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’We are investors and we expect companies to manage the risks in their supply chain’

Investors worth $1.25trn urge industry to switch to sustainable plant proteins

Niamh Michail

By Niamh Michail+

27-Sep-2016
Last updated on 12-Oct-2016 at 16:35 GMT2016-10-12T16:35:42Z

'Investors want to know if major food companies have a strategy to avoid this protein bubble,' said founder of the FAIRR Initiative Jeremy Coller. © iStock/MarcoScisetti
'Investors want to know if major food companies have a strategy to avoid this protein bubble,' said founder of the FAIRR Initiative Jeremy Coller. © iStock/MarcoScisetti

A group of investors worth $1.25 trillion (€1.1 trn) in assets are urging 16 food companies to accelerate the switch to sustainable, plant-based proteins.

The 40 institutional investors are part of the FAIRR Initiative, which aims to raise awareness of the material risks posed by industrial animal production on investment portfolios.   Members include the Swedish state pension funds, Aviva Investors, Boston Common and Coller Capital.

It has targeted 16 food companies, including Kraft Heinz, Nestlé, Unilever, Tesco, Walmart and General Mills, and is urging them to identify their plans to respond to this risk with a particular focus on diversifying into plant-based sources of protein as a key strategy.

It has published a report entitled ‘The future of food - The investment case for a protein shake up’ .

A statement issued by the investor group singled out General Mills, which manufactures brands including Häagen Dazs and Yoplait, as an example of good practice for supporting sustainably-minded start-up companies such as Beyond Meat.

Programme director at FAIRR Rosie Wardle told FoodNavigator it is not specifically urging divestment from unsustainable companies - although some may want to take that option, she added. “Others prefer to take the path of engagement with the companies to improve practices. Engagement is the approach of this initiative.”

This is business

Wardle said she expects food companies to take heed of the letter because, at the heart of the investors’ approach, is a business case.

“We are asking the companies to manage the risks and opportunities in their supply chain. Simply put - inaction leaves these multinationals reliant on an unsustainable system that risks enormous damage to environmental and public health; while strategic planning and innovation now can help both future-proof their business." 

Sustainable protein: What does it mean in practice?

"It's not a demand for ruling out animal products entirely," says the FAIRR report.

But it should mean:

Diversifying the range of protein on offer and prioritising choices that have less impact on health, land, water and the climate: for example, opting for sustainably sourced fish or poultry instead of beef, or beans instead of pork.

Moving away from meat and dairy as the dominant ingredient in every menu option to instead making them an occasional complement to a meal.

Selecting lean cuts for meals that do feature meat, and reducing or eliminating the use of red and processed meat (such as bacon, ham and sausages).

Sourcing food that meets a credible certified standard – like Animal Welfare Approved or the Global Animal Partnership for high-welfare methods of farming in the US, the Marine Stewardship Council certification for sustainable fish, the Soil Association for organic certification in the UK.

Producing and procuring appealing and accessible alternatives to meat based on plant proteins and new food tech innovations.

Source: The future of food - The investment case for a protein shake up

This could open them up to the plant protein market, predicted to grow 8.4% annually for the next five years according to figures from Allied Market Research, she said.

While there are a lot of exciting start-ups recreating the taste and texture of meat and dairy with animal-free alternatives – Wardle cited Hampton Creek, Clara Foods and Beyond Meat – but that the sector is far too small for institutional investors and major capital to get involved.

“So raising the profile of the sector and helping educate consumers and investors alike about its potential would be a very positive impact of this engagement campaign,” she added.

Jeremy Coller, founder of the FAIRR Initiative and chief information officer of Coller Capital - one of the 40 investment firms – called the world's over-reliance on factory farmed livestock for protein a recipe for a financial, social and environmental crisis.

Investors want to know if major food companies have a strategy to avoid this protein bubble," he added.

Nestlé: 'Our main opportunities lie in innovating new products.'

A spokesperson for Nestlé said: “As a group, we generally do not use much meat, so our main strategy is not to focus on replacing the meat that we do use as its impact would be minimal. Our main opportunities lie in innovating new products using alternate proteins.”

The Swiss global food giant has a range of vegetarian meals sold across Europe under the Garden Gourmet and Herta brands, and dairy-free milks sold in Brazil.

We also have a research programme designed to enable and accelerate the usage of diversely sourced plant proteins, on the one hand using existing sources of plant proteins more widely, on the other hand exploring new sources of plant proteins.

“In terms of timetables and targets, this is still a relatively new area, where in many countries the consumers are not fully prepared to replace or reduce meat in their diets. Our focus is to innovate great tasting solutions to encourage consumers to try them and over time make small, sustainable shifts towards a higher plant based, more balanced diet.”

Kraft Heinz and Unilever did not respond to requests for comment.

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