The alternative protein sector is not just a profitable investment opportunity, but also crucial to helping the world achieve net zero targets, a senior executive at Temasek said at the Asian Financial Forum earlier this week.
“Temasek has been an early investor in the alternate protein space. We have invested in several companies such as Impossible Foods, Perfect Day, Olive Farms, and most recently Upside Foods. [We have also invested in] the cell-based protein production space,” said Anuj Maheshwari, managing director and head of AgriFood at Singapore state investment firm Temasek, which manages more than $280 billion in assets.
Cell-based proteins involve taking cells from animals and replicating them to produce actual animal proteins, or meat, for human consumption — all without the need to raise and slaughter any animals.
In addition to being an investor, Temasek sees a major need to work with food tech companies and food tech startups to help them scale up their businesses, especially in Asia. It launched the Asia Sustainable Foods platform late last year precisely for this purpose.
“We also announced a joint venture with ADM on microbial protein scale up, as well as with Cremer, a German AgriFood company focused on plant-based proteins, in order to sort of scale up growth in the sector,” he added.
DOUBLING IN DEMAND
While Temasek has made investments into sustainable food production around the world, most of their investments in the sector have focused on locating opportunities within the context of Asia and the developing world.
A recent report by PwC, Rabobank, and Temasek estimates that in Asia alone, food demand is going to double in the next 10 years, and the food consumption market will grow from $4 trillion to $8 trillion.
“This growth will not just be driven by the number of mouths that we need to feed, which is expected to grow by as much as 250 million, or the size of Indonesia, but [also by] food habits that are changing considerably in Asia,” said Maheshwari.
According to Maheshwari, consumer habits are moving towards healthier and more sustainable diets, as well as trends like online buying.
“There is a fundamental shift that's happening in the food sector in India, along with a significant growth that we are seeing around that as well. We feel this is a phenomenal opportunity to not just achieve something from a social impact perspective, but also from an environmental perspective,” he said.
EYE ON ASIA
While consumer demand varies across different geographies, one of the most prominent trends that Temasek has discovered is consumer desire in decreasing meat consumption. As many as one in four consumers who were surveyed across Asia reported that they wanted to decrease their animal protein consumption and move towards more sustainable sources. This number was even higher in China, where one in two consumers wanted to reduce their animal-sourced protein.
“We're seeing these kinds of shifts in consumer behavior, which is allowing us to back companies that are creating products suitable for the market, and Asia obviously has a long history of consuming plant-based proteins,” said Maheshwari.
“If you look at a market like India, the basic protein is really from lentils, and in places like China, tofu and beancurd are a very common source. So we believe that that's definitely going to be a trend going forward, in terms of greater consumption of plant-based and alternate proteins,” he added.
A SUSTAINABLE NEXT NORMAL
This year’s Asian Financial Forum was focused on “navigating the next normal towards a sustainable future” — and innovation in food production and agriculture is a core component of building this sustainable future, according to the speakers.
Food production and agriculture are not only good investments from an impact standpoint; they will also prove to be very lucrative investments in the near future, they said.
The world’s population is expected to grow to almost 10 billion by 2050, boosting agricultural demand by some 50 percent compared to 2013, in a scenario of modest economic growth, according to data from the Food and Agriculture Organisation of the United Nations.
“At the end of the day, it all boils down to feeding people. When we look forward to 2050, there are going to be an exceptionally large number of people on this planet to feed, and current systems are not going to be able to feed them,” said Monila Kothari, Apac President at Givaudan Taste and Wellbeing.
“If you look in terms of the consumption of protein, it’s going to be up by 70%. Now, all of us know that animal protein alone will not be able to fulfill this demand. Therefore, there is an urgent need for us to be able to develop, enable other sources of protein,” said Kothari.