'There isn’t a green premium anymore': B2B foodtech surges as plant-based meat stalls

The ‘State of Alternative Proteins’ report from the non-profit Good Food Institute, which has offices around the world, presents a complicated picture of the global industry. As has been long observed, there has been something of a stall in sales and consumption of plant-based proteins, particularly those products directly imitating existing meat products.

At the same time, the report, which has been widely shared and commented on across social media, has observed various ways the industry is still progressing. These include the rapid uptake of plant-based egg products in the US amid massive price spikes partially caused by avian flu. San Francisco based Just Egg say sales grew five times faster in January this year than all of 2024.

It's all about price parity

This growth in plant-based egg products highlights something very important to understanding the potential for the alternative proteins market in 2025, and that’s that consumers will not tolerate increased prices for alternative products amid the various cost of living crises.

“There isn't a green premium anymore,” says Louise Heiberg, investment director at Nordic Foodtech VC. “For a moment of time, we thought that we could put an extra price on top of everything, just because it had a sustainable angle, or a more sustainable product. But the industry and consumers have shown they are not willing to pay for it.”

Nordic Foodtech focusses on seed and pre-seed investments in tech companies looking to transform the global food system, particularly around Northern Europe, the Nordics and Baltics. Among their portfolio, says Heiberg, are several companies that have managed to get the margins right.

For one, there’s the Copenhagen-based Endless Food Co, which manufactures (as previously featured in Impact Loop) chocolate from grains left over from the brewing process. “They nailed the product from the beginning,” says Heiberg, observing that the company was generating revenue from the beginning. “They definitely know their playbook, had a very high-quality product from the beginning, and a straightforward B2B ingredient sale.”

B2B may be more important than B2C

The fact that Endless sells its product to other businesses, rather than direct to consumers as a standalone product, highlights another main theme of the Good Food Institute’s report. Even as growth in sales of ‘dupes’ like vegan steak and sausages slows somewhat (what Heiberg sees as more of a correction in the industry), a whole ecosystem of behind-the-scenes ingredient producers is maturing to, as the report describes, "reduce costs and optimize processes.”

In particular, the report describes how alternative proteins made from food waste, or from various fermentation processes, are seeing greater uptake as ‘drop-in’ ingredients in companies’ production processes. The authors note that patents for fermented proteins have grown 6500% in 10 years, mostly in biomass fermentation, and that fermented protein seems to generate the most interest on social media.

Heiberg points to the Finnish company Enifer, also in Nordic Foodtech’s portfolio, as an example of this growth. “They take by-products from the forest industry and turn it into drop-in protein ingredients for food, aqua-food and pet food,” says Heiberg. The company is developing its first full factory and has already locked in future sales with industrial pet food and aqua feed partners, at a price point that makes their business competitive with ‘regular’ ingredient providers. “From the beginning, we saw a route to price parity,” says Heiberg. “They cracked the code from the beginning.”

Key trend for 2025: Innovation

The GFI report is bullish on the growth of alternative proteins, particularly as input costs come down to approach price parity with animal-based. They also note surveys showing that half of US and European consumers are open to trying alternative proteins. There are of course headwinds, such as continued low venture funding in the industry relative to other kinds of sustainability tech, and backlashes against the industry such as in Hungary, where legislation is being debated to ban cultivated meat products.

On the other hand, the report notes multi-million dollar state investments into food innovation and scale-up assistance in the U.K. and EU.

Louise Heiberg at Nordic Foodtech says that core research-based innovation is what they’re most on the lookout for as investors. “We're always excited for technologies that could radically renew and reshape our food systems in a way that we can't fully predict at the moment,” says Heiberg. Top on her list of projects she’s looking to invest in is bio-solutions: microbes for soil health, enzymes to reduce food waste, fermentation, etc.

Heiberg notes that Europe’s food standards agency could help the industry by streamlining its regulatory processes, where it currently soaks up a lot of time and energy. All the more important as US companies, put off by the Trump administration’s hostility to anything ‘green,’ look to setting up shop in Europe instead.

"The need for solutions in the food systems has not changed, despite the global downturn in the economy, despite what some would say is a crash in the alternative space," says Heiberg. “We are back to the fundamentals of what it’s always been about: investing in great casing, solving real problems for the industry and transforming our food system."