New Report: $16bn Invested in US Plant-Based Protein Market Since 2009

Alternative dairy products are leading the way while mainstream restaurants start to add plant-based burgers to their menus.

Plant-based protein alternative companies have attracted $16 billion in investment during the last 10 years, including venture capital funding and acquisitions. In 2017 and 2018 alone, some $13 billion was invested in the category, according to new reports from The Good Food Institute.

Last year, investors poured $673 million of investment into alternative meat, egg, and dairy startups led by Impossible Foods’ $189 million late-stage VC round. This was followed by Ripple’s $65 million Series C round, Beyond Meat’s $50 million Series H round, and Califia Farms’ $50 million private equity round.

The number of plant-based deals saw a 39% increase to 46 during 2018 compared to 2017.

One explanation for the increasing investor interest could be the uptick in retail sales of plant-based meat, which grew 23% between 2017 and 2018 and exceeded $760 million.

Consumers are showing a clear appetite for plant-based products and fast food chains like Carl’s Jr., Red Robin, and White Castle have started adding products from Impossible Foods and Beyond Meat to their menus. Beyond Meat started selling at Safeway and Kroger as early as 2017, while competitor Impossible Foods is making its supermarket debut this year.

The largest and most developed plant-based category is plant-based milk, which accounts for $1.8 billion in sales and represents 13% of the total US retail milk market. If plant-based meat reaches market share parity with plant-based milk, the market could be worth more than $10 billion.

Some traditional dairy producers have taken issue with the alternatives market, however, supporting legislation in certain states that would prohibit alternative companies from using terms like dairy or milk on their labels.

Plant-Based Protein IPOs & Acquisitions

The sector is also reaching some maturity milestones including Beyond Meat’s stellar IPO last week, when it raised $240m at a valuation of $1.46 billion, pricing the deal at the top of an increased price range. It later surged 135% in its stock market debut valuing the company as high as $3.52 billion and at one point was trading around $62 a share.

Venture investors in Beyond Meat will be keenly watching the stock price for the next 180 days after which they will be able to sell their stakes and calculate their returns. They include S2G Ventures, Powerplant Ventures, Bill Gates, Leonardo Dicaprio, and former McDonald’s CEO Don Thompson.

Next to Beyond Meat’s IPOs, there have been 19 acquisitions in the space since 2009, with over half of those deals taking place during 2017 and 2018 alone. The biggest acquisition took place in 2017 when Danone acquired plant-based milk maker WhiteWave Foods for $12.5 billion.

Cell-Cultured Meat Also Picks Up Pace

In the cell-cultured meat space, 2018 was also a banner year. GFI found 12 cell-based meat companies raised capital worth $50 million in 14 deals. This was double the capital invested in 2015, 2016, and 2017 combined. At the end of 2018, a total of $73 million in capital had been invested since the field emerged as a commercial industry in 2015. In 2018, 11 new cell-based meat companies were founded, bringing the total number of companies to publicly announce themselves to 27.

The biggest question circulating in the lab-grown meat world is when products may become commercially available. The three best-funded cultured meat startups, Memphis Meats, CUBIQ Foods, and Mosa Meat, have all announced that they expect to start selling products in 2021.

Consumer interest in cell-based meat is already strong, with a 2018 survey of 3,030 consumers finding that 30% of U.S. consumers, 59% of Chinese consumers, and 50% of Indian consumers were very or extremely likely to purchase cell-based meat regularly.

Find out why AgFunder Founding Partner thinks the plant-based meat category has more potential here.