Food, beverage startups must understand evolving market dynamics to meet growing demand for alternative protein products, says GlobalData
June 25, 2021 (Investorideas.com Newswire) Soaring appetite for livestock-based products are creating prolonged and persistent environmental and social issues. As a result, changing consumer behavior towards alternative protein options—due to health awareness as well as animal welfare, disruptive R&D technologies, new product launches, and subsequently venture capital (VC) investments are driving the growth of the global alternative protein industry. In addition, the COVID-19 pandemic has accelerated the shift towards alternative protein. Against this backdrop, food and beverage startups must understand the evolving market dynamics to meet the growing demand, says GlobalData, a leading data and analytics company.
GlobalData's latest report, ‘Is Alternative Protein The Next Big Thing For Your Sector?', highlights the growing discussions around alternative protein on social media platforms and mentions for the same in companies annual filings. It also reveals that while start-ups have been creating a new wave of change, big players are also showing interest in the alternative protein space.
Shagun Sachdeva, Innovation Analyst at GlobalData, comments: "As veganism continues to become mainstream, companies are making efforts to replicate certain animal proteins ranging from the development of egg white cell cultures to lab grown cultured meat.
"With VC investments rising exponentially in the alternative protein space, the total deal value witnessed growth from US$111.5m in 2017 to US$1,586.3m in 2020. The average deal value indicates that there are several new start-ups raising early-stage funding. There appears to be two waves in the alternative protein VC investments space – the first wave reached its peak in around 2015-16, when companies such as Beyond Meat raised late-stage funding to expand operations. Another wave was witnessed in the recent years, when a number of start-ups started exploring parallel options in producing alternative protein related products."
Companies are coming up with innovative product launches that resonate with the millennials, diversify away from the core traditional protein categories and increase touchpoints with the younger generation. Flavor innovation, channel expansion, anti-allergic variants, private label growth, hybrid products and edible packaging are some of the notable product innovations in the alternative protein space.
Ms Sachdeva adds: "As consumers are embarking on the growing trend of plant-based protein, companies intend to engage with the new set of consumers by retooling their product portfolios and reformulating their strategies. Companies are patenting their product manufacturing techniques and investing in novel technologies right from AI, 3D printing to cell-culture and fermentation. Subsequently, investors are eager to grab a spoonful of alternative protein start-ups that believe in the potential of technology to radically recreate the protein ecosystem."
GlobalData's Technology Leaderboard matrix reveals that Nestle SA remains clearly the disruptive innovator with total patent filings of more than 1,600 as of 31 December 2020. While corporates seem to be patenting heavily in the alternative protein area, Impossible Foods Inc is the only startup in the top 20 patentees list and is ranked 15th among top 20 patentees.
Ms Sachdeva concludes: "Firms looking to enter the alternative protein space will need to continuously evolve and remain relevant for consumers by using insightful innovation and capitalize on current trends. Furthermore, innovative food companies need to focus on customer experience, new distribution channels and strong social media push to garner attention for their products."
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Notes to Editors
- Quotes provided by Shagun Sachdeva, Innovation Analyst at GlobalData
- Information based on GlobalData's report: Is Alternative Protein The Next Big Thing For Your Sector?
- GlobalData's Technology Leaderboard matrix provides unique insights on companies' growth and innovation category that these companies belong to which indicates the nature of their innovation in terms of patent filings. While, Patent Strength Indicators (based on number of parameters) are needed to evaluate technological innovation competitiveness between companies and identifying the quality of the patent
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