Israel’s alternative protein sector suffered 78% investment decline, double global drop
Israel’s alternative protein sector suffered 78% investment decline, double global drop
The fall in investments in 2023 in Israel, which was considered a leader in the field of alternative protein, came amid political unrest and the outbreak of the war
Israel, once a leader in alternative protein development, experienced a dramatic 78% decrease in investments in 2023, plummeting from approximately $454 million in 2022 to just $100 million. This decline is nearly double the 45% global drop in the industry, which saw investments fall to $1.6 billion. The significant drop in Israel is attributed to the judicial reform and the Gaza war that began on October 7.
The Good Food Institute (GFI) data includes unpublished transactions, while research institute RISE Israel, which only includes reported transactions, said that total investments in Israeli companies were $83 million, marking an 82% decrease. Consequently, Israel has fallen from second to fifth place in global investment rankings, now trailing behind the United States, Sweden, the United Kingdom, and France.
This decline in investment is particularly troubling for the alternative protein sector, which relies heavily on private funding for early-stage growth and expensive development procedures. Despite this, a report by the Israel Innovation Authority, GFI Israel, and the World Economic Forum highlights Israel’s potential and the positive trends that characterized the field until last year.
Currently, Israel is home to 80 startups in the alternative protein field, with expectations of 200 new companies by 2030. From 2014 to 2023, Israeli companies received $1.2 billion in investments, representing 10% of global investment in the sector. The report underscores the state's crucial role in promoting the industry through extensive collaborations and leveraging state assets for global leadership.
However, the sector’s reliance on research and development is at risk. Many researchers report a "quiet boycott," which could hinder local industry growth. According to GFI, the Hebrew University and the Volcani Institute conduct most of the research in this field. Recent decisions, such as Jeff Bezos' climate fund opting out of establishing a foodtech center of excellence in Israel due to the war, further exacerbate the industry's challenges.
Ella Waldman-Rentzer, Vice President of Strategy and Governance at GFI, noted some positive signs despite the difficulties in raising venture capital in 2023, such as the launch of 15 new companies and an increase in average investment in new companies to about $6 million. She emphasized the importance of food security and the need for Israel to continue developing leadership in alternative protein production.
In terms of consumption, the alternative protein market saw a boom during the pandemic, but 2023 brought a 2% decrease in sales in the U.S., totaling $8.1 billion. The plant-based meat sector in the U.S. experienced a 12% drop in sales to $1.2 billion, although global sales of plant-based meat have nearly tripled from $2.2 billion in 2014 to $6.4 billion in 2023.
