Food for Thought: The Protein Transformation by BCG MARCH 24, 2021 By Benjamin Morach, Björn Witte, Decker Walker, Elfrun von Koeller, Friederike Grosse-Holz, Jürgen Rogg, Michael Brigl, Nico Dehnert, Przemek Obloj, Sedef Koktenturk, and Ulrik Schulze
The world’s consumers love animal-based protein, so much so that in 2020 they ate 574 million metric tons’ worth of meat, seafood, dairy, and eggs, almost 75 kilograms per person. Moreover, the amount consumed is still increasing, especially in developing markets. Yet concerns about the environmental costs of growing all the animals we eat, how those animals are treated, and the consequences for human health of eating so much conventional protein are rising even faster.
However, we see today only the beginning of the protein transformation. By 2035, after alternative proteins reach full parity in taste, texture, and price with conventional animal proteins, 11% of all the meat, seafood, eggs, and dairy eaten around the globe is very likely to be alternatives. With a push from regulators and step changes in technology, that number could reach 22% in 2035. By then, Europe and North America will have reached the point of “peak meat,” and consumption of animal proteins will begin to decline.
The investment perspective
Regardless of whether any of these alternative scenarios come to pass, substantial capital must be invested across the protein value chain to support the protein transformation. The extrusion capacity needed for plant-based proteins, for example, will require up to $11 billion to reach the baseline case of 11% adoption by 2035 and as much as $28 billion if the greatest upside scenario happens. Almost 30 million tons of bioreactor capacity for microorganisms and animal cells will also be needed in the base case, requiring up to $30 billion in investment capital—and far more in either of the upside scenarios. These are just two of the technologies required to unlock the market’s growth; the total capital needed will likely be much higher.