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The Great Protein Shift: Re-Thinking One of the Fundamental Building Blocks of the Human Diet

Posted by Camilla Stice and Abhirabh Basu on May 7, 2015 7:30:44 AM

Protein is essential to health and nutrition, but the challenges of finding sufficient and sustainable food for the populations of the 21st century will be most acute for protein. The ways most of us have eaten for millenia will change as powerful factors are shifting demand and driving the development of novel sources. To wit:

  • Increases in global population and prosperity levels heighten protein demands. The UN predicts population growth to 9.6 billion by 2050, and rising global prosperity drives increased protein consumption as affluent consumers seek a better diet. All told, we project global protein consumption will rise from 470 MMT in 2014 to more than 940 MMT by 2054.
  • Supply and environmental impacts dampen the future of conventional meat production. The 65 billion animals a year raised for human consumption eat nearly a third of the crops grown worldwide and produce more than 14% of the total greenhouse gases. This production is also notoriously inefficient: For most animals, it takes approximately 10 kg of feed to generate 1 kg of edible meat.
  • Consumer preference and advancing nutrition science drive alternatives. While global meat consumption is still on the rise, consumer's desires and health concerns in developed countries are driving many toward alternative protein sources. U.S. consumers, for example, have already demonstrated a significant shift away from red meat and toward poultry consumption and many are cutting out or minimizing meat altogether.

The challenges facing traditional protein production will force changes on agricultural suppliers, farmers, and food formulators alike. Lux Research has been tracking a variety of approaches that are likely to emerge in the near- and long-term as humans search for more and better protein in the coming decades.

Near-term: Rapid Growth in Aquaculture Closes the Gap Between Supply and Demand

One way that populations have already sought out to generate protein has been taking it from the seas. In the last 20 years, consumption fish has grown by 64% and fish now accounts for about 20% of human intake of animal protein, rising from a meager 7% in 1990. However, rampant overfishing and illegal and unregulated fishing from the traditional fishing industry has resulted in the decline of ocean species including wild salmon, blue fin tuna, and sea bass. A more sustainable means of production has been needed to meet the rising demand for fish. Aquaculture, the farming of fish and other aquatic animals, is now responsible for over 42% of the global fish production and is set to reach 62% by 2030 (see Figure 1).

Figure 1: Aquaculture Market is Big and Booming

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Aquaculture production has steadily grown at an annual rate of 6.2% from 2000 to 2014, providing over 500 different species of fish to the tune of over 100 million tons in 2014. That amounts to a staggering amount of revenue – $170 billion, growing at an even hotter 8.3% annual rate since 2000, as aquaculture has pushed in to high-value species like salmon. This production is concentrated in a few hot spots, most notably China, which supplied 57% of the global market; other regional leaders include Egypt, which now produces 62% of all farmed fish in Africa, while Norway contributes 46% of Europe’s aquaculture.

While fish farmed have the potential to overcome some of the environmental and efficiency deficits of meat, and the ecological devastation of ocean capture, aquaculture systems have their own challenges, particularly when it comes to water usage. Most aquaculture is done in simple pond systems, but without water treatment, these fish populations swim in a putrid cocktail of dead fish, feed, feces, and nutrients that breeds disease and can eradicate entire crops. Traditional systems are also inefficient, consuming large sums of water to produce limited quantities of fish.

As a result, water treatment is one of the most pressing ways to play the aquaculture boom. Water treatment systems for aquaculture represent a $7.2 billion opportunity already today, which we project will grow to $13.3 billion in 2030. The area is also ripe for innovation – several promising start-ups including BioGill and BioFishency market their treatment systems to farms and commercial facilities – and larger companies are starting to enter. Kruger Kaldnes, a Veolia subsidiary with expertise in wastewater treatment is now involved in multiple aquaculture projects in Europe and Asia, while GE, Boeing, and Masdar Institute of Science and Technology have launched an Integrated Seawater Energy and Agriculture System to produce biofuels and fish simultaneously.

Long-term: From Fish to Plant to Petri Dish – Alternative Protein Sources Rise in Coming Decades

While rising fish consumption will continue and take some pressure off terrestrial livestock, aquaculture alone will not be enough to manage all the challenges presented by changing protein demand. We project that alternatives to meat and fish – ranging from soy and other well-known plants to more exotic options like insects, algae, and even lab-grown meat – will rise from a modest 2.1% of global consumption today to 33% of the protein market by 2054 (see Figure 2).

Figure 2. Alternative Proteins Gain Market Share as Meat and Seafood Consumption Slows

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As alternative protein consumption grows, it will also diversify (see Figure 3). Here's how we project the changes playing out over the coming decades:

Figure 3. The Alternative Protein Landscape Diversifies in the Coming Decades

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  • 2024: First-generation plant protein dominates alternative protein landscape. In 2024, alternative proteins will reach 6.5% of the global protein market but remain dominated by first-generation soy protein, which will account for 83% of the alternative protein market.
  • 2034: Nascent alternatives continue chipping away at first-generation plant protein. By 2034, alternative proteins will account for 13% of the protein market and other alternative proteins will begin to make serious inroads. Second-generation proteins – protein extracts from well-established crops such as pea, canola, and rice – will increase to 12% of the alternative protein market, while third-generation proteins, from novel plant sources naturally high in protein like moringa, will reach 6%, and algae-based protein will reach 8%.
  • 2044: New entrants diversify alternative protein landscape. In 2044, alternatives will be meeting a full 22% of protein demand, and we see a wide spectrum of alternative protein sources on the market. In addition to plant and algae proteins detailed above, protein from insects, food waste, and synthetic biology techniques will have a presence. Even meat grown in vitro will be on the market, albeit as a tiny niche.
  • 2054: Established protein sources neck-and-neck with growing nascent alternatives. Midcentury will find a more balanced mix of alternative proteins accounting for 33% of the global market. Once-dominant soy will have just a 22% market share among alternative proteins, and second-generation plant protein, algae, and third-generation plant proteins, ring in at 20%, 18%, and 13%, respectively.

Clearly there will be no one solution to the coming century's challenges of protein supply and demand, but participants in the food value chain will need to manage through a series of significant shifts and be prepared to plan over multiple time horizons. Already today, aquaculture is a booming business and an attractive play, particularly for those with water treatment expertise. In the longer run, more plant-based sources will become significant, diversifying the mainstream market, and shifting the land distribution of agricultural crops toward protein-heavy varieties. Ultimately, technology developers will bring novel protein sources, designed to nourish the world while easing the environmental burden of our modern-day food supply.

 

For more information on Food and Nutrition technologies, contact Camilla at camilla.stice@luxresearchinc.com.

For more information on Water technologies, contact Abhirabh at abhirabh.basu@luxresearchinc.com.