Alternative protein.
Alternative protein technologies aim to deliver the protein a growing population needs with a fraction of the land, water, and emissions footprint of conventional animal agriculture.
Executive Summary
Animal agriculture, principally cattle, poultry, and pork, is the single largest source of agricultural greenhouse gas emissions, accounting for an estimated 12–20% of global emissions on its own (FAO), within agriculture's broader 13–21% share of the global total. Raising livestock and growing the crops to feed it consumes roughly 80% of the world's 4.1 billion hectares of agricultural land, even though animal products supply a minority of global calories.
Why it matters
Conventional animal agriculture's heavy land, water, and antibiotic use is increasingly costly just as global protein demand keeps rising, threatening long-term food security and public health.
Why now
Falling production costs and shifting consumer preferences toward healthier, more responsibly produced diets are accelerating the shift away from conventional animal protein.
Investment
Alternative protein presents a structural opportunity to invest in meeting rising global protein demand as conventional livestock farming reaches its land and resource limits.
Introduction
Alternative protein refers to a range of products produced without relying on conventional livestock, for human food and animal feed alike. On a high level, it encompasses three broad pillars: plant-based, fermentation, and cultivated.
Despite a compelling structural investment thesis in terms of efficiency gains, and a clear impact thesis in terms of carbon footprint, the sector's capital cycle has been volatile. Capital invested in the sector grew from roughly $1 billion in 2019 to a $5 billion peak in 2021, falling to $881 million by 2025 as plant-based sales growth slowed and cultivated meat's path to cost parity proved far slower than projected. For investors entering now, that shakeout has left fewer, stronger competitors and reset valuations from the 2021 peak.
Beyond the favorable entry point created by the correction, the structural case for alternative protein still rests on a straightforward efficiency advantage: it needs far less land, water, and energy than conventional livestock, with climate, biodiversity, and food security benefits following as a result.
Key idea
Alternative protein refers to a range of products produced without relying on conventional livestock, for human food and animal feed alike. On a high level, it encompasses three broad pillars: plant-based, fermentation, and cultivated.
The What
Alternative protein includes a range of products produced by distinct technologies, each with its own cost structure, regulatory path, and climate and health profile. RRI assesses them across three pillars: plant-based, fermentation (including gas fermentation as a distinct sub-type), and cultivated.
The three pillars are:
- Plant-based protein, made from soy, pea, wheat, and other crops processed into familiar formats
- Fermentation-derived protein, including single-cell proteins grown from fungi, algae, or yeast, and precision fermentation, which uses engineered microbes to produce specific animal proteins such as casein or whey; and gas fermentation, in which microbes are grown on carbon dioxide and hydrogen rather than organic feedstock, producing protein from air and electricity
- Cultivated meat, animal cells grown directly into muscle tissue outside a living animal
Potential resource savings at full commercial scale, by pillar*
Plant-based:
~79% less land
~95% less water
Fermentation:
~90% less land
~96% less water
Cultivated meat:
~90% less land
~80% less water
The resource case and climate impact vary by product and production method:
Plant-based protein
Plant-based protein has the lowest production-stage footprint of any production method, but land use varies significantly by crop. Nuts and some pulses rival dairy and poultry in land intensity, while soy, pea, and wheat protein remain dramatically less land- and emissions-intensive than beef. Processing into meat-format products adds emissions back in, though the net footprint still sits well below the animal product it replaces.
Fermentation & single-cell protein
Single-cell and precision-fermented proteins are grown independent of climate, season, and growing location, and don't require arable land or freshwater at the cultivation stage. Microorganisms can be grown on low-cost waste feedstocks instead. The resource burden shifts rather than disappears: bioreactor facilities, downstream processing, and supply chain infrastructure replace land and water as the primary inputs, which is why renewable energy sourcing is central to achieving the highest climate benefit.
A distinct and still-emerging subset takes this further: hydrogen-oxidizing microbes fed on carbon dioxide, hydrogen split from water using renewable electricity, and a small number of minerals produce a complete protein with no farmland, no fresh water at scale, and no weather dependency. In effect, CO2 becomes a feedstock rather than a waste product, giving it one productive pass through the food system before being respired back out. It's the most fully decoupled-from-agriculture production method in the sector, but one of the most capital-intensive to build at scale.
Cultivated meat
Cultivated meat is grown directly from animal cells without raising or slaughtering livestock, eliminating the land tied up in grazing and feed production. Its full-scale environmental performance depends heavily on the energy source and nutrient density of the cultivation medium, and hasn't yet been validated at commercial scale. At today's technology level, evidence points to a substantially lower land and water footprint than livestock, but a higher one than plant-based alternatives; the full-scale projections in the callouts above assume renewable energy and growth media efficiencies not yet achieved at commercial scale. As with fermentation, the resource savings are real but the input mix shifts toward energy and industrial infrastructure.
Alternative protein by pillar: maturity and investment profile
Pillar
Plant-based
Commercially mature
Taste parity ceiling and ultra-processing scrutiny
Clean-label premium, foodservice and institutional scale
Fermentation
Commercially scaling
Energy dependency, bioreactor capex
Ingredient platform plays, B2B supply, precision proteins
Cultivated Meat
Early commercial
Cost parity timeline, regulatory patchwork
First-mover positioning in cleared markets
The Why
Despite the funding correction and early commercial maturity, the business case is compelling. Conventional livestock farming is structurally inefficient: it takes roughly 6 to 8 kilograms of grain to produce one kilogram of beef, meaning most of the input cost — land, water, feed, and years of animal husbandry — is lost in conversion. Alternative protein eliminates most of that loss and can be formulated precisely for the highest-value applications, further reducing waste and offering margin flexibility that conventional livestock farming structurally can't match.
Alternative protein's upside as an investment category spans three additional dimensions: climate, animal welfare, and human health.
The benefits of regenerative agriculture in terms of planetary resilience, animal welfare, and human health are significant:
Climate impact
Alternative protein's climate case rests on adopting a lower-carbon and land-use footprint than conventional livestock farming. That displacement effect is substantial at scale: a joint analysis by BCG and Blue Horizon (a fund in which RRI is invested) estimates that reaching just 11% global market penetration by 2035 could avoid roughly 0.85 gigatons of CO2-equivalent emissions, comparable to decarbonizing nearly all of global aviation, while a more ambitious adoption scenario (up to 50% by 2050, cited by McKinsey) puts the figure as high as 5 gigatons annually.
Nearly 80% of global agricultural land is used to raise livestock and grow the crops that feed it. A global shift away from animal protein is estimated to cut agricultural land use by roughly 75%, freeing around 3.1 billion hectares for restoration, roughly the combined land area of North America and Brazil. Even partial substitution frees meaningful land for biodiversity recovery and carbon sequestration, and protects tropical forests and grasslands critical to global oxygen production from being cleared for agriculture.
Animal welfare
Commercial livestock farming feeds billions of people, but tens of billions of animals are raised and slaughtered each year for meat, eggs, and dairy, while roughly a third of all food produced is never eaten. The number of animals farmed continues to rise alongside population growth, with corresponding pressure on land as more forest and grassland is converted to grazing.
This is increasingly showing up in consumer behavior, not just sentiment: a growing share of consumers, especially younger and more urban households, are reducing or eliminating meat specifically in response to concerns about industrial farming practices, and animal welfare consistently ranks among the top reasons people give for trying alternative protein across the markets surveyed. The number of vegans in the EU alone is projected to grow from 6.6 million in 2023 to roughly 8.3 million by 2033, and flexitarian eating, reducing rather than eliminating meat, has grown even faster.
Human health
Health is one of the most consistently cited reasons consumers give for trying alternative protein: in a multi-market survey of more than 3,700 consumers by BCG and Blue Horizon, roughly 75% named a healthier diet as their primary motivation. The World Health Organisation classifies processed meat as carcinogenic to humans and red meat as probably carcinogenic, with each 50-gram daily portion of processed meat raising colorectal cancer risk by roughly 18%, and high intake of both linked to elevated cardiovascular disease and type 2 diabetes risk.
Alternative protein also removes a transmission pathway for zoonotic disease, a meaningful consideration given the role animal agriculture has played in past disease outbreaks. And it's worth noting that conventional animal protein isn't without its own digestibility concerns: red meat and dairy carry issues including Neu5Gc (a non-human sialic acid linked to inflammation) and A1 beta-casein, associated with digestive intolerance in a meaningful share of consumers.
The health case isn't one-sided, though. Whether alternative protein is better depends on the product: whole-food plant-based alternatives to processed red meat carry a well-established benefit, while highly processed meat analogs draw growing scrutiny for long ingredient lists, high sodium, additives, and missing micronutrients. This matters for investibility, since a wave of negative consumer health experiences risks damaging trust across the entire sector. Products that prioritise nutritional integrity and avoid harmful ultra-processed inputs face a higher input cost structure, but are better placed to capture the premium end of a maturing market.
Investment
By 2050, global demand for protein is expected to rise sharply alongside population growth and increasing incomes, even as livestock systems face mounting constraints on land, water, and emissions. Alternative protein offers a way to meet that demand with a fraction of the resource footprint. However, 2025's sharp funding correction means the investable opportunity looks different than it did during the speculative boom of 2019–2022. Capital is consolidating around businesses with real revenue, defensible unit economics, and a credible path to scale, rather than technology promise alone.
With that in mind, we see the following areas as the most interesting investment opportunities:
Alternative protein ingredients
The largest near-term market for alternative protein isn't consumer-facing meat substitutes but the ingredient supply chain behind the wider food industry. Food manufacturers are actively seeking non-animal substitutes across a vast range of existing products, driven by cost volatility, consumer demand, and regulatory and supply chain risk. As production scales, the cost structure of alternative protein ingredients points toward a cost advantage over conventional livestock equivalents.
Next-generation protein production
Some of the most compelling opportunities in alternative protein are companies with genuinely differentiated production methods: gas fermentation, biochemical conversion of waste streams, or precision fermentation of novel substrates. The investment case is backing proprietary process innovation before it scales, with returns driven by the cost curve and the potential for the method itself to become a platform others build on.
Functional & performance nutrition
Sports nutrition, clinical nutrition, and healthy aging are high-margin segments where consumers already pay a premium for protein quality. Precision fermentation can produce complete proteins with precisely controlled amino acid profiles and batch consistency that animal-derived sources struggle to match, making it a natural fit for performance and clinical applications where protein quality and purity matter more than price.
Cultivated protein
Cultivated meat and seafood sit at the longest development horizon in the sector and have yet to approach price parity but offer something no other alternative protein can: a product structurally identical to its conventional counterpart, with no taste or texture compromise. The regulatory picture varies significantly by market and remains a real investment headwind, but success would open the door to mainstream adoption as no other alternative protein approach can. Cultivated protein therefore remains an interesting investment area.
Consumer food brands
The consumer market for alternative protein finished products is highly visible but also highly selective: most brands don't achieve the taste parity, price competitiveness, and distribution reach needed to survive. The funding correction has reset valuations on brands with genuine commercial traction to levels that make them attractive entry points, while weeding out those that relied on novelty rather than repeat purchase. Given the high failure rate and volatility of consumer brands, a fund approach offers a more risk-managed exposure than direct positions.
Nutritional science & medicinal food
Most alternative protein products today prioritise taste and cost parity over complete nutrition, leaving a meaningful gap for companies that can deliver all three. Products backed by credible nutrition science can access premium pricing, healthcare distribution channels, and partnerships with insurers and clinical nutrition programmes that commodity plant-based brands can't reach. As health scrutiny of the sector grows, validated nutritional quality will become a genuine competitive moat.
Scale-up capital
The alternative protein sector has a structural under-supply of patient, growth-stage capital, leaving a funding chasm that is one of the sector's most significant bottlenecks. Selectively backing companies at this stage offers exposure to de-risked opportunities, where the technology or product is proven and current valuations, reset by the funding correction, offer an attractive entry point.