A recent study by consultancy firm Systemiq reveals exciting opportunities for Germany to harness alternative protein sources as a driving force for economic growth while paving the way for new trade possibilities. This investigation spotlights the potential for job creation in this burgeoning sector, highlights the environmental advantages of diversifying the protein supply, and suggests essential measures for Germany to solidify its position as an innovator in this area.
Overview of the Study
The report, entitled “A Taste of Tomorrow: Exploring the Economic Advantages of Protein Diversification in Germany,” was produced in collaboration with GFI Europe, a non-profit think tank. Notably, this analysis marks the first comprehensive examination of plant-based, fermentation-derived, and cultured foods in Germany, assessing these options through economic, environmental, and social lenses. The study also sheds light on the barriers that may impede the widespread adoption of alternative proteins in the German market.
One of the report’s most striking conclusions is that Germany’s potential in the alternative protein sphere goes far beyond merely meeting local demand; the nation could emerge as a key exporter of production technologies and services, reaching markets throughout Europe and beyond. If the right conditions are established, Germany stands poised to be a major influence in this fast-expanding industry.
Market Scenarios and Economic Impact
The report outlines different developmental scenarios for the alternative protein market, each reflecting varying levels of political support and financial investment. In a conservative projection, with minimal backing, the sector could develop into a market worth around 5 billion euros by 2030, eventually growing to 8 billion euros by 2045. Even in this cautious outlook, such economic growth could generate approximately 45,000 new jobs by 2030, increasing to 115,000 by 2045. However, without addressing existing challenges, Germany risks falling behind on the global stage.
Moreover, the study presents a mid-level scenario and an ambitious alternative. In the latter, with substantial public investment and streamlined approval processes for these alternative products, Germany could assert itself as a frontrunner in protein diversity. The domestic market for plant-based and fermentation-derived foods could skyrocket to about 10 billion euros by 2030 and reach nearly 23 billion euros by 2045, making up around 10 percent of the current food and beverage sector. This ambitious roadmap could lead to the creation of up to 95,000 jobs by 2030, potentially rising to 250,000 sustainable jobs by 2045.
Policy Recommendations for Growth
Currently, the German alternative protein market faces significant challenges that could impede its growth and global competitiveness. To tackle these pressing issues, the study recommends five policy actions that resonate with widely supported objectives within Germany:
- Enhance support for companies navigating the EU’s novel food approval process to ensure they can submit comprehensive applications.
- Significantly increase public funding for research from 13 million euros annually to an average of 140 million euros, with 30 million specifically allocated to establish a new innovation hub.
- Allocate 120 million euros each year to attract private investment in infrastructure for alternative proteins while reducing investment risks through guarantees and low-interest loans.
- Use public procurement strategies to effectively incorporate plant-based foods and alternative protein sources into community catering, such as in schools, hospitals, and daycare centers.
- Create incentives for agricultural operations to shift towards alternative proteins, integrating them more fully into domestic value chains related to protein diversification.
Sophie Hermann, a partner at Systemiq, emphasized that diversifying Germany’s protein supply offers consumers more choices, boosts the nation’s economic competitiveness through innovative exports, and fosters sustainable job creation. She acknowledged that the industry is still emerging and carries certain uncertainties, but she firmly believes that advances in technology, regulatory frameworks, and targeted investments will be essential in navigating these challenges. With coordinated efforts from all stakeholders and strategic political support, Germany could carve out a significant role in this innovative sector.
Ivo Rzegotta, Senior Public Affairs Manager at GFI Europe, pointed out that decisive political action could position Germany as a world leader in alternative protein sources. He urged the next government to prioritize these proposed measures, particularly focusing on funding for research, infrastructure investment, and assistance for companies through the complex approval maze. Such efforts could spark private investment and enhance the industry’s capacity for innovation. Without prompt action, Germany risks missing out on the substantial economic and environmental advantages offered by alternative proteins, subsequently endangering its standing in the global marketplace.
Source: Vegconomist