Capitalizing on "a global shift in meat production," investors have put more than $16 billion into U.S. plant-based and cell-based meat companies in the past 10 years — $13 billion of it in 2017 and 2018. That's according to two reports released Monday from The Good Food Institute.
There's also been a spike in acquisitions and new companies, the institute noted. Of the 19 acquisitions of plant-based companies since 2009, 10 occurred in the past two years, the report said. The largest is Danone's purchase of WhiteWave Foods in 2017 for $12.5 billion.
Last year, $673 million was invested in plant-based meat, egg, and dairy companies, the report said. The largest minority investment was toward Impossible Foods' $189 million late-stage VC round, which included $50 million in earlier debt financing. Following that were Ripple's $65 million Series C round, Beyond Meat's $50 million Series H round, and Califia Farms' $50 million private equity round, the report said.
Global cell-based meat companies saw a flurry of activity last year, the institute found, with 12 firms raising $50 million in 14 deals. Memphis Meats led the pack with $22 million, including funds from Tyson Foods and Cargill. Spain's CUBIQ Foods raised $14 million and Netherlands-based Mosa Meat attracted $9 million. That was double the investment in three previous years, the report said. Also last year, 11 cell-based meat companies were established, for a total of 27.
The Good Food Institute noted changing consumer attitudes and the boost in sales of plant-based meat alternatives are driving these investments.
"Investors and entrepreneurs are capitalizing on a global shift in the way meat is produced. The market opportunity here is massive," Executive Director Bruce Friedrich said in a statement.
Retail sales of plant-based meat products jumped 23% between 2017 and 2018 to more than $760 million, according to Nielsen data the institute compiled. In the same time period, total U.S. retail food sales increased 2%. The Good Food Institute reported U.S. retail sales of plant-based foods replacing animal products — as defined by the institute — climbed 17% to exceed $3.7 billion in the past year. Adding in SPINS sales data for plant-based products in the natural channel, the plant-based market totals more than $4.1 billion.
Consumers reduce or eliminate animal products from their diet for many reasons. Some want to cut back on cholesterol, add protein and emphasize clean eating. Others are concerned about animal welfare, and some worry about sustainability and the effect of animal agriculture on the environment. Regardless, more people are shifting to flexitarian, vegetarian or vegan diets.
Should these trends continue at the current pace, it's likely more food companies will join the plant-based and cell-cultured meat segments. Already big food brands — including meat processors — have gotten into plant-based products to appeal to consumers and bolster balance sheets.
One is Tyson Foods, which sold its share in Beyond Meat and plans to launch meatless protein products this summer. Nestlé will roll out its plant-based Garden Gourmet Incredible Burger in Europe this spring and in the U.S. by summer, and said it will introduce a cook-from-raw plant-based Awesome Burger this fall in the U.S. under its Sweet Earth Brand. Laurent Freixe, CEO of Nestle Americas, anticipates the company's plant-based business could hit $1 billion in sales within 10 years, according to Bloomberg. Add in Beyond Meat's recent IPO, which shattered expectations, and these developments signal a thriving future for plant-based meat alternatives.
What's next for cell-cultured meat is an open question. Currently, a handful of companies are racing to be first to market with affordable beef, chicken, fish or crustacean products consumers will buy and enjoy in place of conventional ones. However, they may have to position their products as "innovative, humane luxuries worth the steep price tags," The Wall Street Journal reported.
Consumer education and acceptance will be key. The Good Food Institute said research it collaborated on with the University of Bath and the Center for Long Term Priorities found 30% of U.S. consumers, 59% of Chinese ones, and 49% of Indian ones were very likely or extremely likely to regularly purchase cell-based meat. The group's conclusion was that "Interest in clean meat is expected to grow once there is a product on the market and consumers are more familiar with it."