Israeli companies are leading the world in food tech investments in the plant-based alternative proteins sector, and come second only to the US in funds invested in the alternative protein industry as a whole, according to an updated report published this week by the Good Food Institute (GFI) Israel.
The alternative proteins sector includes plant-based substitutes for meat, dairy, and egg, cultivated dairy, meat and seafood made from cells, and various fermentation processes and products. Cultivated protein startups and fermentation tech startups often overlap.
The GFI report highlights new figures in the Israeli food tech sector from the first half of 2022 (H1 2022), showing that $160 million in funds were poured into Israeli startups developing plant-based food products, equivalent to 22 percent of the world’s total, and slightly ahead of the US in this sector.
The global alternative protein sector as a whole drew $1.75 billion in H1 2022, with $320 million invested in blue-and-white alternative protein startups and companies, accounting for 18% of the total.
American alternative protein companies were far ahead with $857 million in total investments so far in 2022, and with cultivated protein startups — which harvest cells from animals and then grow them to create alternative meat and dairy products — leading the charge.
In fermented proteins, which use microorganisms such as bacteria and fungi, Israel is also second place to the US, taking 38 percent of global investment in this field with $152 million in investments, according to the report.
In third place overall came China, with investments of $120 million, followed by Singapore ($104 million), and France ($96 million). These three countries are involved solely or primarily in plant-based alternative protein products.
Alternative protein growth
Israel’s alternative protein industry grew by 160% in H1 2022, compared to H1 2021, according to the GFI report. The industry had grown by about 450% in 2021 from 2020, with Israeli startups raising some $623 million in investments last year, according to the initial GFI report in March.
The most notable deal in the Israeli plant-based protein sector in 2022 so far was the $135 investment in Redefine Meat, a maker of 3D-printed plant-based meat products, to fund production lines in Israel and the Netherlands, as well as expand its partnerships with restaurants and eateries.
The company’s products include animal-free lamb and beef cuts, burgers, sausages, lamb kebabs, and ground beef, and are sold in some 200 restaurants and establishments in Israel and Europe (including Michelin-starred eateries). In July, Redefine Meat signed a deal with Israeli-founded hospitality company Selina to serve its plant-based meat substitutes at over 150 Selina locations starting in Tel Aviv and London.
The second-largest investment raised by an Israeli food tech startup (announced in early 2022) was $120 million for Remilk, a developer of animal-free milk and dairy. The company uses a yeast-based fermentation process to produce milk proteins that, the company says, are indistinguishable in taste and function from cow milk proteins, but free of lactose, cholesterol, and growth hormones.
The investment was the single largest in a cow-free dairy company to date. Remilk has set up production facilities in Europe and the United States, where it is already working with leading food companies, and collaborating with regulators and rabbinic authorities to get its product cleared and certified.
GFI said that the significant growth in the Israeli alternative protein sector was attributed to large investment rounds in companies coming close to the commercialization stage, expanding their operations, and targeting global markets.
GFI Israel’s Innovation Director Aviv Oren said in a statement this week that “Israel continues to establish its global leadership in food tech innovation.”
Oren said the “young and fascinating” alternative protein industry provides “an opportunity to repair the global food system” while meeting food security and climate change goals, while attracting scientists and entrepreneurs from various fields.
At the same time, Israel lacks some of the supporting infrastructure for the local industry in the form of multidisciplinary research centers, technology transfer programs (from university labs to industry), research grants and training, and specific innovation hubs for cultivated meat, plant-based proteins, and fermentation tech startups.
“We need more researchers. This is super important because the field is built around academic research, which needs government funding,” Nir Goldstein, managing director of GFI Israel, told The Times of Israel in January.
Earlier this year, GFI Israel published a report that urged the government to put together a national strategy to support the country’s growing food tech industry if it hopes to maintain a key role in the sector over the coming years.