The challenge of food supply

A United Nations report predicts that the current world population of 7.9 billion people will reach 11.2 billion by the year 2100. Up to 37% of greenhouse gases can be attributed to our present system of nutrition. A closer look at the consumption of meat reveals that only 9% of our entire diet consists of meat, yet 43% of food-related greenhouse gas emissions are caused by the consumption of meat. Meat production has been increasing rapidly since 1961. This shows that the fight for a better future might be decided in part on our plates.

Global meat production

The new meat?

The food industry is exploring new paths to develop sustainable, alternative protein solutions to meat, ranging from plant-based, cultured meat to proteins obtained from fermentation, and new ingredients such as microalgae and insects. Some of the plant-based sources of protein – such as seitan (wheat protein), tempeh (fermented soya beans), tofu, and jackfruit – have already been consumed for centuries.

In the case of the purely plant-based sources of protein from grain, vegetables, and legumes, the protein is isolated and modified to resemble muscle tissue. Haemoprotein obtained from plants, much like the blood pigment haemoglobin, not only creates a blood-like appearance, but also provides a meat-like taste. Soya dominates the market with respect to plant-based protein sources, despite growing scepticism relating to allergies, oestrogenic effects, and genetically modified plants.

Other challenges include the heavy processing of these products in combination with the utilisation of numerous additives. From a sustainability perspective, there are advantages over conventional meat production, such as lower greenhouse gas emissions and a reduction of water and land use.

Cultured meat is another development that has financial, ecological, and health-related future potential. The term cultured meat, which is synonymous with in-vitro meat and clean meat, refers to meat that has been grown in a lab. For this, muscle tissue or embryonic stem cells are extracted, expanded, and then formed into muscle cells. These cells are cultivated further in a bioreactor and later transferred to a matrix so as to let them grow into muscle fibres and larger tissue.

Critical components of this process include the nutrient solution and the supporting structure, which rely on ingredients derived from animals. This is contrary to the belief of many consumers in a production method that causes no harm to animals. The industry is currently looking for alternatives for these critical parts of the process.

The way forward?

A study conducted on the future of the meat market by international consulting firm Kearney predicted that by the year 2040, some 60% of global meat consumption will be in the form of alternative sources of protein. Within the scope of the Green Deal and the Farm to Fork Strategy, the European Commission presents the development of alternative sources of protein as a main research topic that addresses the demand in society for a healthier diet while lessening the impact on the environment at the same time. One thing is certain: There is a definite trend towards a healthier and more sustainable protein diet. This development is transforming food production, and the path towards a change in consumer behaviour that leads to alternative protein solutions is filled with hurdles concerning taste, prices, and acceptance.

Lydia ReichReich, MBA CPM
Senior Fondsmanagerin at Raiffeisen KAG

This content is only intended for institutional investors.

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