With first the pandemic and then issues of food security weighing on traditional food supply chains, the alternative protein industry has evolved from an initial curiosity to one that is claiming a mainstream spot on consumers’ plates and palates.
For one, Singapore’s beloved national dish — chicken rice — is in trouble. With the war brewing in Ukraine, corn-based feed export from the country has been halted. Ukraine is the largest corn feed exporter. Hence, as countries worldwide face this shortage of chicken feed, the breeding of poultry is also affected, cascading down to consumers and affecting the sales of chicken rice in Singapore.
Singapore, as the small city-state it is, relies highly on the import of food due to its lack of land to breed livestock and grow farms. With this supply chain issue now and Malaysia — Singapore’s main source of poultry — cutting exports of poultry, chicken is scarce and expensive.
While Singapore is trying to increase its import of poultry from other countries, there is a concern of food security. Meanwhile, if chicken is unavailable, what can consumers turn to for their protein consumption?
This is where alternative protein products come in. These typically plant-based alternatives or lab-grown meat is gaining popularity in Singapore. From the likes of Impossible Foods and Beyond Meat reaching the shores of Singapore, several other homegrown companies are coming up with their own formula and recipes for alternative protein products.
However, the alternative protein space in Singapore, compared to the US and Europe, is still rather nascent. The way Michal Klar, co-founder and general partner of Better Bite Ventures, sees it, the region is full of potential and he believes that Asia is the next big region for the alternative protein industry to grow. “Asia is an important part of the global transition towards a more sustainable way of producing protein. It is probably the largest [protein consumption] market in the world,” he says.
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As the middle-class segment grows within this region and people are becoming more educated about global sustainability and food security issues, Klar finds there is a “driver for transition” in Asia Pacific (Apac).
With that, Better Bite is born to support early-stage founders and entrepreneurs in the alternative protein space, specifically in Apac. The venture capital firm is interested in investing in technologies that focus on plant-based, cell-based, precision fermentation, biomass fermentation, molecular farming and cellular agriculture.
Food-tech unicorns
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Along with Klar’s co-founder Simon Newstead, the two Apac-based operators turned impact investors are here to invest in bold founders building Asia’s future food-tech unicorns.
“Now is the time for Asia. We believe homegrown companies with local insights will take a leading role in this rapidly growing market,” says Klar.
The duo have a combined 20 years adopting a plant-based lifestyle and sector expertise, including running the Future Food Now newsletter and Vegan Startup podcast, as well as a track record of investing and venture-building in food and tech. They are also passionate in helping power a new wave of start-ups within the region.
“Having been founders ourselves, we know how helpful having truly supportive investors can be. Being responsive with founder-friendly terms, a lack of red tape and a focus on long term sustainability, we aim to be a trusted partner right from the start,” says Newstead.
Better Bite was launched in February this year. It boasts a US$15 million ($20.8 million) fund, and has invested in an initial portfolio of 10 start-ups that harness plant-based and cellular agriculture technologies to create climatefriendly meat, dairy, egg and seafood alternatives that are sustainable.
“At this moment, we have 10 companies across Apac in our portfolio, and we are targeting to reach between 20 and 30 companies to invest in with this fund,” says Klar.
While there may be other funds out there investing in the alternative protein space, Better Bite is the first of its kind that is entirely dedicated to alternative protein investments in Apac. It is backed by leading impact investors, growth-stage fund managers, family offices as well as food and tech entrepreneurs from Asia, the US and Europe. It invests primarily at founding, pre-seed and seed stages.
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Klar explains to The Edge Singapore that apart from the start-up being in the right industry and stage, the fund will also focus on the team running the company, its credentials and its background.
When the fund arrives at a conviction to invest in a particular company, it will typically put in about US$300,000 to US$600,000 in its first round of investment. “We will invest as much as we can in the companies that we have decided on, but we still have certain limitations, which is of course our relatively small fund size,” explains Klar, adding that more often than not, investing in these early-stage startups will see Better Bite as the sole investor.
As for follow-up investments, the fund has allocated about 30% for such. While there is no cap on the follow-up investment, Klar explains that it will be decided on a case-by-case basis. “Even if we don’t invest [money] a second round, because of our limit fund size, we will still actively support the start-ups to connect them with other potential investors,” says Klar. He adds that there is interest in a second fund down the line, but the venture capital firm is currently focused on deploying its current fund, while supporting and building its portfolio of investments.
Growth prospects
Better Bite aims to help start-ups within the alternative protein space grow. As it focuses on early-stage start-ups, it is encouraging more entrepreneurs to look into this space and share their ideas to better this still-nascent industry.
Klar admits that these early-stage start-ups are typically not profitable when Better Bite comes in with its investment, but the focus is to help them build their product and find a market fit. Overall, he emphasises that Better Bite is “patient capital”, meaning that it is a fund that is in no hurry to exit its investment in a company, as it is focused on helping the start-ups achieve their maximum potential.
“The timing for Better Bite to launch in the market now is perfect,” claims Klar. “The penetration of alternative protein companies in the region is still rather low, even in developed markets like Singapore,” he says, alluding to this as a “chicken and egg” problem where the market has to provide consumers the supply — affordable and delicious options — while consumers have to create the demand — that is, be open to try and accept this new way of eating.
To be sure, the alternative protein industry is indeed growing, thanks to both entrepreneurs seeing an opportunity in this space and consumers becoming more educated and aware of sustainability issues.
According to Good Food Institute (GFI), a non-profit organisation that promotes alternative protein offerings worldwide, funding for Apac start-ups working on plant-based proteins, cultivated meat and protein fermentation grew by 92% last year, with the total funding across all three sub-sectors reaching US$312 million, almost double from US$165 million in 2020.
Globally, the trend is increasing too as data showed a 60% growth in alternative protein funding to US$5 billion last year, from US$3.2 billion in 2020.
Comparing the numbers, Apac may well be the fastest-growing on the alternative protein start-up scene, but the GFI data shows that the region is falling behind on so-called missioncritical fermentation technologies. Better Bite is aware of this and is actively looking for such start-ups to provide support. This is important because fermentation has the potential “to almost single-handedly resolve the global protein deficit”, the non-profit organisation states.
Meanwhile, global F&B player DuPont Nutrition & Biosciences has forecast that just the plant-based meat market, representing only a subset of the alternative protein industry, will grow by 25% to US$1.7 billion over the next five years in Asia alone.
In Singapore, several start-ups within the alternative protein industry have popped up and are gaining traction. Singapore has plans to become Asia’s hub for alternative protein, as it sets out to produce 30% of its nutritional needs locally by 2030 with $140 million dedicated to funding this goal, which is a part of the “30 by 30” target.
Working towards this goal, Singapore was the first country in the world to approve the commercial sale of cultivated meat in December 2020. Following the regulatory nod, several international food tech companies have been attracted to Singapore and want to open up their Asian base here.
Looking forward, Klar hopes the alternative protein industry will capture about 10% of the overall food industry in the next 10 to 20 years. While Klar notes that there are other studies out there that are more bullish on this outlook — estimating well around 20% to 30% share of the overall industry in the next decade — he is aware that this progress is very much dependent on the progress of technology within the industry.
Photo: Albert Chua/The Edge Singapore
