波士顿咨询：替代蛋白行业可以向电动汽车公司学习什么 What the Alternative Protein Industry Can Learn from EV Companies

WhattheAlternativeProteinIndustryCanLearnfromEVCompanies

JULY11,2024

By

ElfrunvonKoeller

,

NeeruRavi

,EmmaIgnaszewski,RosieWardle,

AndreyBerdichevskiy

,

NathanNiese

,SaraKopunova,andDanielGertner

READINGTIME:15MIN

Alternativeproteinsburstontothesceneadecadeago,promisingcomparabletastetoanimalproteinsandfewergreenhousegas(GHG)emissions.But

alternativeproteins

havefacedchallengesinwinningover

consumers:today,plant-basedmeataccountsforonly1%ofmeatdollarsalesinUSretail,andmanyalternativeproteinstartupsfacetightprivatecapitalmarkets.

Andyet,

achievingmassadoption

ofalternativeproteinsiscriticaltoreducing

theimpactsofglobalfood

production

.Animalagricultureaccountsforroughly15%to20%ofGHGemissions—greaterthanthe

combinedcarbonoutputofcars,motorcycles,andotherpassengerlightvehicles.Ifalternativeproteinscould

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capturehalfoftheglobalproteinmarket,includingdairy,thisswitchwouldmitigate5gigatonsofCO2equivalentsannually.

Achievingmassadoptionofalternativeproteinsiscriticaltoreducingtheimpactsofglobalfoodproduction.

“

Torealizeitsfullpotential,thealternativeproteinindustryshouldtakeinspirationfromtheelectricvehicle

(EV)sector,whosesuccesshascomeinlargepartfromaddressingthehurdlestoconsumeradoptionthat

limitedpotentialexpansionearlyon.Privatecompaniestackledthesechallengesbyinnovatingtonarrowthegapinqualityandpricewithgas-poweredvehicles,governmentshelpedbyprovidinggeneroussubsidiesandpolicies,andinvestorscontributedbyfundingthefullvaluechain.

AccordingtotheInternationalEnergyAgency,governmentsworldwideprovidedroughly$40billionindirectpurchasesubsidiesforEVsin2022.Thatdwarfsthe

$635million

intotalgovernmentsupportthatthe

alternativeproteinindustryreceivedthatsameyear.Thisimbalanceislikelyevenlargerifweincludeall

governmentsupportforEVs.AlongstandingpubliccommitmenttoEVshasstimulatedsignificantprivateinvestmentoverthepastsevenyears—enablingtheEVindustryworldwidetogrowfromlessthan0.2%oftotalnewcarsalesin2012to18%in2023,accordingtoIEAdata.

KeyParallels:EVsandAlternativeProteins

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TheparallelsbetweentheEVandalternativeproteinindustriesarestriking.Botharedisruptivetechnologiestakingonincumbentswhoseproductsarerootedinconsumercultureandidentity.BothareresponsibleforlargeslicesofglobalGHGemissions(passengerroadtransportationfor10%;animalagriculturefor

15%to

20%).ThispositionsEVsandalternativeproteinsastwoofthemostmeaningfulsolutionstomitigateclimate

change

.

Andyet,bothhaveencounteredobstaclesingainingconsumertrust.EVshavebeenscrutinizedforbattery

fires,consumerrangeanxiety,alackofcharginginfrastructure,andecologicalandethicalissuesrelatedtotheminingandprocessingofrawmaterials.Alternativeproteinshavefacedcriticismforthelevelofprocessing

usedtocreateplant-basedsubstitutions.

Thesimilaritiescontinueonthesupplyside,wherethetwoindustriesconfrontedearlychallengesinscalingproduction.Bothsectorshaveencouragedindustryincumbentstosupportandinvestindiversifyingtheir

productportfolios.Foralternativeproteincompanies,thatmeanspersuadingfoodand

agribusiness

firmstoinvest,justaslegacyautomakersexpandedintoEVs.

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Alternativeproteinsareoneofthemosteffectivetechnologieswehavetoreducetheenvironmentalcostsofourfoodsystems.Unfortunately,thisareaisnotmovingatthespeednecessarytocombatclimatechangeandisfarbehindadvancesintheenergysector.It’simportanttoseewhatcanbelearnedfrominnovationsinenergyand

transporttoaccelerateeffortsinthisspace.

HannahRitchie,DeputyEditorofOurWorldinDataandauthorofNottheEndoftheWorld

“

Buildinginstitutionalsupporthasbeenchallengingforalternativeproteincompaniesinrecentyears.A代era

flurryofprivateinvestmentfrom2019to2021,fundingslowed.Alltold,alternativeproteincompaniesraised

one-eighthoftheprivatecapitaloftheEVindustryfrom2017to2023.(SeeExhibit1.)Theirfundingstruggles

havebeencompoundedbytheongoingregulatorybattlesoverproductlabelingandacomplicated,patchworkapprovalprocessfornovelfoodproducts.

Still,thereareearlysignsthatthealternativeproteinindustryisgainingregulatorysupport.TheUS,Denmark,

Israel,Singapore,andSouthKoreacreatedpolicyframeworksforcultivatedmeat,andtheUS,Israel,and

Singaporeapprovedagroundbreakingfermentation-derivedanimalprotein.Butforthealternativeproteinindustrytoachieveitsfulleconomic,environmental,andfoodsecuritybenefits,governmentsneedtostepuptheirsupport.

Andtosuccessfullyexpandthissector,governmentsandalternativeproteincompaniesshouldlearnfromthelessonsthatjump-startedthegrowthoftheEVindustry.(SeeExhibit2.)

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Lesson1:InnovatetoAchieveParitywithAnimalProteins

Tocompetewithgas-poweredvehicles,EVmakershaveusedthepublicandprivateinvestmentstheyreceived

toinnovateonvehiclequalityandcost.Overtime,they’vesignificantlyclosedthegapwithtraditionalvehiclesonprice,range,andmodelselection.(SeeExhibit3.)What’smore,theyhavedeliveredcapabilitiesthat

traditionalautoslacked,includingcutting-edgeoperatingsystemsandsuperioracceleration.Suddenly,sustainabilityisnolongeratradeoff—butabonus.

:

Thatsaid,EVsareoneofthehighest-costinvestmentsthatmanycustomersmake.Carshopperso代enpurchasevehiclesa代erbrieftestdrivesandlivewiththeirdecisionforseveralyears.

Bycontrast,consumershavehundredsofopportunitieseachyeartochoosetheirpreferredproteinproductsatagrocerystoreorrestaurant.Foodchoicesarestuddedwithculturalritualandnovelty,fulfillingadistinctneedforconsumers.Thosedifferencesimpacthowalternativeproteincompaniesdesignandmarkettheir

products.

DeliveronConsumers’Needs

Bymakingtheirvehiclescompetitivewithgas-poweredcarsonprice,range,andmodelselection,themostsuccessfulEVmakershavegivenconsumerschoiceandtrustinproductquality.Thishashelpedsell

sustainabilityasan“and,”notan“or”

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Forthealternativeproteinindustrytoachievesimilarsuccess,companiesmustinnovatetocreateproductsthatmimicthebestpropertiesofanimalproteins.

Consumeradoptionofalternativeproteins

won’ttakeoffuntiltheymatchanimalproteinsintaste,texture,price,andconvenience.

Thealternativeproteinindustryneedstodeliverproductsthatdomorethanappealtoconsumers’better

natureregardingclimatechange,waterpollution,andotherethicalconcerns.Companiesmustalsoappealtotheircustomers’corefoodneeds.Thisrequiresproducerstotakeaholisticapproachthatprioritizestasteandtexturealongsideconsiderationssuchaspriceandconvenience.Thegoalistomakealternativeproteinsa

choiceratherthanacompromise.Thisway,sustainabilitybecomesasweetener,notasacrifice.

DevelopProductsThatSurpassConventionalProteins

TheevolutionofmostsuccessfulEVplayerssuchasTeslareflectsabroadervisiontomeetandexceedconsumerexpectationsforlightweightvehicleswritlarge,notjustEVs.Insteadofconcentratingonlyon

sustainability,successfulEVmakershavefocusedondeliveringgreatcarswithinnovativefeaturesnoto代enfoundintraditionalcars.ThismeansproducingEVswithalowcostofownership,activesafetyfeatures,self-drivingtechnology,andadvancedso代ware.

Similarly,themostsuccessfulalternativeproteinproducerswillbethosethatfirstdeliveronconsumers’needs—whichincludeclosingthegapintasteandprice—andthenout-innovateexistingfoodcompanies.

Technologygivesalternativeproteinmakersunboundedcreativitytoinnovateinwaysthatthemakersof

animalmeatscan’t.Thiscouldmeandevelopingproductswithadditionalbenefits,suchasenhancednutritionorwellness-promotingfunctionalingredients.

Alternativeproteinproducerscanalsousetechnologytoprovidenoveltastesandflavorscurrently

unavailabletoconsumers.Overtime,theabilityofalternativeproteinmakerstopersonalizeandcustomize

theirproductstoaddressconsumerallergies,healthconditions,andotherdietaryneedsandpreferencesmaygivethemanedgeoverconventionalproteins.

Theuniquepropertiesofplant-basedingredients—suchasfiber—canbeleveragedtohelpfillnutritionalgapsindiets,whichisanattractivepropositiontoimportant

demographicssuchasparents.

StephanieBanham-Eichner,CEOandCo-FounderofKiddiwinks

“

Lesson2:BuildaSupportivePublicSector

Publicsectorsupporthasbeencriticaltothegrowthofnoveltechnologies,fromsemiconductorsandthe

internettobiotechnology.(TheUSbiotechindustryalonenowreceivesmorethan$9billioninannualfundingjustfromtheNationalInstitutesofHealth.)This,too,wasthecasewiththeEVindustry,whichhasbenefited

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fromgovernmentsubsidiesandincentivesthathavehelpedunderwritethecostsofR&D,tooling,manufacturing,andthegrowingnationalnetworkofchargingstations.

Ambitiousdemand-,supply-andecosystem-sidepolicies—suchastheInflationReductionAct(IRA)and

InfrastructureInvestmentandJobsAct(IIJA)intheUS,thedual-creditsystemfornew-energyvehiclesinChina,andtheEuropeanUnion’sGreenDeal—haveacceleratedEVadoption.Thesepiecesoflegislationfollowa

similarfour-stepframework:governmentinvestmentandsupportprimarilyincludesettingambitioustargets,stimulatingsupply,drivingdemand,andproactivelyaddressingscale-upchallenges.(SeeExhibit4.)

:

SetAmbitiousTargets

TheEuropeanUnion’sstair-stepapproachtoreducingautoemissionsisanexampleofambitioustarget

setting.TheEU’snewCO2standardsrequireaverageemissionsfromnewcarstofall55%by2030versus1990levelsandfornewmodelstobezero-emissionsasof2035.Whilegovernmentshavecreatedafewgoals

supportingalternativeproteins,theyneedtomakemuchlargercommitmentstoestablishingambitioustargetsforcarbonreductioninthefoodsystem.

StimulateSupply

ThecatalystsforChina’sproductionofEVswerestricteremissionsstandardsandadual-creditpolicythatfinanciallyrewardedcarmakersthatmettheirEVquotas.Incontrast,governmentsupportforalternativeproteinshasbeenmoremodest.AccordingtotheGoodFoodInstitute,governmentsaroundtheworld

investedroughly$180millioninalternativeproteinR&Din2022,withmuchofthatfundingallocatedtopubliclyaccessibleresearchgrants.

Whilegovernmentsalsoprovidefinancingtosupportdomesticmarketdevelopmentandtheinfrastructureforcultivatedandfermentedfoods,morefundingisneededtodevelopandscaleupthefullspectrumof

alternativeproteins.Becausestartupsareconductingmuchoftheresearch,thebreakthroughstheyachievetendtobetreatedasproprietary.Governmentscanplayarolebyfundingopen-accessresearchthathelpsalternativeproteinmakerscollectivelyachievescale.

DriveDemand

Governmentscanalsostimulatedemandbyenactingregulationsthataidcompaniesinbringinginnovativeproteinstomarket.Forinstance,ChinesepolicymakershelpedreigniteEVdemandduringthepandemicwithgenerouspurchasecreditsonthenationalandlocallevels,aswellasstreamlinedlicenseplateregistration

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processesforEVs(comparedwithinternalcombustionvehicles).Whilegovernmentshaveimplemented

programstolowerthepricesofEVs—stokingconsumeradoption—manyalternativeproteincompaniesarestillnavigatingthepathtomarket.Butastheindustrygrowsandapplicationsformarketapprovalincrease,governmentsmustbepreparedtoevaluatealternativeproductsquickly.

Mostalternativeproteinresearchhasfocusedonimprovingtaste,price,andtexture—allareaswhere

conventionalanimalproductsstillenjoyanadvantage.Moreworkmustbedonetoaddressotherareas

importanttofoodchoices,includingfactorssuchashealthandvariety.TheEuropeanUnion,ledbyGermany,isfundingresearchtoimprovetheavailability,sensoryproperties,andnutritionalbenefitsofalternative

proteins.

AddressScale-UpChallengesandLaborConcerns

Onemainchallengeforanyemergingindustryistocreatethepublicinfrastructurethatmaybeneededtosupportitsproducts.Inearly2023,USpolicymakersgavetheEVindustryaboostbyprovidingupto$7.5billioninpublic(IIJA)fundingtobuildmoreEVchargingstations.Inadditiontoitsowncharging-station

initiative,theChinesegovernmentalsohelpedEVmanufacturersaddressshortagesofskilledworkersbydevelopingaGerman-stylevocationaleducationsystem.

ThealternativeproteinindustrycantakeapagefromtheUSandChineseEVindustriesbyhelpingstartupsbuildmorelabsandadddemonstration-scalecapacity.TheEUhastakenthatstepbyfundingBioBase

EuropeinBelgium,apilotmanufacturingfacilityforinnovativebio-basedproductsandprocesses.ProactivemeasureslikethiswillhelpWesterneconomiesremaincompetitiveinthetransitiontoalternativeproteins.ThegovernmentofSingaporeoffersvaluablesupporttotheindustryaswell.(See“Singapore’sAlternativeProteinPoliciesServeasanInspirationforGovernmentsWorldwide”)

SINGAPORE’SALTERNATIVEPROTEINPOLICIESSERVEASANINSPIRATIONFORGOVERNMENTSWORLDWIDE

Singaporeprovidesstrongpublicsupportforalternativeproteins,particularlyinresearchandinfrastructurefunding.Thecountry’salternativeproteinpolicycanbemappedtothesamefour-stepframeworkasEVs.

Setambitioustargets.AlternativeproteinscanplayaroleinhelpingSingaporeachieveitsambitious“30by30”goal—producingatleast30%ofitsnutritionalneedsdomesticallyby2030—andmakingitsfoodsupplychainmoreresilient.

Stimulatesupply.Singaporehasdedicated$107milliontofundR&Dforalternativeproteins,includingprojectstoimprovethenutrition,taste,andtextureofplant-basedproteinsproduceddomestically.

Drivedemand.TheSingaporeFoodAgency(SFA)haspioneeredaregulatoryframeworkfor

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cultivatedandmicroorganism-basedmeats.TheSFAchangedtheapprovalprocess,

requiringalternativeproteinmakerstoseekpremarketapprovalofproductsthatdonot

haveahistoryofbeingconsumedasfood.Companiesmustsubmittestresultsaddressingpotentialriskssuchastoxicityandallergenicity,aswellasdetailsoftheirmanufacturingprocesses.Thispreapprovalprocessisdesignedtogiveconsumersconfidenceinthesafetyofalternativeproteins.

Addressscale-upchallenges.Singaporeisbuildingitsproductioncapacitybyhelping

startupsfundtheconstructionofsharedlaboratoryandproductionspaces.Thisincludesa$21millioninvestmentintheFoodTechInnovationCentre,whichwillprovideupto10,000litersofcapacityformicrobialfermentation.Inaddition,academicinstitutionsinSingaporehavebeenworkingwithindustrypartnerstodevelopshortcoursestotrainadultlearners

andcareerswitchersforjobsintheplant-basedmeatindustry.

Lesson3:BoostPublicandPrivateInvestment

Therecord$635millionthatgovernmentsinvestedin2022tosupportresearch,development,andproductionofalternativeproteinsisstillafractionofwhattheindustryneedstothrive.A2021BCGanalysisfoundthat

nearly$30billionand$11billion,respectively,arerequiredworldwidejusttobuildthecriticalbioreactorsandextrusioncapacitytoproducesausagelinks,patties,andotherproductsaffordably.Theindustry’spublic

fundinglevelsstandincontrasttotheEVsector:theUSbipartisanIIJAenactedinlate2021included$7.5billiontohelpsubsidizethebuildoutofanationalEVchargingnetwork.

Similarly,privatecapitalforalternativeproteinslagsothersectors.Accordingtotheventurecapitalfirm

AgFunder,VCfundingforthe“innovativefoods”categoryfell51%,to$1.6billionin2023—bringingfundingdowntopre-COVIDlevels.(Thisgapislikelyevenlargerwhenconsideringnon-VCfunding.)

Thesuccessofelectricvehiclesshowshowfastpublicandprivateinvestmentcancatalyzegreeninnovation.Forward-thinkinggovernmentsandfoodcompaniesnowhavetheopportunitytoreplicatethatsuccessforalternativeproteins.

LewisBollard,ProgramDirectorforOpenPhilanthropy

“

LikeEVs,alternativeproteinsrequirealotofcapitaltoresearchandproduceatscale.JustasEVmakers

neededtoinvestheavilyintooling,so代waredevelopment,andemergingbatterytechnologiestosucceed,

alternativeproteincompaniesrequirefundingtocontinueresearchingnewfoodtechnologies,includingcell

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culturesandprecisionfermentation.Theyalsoneedsupporttoidentify,develop,andbuildindustrial-scalemanufacturingprocessesandfacilitiesfortexturizing,extruding,and,insomecases,3Dprintingproteins.

PublicandprivateEVfundingisallocatedacrosstheend-to-endvaluechain—fromrawmaterialminingtoEV

charging.Bycomparison,thefundinglandscapeforalternativeproteinsischaracterizedbyinvestmentwhitespace.(SeeExhibit5.)Still,asalternativeproteincompaniesseektosecurefunding,theycanapplylessonslearnedfromtheearlierexperienceoftheEVindustry.

:

AllocateDollarsAcrosstheValueChain

Buildingresilientsupplychainsrequirescompaniestoinvestinthevaluechainfromendtoend.By

supportingthefullspectrumofactivities—fromearlyresearchandinfrastructuresupporttoingredient

sourcingandconsumersales—stakeholderscancreateefficiencies,avoidbottlenecks,andcutcostsenoughtoensurethatalternativeproteinsareaccessibletoawideraudience.

DeliverPublicandPrivateFundingtoJump-StartR&D

Securingbothpublicandprivatefundingiscriticaltoconducthigh-risk,early-stageresearch.Publicfundingsuchasgrantsandsubsidiescanhelpsupportfoundationalresearchandpilotprojects.Accordingtoa2023articleinMITTechnologyReview,the$29billionthattheChinesegovernmentpouredintorelevantcreditsandtaxbreaksfrom2009to2022enableditsnascentEVindustrytobecomethegloballeader.

Thistypeofgovernmentsupportattractsprivateinvestmenttofundproduction,distribution,marketing,and

othercorebusinessfunctions.Adualpublic-privatefundingapproachcouldalsohelpbuildmarketconfidence

inalternativeproteincompanies.Initiativescouldincludegovernment-backedresearchinstitutions

collaboratingwithstartupsonR&Dprojectsorpublic-privatepartnershipstofundinfrastructurethatsupportsalternativeproteinproductionanddistribution.

TheRoadAhead

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Alternativeproteinsofferasustainableandethicalsubstituteforindustriallivestockfarming,withfewer

carbonemissions,lessthreattobiodiversity,andnocontributiontoantibioticresistanceandpandemicrisk.Withtheincreasingthreatofclimatechange,it’smorecrucialthanevertoprioritizereducingtheagriculturalsector’scarbonfootprintandloweringitsenvironmentalimpact.Andasclimatechangedisruptstraditionalagricultureandasgrowingglobalpopulationsconsumemoremeat,arobustalternativeproteinindustry

couldincreasecountries’foodsecurity.

Whilethealternativeproteinspace,especiallywithregardtocultivatedmeats,hasseenheavycriticismoverthepastfewmonths,itisworthnotingthatthefieldhas

seenmoretechnologicaladvancementsandcostreductionsthanmostother

disruptivetechnologiesoverthesamedurationoftime.Assuch,thoughtheinitialprojectsfromcompanieswereover-zealous,theactualimpactoftheindustryshouldnotbesidelined.

Dr.ViknishKrishnan-Kutty,FounderandCEOofCellivateTechnologies

“

Governments,investors,incumbentfoodcompanies,andalternativeproteincompaniesshouldembraceandacceleratethetransformationbytakingtheseactions.

Governments

Buildsupportivepublicpolicythatleveragesthefour-stepframeworktoactasacatalystforalternative

proteininnovation.PolicymakerscanhelpcompaniesfundR&D,securerawmaterials,andbuildproductionprocessesandinfrastructure;thiswillhelptheindustryachievethescaleitneedstoreachpriceparitywith

animalproteins.(See“KeyChallengesforAlternativeProteins”)

KEYCHALLENGESFORALTERNATIVEPROTEINS

TherapidgrowthoftheEVindustryincreaseddemandforcriticalmineralsusedtoproducebatteriesandelectroniccomponents,creatinghurdlestoscalingproductionandbuilding

chargingstations.Anticipatingsuchbottleneckswillbecriticaltothelong-termadoptionofalternativeproteins—andrawmaterialsavailabilitycouldpresentasimilarbottleneckin

thisindustryaswell.

Producerswillneedtoworkthroughongoing

supplyshortages

inkeyingredientsassuppliers

rampuptomeetthegrowingdemandsofalternativeproteinmakers.Thisincludescoconutoilandpeaproteinforplant-basedalternatives,fermentationfeedstock(forexample,

glucose,nitrogen)formicroorganism-basedproteins,andalbuminproteinforcultivatedmeat.

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Theseconstraintsmayaffectmanyalternativeproteincompanies,thoughtheimpactforeachdependsontheunderlyingtechnologies,productionefficiencies,andmarket

penetrationfordifferenttypesofalternativeproteins.Forexample,priceisaprimary

challengeforcultivatedmeatproductionowingtocellmediaingredientcostsandthe

difficultiesofscalingproduction,whilemeetingconsumerexpectationsontasteandtextureisamorecriticalconcernforplant-basedmeat.

Acombinationoftechnologybreakthroughs,stateandfederalfundingtostimulateresearch,

andthebuildoutofinfrastructurehashelpedEVsachievecriticalmass.Asimilarapproachcouldhelpalternativeproteinsachievetheirowneconomiesofscale.Forexample,BCG

identifiedthreekeystousing

commercialbiomanufacturing

toreachcostparitywith

traditionalmethodsoffoodproduction:theabilitytodigitallyengineerstrains,scale

productionto2millionlitersofworkingcapacityperfacility,andsparkconsumerdemand.

Accomplishingthesegoalswouldreduceproductioncostsbyupto90%—enoughtomeetorexceedpriceparitywithincumbentfoodproducts.

Investors

Channelinvestmentdollarsacrossthevaluechaintoincreaseadoption.EncouragecompaniestodevotesufficientresourcestoinnovationinR&Dthatnarrowsthegapwithconventionalproteinsandpositionsproductsforsustainedconsumeruptake.

IncumbentFoodCompanies

Innovateearlytogainasignificantcompetitiveedgebysettingalternativeproteinindustrystandards—andresettingcustomerexpectationsforalternativeproteins.

AlternativeProteinCompanies

Unveilproductsthatappealtocoreconsumern