Top investors call on global food brands to make plant-based shift
An investor-led coalition worth $2.4trn has urged the likes of Unilever, Nestlé and Tesco to diversify their protein sourcing away from a reliance on animal proteins.
The market for alternative plant-based proteins could expand at an annual rate of 8.29% in the next four years and reach $5.2bn by 2020.
And a new report backed by 57 large investors such as Aegon, Aviva, Coller Capital and Nordea is calling on major food companies to capitalise on this transition.
The investor coalition is run by the FAIRR initiative, started by Coller Capital chief information officer Jeremy Coller.
He said: “Ultimately, this trend is driven by the inability of the global meat industry to manage the environmental, public health and animal welfare challenges that the world’s current demand for animal protein creates; and that is generating remarkable opportunities for food companies and their shareholders.”
Ahead of the curve
The report evaluates 16 multinationals on their potential to exploit the rising demand for alternative proteins.
Nestlé and Tesco are best prepared, according the study, with both companies praised for investor engagement and setting livestock emission targets. Tesco has set a goal to reduce agricultural emissions by 15% by 2030.
The pair were also commended for their monitoring processes and innovative consumer marketing. In January, Tesco introduced 20 ready meals with plant-based options under a wider consumer brand.
Nestlé’s stakeholders engagement in sustainability AVP Duncan Pollard said that global food brands have a responsibility to take a long-term approach to food production.
“The development of the protein supply chain is an issue with the potential to radically reshape the supermarket shelf of the future,” Pollard said. “We very much welcome the support of those investors who want to act today to stay ahead of the curve in the economy of tomorrow.”
At the other end of the spectrum, Costco and Whole Foods were both criticised for failing to adequately respond to investor requests for information or further meetings. Costco, which has a large footprint from its meat sales, was singled out for failing to recognise protein diversification as a material issue.
The need to tackle the climate impact associated with the human consumption of meat and dairy is significant, with GHG emissions from the livestock sector estimated to account for 14.5% of the global total.
US-based firm Impossible Foods has introduced its own novel solution to the issue. The company has introduced a non-meat burger, which cost $80m to produce, that uses 95% less land and around 75% less water than traditional burgers.
Just 18 months after launch, the Impossible Burger is now available in more than 500 US restaurants and has received funding of over $250m from mainstream investors.
Elsewhere, prominent industry players Cargill and Tyson Foods recently announced investments in cultured meat start-up, Memphis Meats.