GFI APAC, the Asia-Pacific division of the Good Food Institute, recently released investment data in the alternative protein sector in the Asia-Pacific region. Investments in start-ups working on plant-based proteins, cell-cultured meat and precision fermentation rose by 92% in the Asia-Pacific region last year, with total funding reaching $312 million, the data shows.
Over the past few decades, Asia has built a reputation as the "world's factory", churning out vast quantities of products for the global market at speeds and prices unmatched anywhere else. The United Nations predicts nearly 10 billion people to feed by 2050 amid diminishing arable land and growing concerns with climate change: Can Asia-Pacific supply the same amount of protein?
Not only does Asia have an exciting consumer market, but it also has unparalleled talent and production capabilities. As a manufacturing hub for mass production, the Asia Pacific region is likely to be the same for the alternative protein industry.
According to the latest data from GFI APAC, the total financing of the alternative protein industry in the Asia-Pacific region will reach US$312 million in 2021, almost double the total financing of US$165 million in 2020. In contrast, funding in the global alternative protein industry rose 60%, from $3.2 billion in 2020 to $5 billion last year. This shows that the Asia Pacific region has the fastest growing alternative protein entrepreneurial opportunity.
But GFI APAC data also shows that the Asia-Pacific region lags behind when it comes to sophisticated fermentation technology. Less than 10% of total funding went to this sector, compared to 26% in Europe and a whopping 46% in North America.
Precision fermentation is important because the technology has the potential to "single-handedly" solve the global protein shortage. In short, while the alternative protein industry in Asia Pacific has seen a lot of growth, there is a lot to catch up. Even of the $30 million in fermented protein investments in the region, Australian companies made up the majority, notably All G Foods with $16 million, Nourish Ingredients with $11 million and Eden Brew with $3 million.
Asia Pacific now has a larger share of the global alternative protein market than ever before, while North America continues to dominate, with roughly two-thirds of capital going to North American startups. Asia Pacific received 6% of global financing, up from 5% in 2020 and 1% in 2015, but still lagging behind Europe (10%). The Middle East holds the second spot with an 11% share of funding as Israeli alternative protein startups complete several large funding rounds. This includes a $347 million Series B in Future Meat Technologies led by ADM in December, and a $105 million Series B in Aleph Farms in July with participation from L Catterton, Cargill, BRF and Thailand United Group.
It also contributed to Europe's first drop out of the second position since 2010. But Swedish plant-based milk brand Oatly, which completed a $13 billion IPO last year, has also played a positive role in the alternative protein market.
Since Beyond Meat's successful IPO in May 2019, more and more investors have felt that they are missing out by not entering the alternative protein space. Frankly speaking, the alternative protein market in Asia Pacific is still in its infancy; it is following a slightly different trajectory in order to cater to regional flavors and food cultures, which will also present opportunities for investors.
Now is the right time for startups in the Asia-Pacific region to understand the local market better than the international industry leaders. Just like the rest of the tech industry, local tech startups often win, with Didi, Gojek and Grab beating Uber. This also happens with surrogate proteins, and we're already seeing some signs. For example, Indonesian plant-based meat startup Green Rebel Foods is a leader in the local market, producing products that truly cater to Southeast Asian tastes.
To truly see the alternative protein market in Asia Pacific take off, there will need to be a significant increase in support for plant-based, fermentation technologies and cell-cultured meat infrastructure, which are critical to nurturing the growth of the alternative protein industry. In the first two months of 2022, the region has already seen several major nine-figure funding deals, including Singapore and China-based plant-based meat startup Next Gen Foods and Zhou Zero, which raised $100 million each.
According to GFI APAC analysis, it is undeniable that alternative protein financing in the Asia-Pacific region is on a rapid upward trend. From a venture capital perspective, these investments will help translate scalability, meaning the commercialization capabilities of these companies will be greatly improved. They are moving beyond the early stages of product prototyping and market testing into mass production, launching products, setting up factories, and delivering alternative protein products to commercial customers and end consumers.
