Advancing solutions for alternative proteins

The role of fat will become increasingly important as demand increases for plant-based products that have properties more akin to animal-based ones. It will be essential to achieve sufficient fat and moisture performance in end products because lipids are integral to key product attributes such as texture, flavor, and overall familiarity. A significant amount of research has been done around structuring and encapsulating fats and flavors, but the best techniques for alternative protein applications have not been exhaustively explored.

It will be incumbent to demonstrate the environmental and sustainability benefits of cultivated meat before production is at commercial scale. Conducting rigorous life cycle assessments will be critical, and these analyses should be sure to note the potential for increased efficiencies across all stages of the plant, fermentation, and cellular agriculture life cycles, as well as the opportunities for increased efficiency that come with scaling up production.

Protein fractionation and functionalization (the process of isolating, identifying, and characterizing plant proteins, then preparing them for processing via extrusion or other texturization methods) are among many underexplored areas, especially for unconventional plant protein sources like specialty crops (e.g., lemna, hemp). These processes are critical for protein functionality and performance, and thus can make a huge impact on taste and texture.

The fat profile of most plants is not ideal for recapitulating the properties of animal-based fats. Traditional oilseed crops could be modified to produce higher levels of fats that are desirable to plant-based formulators but are more difficult to source from plants, such as saturated fats, eicosapentaenoic acid (EPA), and docosahexaenoic acid (DHA).

Novel methods for texturizing and structuring plant-based proteins are needed to provide alternatives to extrusion (currently the predominant method for texturizing plant-based meats). Practitioners report that even small shifts to process (e.g., heat, moisture levels) or input variables can have exaggerated effects on extruded products, and thus the industry would benefit from production methods that are less sensitive and more robust. Extrusion alternative research is particularly well suited for academic R&D, with massive commercial potential upon technological validation.

Many cell types used for cell-based meat are naturally anchorage dependent and must be cultured on microcarriers or another solid surface, though innovations in cell adaptation or editing can now facilitate suspension growth.

A litany of volatile compounds, many of which differ by species type and cut, contribute to the taste of meat; these compounds should be more holistically explored and characterized.

To fully capture the meat-eating experience that consumers expect, the cultivated meat industry needs to draw upon the deep meat science expertise that exists in the conventional meat industry. There is a knowledge gap and a lack of standardization between the meat science field and the cultivated meat field with respect to analytical tools and key parameters for defining meat composition and quality.

Cultivated meat research can be accelerated across the board by the development of appropriate research tools and key data sets. A suite of assays, genomic data, contract research services, and commercially-available reagents exists for humans and commonly used laboratory species such as mice or fruit flies. However, the same species-specific research toolkit does not yet exist for most species used in cultivated meat, with an especially large gap — and, thus, opportunity — for seafood species.

While real-time, in-line monitoring techniques exist for cell culture processes, they have not been optimized for cultivated meat or fermentation-derived protein production processes. Broadly, there is a pressing need for the development of novel, scalable technologies that enable greater efficiency and effectiveness in the monitoring of end-to-end production processes.

Strain engineering is a particularly promising avenue, and may also unlock the potential to use cheaper fermentation feedstocks, which would ultimately drive down production costs.

Experts also suggest that safety studies and genetic tools for a wide range of microbes would increase innovation in host strain selection.

Fermentation-derived lipid production is relatively unexplored for food applications but has a fairly robust history for industrial chemicals. The alternative protein industry may be able to develop an open-access research foundation and accelerate the commercialization of fermentation-derived fats by aggregating lipid synthesis pathway insights from the chemicals industry.

Scaling up in-house is an alternate, but potentially risky route. Significant know-how is required to understand the process of moving from the lab to the pilot plant that is necessary to demonstrate commercial scale. In-house scaling also requires that companies find the right balance of focus between product development and manufacturing/ operations at scale. Companies should carefully consider whether to lease vs. purchase equipment. Nonetheless, full vertical integration offers significant intellectual property insulation and represents a potential mid-to-long term cost savings for manufacturers.

Developing and commercializing production equipment and facilities that are optimized for alternative protein production at scale is expensive and technically challenging, but will be a major source of commercial opportunity for engineering and design firms and investors in the space.

As a result of a lack of optimized, off-the-shelf infrastructure for alternative protein production, retrofitting existing assets may be a viable solution in some cases. Making modifications to assets or facilities can be quite expensive depending on the prior use-cases (e.g., bioreactors over-engineered for biopharma, non-food-grade fuel ethanol equipment). Furthermore, there may be technical limitations governing how much retrofitting can be done before novel solutions are necessary, suggesting that this may not be a viable long-term solution. Lastly, a critical assumption is that there is idle capacity available to retrofit, which is often not true for food-grade equipment and facilities.

A significant amount of work must be done to understand if there are more effective processes beyond extrusion. Determining this requires rigorously assessing and testing these novel methods, and optimizing them for the plant-based sector. Potential alternative production methods include couette shear cell, 3D printing, and processes developed from the weaving industry, including novel spinning technologies.

The existing infrastructure that is technologically suitable for cultivated meat production has been designed for biopharma, a price-insensitive application at a much smaller scale than what will be needed to produce millions of metric tons of meat.

There is currently a finite amount of fermentation capacity for which numerous applications of the technology all compete.

Post-bioreactor, downstream processing technologies such as cell harvesting and target molecule purification have yet to be optimized for cultivated meat and fermentation production processes, are expensive to run, and are not yet scaled.

While many promising startups have thus far not struggled to generate the earliest rounds of funding, it is important to recognize the difficulties in accessing transformative investment dollars for growth and building out large-scale production capacity. Though there are exceptions, and bottleneck investment rounds vary by sector maturity, it is broadly challenging for companies to raise sufficient later-stage growth funding on quick timelines. To be clear: we believe that companies with great products will likely be able to raise growth capital. But we believe that there are opportunities to accelerate the timelines in which those companies are able to raise such funding.

Novel public sector incentives such as generous infrastructure and workforce development loans or production purchase guarantees could quickly speed the scale up of the alternative protein industry.

Another area for further innovation is building more robust techno-economic models that accurately map out the path to commercialization. This analysis will be crucial to generate additional investment throughout the space broadly by addressing extant gaps in data and illuminating the business case for this nascent industry.

Enzymatic methods offer promise as a cheaper, less scale-dependent, efficient processing method because they can be fine-tuned to a particular substrate and tailored to produce a specific end result. While enzymes have been used in the processing of plant proteins for many thousands of years, there are opportunities to specifically tailor these methods to the alternative protein space.

Biological methods may be more adaptable and versatile than traditional chemical or mechanical processing methods that require specialized, built-for-purpose infrastructure. However, little systematic exploration of biological processing methods has been done for alternative protein inputs.

Another key area for innovation is side stream valorization, which will play an important role in de-risking the alternative protein industry at scale.

• Use cases for traditional crop side streams (like husks) or processing fractions (like leftovers from protein isolate extraction) have been identified in some cases, but as demand rises for novel protein sources, finding efficient and valuable ways to commercialize all plant products and byproducts is a major opportunity.
• For cultivated meat and fermentation, the challenge is finding ways to recycle or upcycle spent media the most significant waste product in terms of volume.

Ingredients and inputs are often sold through high-touch, contractual relationships. It is often challenging for product developers, procurement teams, and ingredients suppliers to efficiently find each other, and it can be difficult to understand the landscape of ingredient suppliers and product offerings. There is a need for marketplaces, exchange platforms, brokers, and services that can facilitate matching ingredient buyers and sellers, including easy ordering of R&D quantities and simple comparisons between different suppliers and products. It is not uncommon for startups to lack significant buying power and experience difficulties purchasing inputs, such as ingredients, because large suppliers may require minimum order sizes or charge high prices for low quantities.

Increased communication between suppliers and buyers would be made easier if widely-adopted ingredient standards were established.

A lack of granular, segmented demand forecasts, particularly second-order forecasts for upstream inputs, results in uncertainty for ingredient suppliers and farmers. Market reports often group products or geographies, so critical nuances are missed, making it challenging for suppliers and producers to accurately plan production. Thus, the development of robust demand forecasts by an independent expert or respected third-party organization would substantially address production volume uncertainty amongst stakeholders across the supply chain.

As ingredient suppliers specialize and add more value to their ingredients upstream, the superficial volume of ingredients available cannot be used one-for-one in plant-based products. As a result, the supply to achieve sufficient volumes is fragmented, making it challenging to maintain standardized quality downstream in large-scale production. Ingredients from different suppliers exhibit a range of sensory and functional characteristics, leading to undesired variability in the end product formulation. Increased coordination throughout the supply chain will be important, as plant-based meat manufacturers benefit from raw materials processors and farmers working in concert to develop high-quality, homogenous ingredients.

Once novel crops with promising potential as alternative protein inputs are identified, it can be challenging to establish the agricultural infrastructure — from seeds and farm equipment to storage and transportation — that is necessary to enable efficient and scaled cultivation. It will be important to build the upstream supply chain infrastructure quickly enough to match growing demand. Traditional crop cycles make it hard to transition land quickly, and farmers may lack the expertise or risk tolerance to switch to crops that are more suitable for plant-based meat. To motivate farmers to switch to novel species or cultivars and de-risk their first few seasons, robust market data, insurance or price guarantees, and tailored technical assistance programs could ensure that plant-based inputs can be a profitable and competitive option for growers.

Growth factors, which are not currently commercially available in food-grade versions, are widely noted as one of the most problematic inputs due to limited suppliers and high cost.

While some cultivated meat companies have become vertically integrated in order to develop their own media solutions at the proper scale and cost, this is an added scientific challenge and a resource-intensive endeavor that may be better addressed by a dedicated provider. Existing suppliers or prospective B2B partners feel they need additional regulatory clarity governing the requirements for manufacturing inputs for the cultivated meat industry.

Currently, alternative feedstocks remain highly inconsistent and there are concerns around the food safety and regulatory issues that may arise given the use of a lower grade, unconventional input such as an agricultural side streams.

To reach mass commercialization, alternative, cheaper, and more sustainable substrates must become widely available.

Low initial sales volumes are a big driver of the challenges alternative protein companies face when trying to set up their initial distribution. Distributors are often focused on high-volume products that turn over quickly and will be purchased in large quantities. Many foodservice and retail customers are only interested in purchasing alternative protein products if those products are available from their preferred distributors, and distributors likewise only want to carry alternative protein products if there are anchor retail or foodservice accounts with some guaranteed sales volume. Consequently, alternative protein companies need resources and services that can help them find keystone early customers who serve as anchor accounts for expanding distributor relationships, such as sales brokers who can work simultaneously with distributors and anchor accounts to build up needed sales volumes.

After getting products on shelves and on menus, alternative protein products need to demonstrate strong enough sales, demand growth, and profitability to maintain or increase distribution, which requires being strategic about the number of SKU’s brands focus on and their marketing efforts. Alternative protein companies would benefit from services, partnerships, salesforce training resources, channel marketing to buyers, and consumer marketing solutions that make it easier to coordinate the multiple disparate efforts required in each targeted market to maintain and drive growth.

While foodservice has traditionally been a common go-to-market strategy for alternative protein companies, the Covid-19 pandemic has caused a significant decline in foodservice volumes and caused many consumers to shift their food purchasing to other channels. Increasingly, alternative protein brands need access to alternate channels such as online direct-to-consumer or third party e-commerce channels to establish crucial early sales traction. The rise of online purchasing in retail, foodservice, and direct to consumer (DTC) has made it imperative for alternative protein companies to build loyal consumer followings and make their products stand out via discovery and searching on digital purchasing platforms. DTC also creates an imperative for brands to optimize their cold-chain logistics.

D2C sales entail high-shipping volumes and small average order sizes, which increases the per-unit cost of shipping and thus the overall complexity of cold-chain logistics. Brands should engineer packouts that last two or more days and experience a 1% or lower product spoilage.

High-quality research and best practices around effective marketing, including terminology, product positioning, and cultural contextualization, is needed to guide product development and marketing efforts. 

• Studies of actual consumer behavior (revealed preference) are needed since consumers will often mark on surveys that they care about things that do not actually influence purchasing behavior. For example, US consumers regularly claim much more concern for environmental issues than is represented by actual purchasing behavior.
• Regular taste tests against actual animal products or best-in-class alternatives are needed to provide a sensory competitive benchmark. Alternative proteins will not reach their potential unless regular consumers of animal products find them comparable or superior based on sensory attributes.
• Additional studies on nutrition, public health, sustainability, and food safety are warranted to ensure that alternative proteins can counter misinformation and provide accurate information to consumers and food influencers.

More studies are needed on effective novel food product and technology naming, such as GFI’s work on cultivated meat nomenclature, as this terminology influences both legal compliance and consumer demand. One current need case is aligning on shared terminology for ingredients and end products derived from biomass fermentation and precision fermentation.

While further research studies are warranted, there are some best practices for plant-based and alternative protein marketing that have already emerged but not yet been embraced by all manufacturers, retailers, restaurants, and food distribution channel companies. GFI has collected some of the marketing best practices for both retail and foodservice. 

• Studies and findings from market research have found that merchandising plant-based meat, egg, and dairy products in the same section of the store as animal-based versions (such as the refrigerated or frozen sections) increases sales. While this adjacent merchandising is increasingly common, many retail outlets still use a segregated strategy.
• Studies have found that removing plant-based items from a special plant-based section and putting them into the main menu strongly increases sales of those items. Even still, many restaurant brands keep plant-based items in separate menu sections.
• While plant-based foods are often marketed with health benefits receiving primacy in the communication hierarchy, studies have found calling a food “heart-healthy” or “low calorie” decreases sales (both outcomes that would be unlikely to align with a consumer survey but can be captured in studies of actual consumer behavior). Market findings suggest that messaging needs to emphasize core drivers like taste and familiarity more than health benefits, and a lot of the current marketing across the plant-based category falls short.
• There is evidence that labeling a product “vegan” or “vegetarian” decreases sales of that product when compared to using terms like “plant-based” or other plant-centric terminology in markets like the US. However, many CPG, retail, and foodservice companies still persist in using these terms, which narrow their product appeal.