Food giants investing ‘record amounts’ in plant-based protein, investor report reveals
The initiative, supported by investors collectively managing $68trn of assets, has today (26 October) published a report detailing its engagement with almost two-dozen large food and drink firms including ingredient suppliers, manufacturers and retailers, on the topic of protein diversification. FAIRR advocates for protein diversification as a means of reducing risk in the sector, including risks such as antibiotic resistance and climate risk.
The report reveals that 35% of the 23 businesses now have a time-bound, numerical target to increase sales of meat and dairy alternatives, up from 28% this time last year. One of the firms to have set a target this year is Ahold Delhaize’s Dutch supermarket brand Albert Heijn, which is now aiming for 60% of protein sales to be plant-based by 2030. Also praised in the report in Conagra Brands, the US-based company producing brands including Slim Jim, Gardein, Hunts and Reddi Whip.
Promisingly, the report also revealed that many companies are now able to offer plant-based alternatives to meat and dairy products at a similar price point. It states that Tesco’s ‘Plant Chef’ ready meal range is 11.6% cheaper than the supermarket’s own-brand ready meals including meat, for example. Similarly, Walmart now offers alternative proteins in its ‘Great Value’ own-brand line.
In the context of rising food prices this year, FAIRR has documented a 6% increase for meat and just a 3% increase for plant-based meat alternatives.
FAIRR believes that plant-based products will reach cost parity with meat and dairy alternatives in 2023 at the earliest and by 2031 at the latest. It is also expecting major breakthroughs in taste and texture this decade.
“Combined with inflation that is driving the price of traditional meat and dairy up at a quicker rate than alternatives, we are starting to see a world where plant-based meat and dairy is just as affordable as conventional animal-based products,” said FAIRR chair and founder Jeremy Coller.
Nonetheless, there are concerns that some brands will not be increasing their investment in alternative proteins as economic concerns continue to bite. Brands will also doubtless be seeing media coverage of challenger brands that are deemed to have expanded too rapidly, such as Beyond Meat.
FAIRR found that around half of the companies assessed are likely to maintain, rather than accelerate, their work on product research and development as well as on broader climate risk mitigation.
Despite this increased investment in alternative proteins, FAIRR is concerned that many firms are not seeing protein diversification as a means of minimising climate impact and risk.
The report also raises questions over the ambition and credibility of net-zero targets in the sector. It states that 16 of the 23 companies have publicly stated net-zero targets, but only five (Ahold Delhaize, Unilever, Tesco, Nestle and Marks & Spencer (M&S)) have targets covering Scope 3 (indirect) emissions. On average, 94% of the total emissions of each company engaged by FAIRR are Scope 3, making this a crucial element of climate action.
The report notes that most of the companies (65%) have 2030 climate targets approved by the Science-Based Targets Initiative (SBTi). With the SBTi set to increase its minimum requirements from alignment with a 2C pathway to a 1.5C pathway, the report calls on companies with 2C targets – Unilever and Groupe Casino – to update their targets as a priority. But it believes all food companies should revisit their Scope 3 emissions targets.
Companies named as laggards in engagement with FAIRR on climate-related issues are Costco, Amazon, Coles, Grupo Nutresa, Krogerand Saputo. Additionally, Walmart and Hershey are named as weak performers in terms of engaging consumers with the need to change dietary habits.
Fund for thought
In related news, the Global Alliance for the Future of Food is urging the Egyptian COP presidency to recognise the importance of food systems in climate mitigation and adaptation. There will be a day dedicated to food on the agenda this time around.
The Alliance has released a report stating that just 3% of public climate finance provided globally goes to food systems, despite the fact that agriculture and food waste are significant sources of emissions and that food systems will experience climate shocks in a warming world.
The report states that an estimated $300-350bn each year is needed annually to make food systems sustainable and climate resilient. It argues that this money could be found by redirecting farming subsidies which encourage the exploitation of nature.
Without a major scaling up of funding, the report warns, food systems emissions will jeapordise the Paris Agreement and undermine efforts to halt and reverse biodiversity loss.
The Alliance’s climate programme director Patty Fong summarised: “Food systems transformation is critical to ensure food security, improve health, protect biodiversity, and prevent a climate catastrophe. Governments at COP27 must raise their ambition on food and farming, including by boosting finance available to lower-income countries.”
Source edieOctober 27, 2022