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  • For the Alt Protein Industry

Infrastructure

Our interviews of food system transformation experts, alt protein industry analysts, entrepreneurs, and investors highlighted ways that the alt protein industry can create broader co-benefits through a thoughtful approach to infrastructure creation. Respondents underscored the central importance of prioritizing worker well-being in alt protein processing and manufacturing through continued innovation and uptake of improved manufacturing equipment. Recognizing that alt protein production will entail different amounts and types of labor than the incumbent animal protein industry, respondents in our sample highlighted the importance of converting existing animal agriculture facilities and—wherever possible—siting new alt protein processing facilities in rural locations where existing employment opportunities center around the meat and feed industries. Lastly, food system transformation experts emphasized the transformative potential of investing in the creation of multi-use and shared facilities that can support co-benefits for other local value-added food processing.

Sourcing

Both investors and food system transformation experts in our sample particularly prioritized the additional potential co-benefits that could come from embedding environmental and social benefit into evolving ingredient-sourcing norms in alternative proteins. Investors sought environmentally and socially responsible sourcing for perceived consumer interest and reduction of future supply chain and reputational risks. Movement experts saw the potential to align alt protein creation with ecological agricultural practices that benefit soil health, water quality, and clean air and to better align with social benefits by strengthening the rights of agricultural and food chain workers, supporting BIPOC* farmers, and building supply chain articulation with food hubs and production cooperatives. For example, alt protein production could provide stacked co-benefits to achieve environmental, social, and resilience goals by increasingly designing sourcing to aggregate ingredients from domestic, smaller-scale alternative agricultural production rather than relying on a single industrial supplier.

Entrepreneurs and industry analysts acknowledged the importance of aligning alt protein sourcing with environmental and social co-benefits as much as possible but noted important structural barriers, including the shortage of appropriate and affordable inputs from environmentally and socially responsible production, challenges in verifying common-good benefits, and roadblocks such as the requirement to use (largely conventional) US commodity crops in the creation of food products destined for the National School Lunch Program. These and other barriers indicate areas of potential political advocacy and the need for alignment and innovation in common-good impact assessment.
We’re looking at how to shift from high-tillage, high-input, limited-rotation cropping systems for commodity corn and soy toward a more dynamic and diverse agricultural profile that promotes continuous living cover and perennialization. To the degree that producing inputs for alt protein can promote a more diverse cropping system that can protect the soil and reduce fertilizer/pesticide inputs, that would serve our common goal of breaking the cycle of commodity feed crops.

Pete Huff, Co-director, Wallace Center at Winrock International

Wherever possible, alt protein producers can increase the creation of common-good co-benefits and the potential for closer allyship with the food transformation advocacy community by sourcing from environmentally friendly and socially just forms of agriculture. Where no viable options yet exist, the industry and its investors could increase co-benefits by investigating what is necessary to develop such a supply chain. Alt protein producers can also create important positive signaling and transition support within the supply chains for key inputs by committing to longer-term purchase contracts for farmers transitioning away from producing farmed animals or their feed crops. Additional ways to maximize alt proteins’ co-benefit potential through sourcing and to better align the industry’s future path with food system transformation levers include focusing on ingredient streams that would otherwise support the conventional meat industry and considering alternatives to genetically modified alt protein ingredients where other viable options exist.

Supply Chain Coordination

Our interviews with industry analysts and food system transformation experts revealed the co-benefit potential of increasing supply chain coordination and management. Alt protein brands and their investors could increase environmental and social co-benefits by investigating possibilities for reducing the length of supply chains and favoring domestic— and even regional—sourcing rather than international sourcing where possible. Adopting digital supply chain management tools could enhance co-benefit potential by contributing to better food system resilience, lower waste, and greater product attribute transparency within supply chains. Digital supply chain tools are sorely needed to manage negative effects within product supply chains, such as price hikes and weather shocks, and can also facilitate improved data gathering for environmental and social impact assessment. Development of enhanced data retention and supply chain coordination can set the stage for common-good enhancement by making visible where alternative proteins are failing to have impacts distinctly better than those of the incumbent animal protein system and where growth at one stage of the supply chain may be built on exploitation or contraction in another stage. Improved supply chain articulation and management can be a critical tool for establishing the alternative protein industry as a restorative value chain rather than an extractive supply chain.

A diverse sourcing plan contributes meaningfully to small farm economic benefits, broadens opportunities for BIPOC farmer participation, keeps money in local economies, improves articulation with sustainable agriculture, and increases supply chain resilience.

Emma Sirois, National Director of Healthy Food in Health Care, Health Care Without Harm

Value chain coordination could offer transparency around product attributes— where was it grown, how was it grown, what kinds of certifications or claims? The more information the value chain can retain, the better, and the more able institutional purchasers are to categorize those products and purchases. Blockchain tech is really exciting.

Emma Sirois, National Director of Healthy Food in Health Care, Health Care Without Harm

Reducing the length of supply chains is probably one of the most effective changes that can be made right now. Reducing reliance on imported ingredients wherever possible will shrink the carbon footprint of plant-based products even more.

Carl Jorgensen, Agriculture Consultant, The Plant Based Foods Institute

Business Philosophy and Growth

Food system movement experts in our sample encouraged a shift toward viewing the gathering of material inputs for alternative proteins as a value chain rather than simply as a supply chain. While subtle, this shift could open the possibility of increased co-benefits by allowing alt protein companies to see opportunities to create value for social and environmental goals as well as for their brand. Value chains without vertical integration involve contracts, rights, and obligations within each link, which contributes to shared risk and shared wealth by leaving money at every link instead of filtering the profits entirely to the top. Transformative recommendations included looking for ways to build broader common-good priorities into value creation, for example, by regionalizing and localizing supply chains and staying accountable to producer and consumer communities. Whenever possible, plant-based alt protein companies and their investors can maximize their contributions to the common good by thinking, “What does a transformational company look like, and what would it do?” They could more deeply embed social and environmental benefit into company priorities by acquiring certifications that reflect the brand’s core commitment to broader societal benefits.

Where possible, alt protein producers could improve common-good benefits by seeking investments that operate on a longer growth timeline than typical VC and are fully missionaligned. Companies may consider funding outside of the VC realm if the VC timetable (10 years or less) is too restrictive to support the long-term changes needed to structure a new supply chain with full common-good benefits. Sources of such financing specifically recommended by one respondent include specific agri-food financing institutions that understand the unique challenges of early-stage and seasonal sales, such as Mad Capital, Walden Mutual Bank, Rabo AgriFinance, and Compeer Financial. These institutions have created unique financing programs that recognize the special risks that agri-food businesses face and allow longer-term payments that recognize early and seasonal cash-flow challenges.

Communication

Many interviewees across the different groups in our sample underscored the importance of promoting the common good through the communication practices normalized within the alt protein industry. The common good is served both by transparency in consumer messaging about ingredients, product additives, and nutrition and by more proactive communication with input producers and processing factory workers. Authentically forging more open communication with these parties, as some industry pioneers have done,50 can illuminate ways of better aligning alt protein production with benefits to workers and rural communities. For maximum common-good benefit, plant-based companies could—with the help of food system advocates—conduct good-faith outreach to workers and suppliers in the conventional meat and feed supply chains to ask how they would want to be involved in the alternative plant-based supply chain and what the transition could look like. Respondents in many groups of our sample agreed that the plant-based alt protein industry could also deepen its benefits to the common good by engaging more with lobbying efforts related to alt protein production. Small businesses can be highly impactful constituents in efforts to secure local congressional support.

Lobbying efforts would benefit quite a lot if companies would more actively support our shared goals. Small businesses can do a lot to influence local congresspeople if they can find the right arguments and tell an effective story about what they are doing and why they are doing it.

Bruce Friedrich, President and Founder, Good Food Institute

Companies can donate and fund projects, give back to groups that are trying to improve the health of communities. It’s not ok to exploit or use [social] issues as marketing. When some companies reach out to Black and Brown communities, it feels fake. I want to see companies that will allow their employees to unionize, pay them living wages from bottom to top of supply chain.

lauren Ornelas, Founder and Senior Programs Director, Food Empowerment Project

Community Accountability and Social Impact

Many food system movement experts in our interviews called for the alt protein industry to allow for greater unionization by its workforce, citing the benefits of higher unionization and even the promotion of cooperative ownership models. Increasing the plant-based industry’s commitment to worker well-being can reduce potential opposition by ensuring that alt proteins exceed the standards of the incumbent industry. To further maximize community co-benefits from alt proteins, companies can recruit from educational pipelines that currently serve the animal agriculture industry and build additional pipelines broadening access to alt protein career training. In both educational settings and recruitment, it would benefit the common good if alt protein companies strongly support diversity and act in genuine allyship with BIPOC populations that traditionally face greater barriers to involvement.
  • Government and Policy Support
Food system transformation advocates and alt protein industry analysts in our sample were in broad agreement that that policymakers and legislation could—and should—better support the alt protein industry to increase its positive impacts on the common good, building on a long legacy of government support for private sector innovation and improvement.51 While research and development represents one key public good government could support, there are opportunities for beneficial public investment throughout the alt protein value chain.52 Potentially impactful government actions mentioned by our interviewees included supportive policy shifts and additional cooperative action and investment.
Increasing public support for value chain coordination is critical for supporting farmers transitioning to new crops and new markets. We currently rely on farmers being very entrepreneurial to find markets. We could support that better through government programs.

Pete Huff, Co-Director, Wallace Center at Winrock International

Supportive Policy

Policy changes that interviewees suggested to expand the public benefits of alt protein production included strengthening land conservation incentives, realigning product subsidies, and improving public support for improved value chain coordination. Expanding and strengthening conservation programs could provide transition incentives for farmers and bolster domestic plant-based input production. Adding subsidies for crop production with fewer negative environmental and social externalities and reducing public support for farmed animal and feed crop industries would go a long way to leveling the subsidy playing field that currently disadvantages plant-based alternatives—and the common good—in a price-parity race to the bottom. Lastly, experts noted that public support for improved tools and management of value chains could have co-benefits for a broad range of farmers and rural communities, especially those interested in transitioning to new crops and new markets.

Funding Collaboration between Alt Protein and Government

Interviewees across all categories of our sample shared insights related to increasing government coordination and cooperation with the needs of the growing alt protein industry. First among these suggestions was the value of expanding public-private partnerships to help plant-based companies provide greater co-benefits at all stages of production. Many entrepreneurs, industry analysts, and food system transformation experts agreed that the alternative protein industry’s profit motive does not position it well to prioritize expanding common-good benefits without government-led research, standard-setting, and financial assistance. Many interviewees mentioned the potential benefit of government-funded research and development and government-facilitated collective marketing efforts for alt proteins— perhaps similar to checkoff programs—for advancing entire sectors of the alternative protein industry. Additionally, analysts highlighted the potential for government backing to bolster impact assessment and product standards, contributing to more effective benchmarking and more robust compliance. Others emphasized the importance of expanding government supported loan guarantee programs to enable and de-risk large investments in building or transitioning commercial plants and facilities. Investors were nearly unanimous in observing that government investment could provide critical support for capital expenditures early in alternative protein companies’ growth, an area where VC is especially hesitant to invest.

Externalized public funding would be especially helpful for financing capital expenses related to hard infrastructure and processes, where VC hesitates to invest. This would be one opportunity for ensuring enhanced common good benefits can be meaningfully baked into the industry from the beginning.

Lisa Feria, Managing Partner and CEO, Stray Dog Capital

On the CapEx side, that’s where we need government to provide the infrastructure for companies to grow. In the US, we are definitely seeing signs of that in federal and state-level funding for facility buildout and state incentive programs. We need much more of that if we’re going to meaningfully impact this industry. I also think that governments need to think about this investment in a more joined-up way; it’s about national security, climate change, net zero, food security, biosecurity. There’s some joining of the dots between these issues of national priority in the US with biomanufacturing. We need more of that thinking instead of siloing food as its own thing not considered relevant to the rest.

Rosie Wardle, Co-founder and Partner, Synthesis Capital
  • Investor Actions

Vision and Leadership

Ask about Impact: The entrepreneurs and investors in our sample highlighted the meaningful role that investors can play in supporting alt proteins’ contributions to the common good simply by putting the issue on the table with companies. Entrepreneurs shared that when investors ask about products’ impacts on the common good during due diligence or even after investment, it raises those issues’ priority with start-ups and normalizes the ask. Investors and entrepreneurs remarked that if enough investors asked about common-good benefits and metrics—particularly if questions and metrics were standardized across investors— it could improve and expedite data-gathering for the entire industry. In the near term, investors noted that simply asking companies about common-good benefits, regardless of whether companies can provide answers, is worthwhile, as doing so raises the profile of common-good benefits with companies and demonstrates investors’ interest.
Support Impact Measurement: While early-stage investors in our sample expressed that it is often difficult for small or early-stage companies to provide metrics on common-good benefits due to resource constraints, they highlighted the unique opportunity for investors to help start-ups lay foundations for best practices early on. Things like solid HR systems or diversity, equity, and inclusion policies might fall off companies’ priority lists during their early years, but when early-stage investors prioritize these practices and provide support to make them possible, it can set companies up to effect positive impact as they grow. Some investors in our sample fund the use of impact assessment tools on behalf of start-ups in their portfolios. This benefits companies by making impact measurement financially accessible and, when done across multiple companies in the same space, benefits the entire sector by spurring companies to compete in creating common-good benefits. Investor support for impact assessment also contributes to the long-term improvement of data gathering and may gradually make co-benefits into a baseline expectation for alt protein companies.
Invest in Underfunded but Crucial Areas: Plant-based alt protein industry leaders and analysts that we interviewed urged investors to consider investments in areas of plant-based supply chain inefficiency and empty spaces that prevent plant-based alternative protein supply chains from being able to compete with conventional animal agriculture. For example, respondents cited a lack of domestic (US) processing infrastructure, organic-certified processing plants and processing plants generally, and grain elevators. While these areas are outside of the typical VC realm, investments in them would greatly support the success of the industry as a whole.
Embrace Aspirational Goals: On a more aspirational level, investors we spoke with expressed a desire to broaden common-good benefits in their diligence, including metrics that are typically left out of standard impact measurement, such as soil health and farming practices used by ingredient suppliers. While the current feasibility of impact measurement for additional elements of the common good may be limited, expanding the breadth of impact measurements available could be a goal for more investors. Entrepreneurs we spoke with also expressed a desire to see more enthusiasm and support from investors for companies to commit to common-good benefits, such as certifications like B corp. Investors can make an impact by encouraging companies to pursue common-good-related benefits and certifications rather than regarding such activities as secondary or less important to other areas of the business. Ultimately, investors can support plant-based alternative proteins’ impact on common-good benefits by investing in companies that seek to be truly transformational and are actively building transparency, accessibility, and accountability in the food system.

Collaboration and Coordination

Consider Flexible and Integrated Funding Structures: One of the most concrete ways investors can support plant-based alt proteins’ benefits to the common good is by investigating opportunities to invest through and alongside models of integrated capital. RSF Social Finance defines integrated capital as “the coordinated use of different forms of financial capital and non-financial resources to support an enterprise that’s working to solve complex social and environmental problems.”53 As we discussed above, the limitations of the VC model create an opportunity for other forms of investment to fill unmet needs. For example, low- to no-interest loans could help farmers transition to the production of alt protein input crops or build processing facilities, and grant funding could support publicly available alternative protein research. Few investors we spoke to had investigated or tried this, although some have affiliated philanthropic sides of their organizations. Investors could learn from integrated capital practitioners about how to mobilize integrated capital effectively to maximize alternative proteins’ benefits to the common good.54 As we discussed, improved access to nondilutive and longer-term funding sources remains one of the greatest pathways for alt proteins to realize broad co-benefits. To address this need, investors could consider extending investment timelines to provide companies with longer development runways. They may also consider whether they could provide or connect companies to forms of nondilutive funding. Their ability to do this may depend on where a company is located; for example, US-based companies in our sample reported rarely accessing nondilutive funding, whereas investors reported that most of their EU-based portfolio companies received government grant funding. In addition to supporting alternative proteins’ benefits to the common good, nondilutive funding benefits investors by removing some investment risk, decreasing the dilution of their dollars, and perhaps allowing them to spread their funds across more investment opportunities.
Engage with Government Policy: When possible, industry academics and analysts whom we interviewed recommended that investors engage with government policy regarding alternative proteins. This may be most easily done through collaboratives such as trade associations, where investors do not need to engage with policymakers directly but have their interests represented collectively. The long-term benefit of such engagement would hopefully be more government grants and subsidization of the alternative protein industry, which are currently orders of magnitude smaller than those awarded to the conventional animal agriculture industry.55
Rescue and Preserve Intellectual Property: The alternative protein industry is currently experiencing a scarcity of funding, which has resulted in several companies having to shut down. Respondents noted that as this has happened, much of the IP from these companies was sold to trading companies for “pennies on the dollar” and risks being lost to the industry. Investors could play a role in rescuing and preserving the IP developed by companies that have recently fallen or will soon fall to the alt protein market slump. While doing so would not save individual companies from failure, it would preserve the IP for the benefit of the industry as a whole and for potential future use.
Greater availability of sources of non-dilutive funding could be very helpful for freeing companies to pursue greater benefits to the common good. Existing non-dilutive funding sources (e.g., research grants, the X Prize) are difficult to access, taking significant time and resources to obtain as well as requiring rigorous documentation and reporting processes.

Christie Fleming, CEO, The ISH Food Company
  • Advocacy and Education
Overall, advocates in our sample urged their peers to take a food system transformation lens to their work rather than just focusing on one specific issue area. They also highlighted the importance of aligning the many sides of the food system transformation movement and of circumventing the playbook and narratives of the meat industry. These views were echoed by other segments of our sample.

Advocates also emphasized the importance of maintaining the belief that transformational change of the food system is possible and of working toward a food system that empowers this systemic change for people and animals. Finally, on a more concrete level, advocate respondents mentioned the important watchdog role of nonprofit organizations in keeping corporate standards legitimate and beneficial.

In terms of engaging with the corporate sector, some advocates recommended that nonprofits connect with sustainability leads or employees in similar positions at food and meat corporations that have purchased plant-based start-ups. While a large company’s general business model may not fully align with the goals of nonprofit advocates’ organizations, respondents noted that employees in these roles often have deep personal commitments to aligned causes and can act from the inside to keep values in place at acquired plant-based companies. On the consumer-facing side, nonprofit industry experts reaffirmed the importance of communicating the benefits of plant-based products to consumers so that the success of the sector is not reliant solely on the “taste, price, convenience” model for consumer uptake.

Respondents also noted the important role of educational institutions in building plant-based alt proteins’ contributions to the common good. Industry experts highlighted the need for more educational programs that can feed into alt protein workforces, such as internships, career fairs, scholarships, and other entry points. Interviews highlighted the need for a greater commitment to diversity in education relevant to alt proteins.
We’re all trying to make the world a better place, address climate change, and save animals, but it really does feel like there’s a pretty serious and increasing dividing line between the daily realities of companies vs. investors vs. advocacy groups. I definitely think there’s a need for investors and CEOs and founders and the nonprofit world to come together a lot more effectively for food system change. Most importantly, I would like to see more of the analysis done to inform the industry be based on data and lived realities of companies in this space.

Christie Lagally, Founder and CEO, Rebellyous Foods

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