WASHINGTON — Investor appetite for alternative proteins remains healthy, according to the Good Food Institute (GFI). The global sector has drawn $14.2 billion in private capital over the past decade, with annual investments doubling on average every year.
Amid market turmoil, alternative protein companies raised $2.9 billion in 2022, marking a significant deceleration from the prior year. Still, a GFI survey of more than 100 investors active or interested in the category found that 99% of respondents expressed optimism about the alternative protein industry over the long term.
Alternative proteins include plant-based meat, seafood, eggs and dairy; cultivated meat and seafood; and proteins derived from fermentation. The GFI analyzed investment activity in a series of state-of-the-industry reports. Citing Pitchbook data, the GFI said total funding in alternative protein companies declined 42% last year, in line with broad-based declines in global private funding, which fell 35%.
“Alternative proteins are a scalable solution that, with proper levels of public and private support, can transform our global food system for the better,” said Caroline Bushnell, vice president of corporate engagement at GFI. “The growth opportunities for this nascent industry are significant. With further investment and continued innovation to improve the taste and affordability of products, the industry will accelerate and be poised to capture sizable market share.”
Plant-based meat, egg and dairy companies raised $1.19 billion in 2022, closing 145 deals. The largest investment was $135.6 million raised by Redefine Meat. The segment’s all-time investment, since 1997, reached $7.78 billion, with all-time deals reaching 935. The plant-based industry has seen 121 liquidity events, including 15 in 2022. The most notable event during the year, according to GFI, was the acquisition of Sol Cuisine by PlantPlus Foods, a joint venture of ADM and Marfrig, for $102 million. The number of unique investors grew by 17% in 2022 to an all-time total of 1,521 in 25 years.
“Continued growth of the plant-based category will be enabled by innovation that results in delicious and appealing options,” said Alice Raksin, investor with L Catterton. “As consumers increasingly seek out alternative proteins for personal health and environmental reasons, winners will be created in the category and generate strong returns for investors.”
Cultivated meat and seafood companies raised $896 million in 2022, closing 77 deals. The segment’s all-time investment reached $2.8 billion, with all-time deals hitting 294, including 12 growth-stage (Series B or higher) deals. The number of unique investors increased by 19% last year to reach a total of 679 investors since 2016. The largest transaction in the segment was Upside Foods’ $400 million Series C round in 2022. Two key liquidity events occurred in 2022, as JBS acquired Spanish cultivated meat company BioTech Foods for $39 million and Upside Foods purchased cultivated seafood company Cultured Decadence for an undisclosed sum.
Fermentation companies raised $842 million in 2022, closing 89 deals. The largest investment was Meati Foods’ $150 million Series C funding round. The segment’s all-time investment reached $3.69 billion, with all-time deals at 301, including 23 growth-stage deals. The number of unique investors increased 38% in 2022 to a total of 713 investors since 2013.
“Fermented protein producers are attracting meaningful capital, which is funding an industry-wide race to deliver superior taste, texture and nutritional profile in a cost competitive and scalable manner,” said Caitlin Walsh, managing director of Thematic Investing, CPP Investments. “Looking ahead, more investment will be needed across the space to help overcome challenges such as lowering production costs, obtaining regulatory approval, and attracting customers for large-scale commercialization.”
Want to learn more about precision fermentation and its impact on the food and beverage industry? Attend The Promise of Precision Fermentation on May 10, the latest Trends & Innovations webinar from Food Business News.
|