The COVID-19 outbreak has triggered an unprecedented health and economic crisis. As well as affecting every country in the world, this novel virus has…
Phase 4 of the Sustain Proteins engagement closed in July 2020 and the full results have been made available in the Sustainable Proteins Hub.
The target 25 global food retailers and manufacturer have disclosed information on their use of protein diversification as both a driver of growth and a tool to mitigate climate risk. Not only do our findings highlight a surge in venture investment towards alternative proteins, but also a significant shift in global diets amid the worldwide health and environmental crisis brought about by the COVID-19 pandemic.
Alternative proteins are now big business and driving growth in the food sector. For investors, an expanding alternative protein portfolio is a lever for growth. More importantly, it is a fundamental and necessary component to manage a company’s exposure to the most material ESG risk facing the food sector. A sole focus on supply chains, which is isolated from portfolio composition, will result in greater capital investment to address risks as demand for meat, dairy and fish continues to grow.
Companies must complement their supply chain interventions with a systematic transition to ensure their protein portfolio results in better health outcomes and is in line with planetary boundaries.
What is protein diversification?
A protein diversification strategy cannot merely focus on adding a few alternative protein products to a company’s current portfolio. It requires companies to develop a comprehensive strategy to expand product development and research, explore the applicability of new food technologies and acquisitions, leverage their marketing power to influence consumers to embrace new products, and engage their supplier community to mitigate impacts on farmer livelihoods. To undertake such a transformation, companies must:
- Evaluate their current exposure to animal proteins and the risk profile of these supply chains
- Assess the strategic implications of growth plans that are predicated on a higher reliance on animal proteins (through scenario analysis).
- Commit at the highest level to transitioning their global business model to less resource-intensive food products
- Develop a cross-functional strategy (involving R&D, marketing, sustainable sourcing) to undertake a transition
- Set clear goals and timelines to achieve a transition
- Report on the right metrics to evaluate portfolio transition
Explore the findings from the latest (2020) report in our interactive Sustainable Proteins Hub. Here, investors can compare and assess the progress of the 25 companies within the engagement.
Previous reports show the evolution of companies involved in the Sustainable Proteins engagement, which continues to provide industry insights and challenge companies to diversify protein sources and build climate-aligned portfolios.
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Investor Members can log into FAIRR’s investor portal to download the full report and access individual company-level analysis.