Valorisation of by-products and symbiosis in the plant-based industry

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Nigel Devine

Nigel Devine

Associate Director

As demand for protein products continues to shift towards plant-based, brands and manufacturers will face increased opportunities around the use of their by-products. Here, we have a closer look at the key drivers of change which are pushing plant-based brands and manufacturers to place a greater focus on increasing the value of their by-products.

June 20, 2022

As the protein market structure shifts towards plant-based proteins, as health and environmental considerations lead to more widespread adoption of vegan, vegetarian or flexitarian diets, manufacturers will need to develop more efficient supply chains which can deliver sustainability and financial benefits.

Valorisation of by-products beyond their primary output is something animal derived protein supply chains have spent decades honing.

Animal by-products, known as the ‘fifth quarter’, are used across a range of sectors, whether that’s for animal feed, cosmetics or pharmaceutical products.

This has resulted in strong supply chains which not only reduce the environmental impact of the meat-derived sector, a major producer of greenhouse gases, but also has a significant impact on the bottom line for manufacturers.

As the plant-based protein sector looks at how to optimise the use of its by-products, there are some significant learnings that can be taken from animal-derived protein manufacturers.

Other options for utilising plant-based by-products

One challenge for plant-based protein manufacturers, which tend to be purpose-driven businesses, is to find a use for by-products which doesn’t compromise its values.

The majority of waste from plant-based protein manufacturing is currently used as animal feed. With rising interest in vegan lifestyles, this is not only failing to capitalise on the full potential value of these by-products, but it is also indirectly supporting the traditional meat industry.

There are a number of other options for plant-based by-products, including textiles, packaging, building materials, biofuel or pet food. However, the most effective option, in both maximising the output and value of waste, is to divert it to feedstock for the creation of new proteins using biomass fermentation.

To illustrate this point, a large proportion of plant-based meat uses the yellow pea. After the protein content, which comprises less than 30% of yellow peas, is extracted, the by-product typically goes to be used as low-value animal feed.

As the plant-based market matures, this by-product could be used in biomass fermentation as a feed stock for the creation of other protein products, increasing the protein output per hectare, as well as selling the by-product at a higher value than it currently achieves as animal feed.

Significant opportunities

There are significant opportunities for the plant-based brands and manufacturers that can be the first to tackle the challenge of the sector’s waste products.

As well as benefitting from the competitive advantages of increased revenues and more efficient supply chains, finding successful uses for by-products from protein products would enable manufacturers and brands, many of which are purpose-driven, to market their products as even more sustainable.

In a period of inflation and a growing cost of living crisis, a potential reduction in discretionary consumer spending could have a major impact on more premium plant-based products.

While the utilisation of by-products in the traditional meat industry has been driven by margins, the scale and premiumisation of the plant-based protein sector means that it is not currently facing significant pressure on margins.

With brands dominating, supply chains are still small and relatively fragmented. However, as supermarket own labels look to capitalise on a growing market, pressure on margins will increase.

In an inflationary market and with greater competition on shelves, investor pressure may accelerate the need to look at margins and efficiency within supply chains.

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Nigel Devine

Nigel Devine

Associate Director

United Kingdom

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