Following the release of DigitalFoodLab’s AgriFoodTech trends report, we continue the discussion with a focus on one of the most debated, and in my opinion, also one of the most misunderstood, parts of the innovation ecosystem: sustainable ingredients, too often reduced to alternative proteins.
This topic often triggers emotional reactions, as the idea of changing the source of what we eat, especially animal proteins, can be perceived by many as an attack on their values. Rather than revisiting why creating alternatives to animal proteins and other climate- or health-damaging ingredients (including cacao, coffee, and sugar) is a good idea, which we have already done many times, notably for meat and for coffee, we will focus on a more operational question: how are the different technological approaches actually performing today, and what does that mean for corporate innovation strategies?
From “the best overall technology” to a “set of solutions”
DigitalFoodLab maps eight approaches to developing sustainable ingredients. Increasingly, the question is less about which is the « overall best » and more about which works best for a specific application, geography and regulatory context. There won’t be a standalone technology that will solve all our challenges.
Even more, in many instances, it appears that the “solution” will be a hybrid mix of mostly plant-based products combined with small quantities of ingredients from fermentation, cellular agriculture or other approaches.
A decade in, but still in the early-stages
After more than a decade, with the creation of thousands of ventures and billions invested, concrete results remain limited. The gap between ambition and what has been delivered is forcing a somewhat brutal repositioning of the innovation ecosystem towards simpler, achievable goals.
Indeed, as shown on the trends curve, no single category is ready for the mass market. Instead, there are two groups, answering each other.
1 – Former stars under pressure: built on the promise of replacing bulk proteins and pivoting towards profitability at a limited scale
These biotechnologies that we have been talking about for years, from cellular agriculture to precision fermentation, are all struggling. Consolidation is underway, with bankruptcies being announced almost weekly. However, that’s far from the end of the story. It rather reflects a strategic pivot:
- away from bulk proteins (producing meat, dairy or seafood alternatives)
- towards high-value functional and health-driven ingredients.
This shift is painful but quite logical: as access to capital dried up, it appeared that the road to scalability for bulk proteins, which would require additional billions, wasn’t viable anymore. Most players are now focused on niche, high-value ingredients, which require limited volumes and can be scaled using existing infrastructure.
This pivot of a large share of the ecosystem is much more successful than often perceived, with some ingredients, notably those with health benefits (such as lactoferrin or new sweeteners), being ready for adoption. For the rest of the ecosystem, consolidation is almost complete, with most categories and applications seeing one or two leaders emerge. Now, they will have to demonstrate their market potential and technical ability to scale.
2 – New wave of technologies focused on scalability and availability challenges
As scepticism about the scalability of alternative proteins grew, a new wave of approaches is emerging: plant cell culture, protein discovery, and molecular farming.
All these technologies are addressing the scalability limitations of precision fermentation, plant-based, cellular agriculture, and biomass fermentation. Indeed, if precision fermentation players struggle to scale in larger bioreactors and the cost of facilities is too high, why not use plants as bioreactors (as molecular farming players intend to do)?
Among them, plant-cell culture stands out in the short term:
- fewer technical and regulatory hurdles,
- great economic incentives due to shortages in coffee and cacao supplies.
- a surge in corporate engagement in under 12 months.
This can be seen on the radar below with an impressive array of corporate leaders who have already got involved in just a year.
What this means for corporates
It would be easy to dismiss sustainable ingredients as “not ready”; that would be a mistake.
Leading corporations are increasingly engaged on these topics, notably through recently announced scale-up and commercialisation partnerships. Interest is, however, unequally distributed with:
- Rising engagement around precision fermentation topics: while the number of partnerships is increasing, it remains a bit scattered, and still few « concrete » visible results.
- High appetite for plant-cell culture, with most of the corporate leaders in the cocoa industry now engaged with startups and universities.
- Still, low levels of engagement on promising and long-term technologies like molecular farming, protein discovery and cellular agriculture.
Now is the moment to clarify what belongs on your innovation radar, and to act on it
Looking at the curve, it would be easy to dismiss most of the technologies presented as still irrelevant. However, innovation is still moving forward much faster than anticipated, despite the reduction in capital invested. Many ventures are on the brink of reaching price parity, some are ramping up production, and others are preparing to (finally) put their products in consumers’ hands.
For leading companies, seeing their peers now seriously engaged through partnerships and commercial distribution deals, often backed by investments, should be a sign that now is the time to determine what is at the centre of their own innovation radar and then to get involved. This is reinforced by the fact that most sub-categories (the intersection of a technology with an application, such as precision fermentation applied to egg white proteins) are being consolidated around one or two players, which is limiting the number of “targets”.
In a word, we remain highly optimistic about the long-term potential of sustainable ingredients: as is often the case with innovations that can create systemic change, short-term impact is overestimated while long-term impact is widely underestimated.
