What are alternative proteins and why are they important?

Alternative proteins refer to proteins derived from sources other than conventional animal agriculture, including plant-based foods (like Beyond Meat products), cellular agriculture (lab-grown meat), and fermentation-derived proteins. They're important because they typically require fewer resources to produce than conventional meat, have a smaller environmental footprint, and can help address growing global protein demands as the world population increases.

What is cellular agriculture?

Cellular agriculture is the production of animal products from cells grown in controlled environments rather than from whole animals. Companies like STKH are developing technologies to grow actual meat tissues from animal cells in laboratory conditions. This process requires significantly less land, water, and feed compared to traditional livestock farming, while potentially eliminating concerns about animal welfare.

How do fertilizer companies fit into the next-gen protein theme?

Fertilizer companies like NTR, MOS, and CF are essential to the future of protein because they provide the nutrients that maximize crop yields. For both traditional agriculture and plant-based protein production, these nutrients are crucial for growing the grains, legumes, and other plants used as feed for animals or as ingredients in plant-based alternatives. Efficient fertilizer use helps ensure food security and more sustainable agricultural practices.

What is Controlled Environment Agriculture (CEA)?

Controlled Environment Agriculture (CEA) refers to technologies and methods that allow farmers to optimize growing conditions for plants indoors. Companies like VFF and UGRO specialize in this approach, which can include vertical farming, hydroponics, and other techniques that use less land and water than traditional farming while producing higher yields. CEA is valuable for growing ingredients used in plant-based proteins and can operate year-round regardless of outdoor conditions.

What factors might drive growth in this investment theme?

Growth in the next-gen protein sector is likely to be driven by several factors: increasing consumer demand for sustainable and ethical food options, technological advancements that make alternatives more affordable and similar to conventional proteins, supportive government regulations and subsidies, growing venture capital investment, and partnerships between startups and established food companies that expand distribution. Additionally, concerns about food security and environmental impacts of traditional agriculture create long-term tailwinds for this sector.

16 handpicked stocks

Next-Gen Proteins

Looking to invest in the future of food? This carefully selected group of stocks represents companies solving our global protein challenges. From plant-based alternatives to agricultural innovation, these stocks have been thoughtfully chosen by our analysts for their potential in this growing market.

Han Tan | Market Analyst

Updated 1 day ago | Published at June 17