Plant Based

Plant-based food alternatives

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Plant-based food alternatives

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Agriculture
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2) Responsible Consumption and Production (SDG 12) Life on Land (SDG 15)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Climate Action (SDG 13)

Business Model Description

Bring innovation through food manufacturers and integrated supply chains in technology to meet gluten, meat, or dairy-free alternatives, driven by real or perceived health, environmental, and lifestyle benefits with foods that substitute for animal or gluten products while still offering pleasing flavor and texture (e.g., plant-based milk, fortified proteins, meat substitutes)

Expected Impact

This initiative intends to promote food alternatives, driven by real or perceived health, environmental, and lifestyle benefits.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

Disclaimer

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The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

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Country & Regions

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Sector Classification

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Sector

Food and Beverage

Development need
> 19,142 companies in Colombia that are in the Food & Beverage sector > USD$ 23B in food and beverage production (15) > A 7.3% CAGR is expected until 2024 (15)

Policy priority
> The National Development Plan (2018-2022) aims to provide business technical assistance services to 4,000 companies to improve their production and administrative processes and the use of markets. It also wants to allocate at least 50% of sector investment so that producers have access to productive assets.

Gender inequalities and marginalization issues
> In rural areas, 36.2% of women are employed in agriculture, livestock, silviculture, and related > Of the national total, there are 29.9% of women who identify themselves as peasants.

Investment opportunities
> Several Funds have invested in the agribusiness in LatAm and Africa, such as Alive Ventures, Carabela, Catalyst Investments, EDFI, Elea Foundation, Incofin, Rabobank, among others.

Key bottlenecks
> The growing middle class with which the purchasing power is increasing has increased their consumption levels in meat and fish segment and dairy productions. In the first segment, the growth was driven mainly by poultry and pork meat categories (5).

Sub Sector

Food and Agriculture

Development need
> 25.2M of Colombians who suffer from either malnutrition or overweight (1). > 65.8% of the land suitable for agricultural purposes is not being used to its vocation. Also, the 11.3M hectares that are currently in use for agriculture.

Policy priority
> The National Development Plan presents an alliance for food security and malnutrition. It creates a Food and Nutrition Security System, with functions and responsibilities within the government, with decision instances at the national and territorial level (20).

Gender inequalities and marginalization issues
> On +38% of the UPA, women are the ones who make the decisions of production (11). > 2.7M hectares of agricultural use by ethnic groups, from which 86.9% correspond to forests.

Investment opportunities
> The pandemic has hit many sectors, but food expenses have remained virtually the same. Food expenses focus on non-perishable goods, fruits, vegetables, and products that improve or promote immune health (15). > National Development Plan aims to support 12.00 families in the Amazon with agreements of forest conservation

Key bottlenecks
> 54.8% of the Agricultural Production Units do not have access to technologies, machinery, and support services, which reduces their productivity (20). > Colombia has 50% of cultivated areas with the use of agrochemicals

Industry

Processed Foods

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Plant-based food alternatives

Healthy plant-based sustainably sourced gluten, meat, or dairy-free food alternatives.
Business Model

Bring innovation through food manufacturers and integrated supply chains in technology to meet gluten, meat, or dairy-free alternatives, driven by real or perceived health, environmental, and lifestyle benefits with foods that substitute for animal or gluten products while still offering pleasing flavor and texture (e.g., plant-based milk, fortified proteins, meat substitutes)

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

> USD 1 billion

CAGR
Describes the historical or expected annual growth of revenues in the IOA market.

5% - 10%

> 19% of Latin Americans declared themselves vegetarian (17). Colombians spend an average of COP$ 3.6M (~USD$ 1k) in food per month, with 45M of habitants, the vegan market is USD$ 9.0B (20).

> Consumer demand for a healthier and more sustainable diet drives plant protein products. The global plant-based protein market is a USD$ 10.8B market growing at a 6.7% CAGR (18).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

> 25%

If you invested $1,000 in Beyond Meat at IPO, that investment would be worth nearly $4,500 as of Feb. 5, 2020, for a total return of around 345% (21).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

According to local investors interviewed, an expected holding period for investments in plant-based food alternatives or sustainably sourced food alternatives would be between 7 to 10 years.

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Capital - Requires Subsidy

> Small agricultural producers may require technical assistance to be able to develop completely sustainable practices and to be able to offer genuinely organic products.

Business - Supply Chain Constraints

> Even though several producers could be trained, it is also necessary that the market size of companies that transform and commercialize the products increases so that the supply of the producers is taken and the demand of the final consumers can be satisfied.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

> 56% of the population is overweight: 38% of young people and adults are overweight, 19% are obese. Overweight is more frequent in women (22%) than in men (14%) (1).

> Food security is the safe and permanent access to sufficient nutritious food for a healthy and active life. More than half of Colombian households (58%) do not enjoy food security (1).

> Agriculture, forestry, and other land use is the sector that contributes the most to the total emissions of greenhouse gases in Colombia, with a total share of 55% (2).

Gender & Marginalisation

> On +38% of the UPA, women are the ones who make production decisions (11).

> From 2.7M hectares of agricultural use by ethnic groups, 86.9% correspond to forests.

Expected Development Outcome

> A plant-based diet is good for human health: a plant-based protein vs. red meat is associated with a lower risk of cancer-related, cardiovascular disease-related, and total mortality (3).

> Helping to improve nutrition and the environmental context could help increase sustainable and healthy products that can solve other problems in the country, such as food security.

> A plant-based diet could add up to 49% to the global food supply without expanding croplands, significantly reducing carbon emissions and waste by-products. Similarly, If we all eliminated meat and milk from our diets, we would be saving 50% of our water use (4).

Gender & Marginalisation

> Improve market opportunities and product quality of 38% UPA led by women, as well as information about healthy possibilities from their crops.

> Allow these ethnic groups to have an additional income without damaging their hectares that have forestry vocation, which may have significant cultural and spiritual values.

Primary SDGs addressed

Zero Hunger (SDG 2)
2 - Zero Hunger

2.1.1 Prevalence of undernourishment

Current Value

The proportion of households experiencing food insecurity was 23.5% in 2016 (33).

Target Value

The proportion of households experiencing food insecurity is expected to reach 13.9% by 2030 (33).

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.2.1 Material footprint, material footprint per capita, and material footprint per GDP

Current Value

> 429 business in 2017 were Green Businesses in Colombia (33).

Target Value

> The government expects Green Businesses in Colombia to grow to 12.630 by 2030 (33).

Life on Land (SDG 15)
15 - Life on Land

15.3.1 Proportion of land that is degraded over total land area

Current Value

> As of 2019, 665,549 hectares of land are in the process of restoration (33).

Target Value

> By 2030, it is expected that this indicator ascends to 1M hectares (33).

Secondary SDGs addressed

3 - Good Health and Well-Being
13 - Climate Action

Directly impacted stakeholders

People

> 15M individuals that identify themselves as framers. > 14% of Colombians who are flexitarian, vegan or vegetarian.

Gender inequality and/or marginalization

> 36.2% of women in rural areas that are employed in agriculture, livestock, silviculture and related. > On +38% of the UPA, women are the ones who make the production decisions (11).

Planet

> 65.8% of the land suitable for agricultural purposes are not being used to its vocation. Also, the 11.3 million hectares that are currently in use for agriculture. > +55k hectares associated producers and marketers of organic products (16).

Corporates

> Restaurants and brands that offer organic, vegan, and/or vegetarian food have not yet been quantified.

Public sector

> 92% of the budget that the government gives to farmers goes to subsidies and the remainder to technical assistance that could help develop the necessary skills.

Indirectly impacted stakeholders

People

> 25.2M of Colombians who suffer from either malnutrition or overweight (1).

Gender inequality and/or marginalization

> 2.7M hectares of agricultural use by ethnic groups, from which 86.9% correspond to forests.

Planet

> +45M hectares (40% of the continental surface of Colombia), which are eroded (17).

Corporates

> +19k companies in Colombia that are in the Food & Beverage sector (6).

Public sector

> USD$ 2.2B are spent by the health system in treating obesity related diseases (5). > The agroforestry strategy, or land use with non-timber resources, is under the Strategy for Control of Deforestation and Forest Management in Colombia and the Colombian Strategy for Low Carbon Development, promoted by the MinAmbiente (7).

Impact Risks

Execution risk: > Lack of sustainable forest management plans definition technical assistance and implementation in potential territories that can benefit from the technology. > Specify that the supply of raw material is constant and available over time, overcoming learning obstacles and possible climate impacts.

Stakeholder participation risk: > Most consumers do not recognize that industrialized products end up being harmful to the body or that plant-based is a better alternative. > Lack of sufficient demand of a growing tendency but is not still substantial in the Colombian market. > There may be international competitors who are more knowledgeable and can better take advantage of the market's opportunities, with a lower price for consumers."

Drop off risk: > Due to lack of knowledge of organic cultivation or lack of technical assistance for adopting newly cultivated species.

External risk: > High costs of certifying products, which would result in a reduced supply of these products on the market and expensive processing and R&D Investments. > It can be growth subject to demand growth and trends, especially in large cities, since in smaller cities, there may not be enough demand.

Unexpected impact risk: > Drastic changes in the environment that are not accounted for in big data, such as earthquakes, tsunamis, and other natural disasters.

Gender inequality and/or marginalization risk: > Both rural women and indigenous communities may not have the necessary knowledge or technical education.

Impact Classification

C—Contribute to Solutions

What

Positive and important outcome due to increase in food quality and availability.

Risk

Increase in GHG emissions and an unbalanced diet that can create nourishment problems

Impact Thesis

This initiative intends to promote food alternatives, driven by real or perceived health, environmental, and lifestyle benefits.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

(National Development Plan - Alliance for food security and malnutrition): Creates a Food and Nutrition Security System, with functions and responsibilities within the Government, with decision instances at the national and territorial level (22).

(National Plan of Green Businesses): Defines the guidelines and provide tools for planning and decision-making that allow the development and promotion of both the supply and demand of green and sustainable businesses in the country (24).

(Agricultural and Rural Development Policy): Defines guidelines to advance between 2018-2022 towards more significant equity and competitiveness in alignment with the Rural Reform (23).

Financial Environment

Financial incentives: Nutresa Ventures is a USD$ 50M fund that invests in early-stage highly innovative companies aligned with Nutresa's core business (Plant Base 2.0 is an investment vertical) (25). Inversor invested in Fruandes, a Colombian company that commercializes its products on a national and international level, with a portfolio of healthy snacks (13). Pomona Impact invested in Runa, an organic drink manufacturer certifies (14).

Fiscal incentives: With the Financing Law, the government imposed the value-added tax on beers and soft drinks, which will no longer be charged only during production but also in the distribution chain (32).

Regulatory Environment

(Law Project 007 of 2017): There is a project in a state "filed by the passage of the legislature" that dictates provisions for the informed consumption of sugar, salt, and fats in processed and ultra-processed products. All of the above with the guarantee of contributing to people's health (29).

(Resolution 719 of 2015): It contemplates the classification of foods in 15 general groups that in turn are subcategorized according to the risk is high, medium, or low for health. Among the high risk are dairy products, meats, and derivatives, eggs, and products based on this, fishing, among others (30)

(Resolution 036 of 2007): Regulates the use and the administrative entity of the "Ecological Food Seal" under the Ecological Agricultural Products Control System that seeks to guarantee the sustainability and renewability of the resources and the quality of the environment and the care of human health (31).

(Law 1943 of 2018): The Financing Law brought a value-added tax on beers and soft drinks, which will no longer be charged only during production but also in the distribution chain (32).

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

According to Acodres (restaurant guild), to 2019, there were 528 establishments with vegan and vegetarian offers compared to 2015 when there were only 43 (26). Pietrán's Veggie Burger and Veggie Bites products were launched to the Colombian market in 2018, serving consumers' needs and healthy trends (26). Sannus Foods is a company that, since 2018, imports the world's most recognized plant-based products to Colombia (e.g., Beyond Meat) and is growing at 800% a year (26).

Public-Private Partnership

UNDP is supporting victims of the Antioquia armed conflict in the development of biofortified products - bean flour for hamburgers' production.

Target Locations

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References

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    • (1) MinSalud (2017) – Gobierno presenta Encuesta Nacional de Situación Nutricional de Colombia (ENSIN) 2015. Accessed June 2020
    • (2) Agronegocios (2019) – Agricultura aporta el 55% de los gases de efecto invernadero que aporta Colombia. Accesed June 20th 2020
    • (3) Kim et al (2019) - Plant‐Based Diets Are Associated With a Lower Risk of Incident Cardiovascular Disease. Accesed June 30th 2020
    • (4) UCAL Sustainability (2019) – The case for plant based food. Accesed June 2nd 2020
    • (5) ElTiempo (2019) - Colombianos pierden un millón de años de vida por obesidad y sobrepeso. Accessed July 1st 2020
    • (6) ANDI (2018) – Industria de alimentos. Acceso Mayo 30
    • (7) MinAmbiente (2018) Enviromental actions promoted by the National Government
    • (8) MinAmbiente (2013) Region Characterization
    • (9) Universidad del Norte (2020) Agiculture in the Colombian Caribbean
    • (10) Semana (2015) Oriniquia the future Colombian food pantry
    • (11) DANE (2016) 7th Presentation from the National Agricultural Census
    • (12) Yunus' Portfolio: Pomario - https://www.yunussb.com/portfolio/pomario.Accesed February 8th.
    • (13) Inversor's Portfolio: Fruandes https://www.inversor.org.co/en/portafolio-2/fruandes/.Accessed February 8th.
    • (14) Runa: https://runa.com/product/.Accessed February 8th.
    • (15) EMIS (2020) Colombia: Food & Beverage Sector 2020/2021
    • (16) Portafolio (2018) Organic food, a business to take advantage of it in Colombia
    • (17) SIAC (2014) Soil Degradation
    • (18) Ashkew (2020) Disrupting the disruptors: Next generation plant-based proteins bridge health and sustainability gap. Accessed 3 May 2020
    • (19) Portafolio (2018) – Beneficios económicos del vegeterianismo y veganismo. Accessed May 14th 2020
    • (20) Mis Finanzas para Invertir (2019) - ¿Cuánto gastan en promedio los hogares Colombianos?. Accessed May 3rd 2020
    • (21) CNBC (2020) - If you invested $1,000 in Beyond Meat at IPO, here’s how much you’d have now. Accessed June 1st 2020
    • (22) DNP (2017) – Plan Nacional de Desarrollo (2018 – 2020
    • (23) MinAgricultura (2017) – Un Campo para la Equidad. Accessed June 2 2020
    • (24) MinAmbiente (2017) – Plan Nacional De Negocio Verdes (2018 – 2022). Accessed June 1 2020
    • (25) Grupo Nutresa (2020) – Nutresa Ventures. June 6 2020
    • (26) Agronegocios (2020) – Crece la tendencia de conusmo de alimentos vegetarianos y veganos en Colombia, Accessed June 5 2020
    • (27) Microsoft (2019) - The path to prosperity through access to high-speed internet. Accesed June 6 2020
    • (28) National Planning Department (2019) - 2030 Agenda in Colombia
    • (29) Martínez, M (2017) Law for the informed consumption of sugar, salt and fats
    • (30) Cámara de Comercio de Bogotá (2017) Food Classification according to current regulation.
    • (31) MinAgricultura (2007) Resolution 00036 of 2007
    • (32) Opinion y Salud (2019) Law 1943, Financing Law
    • (33) National Planning Department (2019) - 2030 Agenda in Colombia