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  • Sustainability
    • General Sustainability

Plant-based protein – past, present and future

  • Article

Learn about the past, present and future of the plant-based protein industry

While the phrase may be new to some – plant-based protein itself is not. Peanut butter, for instance, is precisely that: a plant-based protein. Soy burgers, too, have been part of school lunch programs for at least two decades. There are companies who have been offering vegetarian and plant protein options in grocery stores for 40 years, while others who lead the market in frozen hamburgers have also begun producing a range of veggie patties.

However, interest in plant-based protein that is closer in taste and texture to animal protein has grown significantly in the last few years. That’s when newer companies moved into the space and really began to commercialize plant-based protein, says John Church, co-head of Food & Beverage for HSBC USA.

Now you can find plant-based options in virtually every restaurant – including quick-serve restaurants.

Demand for these meat alternatives is primarily environmental, says John. In its 2019 special report Climate Change and Land, the International Panel on Climate Change (IPCC) notes that plant-based diets could go a long way in mitigating climate change. That’s because cows produce methane, a greenhouse gas, as they digest their food. This environmental impact is exacerbated by deforestation, mainly when woodlands – which take carbon out of the air – are cleared for pastures. “So, as we learn more about climate change, consumers want to do their part by not contributing to an issue that may not be as good as it could be.”

It’s important to point out, John adds, that dairy and beef farmers do also have options for reducing their carbon footprint. This includes investing in a cooperative anaerobic digester to convert manure into fertilizer or renewable natural gas and adopting other regenerative agriculture practices.

In addition to environmental concerns, many people today want to reduce or eliminate animal protein from their diets for health reasons. That’s why John believes plant-based products are not going away. "Will they replace animal protein? I can’t imagine that will happen anytime soon," he says. “But there are a lot of dollars going into the market, so it will certainly continue to grow.”

Big meat producers clearly think so, too, since they are also adding plant-based options to their product lines. The largest meat company in the world, for instance, introduced a line of plant-based burgers and chorizo in 2020. Major players in the animal protein space are also investing in plant-based producers or are offering their own plant-based products.

"Other global events, like the African Swine Fever that wiped out one of the world's largest swine herds in 2019, also have people thinking about food safety," says John. “And plant-based protein is an option there as well.”

What’s Next?

Moving beyond plant-based, next on the horizon is cell-based protein. Also known as clean or cultured, cell-based meat and seafood are produced in a lab from animal cells. “It's not there yet, but protein companies are interested," says John. Plant-based and particularly cell-based processes are more expensive than those related to animal protein. "We've seen higher price points with other innovations such as produce grown in indoor and vertical farms,” he adds. “As with any new technology, I suspect we’ll see that start to come down as demand increases and processes are perfected.

HSBC is committed to supporting those businesses – from the farm to the lab to the boardroom – who are taking an active part in being smarter, stronger corporate citizens by focusing on reducing carbon emissions. That's why we are dedicating up to $1 trillion of finance in investment between now and 2030 to help our customers transition to more sustainable business models. We are also innovating with new financing solutions, including our sustainability-linked loans, which are designed to provide reduced cost of capital as key ESG performance indicators are met.

Visit our Food & Beverage Industry Expertise page for more insights and trending topics.

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