Oct 15 2024

Spanish Plant-Based Industry: a Sunny, Bright Future

This growing appetite for ‘veggie’ diets has been the backbone supporting an emerging plant-based industry that has attracted the interest of venture funds, food companies, and entrepreneurs.

By Jaime Martín - Founding partner & CEO of Lantern

Anyone walking into a restaurant or tapas bar in Spain can rightfully observe the exuberance of products like jamón or chorizo and the preeminence of roasted lamb, grilled beef, or suckling pig on quite a few menus. Yes, Spain is one of the top 10 countries in the world for per capita meat consumption and the number one in Europe. And while this cultural and gastronomic fact is an undeniable reality, the truth is that Spaniards are more and more interested in adopting plant-forward diets as a way to live healthier and more sustainable lifestyles. Based on our study The Green Revolution, 44% of omnivores in Spain try to reduce the amount of meat they eat. On the other side of the spectrum, vegans and vegetarians represent close to 1 million consumers. In 2023, flexitarians accounted for 9% of the total adult population, or about 3.5 million, up from 6.3% in 2017.

The meat-alternative market, while still a lilliputian fraction of the animal meat market, achieved a notable retail market value of 114 million euros in 2023. Whether this market can keep growing will depend on the ability of plant-based brands to overcome critical consumption barriers related to taste, long lists of ingredients, or high prices. The diagnosis is crystal clear, so I would guess that smart money and entrepreneurial talent will work in sync to expand the plant-based market during the next decade. Plus, younger generations have different attitudes towards innovative products and are usually much more open to adopting plant-forward diets than previous generations.

The alternative-protein sector in Spain has come forward as a dynamic and innovative subset within the overall foodtech ecosystem. On one hand, there are remarkable examples of plant-based brands that, in spite of recent challenging market conditions, have built strong followings and made inroads in international markets. Without a doubt, Heura, a scale-up that markets plant-based nuggets, burgers, and other types of meat alternatives, is the perfect example of how a bold and activist branding strategy works to attract plant-forward consumers in disparate markets such as Spain, France, or the UK. This upward trajectory caught the attention of investors, as the company raised 40 million euros from high-profile investors such as Unovis Capital and Upfield (a leading pan-European manufacturer of plant-based products). As we speak, Heura is also diversifying to act as an R&D catalyst for larger food companies that need to make the transition towards healthier, more sustainable products.

Within the alternative dairy sector, Spain has major national champion brands such as Vivesoy and Yosoy, that have developed the alternative dairy category (milk and yogurt) for over a decade, achieving a total retail market size of roughly 458 million euros in 2023, based on NIQ data. In an effort to anticipate the future, large dairy groups are also exploring disruptive technologies through open innovation efforts. Dairy company Pascual has a yearly call for global foodtech dairy startups, named Mylkcubator. Its arch-rival CAPSA has engaged with the local startup ecosystem through its venture arm CAPSA VIDA, which has a handful of exciting plant-based and foodtech investments.

I would like to highlight a couple of startups in the alternative dairy space. One is Quevana, a delicious plant-based cheese startup that manufactures high-quality, craft products that have hit the shelves in places as far as the Netherlands, Germany or Estonia. Another remarkable startup in this category is the ice cream brand Pink Albatross, which stands out with its urban, premium, and clean-label positioning. While still a David fighting against the Goliaths of the industry, the brand has achieved impressive distribution in a short time and commands a legion of fans in love with their pure and intense ice cream scoops in Spain, Portugal and Belgium.

The Spanish foodtech ecosystem is also betting big on companies that develop disruptive technologies that can boost the transition towards a more diverse pool of proteins. Cocuus uses proprietary 3D printing technology to create highly impactful products such as T-bone steaks made of plant-based proteins or even meat byproducts. Novameat has just closed a 17 million series A round to scale its proprietary texture-building technology, scaling the principles of 3D printing to an industrial level. Not less impressive is Cubiq Foods, which specializes in solving one of the big conundrums in the plant-based industry: creating the right plant-based fats with the right functional and organoleptic qualities. The company has attracted Cargill, a leading global food company, as a distribution partner worldwide.

Another critical element that supports the Spanish plant based ecosystem is the vast network or research labs that are at the forefront of foodtech and alt-protein technologies, to name but a few CNTA, IRTA, AZTI or AINIA. These research centers seat at the intersection of collaboration between large food companies and startups, and they will certainly play a major role in the industry going forward.

So, while on a global basis, there has been a recent slowdown in the growth of the plant-based industry, life keeps moving on, and ‘creative destruction’ impacting mature industries like animal protein is probably unstoppable. The future may not be 100% plant-based, not in vain, consumers are diverse and free to choose what they put on their plates, but it will undoubtedly tend in the long-term towards higher diversification in terms of protein sources. Animal meat, vegetable protein from legumes, plant-based manufactured products, and new technologies such as mycelium fermentation or cell-based, will all be the building blocks for that future to come to fruition. Spain has the right assets to be a major player in all of those playing fields.