How agri-food companies

can take advantage of

the plant protein revolution
With soy now in decline, what
might be the next big plant protein?

February 2022
2 How agri-food companies can take advantage of the plant protein revolution

Management Summary

After years of steady growth, plant-based proteins are expected to take off
over the next five years, according to the latest research. With consensus
growth estimates ranging between 9-15% per year, we project the segment
to grow by 12%.

This predicted demand cannot be met with the current production capacities,
however. Consequently, food companies across the entire value chain must
reconsider their position in the plant-based food market if they wish to benefit
from the increase in demand. More specifically, they must select the most
applicable plant-based protein, identify parts of the value chain that capture the
biggest value, and understand how to seize these opportunities.

To help agri-food companies decide on which bets to make, Roland Berger

conducted several expert interviews, researched the latest market reports,
and cross-referenced them with our own recent projects in the plant-based
protein industry. This is what we learned.
3 How agri-food companies can take advantage of the plant protein revolution

Food is changing
The need for a new plant protein

Plant-based protein growth is driven primarily by DRIVERS OF GROWTH IN THE ALTERNATIVE PROTEIN SPACE
environmental, health and wellness, and animal-
friendly concerns.

For example, 59% of Europeans are willing to pay Animal welfare

upwards of 5% more for animal-friendly products. In 59% of all European
the US, over 40% of younger generations say they citizens are willing to pay at
will spend more on healthier products, compared to least a 5% premium for
21% of Baby Boomers. Similarly, over 60% of that animal-friendly products Environment & resources
younger demographic are willing to spend more on In the US, 62% of Generation Z
and 54% of Millennials indicate
food products that do not harm the environment. they are willing to spend more on food
Consumers are therefore looking for alternatives products that don't harm
such as plant-based proteins. the environment (compared to 44%
and 32% of Generation X and Baby
Today, soy is the biggest source of plant-based Boomers, respectively)
protein. But it is losing market share. Since 2014, the
soy-based milk alternatives market is down 2% per
year, while other alternatives are up 16% in North
America and Europe. Although soy has a protein Health & wellness
digestibility corrected amino acid score (PDCAAS) In the US, >40% of Generation
similar to animal-based proteins, its price is com- Z indicate that they are willing
petitive, and it enjoys an established supply chain, to spend more on healthy
there are growing concerns over the beans' aller- products, compared to 32% of
genic and estrogenic reactions. On top of that, Millennials and 21% of baby
soy’s reputation has diminished over its environ- boomers
mental record (i.e. deforestation) and GMO-related
health concerns.

With soy now dwindling in popularity, what then

might the next big plant-based protein be? And how
might the industry keep up with rising demand?
Source: Expert interviews, desk research, Roland Berger
4 How agri-food companies can take advantage of the plant protein revolution

Leading candidates
The future of plant proteins

While soy leads the market in price, other protein OVERVIEW OF PLANT PROTEINS NUTRITION AND COST
alternatives are catching up as their commercializa-
tion stage matures. In our view, the predominant
Non-exhaustive
selection criteria for tomorrow’s biggest plant-based
protein includes five ingredients: Egg

High
1. Functionality (i.e. taste and texture) Soy
2. Cost (compared to the current
Milk
USD 2.4/kg price of soy)
Pea
3. Availability (i.e. mainstream scalability)
4. Nutrition (Can the crop provide all
essential amino-acids?) PDCAAS1) Ground
5. Sustainability (Which plant proteins Canola beef
are more environmentally friendly?)

Based on those criteria, we reviewed the different

sources of proteins. Based on their nutritional profile,
Rice Wheat
soy, canola, and pea are the closest to animal protein.
When price is taken into account, however, soy and
pea are in a much better position than canola.
Low

Pea also has a good ranking on other criteria such as High Low
Estimated cost per kg protein2)
functionality, availability and sustainability. That is
the reason why we believe pea is poised to become
Plant-based Traditional
the next big plant protein for the foreseeable future.
Customers are especially attracted by its gluten-free Average estimated protein concentration in raw material [%]
characteristics, health benefits, and sustainability
when cultivated.
1
 Protein digestibility corrected amino acid score
2
 Does not consider the cost of added ingredients, which can vary widely based on the protein source used

Source: Meticulous Research, FAO, Wageningen University & Research, GFI, Nutrition journals, Expert interviews, Roland Berger
5 How agri-food companies can take advantage of the plant protein revolution

Overview of some plant proteins characteristics

The rise of new plant-based proteins sources

What is more, pea’s functionality makes it a good OVERVIEW OF OTHER CHARACTERISTICS OF PLANT PROTEINS
Non-exhaustive
protein source for yogurt, fish, beef, and chicken
alternatives. Its price is affordable (c. USD 4.2– Application
USD 4.6 per kg), although still more expensive than Crops Trend Allergen risk Sustainability Flavor Dairy Meat Egg Pasta
soy (c. USD 2.4 per kg) for now. This current
combination of strengths might help it overtake soy Soy Severe Poor Strong
as the leading plant-based protein in the near future.
Almonds Strong Low Mild
That said, many companies have already placed early
bets on pea protein, including Cargill (investing Quinoa Low Good Acceptable
USD 75m together with PURIS in the US), Roquette
Wheat Severe OK Acceptable
(opening of the world's largest pea protein plant in
Canada for USD 400m), and DLG (investing in a pea Oats Low Good Mild
protein factory in West Jutland, Denmark, which is
set to produce 50k tons annually under full capacity Duckweed Mild Excellent Mild
by 2023).
Sunflower Mild Good Acceptable
Thus pea, which is primarily grown in Canada and
China, is expected to nearly double its current pro- Canola Severe Good Acceptable
duction volume to 550 kilotons by 2025.
Lupin OK OK Strong

Chickpea OK OK Acceptable

Rice Mild Low Mild

Pea OK Good Acceptable

Low global crop volume Excellent Low

Highest global crop volume Good Poor
OK

Source: FAO, GFI, Roland Berger

6 How agri-food companies can take advantage of the plant protein revolution

Business risk
How agri-food companies should respond

The current structure of the plant-based protein AVERAGE MARGIN ACROSS THE VALUE CHAIN
market is too slow to react to these immediate trends.
Indeed, there is a disconnect between fluctuating
consumer preferences and farmers choosing to plant
what works today instead of what will tomorrow.
This represents an incredible opportunity for first- BUSINESS MODEL TYPE OF PLAYERS AVERAGE MARGIN
movers to assume a bigger and better position in the
plant protein value chain.
Supplying raw • Ingredient traders
Understanding the value chain by crop will be
1 materials • Ingredient processors 10-30%
instrumental when deciding which crop to bet on
and where agri-food companies should position
themselves. Since many first-movers have already
Providing ingredients • Ingredient processors
begun placing bets along the plant protein supply
chain, the time is now for other players to enter the
2 and solutions • Flavor houses 40-60%
market and place their own, most strategic bets
before the market fully matures.
• Plant based manufacturers
Manufacturing of (semi-) finished goods
3 end-products • FMCG and food manufacturers 30-40%
• Pure-play plant-based manufacturers

Investing in next • Start ups

4 gen alternatives • Investment arm incumbents

Source: FAO, GFI, Roland Berger

7 How agri-food companies can take advantage of the plant protein revolution

Value chain
How the value chain is getting structured

Indeed, by 2025, we believe the market will begin its maturing phase, when adoption rates stabilize at "final" levels and FMCG players
have increased their production capacity and secured sourcing. In our view, companies that wait until then will largely miss out on this
growing opportunity. Thus, to prepare for the plant protein future, the agri-food business must confidently answer the key questions
outlined on the next page in strategic detail.

VALUE CHAIN OVERVIEW OF KEY PLAYERS

RAW MATERIALS PRIMARY PROCESSING SECONDARY PROCESSING PRODUCTION DISTRIBUTION

Crop traders: FMCG and food manufacturers: Retailers:

Louis Dreyfus Company (V), Bunge Limited (P, V) Tyson Foods, PHW-Gruppe, Walmart, Kroger, 7-Eleven,
Nestlé, The Kraft Heinz Company, Costco, Ahold Delhaize,
Unilever, Swift & Company, Tesco, Whole Foods Market,
DuPont Kellogg Company, Conagra Marks & Spencer
Ingredient processors:
Nutrition & Brands, Maple Leaf Foods
Cargill (S, P), Roquette (P), Ingredion (V), DSM (V), Kerry (V), Tate & Lyle (V)
Bioscience:
International
Food service companies:
Flavors &
Pure plant-based manufactures: Pizza Hut, Burger King, Starbucks,
Flavor and fragrance houses: Fragrances
Oatly, Tofurky, Vivera, Like Meat, Dunkin’ Donuts, McDonald’s
Givaudan (S, P), Symrise (V), Firmenich (V), MANE (V) (S, P)
Beyond Meat, Livekindly

Plant-based manufactures (semi-) finished goods:

Plant & Bean, Dalco Food, Meatless, VBites
S = Soy1)
P = Peas1)
Integrated manufacturers: Impossible Foods, Eat Just
V = Various1)
 Indication excluding production and distribution
1

Source: Expert interviews, Company websites, Roland Berger

8 How agri-food companies can take advantage of the plant protein revolution

Roland Berger can help

Contact one of our experts today

As the only management consultancy of European KEY QUESTIONS FOR PLANT-BASED PROTEINS PLAYERS
heritage with a global presence, Roland Berger
independently operates 50 offices in all major mar-
kets with a team of 2400 experts. In our Agriculture
and Ingredients business, we have published dozens 1. ORGANIZATION OF VALUE CHAINS
• How is the value chain set up/organized?
of thought-leading and forward-thinking industry
• Who are the key players along the entire value chain?
reports based on our past and present experience in • Who are the key suppliers of the raw materials of the alternative-protein source?
plant-based nutrients and alternative proteins. • Which technologies are those suppliers using?

Our recent advisory partnerships include in-depth

assessment, due diligence, and winning business
models of the alternative protein market, market 2. CURRENT STATE AND EXPECTED DEVELOPMENT
• What are current and future yields and volumes?
analysis of the European alternative protein sector, • Where and how are they produced and processed?
and a plant-based nutrient strategy for a global • Will there be enough supply for selected alternative proteins (vs. demand)?
health science company. Over the last year, we have • What are the technologies and costs needed to process by-products?
also provided diversification options for a global agri-
commodity merchant, investment evaluation for the
meat substitute market, and strategy development
for a European plant-based meat company. 3. COST STRUCTURE
• What are the current agricultural, processing and raw material costs?
• What is the cost structure of processing players?
Want to get the ball rolling on your next plant-protein • What would be the logistics costs and trade challenges/barriers?
assessment? Here is how it works. First, we collect
initial business information to carry out a quick audit.
Then, we provide a scope of work and timeline of
deliverables based on your market position, niche, 4. SUSTAINABILITY IMPACT
• How much water does the alternative protein source consume?
and targeted goals. After that, we present detailed • How much land usage is required to grow the crop?
guidance on how you can improve, and how we • How well does the alternative protein source fix nitrogen?
might be able to further help with the successful
implementation plan of your selected strategy.

To learn more or discuss specifics, please contact

one of our Roland Berger experts today. Source: Roland Berger
Global Experts
Patrick Müller-Sarmiento Gundula Pally
Partner, Germany Partner, Austria
+49 160 744-4126 +43 664 849-3461
patrick.mueller-sarmiento@rolandberger.com gundula.pally@rolandberger.com

Wilhelm Uffelmann Sébastien Murbach

Partner, Germany Partner, France
+49 160 744-8336 +33 6 3747-4584
wilhelm.uffelmann@rolandberger.com sebastien.murbach@rolandberger.com

Regional Experts
Viktoriya Bondarets Siobhán Géhin Jonathon Wright
Partner, Ukraine Partner, Great Britain Partner, United States of America
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Artem Zakomirnyi George Ren John Low

Partner, Russia Partner, China Partner, Malaysia
artem.zakomirnyi@rolandberger.com george.ren@rolandberger.com john.low@rolandberger.com

Alexander Belderok Marcus Ayres

Partner, Netherlands Partner, Brazil
alexander.belderok@rolandberger.com markus.ayres@rolandberger.com
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