Tesco and Nestlé are said to be ‘best positioned’ to benefit from a transition to alternative plant-based proteins, according to an analysis of 16 multinational companies.
The new report, entitled Plant-based Profits, backed by a $2.4 trillion coalition of 57 large investors, highlights projections that the market for alternative proteins, including innovative foods such as the ‘Impossible Burger’, is set to expand at a compound annual growth rate of 8.29% in the next four years, and could reach $5.2 billion by 2020.
It has also urged global food companies to diversify their protein sourcing away from a reliance on animal proteins.
The investor coalition is coordinated by the FAIRR initiative, founded by private equity pioneer Jeremy Coller, and includes pension funds such as AP2, AP3 and AP4 and institutional investors such as Aegon, Aviva Investors, Coller Capital and Nordea.
The 16 multinationals were evaluated on areas such as business strategy, monitoring processes, R&D investment levels and consumer engagement to understand how companies are positioned to capitalise on the rising demand for alternative proteins.
The report has found that all companies market at least “one own-brand alternative protein product”, with Nestlé and Tesco being the “best prepared”.
In addition, three companies have set some type of goals to increase their portfolio of alternative proteins (M&S, Nestlé and Unilever), while all companies lack what it calls a “coherent strategy for how to market and promote alternative protein products on supermarket shelves to drive sales”.
Tesco and Nestlé were praised for their livestock emission targets, investor engagement, monitoring and innovative consumer marketing.
On the other hand, Costco and Whole Foods were both criticised for reportedly “failing to adequately respond to investor requests for information or further meetings”.
Coller, founder of the FAIRR Initiative and CIO of Coller Capital, stated: “From meatpackers to supermarket stackers the global food sector is rapidly taking notice of plant-based alternatives to animal protein products, and that is driving 8% annual growth in the alternative proteins market.
“It’s significant that all of the food producers and retailers engaged by investors now market at least one own-brand alternative protein product.”
Sasja Beslik, head of group sustainable finance, Nordea, added: “Sustainable protein is a fast-emerging issue for the food industry, and it is important for long-term investors to know if the companies they invest in understand the related risks and opportunities.
“FAIRR’s sustainable protein engagement offers practical guidance to companies to ensure they have a business strategy that is robust enough to respond to a changing food supply chain.”
