Building Sustainable Protein Supply Chains

Alternative proteins are now big business: plant-based foods are leading growth for the food sector. For investors, an expanding alternative protein portfolio is a lever for growth. More importantly, it is a fundamental and necessary component to manage a company’s exposure to the most material ESG risk facing the food sector. A sole focus on supply chains, which is isolated from portfolio composition, will result in greater capital investment to address risks as demand for meat, dairy and fish continues to grow.

Companies must complement their supply chain interventions with a systematic transition to ensure their protein portfolio results in better health outcomes and is in line with planetary boundaries.

What do we mean by protein diversification?

Any protein diversification strategy cannot simply focus on adding a few new alternative protein products to the current portfolio. It requires companies to develop a comprehensive strategy to expand product development and research, explore the applicability of new food technologies and acquisitions, leverage their marketing power to influence consumers to embrace new products and engage their supplier community to mitigate impacts on farmer livelihoods. To undertake such a transformation, companies must:

• Evaluate their current exposure to animal proteins and the risk profile of these supply chains
• Assess the strategic implications of growth plans that are predicated on a higher reliance on animal proteins (through scenario analysis).
• Commit at the highest level to transitioning their global business model to less resource-intensive food products
• Develop a cross-functional strategy (involving R&D, marketing, sustainable sourcing) to undertake a transition
• Set clear goals and timelines to achieve a transition
• Report on the right metrics to evaluate portfolio transition

Contact: Jo Raven, Engagement Manager