Three things on alternative proteins

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The alternative proteins market has been through a difficult reset. After a period of high expectations and significant investment, consumption slowed, funding became harder to secure and the sector went through a major shakeout.

But the underlying drivers have not disappeared. Consumers are still looking for alternatives to animal protein, driven by health, sustainability and animal welfare considerations. The challenge is that they need better products, and the industry is beginning to respond.

Three things to know about the sector

1. The core demand drivers remain strong

Consumers remain interested in reducing their reliance on animal protein, particularly where alternatives can meet expectations on taste, nutrition, convenience and price. The appetite is still there, but the bar is higher.

2. Product quality is improving

The industry is responding to earlier consumer concerns with better tasting, more versatile products and cleaner labels. This is important for rebuilding demand and moving the category beyond early adopters.

3. New tailwinds are emerging

Government programs in markets such as the Netherlands, Denmark and the UK are encouraging greater uptake of plant-based options. Large corporates are also looking at plant-based products as one way to support carbon reduction goals.

In summary

Alternative proteins may no longer be riding the same wave of hype, but the sector still has clear structural drivers. The businesses best placed for the next phase will be those that combine stronger products with a clear understanding of changing consumer, corporate and policy demand.

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