in plant-based alternatives have such a major impact on emissions? There is a big difference between the greenhouse gases emitted from the production of conventional meat and dairy products and from the cultivation of plants. For example, beef causes 6 to 30 times more emissions than tofu.
What do current forecasting models tell us about the potential to invest in plant-based alternatives?? The models to indicate that alternative proteins will represent 11% of all protein consumption by 2035, and with some help from technology, investors and regulators, alternative proteins could capture 22% of the global market during this period.
Can investments in plant-based alternatives yield even better future results? Yes. BCG said meat alternatives could grow much faster with advances in technology, resulting in better products, scaled production and regulatory changes, making marketing and sales easier.
What will convince consumers to eat more plant-based foods? Consumers in all markets express a strong willingness to further shift their consumption patterns if their biggest inhibitions related to the products — health and nutrition, taste and safety — are discussed.
Which key areas need to be addressed to create the optimal climate for investing in plant-based alternatives? Everyone has an interest in accelerating protein transformation and the broader transition to a sustainable food system. The 5 target areas explored in the BCG report are:
- Supportive farmers
- Ensure a level playing field for policy and regulation between conventional and alternative proteins
- Focusing capital on transformative enterprises
- Resource Optimization and Waste Recovery
- Continue to build consumer acceptance
Final thoughts on decisions to invest in plant foods
Scientists have concluded that avoiding meat and dairy products is the best way to reduce your environmental impact on the planet. Major shifts in meat consumption in rich countries are essential to end the climate crisis.
The food system is responsible for 26% of current greenhouse gas emissions. Livestock, the largest emitter of greenhouse gases within the food system, is responsible for 15% of global emissions, roughly equivalent to emissions from the transport sector. If we stay on track for an 11% share for alternative proteins in 2035, we will see a reduction of 0.85 gigatons of CO2 equivalent worldwide by 2030.
In addition to deciding to invest in plant-based alternatives, you can also get involved in the switch to alternative proteins by campaigning for your city to Vegetable treat. There are many different ways you can help: you can work on a plant-based school campaign, set up a community garden, lobby the government, form alliances, or help create pressure from below by rallying support from individuals, groups, companies, organizations, scientists and celebrities.
As the founders of the Vegetable Treaty Movement state, we face existential threats from the climate emergency, unprecedented public health crises, world hunger and biodiversity loss. Our food system is at the heart of all of these issues, so we need to move quickly to a compassionate, healthy and climate-friendly food system.
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