Investors Urge Food Giants to Embrace Plant-Based Proteins

Investors are increasingly advocating for some of the world’s largest food manufacturers and retailers to enhance their product lines with more plant-based proteins. This call comes in response to shifting consumer demands and the need for supply chain stability, as highlighted in a recent report from the investor network FAIRR.

<h2>Overview of the Engagement</h2>
<p>The report marks the second year of FAIRR’s engagement with prominent food retailers and manufacturers, including 12 retailers* and eight manufacturers. The investors supporting this initiative manage approximately $11.5 trillion in assets.</p>
<p>These stakeholders are urging companies to tackle risks associated with the meat industry, particularly the changing preferences of consumers and vulnerabilities within supply chains.</p>

<h2>Concerns Over Product Innovation</h2>
<p>“Shoppers are looking for affordability, great taste, and healthiness in 2025, yet food companies are investing too little in product innovation to cater to these expectations,” remarked Dana Wilson, FAIRR’s manager of research and engagements for protein diversification.</p>
<p>Wilson stressed that by being proactive and incorporating nutritious, sustainable plant-based proteins, companies can seize significant market growth opportunities while developing a more resilient product portfolio.</p>

<h2>Mitigating Supply Chain Risks</h2>
<p>Diversifying product offerings with plant-based options can help these companies avoid supply chain disruptions. FAIRR's report cites examples such as the recent surge in egg prices in the US due to an <a href="https://www.cdc.gov/bird-flu/situation-summary/index.html">avian influenza outbreak</a> and the steady rise in beef prices, which have reached their highest levels since the US Department of Labor started tracking prices in the 1980s.</p>
<p>Although demand for beef remains strong, climate-related events have led to decreasing cattle herds, making supply chains more vulnerable to inflation and other economic factors. According to FAIRR, US cattle herd sizes have dropped to their lowest levels since the early 1970s, further exacerbating soaring beef prices.</p>

<h2>Consumer Preferences are Evolving</h2>
<p>FAIRR's report emphasizes the impact of changing consumer preferences, particularly towards “ultra-processed foods” (UPFs). Despite ongoing debates about their health implications, consumers are growing increasingly conscious about their diets, showing a preference for whole foods. This shift raises concerns about the nutritional value of highly processed meat alternatives that are often high in sodium and other additives.</p>
<p>Alarmingly, only three out of eight brand manufacturers engaged in the report have introduced a plant-based whole-food product in the past year. Furthermore, just 25% of the surveyed companies have evaluated their consumer base to gauge preferences adequately.</p>

<h2>Challenges and Opportunities</h2>
<p>The struggle for many companies lies in overcoming taste and texture challenges associated with plant-based products, which has led to declining sales and the discontinuation of some offerings. Notably, Nestlé ceased its SweetEarth brand and vegan KitKats, while Unilever divested its Vegetarian Butcher brand.</p>
<p>Less than half (40%) of the companies involved in the engagement have set aside dedicated resources to improve product innovation in this area, a decline from 45% in 2024.</p>

<h2>Positive Developments</h2>
<p>On a brighter note, some companies are successfully expanding their plant-based offerings. Retailer Carrefour surpassed its initial target of €500 million in plant-based sales ahead of schedule and has now set a new goal of €650 million. Likewise, Ahold Delhaize has broadened its target to achieve 50% plant-based protein sales across all its European retailers by 2030.</p>

<h2>A Growing Market Gap</h2>
<p>“The findings indicate a significant gap in the market at the intersection of whole food, high-protein, and reduced meat diets,” explained Sophie Kamphuis, senior advisor for responsible investment at asset management firm <a href="https://www.werkenbijmn.nl/">MN</a>.</p>
<p>Kamphuis further noted that recent disruptions in animal protein supply chains—caused by climate change, economic conditions, and zoonotic diseases—emphasize the necessity of diversifying into plant-based proteins as a strategy to improve resilience and achieve climate objectives, alongside tapping into a rapidly expanding market.</p>

<p><small><em>*Participating Retailers: Amazon, Ahold Delhaize, Carrefour, Coles Group, Costco, Kroger, Loblaw Co. Ltd, Sainsbury’s, Target Corp., Tesco, Walmart, Woolworth’s Group</em><br/><em>**Participating Manufacturers: Conagra Brands, Danone, General Mills, Kraft Heinz, Mondelez Int., Nestlé, The Hershey Co, Unilever</em></small></p>