What is the future for sustainable protein in Asia-Pacific? Three expert leaders share their views

The protein transition – the move towards plant-based meat substitutes – offers some of the most dynamic and disruptive trends in food innovation around the world. As demand for protein continues to soar in Asia-Pacific (APAC), there are key actions to consider in the near- and medium-term that stand to most strongly benefit farmers, consumers and our planet against this evolving landscape.

One of the primary opportunities for the surge in demand in APAC is to unlock investment for innovation, research and business models for a sustainable protein sector. China and Singapore have emerged as capital hotspots, providing support and growth for entrepreneurs and businesses. Innovation plays a vital role in enabling the sector shift towards pathways including sustainable intensification of the traditional protein sector, alternative or additional proteins, and consumer behaviour change. However, it's important to recognize that there is no one-size-fits-all solution. Different practices will be necessary to meet the diverse needs country to country and the preferences of consumers across the region.

Partnerships can drive meaningful change and holistically address ways to accelerate the protein transition. Collaborations between the private sector, farmers, finance and research institutions, and government can foster innovation and create a robust ecosystem. By combining expertise and resources, these collaborations can pave the way for novel solutions, ranging from alternative protein sources to efficient production systems.

While navigating the protein ecosystem, it is essential to consider the multifaceted nature of the challenges faced. This includes addressing environmental concerns, improving resource efficiency, reducing GHG emissions, ensuring food safety and quality, and meeting the nutritional requirements of a diverse population. Innovative approaches can tackle the many challenges in the sector: such as the development of plant-based and cell-based alternatives, precision agriculture techniques, and novel processing methods.

However, it is important to emphasize that innovation alone cannot bring about the necessary transformation. What is needed is a holistic approach, involving not only technological advancements, but also changes in consumer behaviour, regulatory frameworks and investment patterns.

As the region offers immense opportunities and challenges in the protein ecosystem, experts collectively stress the importance of innovative partnerships and vanguard country leadership in driving a protein transition that benefits people and the planet. But what are the greatest challenges as APAC rethinks the future of protein? What breakthrough actions and innovations are addressing those opportunities? And, what are some examples of innovative partnerships and vanguard country leadership to demonstrate the potential of the protein transition?

Rising income and urbanization are fuelling a growing demand for animal proteins, a trend observed in Vietnam, Indonesia, the Philippines and China, among others. Meeting this demand will require a combination of imports and domestic production. However, domestic production will also lead to increased feed imports, particularly maize and soybean.

The surge in red meat consumption will have consequences, including an increase in non-communicable diseases (NCDs) and associated health costs. Moreover, the rising demand for animal-based proteins will strain natural resources and result in a rapid increase in greenhouse gas (GHG) emissions.

Alternative proteins can address these challenges effectively. Substituting red meat with soybean or other beans and introducing plant-based meats offer sustainable alternatives. Additionally, promoting seafood and poultry as substitutes for red meat can bring about structural changes within animal-sourced foods.

For comprehensive insights, the 2023 China and Global Food Policy Report analyzes various options tailored for China. It serves as a valuable reference for understanding the implications and potential strategies for addressing these issues.

With APAC comprising the world’s largest population share, the growing demand for a more complex diet is resulting in a call to produce food that utilizes lesser resources to meet the challenges on food security, supply chain resilience and sustainability. Some of the top drivers contributing to the shift on the protein ecosystem are mostly health and food security; this is about personal health as well as health of the planet.

Producing nutritious food that meets the needs of a growing and sustainability-focused young population is driving the change towards a more secure, sustainable and just food system for APAC. The pressure of conscientious consumers, climate change, land and water scarcity are additional forces in encouraging protein shifts. Transforming the food system in APAC is a necessity, not choice.

APAC's population is projected to increase by 14% from 4.3 billion to 4.9 billion by 2030. Yet climate change may reduce the world's average agricultural crop yields by 4%. Worsening productivity means less food for the growing population. Reduced productivity will also drive up prices of all crops by 8.1% and all meat products by 5.1%, intensifying food insecurity.

Fifty-five per cent of the global undernourished population, or 424.5 million, are in Asia. Thirty-four per cent of Southern Asia people experience moderate or severe food insecurity, without stable access to affordable food with appropriate nutrition to support health and growth. Undernourishment issues include micronutrient deficiency, stunting in children, anaemia and obesity in adults.

Innovators are trying to address this situation on multiple fronts: Agritech aims at ensuring crops and animal farming are more efficient and climate-resilient. Also, many alternative ways to produce proteins, both plant-based and non-plant-based, have been developed and entered commercial markets. They include: (i) fermentation using microbes or fungi; for example, companies use yeast to produce dairy flavour-giving casein, use microbes and carbon dioxide, hydrogen and other elements to produce plain protein mass or use fungi to produce mycoproteins with neutral flavour and fibres; (ii) algae-based proteins, which are nutrient-rich algae and can have various flavours depending on the species; (iii) insect-based technology, using insect larvae to convert discarded food to proteins; (iv) cell-cultivated meat technology leveraging stem cells, bioprocess and tissue-engineering principles to produce animal muscle cells without rearing an animal.

Efforts are underway to change consumer behaviour through education and awareness of the environmental and health impacts of dietary choices. Chapter five of the 2023 China and Global Food Policy Report provides valuable insights on effective actions to that end.

Governments are investing in low-carbon, regenerative agricultural technologies to promote sustainability and reduce carbon emissions. Initiatives such as precision agriculture, organic farming and agroforestry aim to mitigate the environmental impacts of animal-source protein production.

Public support is shifting to support the production of healthy and sustainable foods instead of subsidizing grain production. This includes supporting whole grains, fruits, vegetables, beans and other plant-based alternatives to meet protein demand while minimizing the environmental footprint.

Governments are incentivizing the private sector to invest in sustainable and healthy foods through taxation, subsidies and regulations. By creating a favourable environment, governments stimulate innovation and increase the availability of environmentally friendly and nutritious options.

Designing the right policies to unlock the flow of investments for a protein transition is imperative. There should be a multisectoral and multidimensional approach in crafting policies that include local protein sourcing to support local farmers of protein-based crops like lentils, pulses and legumes, as well as innovators of protein-based products.

A regulatory framework for new sustainable sources, designing blended financing mechanisms with impact investors to support the farmers, is also needed. Farming cooperatives should also be given technical assistance and support for the sustainable production of protein-sourced products, as well as access to financial support and incentive programmes to encourage them to produce sustainably. Influencing the public is also key; this involves campaigns to drive public awareness of health, safety and the food-security advantages of non-animal-based proteins.

The protein transition involves innovation, product conceptualization, commercialization and fostering awareness. Reducing the sector's overall risk profile would attract more investments.

Building production capacity for commercialization in the food industry requires time and capital. Pilot production facilities operated by commercial entities can expedite initial manufacturing.

Novel food is heavily regulated, requiring significant time and effort to advocate for new legislation and procure the permit to sell. Proactive development of regulatory provisions by the government could benefit both regulators and the industry, facilitating submissions from companies. Access to case studies enables better risk assessment and management by the regulator. Regulatory sandboxes provide interim benefits for start-ups.

ESG investment has emerged as a significant driver of private capital. ESG benchmarking specifically focuses on manufacturing operations, and start-ups at an early stage cannot afford to integrate these metrics to access the capital. For start-ups seeking funds to build commercial plants, it can be a challenging situation, similar to a chicken and egg dilemma. Alternative reporting or goal-setting frameworks can assist start-ups and scale-ups in navigating this landscape effectively.

There are some research activities at the China Agricultural University and Nanjing Agricultural University on plant-based or lab meats, and there are also some private sector companies that are producing meat substitutes. But further research is needed to analyze why the protein transition has not happened as fast as it could and to propose options to unlock the bottlenecks.

We must transform protein systems to address the challenges, but there have been limited successes and examples. The government should reform its policies, the private sector should be given incentives, and consumers should be aware of the consequences of unsustainable and unhealthy diets. Finally, researchers should conduct independent research to assess policies, partnerships and impact of various supply options (local vs. global, modern vs. regenerative (circular), large vs. small) and consumption patterns.

Singapore has launched FoodInnovate, an online database of local resources to support alternative protein firms. This initiative aligns with their commitment to produce 30% of their nutritional needs by 2030 and positions the country as a hub for climate and food security solutions. The government provides a glide path for start-ups, facilitating their journey from ideation to commercialization.

The SDG2 hub and Chefs’ Manifesto campaign advocate for beans as a protein source and support smallholder farmers. The UN Food Systems summit recognizes the vital role of smallholders in transforming food systems and building an impactful protein ecosystem.

The pandemic has brought positive changes to the food system, such as sourcing locally to stabilize supply chains and supporting local production. The government and private sector prioritize food security, but more attention is needed for smallholder support. Digitalization of the food supply chain improves transparency and encourages youth participation. Funding mechanisms for farmers exist, but require better implementation for efficiency, effectiveness and inclusivity.

Due to the new technologies and production methods, suitable existing contract manufacturing companies are not readily available for the new protein sector. Most start-ups have to overcome the key challenge of raising millions of dollars and taking at least two to three years to design and build the pilot production facility before commercializing their products. Given this, big corporations with strategic interests in new technologies can collaborate to provide solutions.

One example is Nurasa, a Temasek-backed joint venture established in 2022 between ADM, Cremer and Scale-up Bio. The aim is "to provide end-to-end contract development and manufacturing organization (CDMO) services in microbial fermentation from lab to pilot scale. It supports food tech companies in process optimization and scale-up and plugs them into a strong ecosystem of partners from research to market launch."

This platform can accelerate the ecosystem's growth by shortening two to three years for start-ups to set up production facilities and another six to 12 months to raise funds before that. Not only does it reduce the risks of commercialization, but also drastically limits the dilution effect of large capital expenditure, making it more investible from a capital point of view.

Good supply is highly fragmented in APAC. For edible meats, for example, the top five companies have less than 5% of the market share; most of the market is served by family operations, small businesses or local chains. Fragmentation is a major hurdle to organizing collaboration with farmers. In addition, most small household farmers have limited time and financial resources, thus low interest and capacity for exploratory innovation and collaboration.

To overcome the survival focus, farmers may need to be provided with clear, tangible financial incentives to collaborate. To overcome the fragmented market challenge, government agencies who manage the farmers’ licenses and permits can share information, such as Hong Kong’s Sustainable Agricultural Development Fund.

Another channel for communicating effectively with farmers is via microfinance service providers with a high user rate. For example, Alibaba’s Ant Group has built relationships and a database of farmers in China and contributed to rural finance and poverty-alleviation efforts. Though their model does not have a mechanism for collaboration, it has huge potential to implement an effective solution.