Funding Challenges Loom for Alternative Protein Sector in Europe as Cultivated Meat Gains Attention
As the European Union prepares to evaluate its first application for the sale of cultivated meat across its 27-member states, firms in the alternative protein industry face significant challenges in obtaining the investment necessary to scale up production.
Alternative proteins represent a range of innovative processes designed to create products that can serve as substitutes for traditional meat and dairy. These methods include precision fermentation, which employs yeasts to produce proteins characteristic of eggs and dairy, and cultured meat, which involves growing animal cells in a nutrient-rich environment to form muscle, fat, and connective tissue.
Alongside these technologies, plant-based alternatives—such as milk-like beverages derived from oats, almonds, and soy or vegetable-based steaks—are broadly available in supermarkets across the EU.
However, data from the Good Food Institute (GFI) reveals stagnation in investment for alternative proteins between 2022 and 2023, with early 2023 figures showing little improvement. Although total investment in alternative proteins in Europe climbed to nearly €800 million in 2023 from around €600 million in 2022, much of this funding was concentrated in a single company, Oatly, a Swedish plant-based leader, which raised €391 million through two significant deals this year.
Mosa Meat, a Dutch firm, stands as a leader in the cultivated meat sector, having secured €40 million in 2024 to enhance its production capabilities and lower costs ahead of its EU market entry.
### Challenges in Scaling Production
Scaling production remains a critical challenge for the alternative protein sector, particularly for lab-grown meat, which is still costly. Companies in this field need substantial investments to establish manufacturing facilities and develop necessary infrastructure.
Kira Smiley, an expert on sustainable food systems, noted a cyclical challenge: without considerable investments, achieving the necessary production scale becomes increasingly difficult. While cultivated meat has received approval for sale in Singapore and the United States, it is not yet produced commercially on a significant scale in either nation.
In Singapore, Good Meat’s cultivated chicken, which has been sold since May 2023, contains only 3% animal cells, with the remainder comprising plant-based ingredients. This blend is designed to make cell-based meat more accessible to consumers while the company ramps up its production capacity, with a retail price of approximately €5 for a 120g pack.
“Investment is crucial for companies aiming to achieve commercial scale; otherwise, prices will remain high, hindering consumer adoption,” Smiley explained.
Carlotte Lucas, head of industry at GFI Europe, echoed this sentiment, emphasizing that the focus must shift toward commercial viability and scaling. She stated, “The current infrastructure in Europe is insufficient to produce at the necessary scale to achieve the intended impacts of these products.”
### Global Investment Trends
On a worldwide scale, the investment landscape for alternative proteins appears bleak. According to GFI, startup investments plunged by 38% last year, marking the lowest level since 2018, with food tech startups experiencing an even steeper decline of 61% in 2023 compared to the previous year.
“It’s a tough funding environment across all sectors right now,” Lucas noted. “A significant recovery doesn’t seem likely in the near future.” However, investment in alternative proteins in Europe has remained somewhat more robust than in other markets.
Additional regulatory challenges in the EU may deter potential investors, as public sentiment shifts toward preferring simpler, less processed food options. Smiley pointed out that any negative perceptions regarding alternative proteins being overly processed could dampen investment interest.
### Addressing the Investment Gap
As the industry seeks to create a more favorable investment landscape, Lucas highlighted the need for public sector support to mitigate risks and foster growth within the industry. Public investment in Europe has remained limited, with notable exceptions such as the Dutch government’s allocation of €60 million to Mosa Meat in 2022—marking one of the largest public investments in cell-based food globally.
Recently, the Polish firm LabFarm received a €2 million grant from the National Centre for Research and Development to advance its cell-based chicken meatballs development. Additionally, Gourmey, a French company pursuing EU approval for cultivated foie gras, received backing from Bpifrance in 2021, despite the French government being one of the most vocal opponents of lab-grown meat in Europe.
Lucas emphasized that the alternative protein sector is “at a tipping point,” where technological and scientific challenges have largely been addressed. However, the development of large-scale infrastructure has not kept pace. Without substantial support, Europe risks missing the opportunity to leverage alternative proteins for enhanced food security, sustainability, and public health.
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John Peterson graduated with a degree in Agricultural Sciences from Wageningen University in the Netherlands. His specialization is in sustainable crop production and soil health management. John is passionate about integrating modern technology with traditional farming methods to enhance productivity while preserving the environment. He currently works as a consultant, helping farmers adopt sustainable practices.