BrazilAlternative proteins a potential $290 billion plus market by 2035
Alternative proteins – plant-based substitutes for meat, eggs, dairy and seafood – are set to occupy 11% of the global protein market by 2035. This is according to a new study by Boston Consulting Group (BCG) and Blue Horizon.
Food habits are changing – growing healthier and more sustainable. The vegan movement worldwide is one example of how consumers today are shunning old diets of meat and dairy – citing health benefits and lamenting the impact on the environment and animal welfare.
BCG worked with Blue Horizon – an impact investment firm focused on the future of food – to survey nearly 60 consumers and interview 40 experts in the protein industry, for an overview of how food is changing.
“In just the past few years, alternative proteins have morphed from a niche product to a mainstream phenomenon,” noted Ulrik Schulze, managing director and senior partner at BCG’s Zurich office. “Plant-based meats are now a fixture at fastfood restaurants around the world, plant-based milk is a household staple, and you can taste meat grown from animal cells in restaurants in Singapore and Israel.”
Consumers are driving this change, helped along by investors – who see alternative proteins as a strong tool in their environmental social and governance armory. The result is that roughly 13 million metric tonnes of alternative proteins were consumed worldwide last year – around 2% of the total protein consumption.
With current driving forces at play, this will likely grow to 3% by 2025 – nearly doubling in volume to 24 million metric tonnes consumed – and charge on at a compound annual growth rate (CAGR) of 3% to reach 97 million metric tonnes by 2035. That’s 11% of global protein consumption at the time.
“Assuming average revenues of $3 per kilogram, this amounts to a market of approximately $290 billion,” noted Schulze. This is the base case, running of consumer and investor interest and generating healthy growth.
Interest, parity and regulation
An interplay of other factors could turbocharge this growth even further. Consumers were surveyed on what needs to change to pique their interest in alternative proteins. The short answer is parity: of taste, texture and price when compared to conventional protein products. Plant-based substitutes fall short on all accounts as of now, although much progress is expected.
“Step changes in alternative-protein technology, whether at incumbent food companies or startups and supported by public or private investment, could lead to rapid gains in production efficiency, better taste and texture, and lower cost,” noted Nico Dehnert, principal at BCG’s Munich office.
This could potentially bring parity forward by roughly a decade – early 2020s compared to early 2030s – and propel alternative proteins to 16% penetration by 2035. And this is not the upper limit. Consumer interest, investor backing and parity could be bolstered with a regulatory push to double the base case expectations.
“Higher carbon prices and support for farmers transitioning from animal agriculture to alternative-protein inputs could boost consumption to 22% by 2035. At that rate, Europe and North America would reach “peak meat” by 2025, and then the consumption of animal protein in those markets would actually begin to decline,” concluded Blue Horizon managing partner and CEO Björne Witte.
What results is a healthy, sustainable, ethical – and tasty – food landscape, which would bring peace of mind to consumers, while contributing to society, economy and the environment.
