The European alternative proteins market comprises businesses that produce and distribute alternative protein products and ingredients. Herein, we see a split between players producing ingredients (e.g. pea and rice proteins) and finished food products (e.g. plant-based meat and dairy-free cheese). Within the latter, there is a split between plant-based, fungal- and fermentation-based as well as cell-based players. We segmented the European market into: (i) meat alternatives, (ii) dairy alternatives, (iii) insects and (iv) alternative ingredients.

The broader European alternative proteins market remains in an early stage, which translates into a fragmented competitive landscape. Herein, the plant-based segment is relatively mature in terms of sales and profitability, while many other players from the fungal-/fermentation- and cell-based segments experience strong growth, but remain awaiting regulatory approvals (e.g. cell-based meat replacements) or major consumer adoption (e.g. insect-based alternatives).

Investor-led interest has been strong, with ~75% of identified European assets being sponsor-backed (as of February 2024). Investors are mainly attracted by the market’s upside potential, the lack of a clear market leader in multiple segments and underlying favourable regulatory drivers. With increasing animal welfare and climate change awareness, some investors are also speculating on governments to approve new product launches within the cultivated meat segment.

ESG topics primarily relate to environmental and social issues. The market plays a significant role in achieving the EU's sustainability targets, as the global food system accounts for ~30% of global greenhouse gas emissions. However, external funding needs to increase ~13-fold to achieve this scale, while consumers stay reluctant about taste and health benefits. From a social perspective, increased alternative protein consumption holds promise for reduced animal harm by reducing the number of livestock. At the same time, ethical considerations around insect sentience require attention.