How alternative protein manufacturers can get started with sustainability
Data from the 2023 Horizons: Alternative Proteins report shows that alternative protein manufacturers see the benefits of sustainability but lack a plan. In this episode, we’ll discuss how you can get started with sustainability through small steps.
Why sustainability? Traditional meat production has negative environmental impacts, and consumers are concerned. According to the International Food Information Council’s (IFIC) 2022 Food & Health Survey, 39% of respondents consider sustainability a top priority, and Gen Z consumers give more weight to environmental impacts than previous generations. Alternative protein manufacturers recognize this opportunity and are motivated to produce a more humane and less resource-intensive product. Illustrating this is the fact that more than half of the companies we surveyed have sustainability budgets; what’s surprising, though, is that many companies don’t have goals or plans around sustainability.
Our experts analyzed the data collected from 150 industry leaders to grasp the trends in alternative proteins. To expand on their findings, CRBers Sebastian Bohn, Sub-Market Leader of Alternative Proteins; Tony Moses, Ph.D., Director of Product Innovation and Fellow; Jason Robertson, Vice President of Food and Beverage; Aaron Kilstofte, Industrial Food and Beverage Team Mechanical Engineer; and Maya DeHart, Energy and Sustainability Specialist join us on this episode. They talk about additional challenges beyond goal setting and planning that keep companies from pursuing sustainability as well as their advice for getting started despite these challenges.
Here’s a look at the episode:
02:38 – Our experts outline the sustainability takeaways from the Horizons report: consumers want a more sustainable meat or meat alternative, and that push is a key part of the alternative proteins industry’s origin story. But there are still questions about how to make these manufacturing processes and facilities more sustainable.
05:07 – Despite the desire for more sustainable operations, manufacturers face a number of challenges that keep them from enacting goals and plans. Aaron and Maya discuss those hurdles.
09:12 – Aaron explains the sustainability adoption curve and the characteristics of companies’ efforts along different points of the curve.
12:16 – The biggest tip for incorporating sustainability into alternative proteins manufacturing is to start small. Maya shares several solutions that are cost-conscious and quick to implement.
14:02 – One of the key takeaways from the report is that companies in this industry need to prioritize sustainability if they want to appeal to consumers and achieve longevity. Maya and Aaron wrap up with their predictions for the future.
Links referenced in the episode:
Transcript of Episode 2: How alternative protein manufacturers can get started with sustainability
Ashley Martins: Welcome back to the CRB Horizons Podcast! We’re bringing you the trends and data collected from hundreds of surveys with industry leaders in the life sciences and food and beverage industries. Join me, Ashley Martins, as we dive into the latest Horizons: Alternative Proteins report with the subject matter experts who wrote it.
Sebastian Bohn: Sebastian Bohn, been with CRB for eight years and I’m the submarket leader of alternative protein.
Tony Moses: Tony Moses, Director of Product Innovation and a Fellow at CRB. I’ve been with the company for three years.
Jason Robertson: Jason Robertson, Vice President of Food and Beverage, been with CRB for 16 years.
Aaron Kilstofte: Aaron Kilstofte. I’m a Mechanical Engineer with CRB’s industrial food and beverage team based here in Kansas City.
Maya DeHart: Maya DeHart. I’m an Energy and Sustainability Specialist for CRB.
Ashley: One of the key drivers of the alternative proteins industry is the effort to create a more sustainable solution to the traditional meat industry. As it stands, the meat industry has a large carbon footprint that accounts for more than 14% of all human-made greenhouse gases, including methane, according to the BBC. The Guardian reports that 60% of emissions in food production are attributed to the meat industry. Raising animals for consumption also requires significant acreage across the world. While agriculture takes up half of all habitable land, livestock production is three-fourths of that. That stat also comes from the BBC, and it begs the question, is this the best use of land? Lastly, meat production uses significant amounts of water. As concerns about our climate rise, consumers are more aware of the limitations and downsides to traditional meat production and they’ve asked for a more humane and less resource-intensive protein. And alternative proteins are promising. Take, for example, that beef production can emit six to 30 times more greenhouse gases than tofu production, according to the Guardian. We will share links to those articles in the show notes.
Given this push for sustainability across the board, alternative protein manufacturers are motivated to create comparable plant-based and cultured meats that use fewer resources. With the significant opportunity for lowering the world’s carbon footprint at the consumer level, manufacturers are considering how their business operations support a healthier world. However, our findings in the latest Horizons report reveal that many companies have sustainability aspirations but no plan.
Sebastian, Tony, and Jason tell us more about what the 2023 Horizons: Alternative Proteins report revealed about sustainability in this industry.
Tony: So, Jason, you mentioned sustainability was one of the topics that popped out to you. You know, I think that’s where this industry started. Can you give us some more insights on what you’re seeing and where that continues to be a theme?
Jason: Yeah, you know, as I was reading the other day, something really jumped out at me. I saw a statistic that I think it was, you know, greater than 75% of the consumer is really looking for that sustainable option. And so that really, you know, I think was in line with what we saw in the report that continues to be that trend. And so, I think folks want to make the right decisions. They are looking for a more, you know, responsible decision when they’re in those aisles and I think this industry is going to have a really nice story for that.
Tony: Yeah. So I think two years ago, we were seeing a lot of people were hanging their hat on just the claim of plant based. Sebastian, did you see any evolution in how manufacturers are looking to achieve a more sustainable product beyond that?
Sebastian: Well, I think, you know, when we talk about sustainability, what we’ve noticed too, there’s multiple facets to what sustainability means for these companies. Like you mentioned in the past if it was a plant-based product, they were just set on, okay, this is a plant based, you know, there’s different sustainability measures and metrics that they’re tracking compared to, let’s say, natural, you know, farm agriculture. So when we’re talking about sustainability for a lot of these startups, especially in the cultivated side and even in the mycelium-based products, the entire intent is just to showcase the difference in the sustainability of manufacturing a protein source. So, again, the push is, you know, here is not only an alternative method to, you know, growing your proteins but then the amount of emissions that result between, you know, the land uptake, the water usage. Now, you’ve got a smaller footprint, a facility, but then you have the flip side of this discussion, which is, okay, there’s a lot of metrics just in the public’s view or in traditional manufacturing and construction, where you have different certifications. Now that’s something that I think we’ve seen again from the survey results that certification and even from talking to individuals, it’s not necessarily a main driver for what these people are pushing for. And I think a lot of that comes back to the story of the mission of these companies is producing your protein source in a more sustainable fashion not the story of our building is more sustainable.
Ashley: What does this mean for alternative protein manufacturers when they are at the crossroad between providing flavorful and nutritious meat alternatives to consumers and endeavoring to be a more sustainable organization? How feasible is this and how are companies planning and budgeting to achieve their goals for more sustainable facilities and production processes? Aaron and Maya dig into these topics for us.
Aaron: The survey found that of those that have sustainability practices established, more than half of them have budgets established. But fewer than that have goals established, and even fewer have concrete plans established to reach those goals. The conventional wisdom is that getting the budget allocated for these things is the hardest step. But with sustainability, it seems to be the opposite of that where the budgets are allocated, but the plans have yet to come. So producers should be commended for taking the first step in this approach, but the challenge is to keep progressing down that road.
Maya: Now figuring out the particulars of what it takes to make a plant run sustainably is the big question that we’re here to help address. At the smaller size of companies, we’re also seeing that the return on investment opportunities from sustainability is key. And so here’s where the opportunities of finding those energy efficiencies that reduce the utility costs or water efficiencies that reduce utility costs mean that they can have that improvement in the financials as well.
And then at the biggest companies that we heard from, the reliability of their systems was key here and sustainability, meaning resiliency, was a priority for them as they’re working to make sure that they can produce the most goods to take to market that reliability of their systems and making sure that their production is fully sustainable and is key for making sure that they’re getting their product to market.
Aaron: Those are both great points, Maya. And like you mentioned, the top drivers being brand positioning and ROI (return on investment); the alternative protein producers really do need that operational savings provided by the sustainability practices. The ROI is an absolute must, and then they springboard that sustainability ROI to use that as a primary differentiator between them and their competition, which is other alternative protein producers and some traditional protein producers as well.
Maya: What did they see as the most significant challenges in addressing their company’s sustainability goals?
Aaron: And despite most of them having established budgets, approximately 80% of our respondents believe that those budgets may be insufficient to address their company’s sustainability goals, so that’s a challenge right there. And, then practically the same number of respondents rated the lack of available personnel as a significant challenge, which I think we all agree is a very consistent theme between alternative protein producers and other food and beverage producers in the market.
What I found interesting is that not only the popular vote but also in the ranked choice analysis of the responses, the respondents confirmed that they’re struggling to find new technology or equipment that can meet the company’s goals. And really I see this as highlighting two key items that companies should focus in on. Number one is attracting and retaining talent has never been more crucial than it is now. And number two, how do we solve that technology conundrum? Well, the way we’ve seen that work out positively in the past is partnering with OEMs, with original equipment manufacturers, partnering with vendors to share that R&D knowledge and to go further faster with the technology development that’s going on in the market.
Maya: Now in the last highlighted category that was a significant challenge was the lack of a detailed plan for success. So creating that step-by-step plan for achieving those next steps is really going to be key to break down understanding of what the next few years to the next ten years look like for sustainability at any company.
Ashley: Some companies have already begun to adopt sustainability in their current facilities, though there are evident barriers. So, what does working toward a more sustainable facility look like for alternative protein manufacturers? Aaron shares his take on where companies find themselves on the sustainability adoption curve.
Aaron: The adoption curve that we talk about in the report is something that manifested from the survey responses, and it really is about where do producers typically start and what they look at and where do they tend to end up. And those at the beginning of the sustainability adoption curve, as we’re calling it, include longer lead items such as power purchase agreements (PPAs), VPAS which is virtual power purchase agreements, and even something as widespread as onsite renewable generation, which is an excellent item to incorporate, if folks have the available space and available infrastructure to do so. So, those are those at the beginning.
Those that have started moving along the sustainability adoption curve tend to look at things like onsite energy storage, battery energy storage systems (BESS units). They also are looking at cogeneration where they’re producing electricity and heat with components on site. So, those are kind of middle of the curve there.
And then those that we found are currently up the curve are fully implemented and have measures that are ongoing towards their sustainability goals. What are they doing? They’re doing pretty approachable stuff. They’re doing water reuse and reclamation; they’re doing recycling; they’re doing conservation measures for basic plant utilities, energy, water, steam, and compressed air and, they’re also doing things very approachable, like composting and food waste reuse as well.
So, there’s a little bit of a curve of sometimes the longer term things are considered at the start. And then they realize, hey, we may need to start with a few more nuts and bolts strategies to get going, and then we’ll work our way up towards some of those more longer term goals in the future.
And the survey responses really highlighted a broad spectrum of technologies that these producers are using. They’re a blend from the highly engineered technologies to the satisfyingly simple technologies as well. The highly engineered technologies that producers are using to achieve their sustainability goals are like we talked about before the combined heat and power and co-generation applications, micro turbines, small gas turbines, the battery energy storage units, the heat recovery units, and the fuel cells as well. Those are the more highly engineered ones that take a little bit more time to plan and implement. But, going to the simple ones as well, like we talked about, how do we conserve those utility streams, things like steam traps, insulation for heating water lines, electric meters or even a relatively old technology that’s just found a new renaissance in the market that people are sort of rediscovering, which is thermal energy storage in the form of ice storage tanks. So, a lot of excellent technologies that are very approachable or even some that are sort of being rediscovered are being used by these producers to meet their goals.
Ashley: Fortunately, sustainability isn’t an all or nothing proposition. Maya shares that no matter where you are on the sustainability journey just starting, even with small changes, is a great first step.
Maya: One of the takeaways from this section for me was also that there is no reason to not start addressing the sustainability goals today, right? There are things that are really hard to tackle like that onsite renewable energy generation that takes a lot of planning, that takes a lot of forethought and maybe capital, but there are also things that can be done today. So doing an energy audit, doing the work of your facility to be able to see what are those lower hanging fruit of the conservation measures that can make a really big difference that may not cost any additional capital, an automation change that might be minimal to adjust the temperature of your water to reduce the amount of energy that has to go into that. That can make a really big difference and does not have to be a capital project that is pursued.
With consideration of some capital projects like onsite renewables and big projects like that, it can be hard to think about the capital that looks like investing. So there are some things that have come up recently in policy at a federal level that are considered even more key to addressing sustainability moving forward, including the Inflation Reduction Act of 2022 and also some proposed SEC [Security and Exchange Commission] rules for climate related disclosures.
Ashley: Now, what can you take away from the current sustainability trends within the alternative proteins industry and how should you apply this information moving forward?
Maya: I think the key takeaways are sustainability is top of mind, and it has to be top of mind from a consumer perspective and also from a financial and planning for a realistic future perspective. And so, if you are part of the few that are not currently prioritizing sustainability, then you’re going to want to jump in today. And there are ways to do that today, and there are keys to plan for the future. And so, with that, the third takeaway being creating a realistic budget and planning for that execution is the most key to make sure that execution is feasible and happens within the time frame that you’re planning for. Because the fear is that we all have these large goals that mean that they’re difficult to address, and either a fear or a lack of time or resources means that they don’t get addressed. And so, in planning for these lofty and aggressive targets, creating that budget and what that budget actually means for the company to a detail level is going to be key. What were your key takeaways and newfound interesting things from the survey results?
Aaron: When it comes to the market and competitors who are adopting these practices right now and we’re already well down the road, I think, to tack on to your message, the key message is that continuous improvement is always better than delayed perfection. Therefore, don’t procrastinate. Start now. Take incremental steps to get to where you’re goals are. And like you talked about, feasible execution is critical. They want a plan that gets them to their goals but without space-age technology. And I think what we have come to understand is that a lot of people are using process adjacencies; they’re using simplified measures, but accumulated simplified measures, to get to that goal where they want for either water reuse or utility conservation. Again, using small incremental goals to get there.
And lastly like you said, of trying to get that plan in place, budgets are great; plans are even better. I would encourage all of our listeners to use the content of the Horizons: Alternative Protein report to engage internal stakeholders in discussion. You’ll either come across an internal consensus on priorities, which helps move the initiatives along faster, or you’ll come across a broadening of your perspective to challenges and to market forces that you may not have considered before. But all of those three things lead to change, and that’s the important thing as well. So, use the content of this report to spur conversation and to move your organization along towards its goals.
Maya: I love that. And I think the considerations, as you are mentioning that the space of sustainability is continually evolving. And so even if today the detailed plan is set in place, continually having that conversation and revisiting what technologies are new on the marketplace and what new policies are in place that may be able to take advantage of to even reduce the financial burden sustainability and really make sure that any considerations for the plant moving forward are taking full advantage of the best technologies on the market. So as this is a really accelerating market to be in, it’s absolutely key to keep tracking what evolution is taking place.
Aaron: And like you said, Maya, that evolution is so critical when equipment vendors and the producers themselves, the owner personnel, are talking directly and working together directly. That’s when a real manifestation of this change happens because the equipment vendors are under the exact same type of goals and the exact same type of scrutiny that the producers are under as well, meaning improve your sustainability and to do more with less. They both have the same goals. Therefore, they should work together, so that should be a goal to really unlock that evolution is to collaborate and find those win-win scenarios.
Maya: And that’s I think some of the best news is that we’re all kind of working towards these goals across this industry. We’re working towards these goals, vendors, and folks like CRB we’re all in this together. And so working towards these together as the technology evolves and as industry conversations evolve, of continuing the conversations not just within organizations, not just with vendors, but also with competitors and with other consulting companies. everything needs to be talked about to make these goals possible. So it’s a great opportunity to continue building that community.
Ashley: The demand for sustainable food choices and thus the need for sustainable facilities and processes is not going away. CRB’s team of sustainability experts helps alternative protein manufacturers transition to more environmentally conscious practices. Get in touch with us at crbgroup.com.
Want more information about sustainability and other forces shaping the alternative proteins industry? Download your copy of the free Horizons: Alternative Proteins report by visiting crbgroup.com/horizons-reports. We will share those links in the show notes.
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