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European alternative protein sector investment rises 23%

Privately held European alternative protein companies raised $509 million (€470 million) in capital in 2024, 23% more than the previous year, figures reveal.

In addition, they brought in $68 million (€63 million) through grants from organisations such as public entities – a 137% increase from the previous year, according to research from global emissions data provider Net Zero Insights and the Good Food Institute (GFI) think tank.

Focus from leadership through governmental support indicates a shift towards widespread recognition of how protein diversification can contribute to food security and the pivotal importance of large funding bodies backing the sector.

GFI research carried out with the Plant Futures Collective and marketing agency HarrisX found that almost half (47%) of German adults and two in five (41%) UK adults report that they are already actively reducing their intake of meat or following a meatless diet.

“It also highlights critical opportunities for companies to enable people to act on their intentions by bringing these foods closer to animal-based products in terms of taste, convenience and familiarity,” Helen Breewood, senior market and consumer insights manager at GFI Europe, told Ingredients Network.

Alternative proteins: Diversified production methods

Privately held plant-based companies comprise the biggest slice of alternative protein brands in the European ecosystem. Investments in these plant-based players increased by 37% to $181 million (€167 million) in 2024.

However, as this figure excludes publicly traded companies, it provides a skewed view that the whole sector witnessed a flourishing fundraising year in 2023.

Novel fermentation techniques achieved record investment figures in 2024. Precision fermentation uses organisms like yeast to mimic organoleptic properties like flavour and texture found in familiar non-plant-based products like meat, eggs and cheese. Companies focusing on precision fermentation techniques generated $130 million (€120 million) in 2024, more than triple the amount generated in 2023.

Biomass fermentation uses a process like yoghurt manufacturing to cultivate significant amounts of mycoprotein from fungi. In 2024, European companies in this field accumulated $129 million (€119 million) in investment, a 10% rise from the previous year.

Data relating to cultivated meat products and ingredient development was affected by several large investment deals made in 2023. Therefore, cash injections in this area fell by $52 million (€48 million) in 2024.

However, companies preparing to enter the market received large funding rounds, demonstrating ongoing interest in advancing cultivated meat production.

Alternative proteins need better funding options

European companies and public research organisations have published nearly 4,000 patents relating to plant-based foods since 2015.

“The plant-based sector remains in its infancy, but we are witnessing an explosion in innovation,” said Breewood.

“Alongside private investments, increasing levels of public funding mean a growing network of plant-based researchers, based at centres such as the UK's new National Alternative Protein Innovation Centre (NAPIC), whose findings are likely to unleash a wave of insights that companies can draw on over the next few years,” she added.

While it is positive to see overall growth in investment during 2024, it reveals a chasm between the industry’s overall development rate and the investment needed to provide sufficient resources.

Despite 2024 investment figures indicating a return to growth, the sector needs better funding options to spur and support development. Companies must find new funding sources and leaders must ensure these are accessible to developers.

Leading from the top

However, Europe needs to bolster its infrastructure to scale and achieve alternative protein commercialisation.

Building a demo or commercial-scale facility can cost between €15 million and 250 million. Funding from governments and organisations such as philanthropic foundations is vital to enable startups to engage in widespread facility development, and manufacture and roll out alternative proteins.

Emphasis is on producing a range of novel finance mechanisms to support the growing alternative protein landscape.

Blended finance models, such as guarantees, grants, concessional loans, leasing arrangements, and market-shaping schemes, are some of the recommended measures.

Public procurement policies can help increase plant-based foods’ adoption rate and lower costs by assisting industries related to alternative proteins, such as companies producing fermentation tanks.

Along with injecting capital into the sector, implementing financial measures can generate interest and confidence in alternative proteins’ relevance, accessibility, and longevity in sustainable food.

“As well as developing tastier products that come closer to consumers’ expectations, plant-based brands need to build a better understanding of what drives their target audiences, communicate the nutritional benefits of plant-based foods more clearly, and help people overcome their lack of familiarity with simple recipe suggestions,” said Breewood.