Boosting the future of food: investing in new proteins and paving the way to low carbon food systems
Our global food production system is a significant contributor to greenhouse gas emissions (GHG), accounting for 26% of the total GHG emissions. Of this, 60% of emissions are attributable to animal-related products such as meat and dairy. Reducing the production and consumption of these products is vital in steering economies towards net zero.
Research shows that avoiding meat and dairy consumption is the most effective way to reduce the environmental impact of food, as they use around 83% of farmland and account for 60% of GHG form agriculture.
One possible solution to this conundrum may be the adoption of 'new' or alternative proteins.
The new protein economy
Alternative proteins come in various forms, including plant-based proteins, edible insects, cultured or lab-grown meat, and mycoproteins derived from fungi and bacteria. Currently, alternative proteins represent around 1% of the total protein market; however, if we can overcome barriers to scale, adoption, and system transformation, studies suggest that they could account for up to 22% of the overall protein market by 2035.
Investing in the new protein economy
According to Oxford Smith School research, investing in the New Protein Economy (NPE) offers several environmental, economic and societal co-benefits. For example, in the UK, it can generate 16,500 near-term jobs, reduce diet-related mortality by up to 7%, reduce the risk of antimicrobial resistance, and save £1.2bn/year on health expenditure. Farmland used for livestock could also be repurposed for ecosystem services, reducing food chain vulnerability to climate impacts.
Regulatory, policy and investment support is needed to speed up the transition to sustainable food systems like alternative proteins. Several countries like Singapore, Israel, Canada and Netherlands have been actively supporting the development of alternative proteins.
However, there are still barriers blocking the way to advance the production of these alternative proteins at scale.
Overcoming Barriers to NPE Investments
Despite the co-benefits, there are hurdles to unlocking investments in NPE, related to scale, adoption and system transformation.
To overcome barriers to scale, such as affordability (for instance, novel proteins require a high retail price relative to incumbents) and emissions intensity (some alternative protein production sources are energy-intensive), policy interventions could include: accounting for externalities through disclosure of the environmental impact of food, fiscal intervention (e.g. pricing conventional proteins to correctly reflect their environmental and social costs), reducing the carbon intensity of energy supply, and stimulating R&D investment in alternative protein technologies.
To address barriers to adoption, such as consumer acceptance and creating market demand, policy interventions could involve establishing comprehensive national dietary guidelines, conducting public awareness campaigns, implementing public procurement initiatives, and regulating alternative protein licensing and certification.
Lastly, to overcome barriers to system transformation, such as system incumbency, policy interventions could involve reforming agricultural subsidies and supporting workforce retraining, particularly in land management and ecosystem services.
What happens next?
New policy should be developed to address these barriers and maximise economic, environmental and societal benefits that would encourage the support and development of new proteins as well as incentivise the population to adopt some of these alternatives into their diets, thus reducing the consumption of high environmental impact food products.
High-income countries, like the UK, could focus more on demand-side interventions, including disclosure, public procurement, fiscal intervention, public awareness, and dietary guidelines. In low-income, low meat-consuming, and high agriculturally dependent countries, a focus on supply-side interventions could be more effective in shifting development trajectories towards sustainable food systems.
Regulation, such as standards and eco-labelling, is a key enabler across all archetypes, and workforce training and reskilling is critical to ensuring that the transition is perceived to be just and equitable.
Exploring and understanding the emerging role of established food companies as investors and drivers of alternative protein innovation is key to drive further investment. These companies, that have an established market and access to capital funding, could transform the way we perceive and eat protein extremely quickly. To offer insight into investment and market opportunities for alternative proteins, we’ve launched a free-to-access database that offers insights for ventures seeking investment, and for funders wishing to deploy capital. Ultimately, we believe this part of the food sector has a key role to play in accelerating progress towards net zero.
