I understand the intention behind this article/blog and agree that we should not write off the alternative protein story but I do not think anybody is doing that anyways. Investors have billions at stake as the low interest rate environment/easy money combined with the FOMO effect among the investor community made them invest in many alt. protein startups at sky high valuations. So what is happening now (when interest rates have gone up and money is not as cheap to borrow as it was couple of years back) and will happen further is that startups with weak business models & inflated promises will not be able to raise fresh rounds of investment at those high valuations as before making it difficult for VCs/PEs to make an exit without losing money. Simply put- Investors who did not do proper due-diligence of startups will lose money. Coming back to the article - there are multiple logical flaws in it- Applying Gartner Hype Cycle (which is used to study the progression in maturity of emerging technologies) to how people make their food choices (driven by multiple factors like biological, social, cultural, economic, psychological, attitudinal, beliefs and so on) is flawed. The blog extends this illogical comparison by trying to draw parallels of growth of alt. proteins with the launch of ChatGPT and Internet adoption in the 90s (internet is a homogeneous entity which had a very unique value proposition of adding to people's convenience just like many other technological inventions). Also, comparing alternative protein products with coca cola's low sugar SKUs is also fundamentally wrong. Coca cola zero is an example of line extension of an established category whereas Alt. protein innovations are completely new products/categories which are trying to mimic their underlying established categories/products.
Thank you for the comment -- we appreciate you reading the article in detail and sharing your views. Our intent was to explore the interplay between technological progress and market traction indicated by the demand and supply curves of the alternative protein industry, not to apply the Hype Cycle to the way people make food decisions. The promise of alternative proteins is to provide a path for consumers to make different decisions about their health and environment without compromising on taste and quality. Conventional meat and dairy products lack this benefit. ChatGPT today and the Internet in the 1990s similarly brought unique value propositions that were previously unavailable to consumers, explaining their rapid rise. We view the categorisation of alternative proteins and their positioning in the market from a broader perspective. Tyson Foods introduced plant-based chicken nuggets that are sold alongside conventional chicken nuggets. Chobani offers oat yogurt as an expansion of its conventional yogurt line. Some consumers (e.g. flexitarians) view this as a line extension, while others may see it as their default food choice. Unfortunately, the dip in performance of public-facing brands such as Beyond Meat and Oatly has led to criticism of the entire industry and a decline in funding momentum. Just as in any emerging market, many startups will fail due to gaps in their offerings or an inability to gain market traction. Despite this, investors must continue to back those companies that have a strong value proposition and a viable path to market. In terms of the Hype Cycle, it is too early to determine how the alternative protein industry will develop, but we continue to see positive developments such as the recent approval to sell cultivated meat in the U.S. market which will create new opportunities, bring in additional capital and engage new segments of consumers.
I understand the intention behind this article/blog and agree that we should not write off the alternative protein story but I do not think anybody is doing that anyways. Investors have billions at stake as the low interest rate environment/easy money combined with the FOMO effect among the investor community made them invest in many alt. protein startups at sky high valuations. So what is happening now (when interest rates have gone up and money is not as cheap to borrow as it was couple of years back) and will happen further is that startups with weak business models & inflated promises will not be able to raise fresh rounds of investment at those high valuations as before making it difficult for VCs/PEs to make an exit without losing money. Simply put- Investors who did not do proper due-diligence of startups will lose money. Coming back to the article - there are multiple logical flaws in it- Applying Gartner Hype Cycle (which is used to study the progression in maturity of emerging technologies) to how people make their food choices (driven by multiple factors like biological, social, cultural, economic, psychological, attitudinal, beliefs and so on) is flawed. The blog extends this illogical comparison by trying to draw parallels of growth of alt. proteins with the launch of ChatGPT and Internet adoption in the 90s (internet is a homogeneous entity which had a very unique value proposition of adding to people's convenience just like many other technological inventions). Also, comparing alternative protein products with coca cola's low sugar SKUs is also fundamentally wrong. Coca cola zero is an example of line extension of an established category whereas Alt. protein innovations are completely new products/categories which are trying to mimic their underlying established categories/products.
Thank you for the comment -- we appreciate you reading the article in detail and sharing your views. Our intent was to explore the interplay between technological progress and market traction indicated by the demand and supply curves of the alternative protein industry, not to apply the Hype Cycle to the way people make food decisions. The promise of alternative proteins is to provide a path for consumers to make different decisions about their health and environment without compromising on taste and quality. Conventional meat and dairy products lack this benefit. ChatGPT today and the Internet in the 1990s similarly brought unique value propositions that were previously unavailable to consumers, explaining their rapid rise. We view the categorisation of alternative proteins and their positioning in the market from a broader perspective. Tyson Foods introduced plant-based chicken nuggets that are sold alongside conventional chicken nuggets. Chobani offers oat yogurt as an expansion of its conventional yogurt line. Some consumers (e.g. flexitarians) view this as a line extension, while others may see it as their default food choice. Unfortunately, the dip in performance of public-facing brands such as Beyond Meat and Oatly has led to criticism of the entire industry and a decline in funding momentum. Just as in any emerging market, many startups will fail due to gaps in their offerings or an inability to gain market traction. Despite this, investors must continue to back those companies that have a strong value proposition and a viable path to market. In terms of the Hype Cycle, it is too early to determine how the alternative protein industry will develop, but we continue to see positive developments such as the recent approval to sell cultivated meat in the U.S. market which will create new opportunities, bring in additional capital and engage new segments of consumers.