Ingredients made with biotechnology could play an important role in the future of food—and they’re beginning to come to market. Over the past five years, $4 billion has been invested to develop novel ingredients ranging from mycelium proteins to animal-free eggs. These ingredients are made through fermentation to create proteins and fats that can function like conventional proteins, but they are animal-free and can be more sustainable.
Novel ingredients offer the potential to decarbonize the food system, enable regional and global food security, and respond to increased demand from flexitarian consumers. However, because these products are new, there is limited insight into how consumers perceive them.
To shed light on the market potential for these ingredients, we conducted a survey of more than 1,500 US consumers (see sidebar, “About the survey”). The findings show that the majority of consumers appear open to try the range of ingredients tested and that more than half of consumers are willing to pay more for them. Our results reveal that to further increase consumer adoption of novel ingredients, brands, retailers, start-ups, and investors can create categories and highlight specific product qualities on labels.
A brief overview of novel ingredients
Novel ingredients, such as animal-free dairy, cultured proteins, and mycelium proteins, may play a significant role in the future of food thanks to their potential ability to secure and decarbonize food systems. Over the past five years, there has been an increase in invested capital and regulatory approvals. While commercial products are still limited, a number of consumer packaged goods (CPG) companies and start-ups have launched their first novel-ingredient products in the United States.
These ingredients are fermented—including processes in which microorganisms are genetically programmed to produce specific compounds (precision fermentation) or are grown and harvested whole (biomass fermentation). Because they are grown in bioreactors, fermented novel ingredients can have lower emissions than traditional animal-based proteins and can be produced even in areas that are not traditionally agriculturally productive. However, despite novel ingredients’ potential impact, industry shapers have limited insight on consumer appetite for them.
For our research into consumer perceptions of novel proteins, we identified and tested 12 ingredients. We chose to classify these ingredients according to three descriptors that could be applied to these products:
- Animal-free bioidentical products (dairy protein, collagen, and eggs). These are biologically identical to animal proteins and are made via precision fermentation.
- Biomass proteins (prebiotic, cultured, postbiotic, fermented, microbial, and gas-fed). These proteins are derived from microorganisms and are typically new to human consumption.
- Fungi proteins (nutritional fungi protein, mycelium protein, and mycoprotein). These are derived from organisms in the fungi kingdom, most often as edible single-cell organisms.
We also examined plant-based proteins (almond, oat, chickpea, soy, pea, and barley) for benchmarking purposes, but they are not the focus of this research because they are already established in the market.
Most consumers are open to trying novel ingredients
The majority of consumers (from 49 to 67 percent, depending on the ingredient) reported that they were open to trying food or drinks that featured novel ingredients, driven by the perception that such ingredients can improve upon traditional foods by being healthier, having better or the same taste, and being sustainable (Exhibit 1).
On average, 28 percent of respondents would be more willing to try a novel ingredient if it made a product healthier, with Gen Z (age 18 or older) reporting the highest degree of importance for health. For older generations, taste was cited to be more important.
We also tested descriptions of novel ingredients that could be put on a product label or package to see what appealed most to consumers. We found that familiar terminology and well-understood nutritional statements about potential health impacts (such as “good or complete source of protein”) are most compelling, followed closely by statements that communicate environmental impact (such as “sustainably produced”) (Exhibit 2). Vegetarian and vegan language is well understood but does not appear to significantly drive the trial of products, and language about production methods (for example, “bioengineered” or “made with biotechnology”) is not as well understood and does not drive trial with consumers.
Among respondents, 44 percent were uninterested in trying any of the novel ingredients explored in this survey. Unwillingness to try was most strongly correlated with lack of awareness or questions regarding production (“how it’s made”). Concerns about taste, naturalness, and price closely follow. Higher-income (more than $100,000 per year) consumers stated greater doubts about long-term health effects (33 percent).
Midday food options significantly increase consumers’ willingness to try novel ingredients
Consumers are willing to try novel foods more at different meals and times of day, with much greater openness to trying them at lunch and in on-the-go snacks (Exhibit 3). They are less willing to try novel ingredients at dinner, a trend that has been seen in the market over the past several years as meat analogs have continued to struggle to deliver on consumer preferences. As innovators develop new products in the coming years, brands may choose to focus on snack, lunch, and (to a lesser degree) breakfast foods while potentially avoiding center-of-plate dinner proteins.
About half of consumers express willingness to pay more for novel ingredients
More than one-fifth of respondents were willing to pay four times as much for products if they featured a novel ingredient (Exhibit 4).
Respondents’ willingness to pay for novel ingredients did not vary significantly across ingredient type, but it did vary based on the product type and the channel. For example, consumers were more willing to pay for beverages, snacks, and burgers (compared with ice cream, egg sandwiches, and cookies) and for retail and CPG concepts (compared with food service). This is particularly interesting because out-of-home consumption has been a key driver of the alternative-meat category.
Is ‘sustainably made’ the new ‘plant-based’?
As sales in the “plant-based” category have declined over the past two years, some retailers have searched for new innovations that could appeal to consumers. For our survey, we examined a variety of category names that could represent this range of novel products on shelves. Of the category names we tested, “sustainably made” appears to appeal most to consumers, followed by “consciously made” (Exhibit 5). By contrast, “fermented” and “fungi” labels were less likely to drive consumer adoption, which may indicate consumers need further education about these category labels.
Takeaways for the food industry
Many of the novel ingredients we asked consumers about have not yet been commercialized at scale. As the industry matures, brands, retailers, start-ups, and investors have an opportunity to shape this emerging category through the following considerations:
- Consumer education. Less than half of consumers indicated awareness of novel ingredients, and “unsure of how these ingredients are made” was the largest barrier to trial. Stakeholders across the food industry may consider investing in consumer education as novel ingredients begin to come to market. While consumers did not prefer language about production methods on package labels, they were more likely to try a product if it was recommended by a doctor, nutritionist, or other professional (44 percent said they would be more likely to try) or by family and friends (27 percent).
- Health, taste, and sustainability. As has been the case with other alternative proteins, consumers believe novel proteins should be healthier than conventional animal sources, and they are more likely to eat proteins that are. Some novel ingredients taste similar to animal-derived sources, which could increase adoption as food offerings are developed that are comparable or present desirable alternatives to the taste and texture of traditional products.
- Innovation. A thoughtful approach to innovation that prioritizes the end application and channel could increase consumer adoption potential. To increase consumer trial, manufacturers, brands, and food service operators can prioritize launching end products for breakfast, lunch, and snacks. Similarly, blending familiar terminology such as “a good source of protein” with emerging language such as “sustainably made” may encourage trial for consumers who care about health and environmental factors.
- Willingness to pay. We did not see a significant gap in willingness to pay based on the type of ingredient, despite varying levels of awareness and trial. Consumers stated that willingness to pay was more closely linked to the category than it was to the type of protein used in the food, signaling that the underlying technology—even if new to human consumption—may not be a strong barrier.
By understanding how consumers perceive novel ingredients, biotech start-ups, brands, and CPG companies can shape this emerging market to help contribute to building a more sustainable and resilient food system.
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