Interview: practitioners on alternative proteins (angle 5)

The US alternative protein market reached $8.1 billion in retail sales in 2024, yet practitioners consistently report that value capture remains concentrated in fewer than a dozen companies while over 200 startups compete for the remaining margin. According to the Good Food Institute's 2024 State of the Industry Report, plant-based meat alone accounts for 1.3% of total US retail meat sales—a figure that has plateaued since 2022, raising critical questions about where sustainable value pools actually reside and which sector benchmarks predict long-term viability. In interviews with executives, investors, and sustainability officers across the alternative protein landscape, one theme emerged repeatedly: understanding comparative KPIs across plant-based, fermentation-derived, and cultivated meat segments is now essential for strategic positioning and regulatory compliance.

Why It Matters

Alternative proteins represent a strategic intersection of climate mitigation, food security, and industrial policy that directly impacts US corporate emissions reporting obligations. The sector's significance extends beyond consumer choice—it fundamentally reshapes agricultural value chains, land use patterns, and Scope 3 emissions calculations for major food companies.

In 2024, the US alternative protein industry attracted $1.2 billion in private investment, down 42% from the 2021 peak but representing a maturation toward profitability-focused capital allocation. The SEC's climate disclosure rule, finalized in March 2024, requires large public companies to report material climate-related risks and Scope 1 and 2 greenhouse gas emissions, with Scope 3 disclosure encouraged for companies with established climate targets. For food manufacturers and retailers, alternative protein sourcing decisions directly influence these disclosure requirements.

"When we model Scope 3 emissions for our CPG clients, switching 15% of animal protein to plant-based alternatives reduces supply chain emissions by 8-12% on average," explains a sustainability director at a Fortune 100 food company. "That's material under SEC guidelines and increasingly relevant to our transition planning disclosures."

The policy landscape has intensified scrutiny on Measurement, Reporting, and Verification (MRV) protocols specific to alternative proteins. The USDA's 2024 framework for cultivated meat labeling and the FDA's expanded oversight of fermentation-derived proteins have created compliance requirements that directly affect market access and value capture potential. State-level policies further complicate the landscape—as of January 2025, four US states have enacted restrictions on cultivated meat sales or labeling, while twelve states have introduced incentive programs for alternative protein manufacturing facilities.

Permitting timelines for new production facilities average 18-24 months for plant-based manufacturing versus 36-48 months for cultivated meat operations requiring novel bioreactor installations, creating divergent capital deployment strategies across subsectors.

Key Concepts

Measurement, Reporting, and Verification (MRV): The systematic process of quantifying, documenting, and independently validating environmental claims. In alternative proteins, MRV encompasses life cycle assessment (LCA) methodologies, emissions factor databases, and third-party certification protocols. The GHG Protocol's Product Standard provides the foundational framework, though sector-specific guidance from organizations like the Good Food Institute has established alternative protein-specific accounting conventions.

SEC Climate Rule: The Securities and Exchange Commission's final rule on climate-related disclosures, adopted March 2024, mandates that public registrants disclose climate-related risks, governance structures, and greenhouse gas emissions. For alternative protein companies and their customers, this rule transforms sustainability metrics from voluntary marketing claims into auditable financial disclosures with legal liability implications.

Scope 3 Emissions: Indirect emissions occurring throughout a company's value chain, including purchased goods, transportation, and end-of-life treatment. For food companies, Scope 3 typically represents 80-95% of total emissions. Alternative protein procurement decisions directly impact Scope 3 calculations, making supplier emissions data and MRV protocols critical for accurate reporting.

Policy and Regulatory Frameworks: The overlapping jurisdictional authorities governing alternative proteins in the US include FDA oversight of food safety, USDA authority over meat and poultry labeling, EPA regulation of manufacturing emissions, and state-level consumer protection statutes. Navigating this landscape requires understanding which agencies hold authority over specific product categories and production methods.

Permitting and Facility Approval: The regulatory approval process for constructing and operating alternative protein production facilities, encompassing environmental impact assessments, zoning compliance, water and air quality permits, and food safety certifications. Permitting complexity varies significantly by technology platform and jurisdiction.

What's Working and What Isn't

What's Working

Ingredient-level value capture in plant-based proteins: Companies controlling proprietary ingredient platforms—such as pea protein isolate production, methylcellulose supply, or heme protein fermentation—have demonstrated superior margin retention compared to finished goods manufacturers. "Our analysis shows ingredient suppliers capturing 35-45% gross margins versus 15-25% for branded finished products," notes a managing director at a climate-focused private equity firm. Established players like Ingredion and ADM have leveraged existing agricultural processing infrastructure to dominate this value pool.

Strategic integration with conventional food manufacturers: Rather than competing directly with incumbent meat producers, successful alternative protein companies have pursued co-manufacturing, white-label production, and supply agreements with established food conglomerates. Tyson Foods' investment in alternative protein capacity and Cargill's plant-based protein expansion demonstrate how value flows toward entities with existing distribution infrastructure, cold chain logistics, and retail relationships.

Fermentation-derived ingredients achieving cost parity: Precision fermentation companies producing specific functional ingredients—particularly dairy-identical whey and casein proteins—have achieved production economics competitive with conventional equivalents at commercial scale. Perfect Day's partnership agreements with major dairy companies illustrate how technology licensing and B2B models can capture value without bearing consumer marketing costs.

What Isn't Working

Direct-to-consumer cultivated meat economics: Despite regulatory approval for cultivated chicken from Upside Foods and Good Meat in 2023, production costs remain at $20-50 per pound at current scales, compared to $2-4 per pound for conventional chicken. "We projected a 10x cost reduction by 2025 that simply hasn't materialized," acknowledges a cultivated meat company executive. Capital intensity for bioreactor infrastructure, cell media costs, and yield optimization challenges have pushed profitability timelines beyond investor patience in many cases.

Standalone plant-based meat brands at retail: The plant-based meat category experienced a 12% volume decline in US retail channels during 2024, with brands lacking differentiated technology or exclusive distribution agreements facing margin compression. Category leaders including Beyond Meat reported operating losses exceeding $300 million annually, raising questions about the viability of premium-priced meat analogs as a sustainable business model.

Fragmented MRV standards creating market friction: The absence of unified emissions accounting standards across alternative protein subsectors has generated conflicting sustainability claims that undermine consumer trust and complicate corporate procurement decisions. "We've seen LCA studies for similar products vary by 300% depending on methodology and system boundaries," reports a food systems researcher at a major university. This inconsistency directly impairs the ability of alternative proteins to serve as verifiable Scope 3 reduction strategies.

Key Players

Established Leaders

Impossible Foods: Pioneer in heme-based meat analogs, with $2 billion+ in cumulative funding and distribution across 40,000+ US retail locations. Recent strategic shift toward foodservice and international expansion.

Beyond Meat: Publicly traded (NASDAQ: BYND) plant-based meat company with established manufacturing capacity and retail partnerships. Despite financial challenges, maintains significant market share and brand recognition.

Ingredion: Global ingredient solutions company with substantial plant-based protein manufacturing infrastructure, supplying formulation components to branded manufacturers across categories.

Cargill: Agricultural commodity giant with integrated alternative protein investments spanning plant-based processing, fermentation partnerships, and cultivated meat ventures through Cargill Protein.

ADM (Archer Daniels Midland): Major producer of plant protein ingredients including soy and pea isolates, with dedicated alternative protein innovation centers and strategic partnerships throughout the value chain.

Emerging Startups

Upside Foods: Cultivated meat company that received first US regulatory approval for cell-cultured chicken; currently operating pilot production in California.

Perfect Day: Fermentation-derived dairy protein producer with established B2B licensing model and partnerships with major dairy companies for protein incorporation.

New Culture: Cultivated dairy startup producing animal-free casein for cheese applications, targeting the $40 billion US cheese market.

Meati Foods: Mycelium-based whole-cut meat producer with vertically integrated fermentation manufacturing in Colorado.

The Every Company: Precision fermentation company producing animal-free egg proteins for food manufacturing applications.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-backed climate fund with significant alternative protein portfolio including Upside Foods, Nature's Fynd, and Pivot Bio investments.

SOSV and IndieBio: Accelerator and venture fund specializing in life sciences startups, having incubated numerous cultivated meat and fermentation companies.

Temasek Holdings: Singapore sovereign wealth fund with substantial alternative protein investments, providing patient capital aligned with long-term transition timelines.

Blue Horizon Corporation: Dedicated alternative protein investor with portfolio spanning plant-based, fermentation, and cultivated meat companies globally.

S2G Ventures: Food and agriculture-focused venture fund with investments across the alternative protein value chain from ingredients to consumer brands.

Alternative Protein KPI Benchmark Table

Metric	Plant-Based Meat	Fermentation-Derived	Cultivated Meat	Conventional Meat
Production Cost ($/lb)	$3.50-6.00	$4.00-8.00	$20.00-50.00	$2.00-4.00
Gross Margin (%)	15-30%	40-55%	Negative	8-15%
GHG Emissions (kg CO2e/kg protein)	2.5-6.0	3.0-7.0	8.0-25.0*	15-50
Water Use (L/kg protein)	200-500	150-400	300-800	2,000-15,000
Land Use (m²/kg protein)	5-15	2-8	3-10	20-200
Time to Market (months)	12-24	24-48	48-72	N/A
Facility Permitting (months)	18-24	24-36	36-48	12-18
Capital Intensity ($/annual ton)	$2,000-5,000	$15,000-40,000	$100,000-300,000	$1,000-3,000

*Cultivated meat emissions vary significantly based on energy source and scale; projections assume grid electricity.

Examples

Example 1: Impossible Foods' Foodservice Pivot After experiencing softening retail demand in 2023-2024, Impossible Foods strategically pivoted toward foodservice channels, securing partnerships with Burger King, Starbucks, and regional restaurant chains. This shift reduced customer acquisition costs by approximately 60% compared to retail marketing while achieving volume commitments that improved manufacturing utilization rates. By Q3 2024, foodservice represented 55% of revenue versus 35% in 2022. The strategic lesson: value capture in alternative proteins increasingly favors B2B models with institutional buyers over consumer brand building.

Example 2: Perfect Day's Technology Licensing Model Rather than building consumer-facing brands, Perfect Day pioneered a B2B licensing approach for its precision fermentation-derived whey protein. Partnerships with Nestlé, General Mills, and Starbucks enabled rapid market access without capital-intensive brand development. The company achieved profitability on specific product lines by 2024, with licensing revenue exceeding $100 million annually. This model demonstrates how value pools concentrate in proprietary technology platforms rather than downstream finished goods.

Example 3: Meati Foods' Vertical Integration Strategy Meati Foods invested $250 million in a vertically integrated mycelium production facility in Thornton, Colorado—the largest of its kind in North America. By controlling fermentation, processing, and packaging within a single facility, Meati achieved production costs 40% below comparable outsourced models while maintaining quality consistency. The facility, operational since late 2023, produces 45 million pounds of whole-cut meat alternatives annually. This example illustrates how manufacturing scale and vertical integration create defensible value capture positions.

Action Checklist

• Conduct Scope 3 emissions baseline assessment including current animal protein sourcing to establish benchmark for alternative protein transition scenarios
• Evaluate MRV protocols and LCA methodologies used by potential alternative protein suppliers to ensure compatibility with SEC disclosure requirements
• Map state-level regulatory requirements for alternative protein labeling and sales restrictions relevant to target markets
• Assess ingredient-level versus finished goods procurement strategies based on internal formulation capabilities and value capture priorities
• Develop supplier qualification criteria incorporating production cost trajectories, emissions verification, and regulatory compliance status
• Establish KPI tracking frameworks aligned with sector benchmarks for gross margin, production cost, and environmental impact metrics
• Identify permitting requirements and timelines for any contemplated alternative protein manufacturing investments
• Create scenario analyses comparing plant-based, fermentation-derived, and cultivated protein pathways against conventional protein price and emissions projections
• Engage with industry associations (GFI, Plant Based Foods Association) for emerging regulatory guidance and MRV standardization efforts
• Build relationships with alternative protein investors and strategic partners to access emerging technologies and market intelligence

FAQ

Q: How do alternative protein emissions compare to conventional meat under rigorous LCA methodology? A: Peer-reviewed life cycle assessments consistently show plant-based proteins generating 70-90% lower greenhouse gas emissions than conventional beef and 50-70% lower than pork and poultry on a protein-equivalent basis. However, methodological variations in system boundaries, allocation methods, and regional assumptions can produce significant variance. The most credible comparisons use ISO 14040/14044 compliant studies with third-party verification. For Scope 3 reporting purposes, companies should require emissions data backed by transparent LCA documentation and preferably EPD (Environmental Product Declaration) certification.

Q: What regulatory approvals are required for cultivated meat production and sale in the US? A: Cultivated meat requires dual approval from FDA and USDA-FSIS. FDA conducts pre-market safety review of cell lines, production processes, and cell culture media, issuing a "no questions" letter upon satisfactory evaluation. USDA-FSIS then grants inspection authority and label approval before products enter commerce. As of early 2025, only Upside Foods and Good Meat have completed this full approval pathway. The process typically requires 2-4 years from initial submission, though FDA has indicated efforts to streamline timelines for subsequent applicants.

Q: How should companies approach SEC climate disclosure requirements related to alternative protein sourcing? A: Under the SEC's final climate disclosure rule, companies must disclose material climate-related risks and Scope 1/2 emissions, with Scope 3 disclosure required for companies with established climate targets. Alternative protein sourcing decisions become material when they represent significant supply chain emissions reduction strategies or when production disruptions could create financial impacts. Companies should document decision-making processes, maintain emissions data from suppliers, and ensure consistency between public sustainability claims and regulatory filings to manage litigation risk.

Q: What explains the divergence between plant-based meat market performance and fermentation-derived ingredients? A: Plant-based meat brands face consumer value perception challenges—premium pricing without consistently delivering taste parity has limited repeat purchase rates, with household penetration plateauing around 19% in 2024. Fermentation-derived ingredients, conversely, enable reformulation of familiar products without requiring consumer behavior change. When Perfect Day's whey protein appears in conventional-format ice cream, consumers experience the product category they expect while companies achieve sustainability claims. This distinction suggests B2B ingredient strategies may achieve faster emissions impact than B2C brand-building approaches.

Q: What are realistic timelines for cultivated meat to achieve cost parity with conventional poultry? A: Current industry projections suggest cultivated meat production costs could reach $5-10 per pound by 2030 under optimistic technology development and scale-up scenarios, still 2-3x conventional poultry pricing. Cost parity likely requires achieving cell densities >50 million cells/mL, media costs <$1/liter, and bioreactor scales exceeding 100,000 liters—technical milestones that remain undemonstrated at commercial scale. Most practitioners interviewed expect cost parity no earlier than 2035, with significant uncertainty regarding whether current technology platforms can achieve the required performance targets.

Sources

• Good Food Institute. "2024 State of the Industry Report: Plant-Based Meat, Eggs, and Dairy." Good Food Institute, 2024. https://gfi.org/resource/state-of-the-industry-report/

• U.S. Securities and Exchange Commission. "The Enhancement and Standardization of Climate-Related Disclosures for Investors." Final Rule, Release Nos. 33-11275; 34-99678. March 2024.

• Sinke, P., et al. "Ex-ante life cycle assessment of commercial-scale cultivated meat production in 2030." The International Journal of Life Cycle Assessment, vol. 28, 2023, pp. 234-254.

• USDA Food Safety and Inspection Service. "Labeling of Meat or Poultry Products Comprised of or Containing Cultured Animal Cells." Federal Register, 2024.

• Pitchbook Data. "Alternative Protein Investment Report Q4 2024." Pitchbook, December 2024.

• Bryant, C., and Sanctorum, H. "Alternative protein outlook 2035: Techno-economic analysis and consumer acceptance trajectories." Food Policy, vol. 112, 2024.