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Wednesday 17 October 2018

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Swedish AP funds among FAIRR investor coalition backing plant-based proteins

Written by Talya Misiri
14/02/18

Swedish pension funds AP2, AP3 and AP4 are among a $2.4trn investor coalition that is calling on food multinationals to provide more alternatives to animal proteins.

A new report titled Plant-based profits, backed by 57 large investors, is urging global food firms to diversify their protein sourcing away from a reliance on animal proteins.

The investor coalition supporting the movement is led by the FAIRR initiative and founded by private equity pioneer Jeremy Coller. The group comprises of pension funds including AP2, AP3 and AP4 and institutional investors such as Aegon, Aviva Investors, Coller Capital and Nordea.

The report predicted that the market for alternative proteins, including those using plant-based ingredients, is set to grow at a compound annual growth rate of 8.29 per cent in the next four years and could reach $5.2bn by 2020.

According an analysis of 16 multinationals, Nestle and Tesco were the best positioned to benefit from a transition to alternative proteins. The two companies were praised for their detailed answers to the investor coalition’s questions and held candid discussions with investors. Costco and Whole Foods were both criticised for failing to adequately respond to the investor’s requests for information or further meetings.

Other companies that were involved included Kraft Heinz, General Mills and Unilever. All companies in the report market at least one own-brand alternative protein product, while there was a universal lack a coherent strategy for how to market and promote alternative protein products on supermarket shelves to drive sales.

The investor coalition for these proteins has grown from 40 investors managing $1.25trn in 2016 to 57 investors with over $2.4trn in AUM today.

Nordea head of group sustainable finance Sasja Beslik: “Sustainable protein is a fast-emerging issue for the food industry, and it is important for long-term investors to know if the companies they invest in understand the related risks and opportunities. FAIRR’s sustainable protein engagement offers practical guidance to companies to ensure they have a business strategy that is robust enough to respond to a changing food supply chain. For us as investors, this engagement also helps us to be on top of the developments in this space as well as to identify food companies that proactively invest in innovative solutions.”

Nestlé AVP, stakeholders engagement in sustainability Duncan Pollard added: “The development of the protein supply chain is an issue with the potential to radically reshape the supermarket shelf of the future. We very much welcome the support of those investors who want to act today to stay ahead of the curve in the economy of tomorrow.”



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