KANSAS CITY — Protein in its many forms and personalized nutrition are capturing investors’ attention. Both topics were highlighted during a panel discussion at the Institute of Food Technologists’ FIRST virtual conference on July 20.  

Developers of alternatives to animal products, whether through plant-based formulations, cellular agriculture or fermentation, collectively raised a record $3.1 billion in 2020, according to The Good Food Institute. Despite some jaw-dropping valuations, more innovation is needed to advance the category, according to the panelists.

“I think we’re in the iPod phase and not even the iPhone phase of this protein revolution,” said Sanjeev Krishnan, chief investment officer and managing director at S2G Ventures. “I see a lot more opportunity to innovate on soy, to innovate on yellow pea, but also new sources of protein, whether it’s fungi or others… I also think traditional meat animal protein is not done innovating either, whether it’s on the sustainability side or the flavor side.

“We have an all-of-the-above approach to protein.”

Darren Streiler, managing director at ADM Ventures, the corporate venture arm of Chicago-based ADM, said he believes alternatives could carve out a significant share of the $1.4 trillion meat market.

“At ADM, we’re a world leader in plant-based proteins, but at ADM Ventures, I’m looking to invest in what’s next for alternative proteins,” he said. “We saw alternative milk take 20% of that market, and we think that in the meat market the same thing could happen.”

Earlier this year, ADM Ventures led a $32 million Series A funding round for Air Protein, which produces a protein-rich powder from the elements of air, including carbon dioxide, oxygen and nitrogen, plus water and mineral nutrients. The fund also has invested in Future Meat, a maker of cell-based meat alternatives, and Nature’s Fynd, a manufacturer of an alternative protein sourced from fungi and produced through fermentation.

“We don’t believe that traditional meat is going away any time soon,” Mr. Streiler said.

Taste, nutrition and cost are the three key factors that will drive mainstream consumer acceptance of alternative proteins.

“In addition to taste, I think part of the pathway to nutrition is maybe being less focused on protein and more focused on actually delivering fruits and vegetables in more approachable formats, more convenient formats,” said Jeff Grogg, managing director at JPG Resources.

He cited as an example Cool Beans, a brand of plant-based wraps incorporating whole beans and hearty grains rather than relying on added soy protein or pea protein.  

“They are on the fringes of this market to change how people eat and in a way that’s not protein focused,” Mr. Grogg said.

The panelists also discussed the convergence of food and health as another area of interest. Emerging research may empower more consumers to eat with the intention to prevent or resolve specific health conditions.

“We’re really just starting to learn about the human gut microbiome, and there is a lot of research dollars put toward that industry into figuring out how various ingredients can interact with an individual’s unique gut microbiome to then have a cause-and-effect relationship to ward off potential indications,” Mr. Streiler said.

Nutrition historically has been oversimplified, Mr. Grogg said.

“We’ve treated as if every human is the same,” he said. “I think what we’re learning now and what we should know by now is that every human is different… We have different genomes and microbiomes, and we have different sensitivities and so forth.”

The needs of an older population also may come into play. Mr. Krishnan said he is investing in foods that address concerns such as bone loss and are supported by clinical studies. 

“As the boomers age, that market is really interesting to us,” he said.

Mr. Grogg noted free health care may be a barrier to adoption of food as medicine, adding, “It might be better if we gave everybody free vegetables instead.”