Billions invested in alternative proteins have failed to win consumers
Venture-capital funding for alternative proteins fell from €341m to €306m in the first half of 2026, according to the Good Food Institute. Within that declining total, precision-fermentation companies raised €100m, more than the entire category secured during 2025. Biomass fermentation also increased its funding, from €60m to €99m, through fewer but larger rounds.
The wider industry has nevertheless performed well below the expectations set a decade ago. Bain & Company’s Green Technology Performance Index compares the progress of technologies with the projections made in 2015 and places alternative proteins among the categories that have most underperformed against those benchmarks.
Jean-Charles van den Branden, who leads Bain’s global sustainability practice, said the consumer proposition had not been strong enough to support adoption at scale. In his account, taste, texture and price were the central shortcomings. After an earlier period of enthusiasm, the assessment was followed by steep declines in the market value of several established companies.
Beyond Meat has changed product formats and its brand identity in an effort to restore growth. Oatly’s market capitalisation has fallen by more than 96% in five years. The oat-drink producer expanded manufacturing rapidly and then encountered supply-chain difficulties in North America, according to the material.
Precision-fermented dairy proteins are made without animals but are designed to be identical to animal-derived proteins. Regulatory requirements, production scale and consumer acceptance have led companies in this field to focus on business-to-business ingredient sales rather than direct retail launches. Van den Branden said the renewed financing could reflect investor interest in technologies addressing weaknesses elsewhere in the category, while noting that it remains uncertain whether the funding will produce products consumers choose at competitive prices.
Germany’s Formo is awaiting a US Food and Drug Administration letter of no objection, which it expects within weeks, before entering the American market. It is expanding output through contract manufacturers and uses E. coli bacteria to produce casein by precision fermentation, unlike companies that use fungi or yeast. The ingredient is highly soluble and could be used in clear, high-protein drinks, a segment currently dominated by whey.
Belgium’s Those Vegan Cowboys is also preparing a US commercial launch and has added several bovine caseins for functional cheeses and nutritional products. In the United States, New Culture, which develops precision-fermented mozzarella, has obtained a second patent for its animal-free casein and is preparing a cow-free mozzarella for food-service customers. For these companies, regulatory clearance would leave production scale and sufficient commercial demand as further requirements for a sustainable business.
