Rising Alternative Protein Market, Must Take Early Steps to Secure Lead

Last Year Global $5 Billion Investment
Growing Bigger to 'All-Time High'
Domestic Focus on Startup Investment
Exploring Market Potential Level
SK's $100 Billion Investment in US, etc.
Positive Targeting of Large Corporations
Need for Food Industry Regulation Improvement

[Asia Economy Reporter Lee Gwan-ju] Since the COVID-19 pandemic, interest in health, environment, and the climate crisis has grown, leading to rapid growth in the global alternative protein market. However, the domestic alternative protein market in Korea is still in its infancy compared to overseas markets. Industry insiders are calling for active research and development and regulatory improvements to secure global competitiveness.

$50 Billion Investment in Alternative Proteins

Alternative proteins refer to proteins artificially produced through methods such as plant extraction, animal cell culture, and microbial fermentation, rather than animal-based proteins. They are particularly noted for their potential to reduce greenhouse gas emissions generated from raising animals, as well as for animal welfare and the expansion of vegetarianism.

Investment in alternative proteins is also expanding annually. According to the Korea Bio Association on the 4th, the Good Food Institute (GFI), a U.S.-based nonprofit organization, announced that the total investment in alternative proteins last year reached a record high of $5 billion. The number of investment deals also increased yearly, with 176 deals in 2019, 202 deals in 2020, and 258 deals last year. By category, traditional plant-based protein investments slightly declined (-9.5%), but investments in newly emerging microbial fermentation proteins (183.3%) and animal cell-cultured proteins (250.0%) increased.

In particular, the climate crisis and the spread of ESG (Environmental, Social, and Governance) management are factors driving the growth of the alternative protein market. The share of alternative proteins in the overall global protein market is expected to continue increasing. The Boston Consulting Group (BCG), a global management consulting firm in the U.S., predicted that the share of alternative proteins, which was only 2% in 2020, will rise to 11% by 2035. If alternative protein technology advances faster than currently expected, this share could grow to 22%.

The Long Road Ahead for Domestic Alternative Proteins

Interest in alternative proteins is also growing in Korea. According to a recent survey conducted by the Korea Consumer Federation targeting 500 adults in the metropolitan area, 9 out of 10 respondents (92.6%) believed that the development of alternative proteins is necessary. The reasons cited included reducing greenhouse gas emissions (21.8%) and animal welfare (17.6%). Additionally, 19.6% of respondents reported having experience consuming alternative proteins.

The industry evaluates that Korea’s global competitiveness in alternative proteins is still at a very early stage. Investments in related startups and funds or exploration of market potential remain limited. Among approximately 150 plant species available in the market, only about 2% of limited protein materials are used, resulting in a lack of product diversity. The low proportion of vegetarians domestically and the absence of a production base are considered the main factors.

However, it is positive that large corporations have recently begun to actively target the alternative protein market. SK is the most proactive. It has invested over 100 billion KRW in the U.S. alternative protein company Perfect Day and plans to enter the Chinese food market through a 100 billion KRW alternative food investment fund established with China’s Joyvio Group. CJ invested 10 billion KRW last year in 10 startups and funds, four of which were related to alternative proteins.

The industry is calling for support and regulatory improvements to strengthen the competitiveness of the alternative protein industry. Ji-woon Kim, a researcher at the Bioeconomy Research Center of the Korea Bio Association, emphasized, "To expand the market, regulatory improvements related to the food industry and marketing using new alternative materials are essential. While technology development, facility construction, and cost reduction efforts are the responsibility of companies, the government should prepare safety evaluation and approval guidelines to support the creation of new markets."

This content was produced with the assistance of AI translation services.