The Digest’s Top 10 Advanced Bioeconomy Markets and Predictions for 2021

4. The Vegan Foods Shakeout

We love vegan food companies and all these protein plays. Yet, one probably has to recognize that companies pivoting to protein or getting into the space are there because “protein is hot” among investors as a use case, and these technologies need better margins and high-volume markets than you can get from low-price sectors like fuels or low-volume sectors like astaxanthin. So, they get trapped between the fuels Wal-Marts and the vitamins Boutiques in an economic no-mans-land, and protein and food has afforded many a way out of a pitch that has troubling aspects for investors. And there’s no doubt that companies like Impossible Foods and Beyond Meat have gone big. 

The trouble is not the technologies, or the viability of the sectors — it is just so many darn companies. A veteran VC told us not long ago that there have been 500 advanced food companies started or out pitching a technology or a focal point. There aren’t going to be 500 advanced food success stories, for the same reasons there were once more than 500 social media companies and today there are a handful of giants, or 500 airlines, or 500 railroads, or take your pick.

There has to be massive differentiation and big markets for 500 companies to thrive, and there aren’t nearly that many niches available in advanced foods. Meat without the cow, eggs without the chicken, sushi without the fish, milk without the cow, and there are several more, but not 500. So, expect a rash of company closures and mergers.