1、Barcl ays Capi t al I nc.and/or one of i t s affi l i at es does and s eeks t o do bus i nes s wi t h c ompani es c overed i n i t s res earch report s.As a res ul t,i nves t ors s houl d be aware t hat t he f i rm may have a c onf l i ct of i nt eres t t hat c oul d affect t he obj ect i vi t y of
2、t hi s report.I nves t ors s houl d c ons i der t hi s report as onl y a s i ngl e f act or i n maki ng t hei r i nves t ment deci s i on.Thi s res earch report has been prepared i n whol e or i n part by equi t y res earch anal ys t s bas ed out s i de t he US who are not regi s t ered/qual i f i e
3、d as res earch anal ys t s wi t h FI NRA.Please see analyst certifications and important disclosures beginning on page 2727.Sus t ai nabl e&Themat i c I nves t i ng Insect Protein:Bitten by the bug Confronted with global food challenges,alternative proteins such as plant-based and cultured meat are
4、receiving well-deserved attention.We see scope for insects to be added to the menu as an alternative for both animal feed and human food.The insect protein market could be worth up to$8bn by 2030 with potential for upside as near-term hurdles ease.Equi t y Res earch 24 June 2019Sustainable&Thematic
5、Investing Emi l y Morri s on+44(0)20 7773 9080 emi l y.morri s onbarcl ays.c om Barcl ays,UK Hi ral Pat el +44(0)20 3134 1618 hi ral.pat el barcl ays.c om Barcl ays,UK Anus hka Chal l awal a+44(0)20 3134 2326 anus hka.chal l awal abarcl ays.c om Barcl ays,UK Kat heri ne Ogundi ya+44(0)20 3134 1391 k
6、at heri ne.a.ogundi yabarcl ays.c om Barcl ays,UK*For l i s t of addi t i onal aut hors,s ee page 2FOCUS#f oodrevol ut i on#t rans at l ant i c Barclays|Sustainable&Thematic Investing 24 June 2019 2 Contributing Authors European Food Retail European Food Retail Canadian Retail&Consumer James Anstead
7、+44(0)20 3134 6166 Barclays,UK Nicolas Champ+331 44 58 32 45 BBI,Paris Jim Durran+1 416 863 8967 BCCI,Canada Americas Agribusiness European Consumer Staples European Consumer Staples Benjamin M.Theurer+52 55 5241 3322 BBMX,Mexico Warren Ackerman +44(0)20 3134 1903 Barclays,UK Arthur Reeves +44(0)20
8、7773 3622 Barclays,UK U.S.CHPC&Beverages U.S.Restaurants Lauren R.Lieberman +1 212 526 3112 BCI,US Jeffrey A.Bernstein+1 212 526 3855 BCI,US Sustainable&Thematic Investing Sustainable&Thematic Investing Sustainable&Thematic Investing Sustainable&Thematic Investing Hiral Patel+44(0)20 3134 1618 Barcl
9、ays,UK Kristina Church+44(0)20 3134 2199 Barclays,UK Emily Morrison+44(0)20 7773 9080 Barclays,UK Sustainable&Thematic Investing Sustainable&Thematic Investing Anushka Challawala+44(0)20 3134 2326 Barclays,UK Katherine Ogundiya+44(0)20 3134 1391 Barclays,UK Barclays|Sustainable&Thematic Investing 24
10、 June 2019 3 CONTENTS EXECUTIVE SUMMARY.4 THE NEED FOR SUSTAINABLE DIETS.5 Population growth putting pressure on food systems.5 The case for alternative proteins.6 INSECT PROTEIN A SUSTAINABLE MIDDLE GROUND.9 How do insects fit into the alternative protein landscape?.9 Insect protein market expected
11、 to be worth$8bn by 2030.9 Market opportunity driven by demand and supply factors.10 Demand factors.12 Supply factors.15 HOW DO INSECTS MAKE THE LEAP?.16 Small brands offer disruption,big brands help with adoption.16 INVESTOR GUIDEBOOK SECTOR IMPLICATIONS.18 Food Retail.19 Agribusiness.20 Food Manuf
12、acturing.21 Leisure.22 APPENDIX 1 COMPANY INTERVIEWS.23 Barclays|Sustainable&Thematic Investing 24 June 2019 4 EXECUTIVE SUMMARY With the global population estimated to increase to 10 billion by 2050,and food production needing to increase by as much as 70%to meet growing demand,serious challenges a
13、re posed around the sustainability of our food production systems,particularly in regards to meat.Our colleagues published a report exploring the potential for plant-based alternatives and cultured meat(Global Food:I Cant Believe Its Not Meat,22/5/19),and we continue this discussion with another opt
14、ion insects.We see scope for insects to reduce the environmental burden of our food system as an alternative for both animal feed and food for human consumption.Although there are numerous hurdles to overcome,notably regulation,price and cultural acceptance,we see insects as a viable middle ground f
15、or consumers wanting to make their diets more sustainable without going entirely plant-based as well as offering a more sustainable source of animal feed.The insect protein market could be worth up to$8bn by 2030(+24%CAGR)and we see upside if the supply and demand factors continue to develop favoura
16、bly,similar to what we have seen in the plant-based space.As the global population grows,incomes in developing countries increase and as Western consumers remain conscious of the health and sustainability impacts of their diet,we see the focus on protein continuing.However,awareness around the envir
17、onmental impacts of traditional animal protein is growing and hence we see rising interest in alternative proteins from consumers,the media and investors.We see plant-based meat alternatives as the current source of disruption within protein and in the longer term also see cultured meat as an option
18、.However,we see future potential for insect protein to also be added to the menu another alternative that has received less attention thus far.Globally,around 2 billion people in over 130 countries already regularly eat insects as a source of protein and the UNs FAO has been advocating for edible in
19、sects since 2003 due to their nutritional qualities and sustainability credentials.We see insects as a high quality source of protein,vitamins and minerals for consumers who are conscious of making their diets more sustainable but dont want to shift to entirely plant-based.We also see insects as a c
20、redible feed alternative for animal agriculture,within the context of increasing sustainability concerns.Although data is scarce,the insect protein market could be worth up to$8bn by 2030 at a CAGR of 24.4%1.We recognise that the insect market is still niche and see a number of hurdles that need to
21、be overcome before adoption becomes mainstream.Notable hurdles include high pricing,inconsistent regulation,a lack of consumer awareness,and overcoming the yuck factor.If these hurdles can be overcome,we see potential for upside to the value of the insect protein market.Similar to what we have seen
22、with other food trends such as plant-based meats and dairy alternatives,we see small brands disrupting the current landscape and acting as a catalyst for change within the mainstream food industry.Paradoxically,for new trends to move into mainstream adoption,we believe small brands require the scale
23、 and marketing power of the big food companies.We saw this within plant-based,with the big food companies acquiring smaller brands,investing in them and/or subsequently developing their own offerings and see the same pathway for insect protein.Our Investor Guidebook(page 18)assesses the impact of th
24、e insect protein trend on Food Retail,Agriculture,Food Manufacturing and Leisure,following discussions with our sector analysts.Within our coverage,we see Nestle and Loblaw leading the exploration into insect protein.We see Food Retail as the first sector to be impacted,with some grocers raising awa
25、reness by stocking insect products.For Agribusiness,we see the nearer term impact from using insects as animal feed,which can represent c40-60%ofthe cost of production.In the longer term,we see a potential impact on the types of protein produced.We see Food Manufacturing helping insects move to mass
26、 scale in the longer term through acquisitions of smallbrands and subsequent development of their own products.Within Leisure,restaurants provide a role in raising awareness but the impact on chain restaurants will likely be later inthe adoption process,similar to what we have seen with plant-based.
27、Why read this report?We have already argued that animal protein is ripe for disruption from plant-based alternatives and cultured meat in Global Food:I Cant Believe Its Not Meat(22/5/19).Here we present insects as another alternative to improve the sustainability of global food production.We acknowl
28、edge insect protein is still a niche area,but we will continue to monitor the trend for supply and demand factors which help overcome the price barrier and support the leap into mainstream adoption.1 According to market research firm Meticulous Research.Barclays|Sustainable&Thematic Investing 24 Jun
29、e 2019 5 THE NEED FOR SUSTAINABLE DIETS To sustainably feed the growing population of the future,we see a need to focus on protein sources in particular as animal products generally have the largest impact on the environment.We are starting to see increased attention on alternative proteins from con
30、sumers,the media and investors and expect this to continue.Population growth putting pressure on food systems According to the UN,the global population is set to increase from the current level of 7.6bn to 8.6bn by 2030,9.8bn by 2050 and 11.2bn by 2100(Figure 1).Population growth will be driven by d
31、eveloping economies,including Asia and Africa(Figure 2).FIGURE 1 World population set to reach c10bn by 2050 FIGURE 2 Population growth skewed to developing world Source:UN,Department of Economic and Social Affairs,Population Division(2017)Source:UN,Department of Economic and Social Affairs,Populati
32、on Division(2017)Food production needs to expand by up to 70%by 2050 To feed this growing population,the Food and Agriculture Organization of the United Nations(FAO)estimates that food production will need to expand by up to 70%by 2050.However,simply expanding current agricultural systems seems to b
33、e an unlikely option due to negative implications for the environment and functioning of the ecosystem(see Global Agriculture:Winds of change:the next environmental debate,11 Feb 2019).Although we rely on agriculture to feed our growing population,we also need to reduce the greenhouse gas emissions
34、associated with our food system as well as other environmental considerations such as deforestation and water over-use.The World Resources Institute(WRI)argues that to feed 10 billion people sustainably by 2050 requires three gaps to be closed:1.The 56 percent food gap between crop calories produced
35、 in 2010 and those needed in 2050 under business as usual growth;2.The 593-million-hectare land gap(an area nearly twice the size of India)between global agricultural land area in 2010 and expected agricultural expansion by 2050;and 3.The 11-gigaton GHG mitigation gap between expected agricultural e
36、missions in 2050 and the target level needed to hold global warming below 2C(3.6F),the level believed necessary to prevent the worst climate impacts.02468101219501960197019801990200020102020203020402050Billions0%10%20%30%40%50%60%70%80%90%100%19501960197019801990200020102020203020402050Developed cou
37、ntriesDeveloping countriesBarclays|Sustainable&Thematic Investing 24 June 2019 6 FIGURE 3 Creating a sustainable food future by 2050 Source:Adapted from the World Resources Institute,70%from FAO Significant environmental implications associated with our food system We have already published on the i
38、mpact that current agricultural systems are having on the environment in Global Agriculture:Winds of change:the next environmental debate 11/2/19).The research highlights the carbon intensity of our agricultural systems,accounting for 24%of global GHG emissions,with beef specifically accounting for
39、9%of all human-induced emissions.Additionally,our research on food waste highlights the inefficiencies within the food system(Food Waste:Ripe for Change,4/3/19),with a third of all food produced for human consumption being wasted each year,according to the FAO.Representing c8%of global GHG emissions
40、,we also argue that food waste is an overlooked driver of climate change that needs collaborative action across the food value chain.The case for alternative proteins Rising incomes lead to greater demand for protein As incomes rise,diets have historically shifted towards consuming greater proportio
41、ns of higher protein,more resource-intensive animal-based foods.We have seen this already in the West and more recently with the rising middle class in China.For example,the FAO estimates that meat consumption in China increased from 10kg/capita per year in the mid-1970s to c60kg/capita per year in
42、2013.The map in Figure 4 shows the meat consumption per person around the globe,with the countries consuming the highest quantities generally being the most developed nations.As incomes(and populations)in developing nations grow,we expect the demand for protein to continue to grow also.The FAO estim
43、ates that global per capita meat consumption is set to increase from c41kg/capita per year in 2015 to c45.5kg by 2030,and then also to c49.5kg by 2050.Barclays|Sustainable&Thematic Investing 24 June 2019 7 FIGURE 4 West vs.East meat consumption(kg/capita per year)Source:UN FAO 2013,Barclays Research
44、 Environmental and health concerns are on the consumer agenda We do not see the focus on protein shifting away,but given that animal proteins have far greater impacts on the environment,alternative protein sources are receiving more attention from the media,consumers and investors.As highlighted in
45、Global Food:I Cant Believe Its Not Meat(22/5/19),growing consumer awareness around animal agricultures impact on the environment,animal welfare concerns,and a focus on health are numerous reasons to believe that alternative meats are not only a fad.Western diets are increasingly focused on protein d
46、ue to health concerns Western consumers are focusing on protein more than any other food category,representing 38%of an average US adults diet,according to the International Food Information Councils 2018 survey.US consumers tend to see protein as a way to solve their health concerns(Figure 5)and fo
47、r the 36%of consumers found to be following a specific diet,a significant number of the most-followed diets in 2018 had a skew towards protein and away from carbohydrates(Figure 6).FIGURE 5 US consumers use protein for health issues FIGURE 6 Type of diet followed by US consumers Source:International
48、 Food Information Council Foundation 2018 Source:International Food Information Council Foundation 2018.Type of diet followed by those answering that they do follow a specific eating pattern.0%5%10%15%OtherAll oils/fatsGrains/Grain foodsDairyFood ingredientsFruitsVitamins and mineralsVegetablesProte
49、inEnergyWeight lossCardiovascularAll issues3%4%5%5%7%10%0%2%4%6%8%10%12%Int.FastingPaleoLow-carbWhole 30High-proteinKetogenic/High-fatBarclays|Sustainable&Thematic Investing 24 June 2019 8 Environmentally-conscious consumers Consumer consciousness around sustainability is one big driver in the discu
50、ssions around alternative protein(Figure 7),with 57%of respondents saying sustainability is either somewhat important or very important.In the UK for example,protein consumption has increased over the past two years(according to Kantar Worldpanel),but the proportion coming from pork,bacon and sausag