National Reconstruction Fund: consultation paper

7 February 2022

National Reconstruction Fund Taskforce
Department of Industry, Science and Resources
By email: NRF_Consultations@industry.gov.au

To whom it may concern

RE: National Reconstruction Fund consultations

The Alternative Proteins Council welcomes the opportunity to provide feedback, on behalf of its members, on the implementation of the National Reconstruction Fund
(Appendix 1 – Membership List).

The Alternative Proteins Council (APC) was established in March 2021 as the peak representative group for Australia’s and New Zealand’s alternative proteins sector.
Alternative proteins, being foods made using plant protein, precision fermentation and cell-cultivating technologies. Our growing membership spans primary production through to value-add consumer goods manufacture.

Background

Plant-based alternative products have been sold in Australia for decades. The newer category of plant-based meats is growing in response to rising consumer demand amongst those seeking meat-free alternatives that mimic meatiness in taste, texture and satiety. Novel forms of alternative proteins include precision fermentation and cultivated meat products have not yet been evaluated for approval by the food regulator in Australia, however, it is believed several organisations will submit Applications for approval of novel food products this year. Although fermentation of food ingredients and medicines is technology that has been employed for years, including in the production of rennet for cheese and in insulin, its use in precision fermentation using microbes to produce bioidentical non-animal dairy proteins and animal fats is an emerging opportunity for food system innovation and addressing sustainability.
Cultivated meat is meat, but grown directly from cells by mimicking the biological process of growth that occurs within an animal. Cultivated meat and other cultivated products like seafood enable the creation of foods directly in a biofactory using far less land, water and energy than traditional production systems require.
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There are currently 20 Australian companies producing plant-based meat. Of the 320 plant-based meat products on shelves in Australian supermarkets, over 50% are made in
Australia and over 60% are made by Australian owned companies. There are currently five Australian companies using precision fermentation technologies to produce proteins and fats as ingredients for use in applications such as animal-free dairy or meat alternatives, two companies developing cultivated meat products and one company making ingredients to produce cultivated meat products.

With a global population edging toward 10 billion by 2050, plant based alternative meat/dairy, precision fermentation and cellular agriculture are becoming an increasingly obvious solution that will complement traditional proteins and facilitate a growth opportunity in the protein supply.

In 2019–20, Australia’s plant-based meat sector generated A$185 million in sales. This was up 32% from A$140 million in 2018–191. Food Frontier and Deloitte Access
Economics have also projected that plant-based meat products alone will generate nearly $3B in Australian sales by 2030 and provide 6000 full-time jobs.2

The CSIRO has demonstrated that plant proteins represent a $6B opportunity for
Australia, and precision fermentation a $1.45B opportunity by 20303.

Globally the plant-based protein market could exceed $US160 billion over the next decade with significant growth in plant-based meat and plant-based dairy products contributing to already established plant-based protein demand.4

Given, also, that a quarter of all food has the potential to be made from alternative proteins by 20405, alternative proteins present a significant opportunity to secure
Australia’s food supply, by diversifying the protein sources we consume and export.

Governments around the world are racing to capitalise on the potential of alternative proteins, including cellular agriculture and precision fermentation technologies. Australia has the opportunity to take advantage of the emerging industry if we act quickly.

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Food Frontier State of the Industry, 2020
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Food Frontier State of the Industry, 2020
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CSIRO National Protein Roadmap, 2022
4
Bloomberg Intelligence: Data-Driven Research (bbhub.io) accessed 15 Nov, 2022
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International technology group GEA New Food Frontiers report

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What types of projects or investments should the Government direct the National
Reconstruction Fund to focus on?

The APC welcomes the Government’s commitment to transform and diversify Australian industry and the economy through the National Reconstruction Fund (NRF). For the purpose of our feedback, our focus is on value-adding in the agriculture, forestry and fisheries priority sector, ie food, in particular alternative proteins.

Furthermore, we welcome a long-term priority approach, noting, however, the NRF targets a later stage in the business life-cycle, offering financial support to businesses that are already growth-ready.

Although many innovative businesses in the alternative proteins sector in Australia are at an earlier stage of the life-cycle, support for initial commercialisation before they can graduate to NRF support, remains crucial. Cuts to other federally funded programs, such as the Modern Manufacturing Initiative (MMI) and Entrepreneurs Program (EP) in 2022 deprive the NRF of is pipeline for preparing innovative SMEs to be investment-ready. It is therefore imperative that alternative complementary industry support programs are put in place by the Commonwealth to support the various state-based programs, and the
NRF pipeline.

Nonetheless, there is still significant scope for co-investment into alternative proteins from the NRF, including infrastructure and onshore R&D and processing capability development.

Alternative proteins have the potential to play an essential role in making our food system more sustainable and reliable, which gives these new foods their particularly bright future.

Much has been discussed in recent times and learned about the complexity and fragility of the supply chain impacted by the Covid 19 pandemic, weather related disturbances and geopolitical disruptions. Supporting the domestic alternative proteins industry to emerge, scale up and thrive will enable Australia to build on its natural competitive strengths and take advantage of the enormous opportunity in job creation, export market development and of course, contribute to food security.

Alternative plant protein, cellular agriculture and precision fermentation derived products have the potential to create more high-skilled jobs, to build new value-add industry, including in regional Australia, both plant production and manufacturing. We are witnessing this positive development in plant-based meat alternatives through value add to local agricultural production and manufacturing.

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Australia’s burgeoning alternative proteins sector has the opportunity to tap into the global protein market worth US$930 billion by 2035.6 To capture the economic opportunity the plant-based and alternative proteins sector needs support and investment across research, production and processing facilities and a pipeline of talent to reach its full potential.

The NRF can play a crucial role in this by investing in critically needed processing and manufacturing infrastructure and dedicated alternative protein R&D centres.

Australian government support of research and development, scaled processing and manufacturing capacity in Australia; as is occurring in Singapore, the US, the Netherlands and Israel; will ensure Australia benefits economically from the opportunity to diversify, strengthen and complement our traditional iconic agriculture industries.

One of the sector’s largest issues is a lack of onshore processing capability, with only one existing large-scale processing facility in Victoria currently servicing domestic demand for plant-based protein products. While another is planned for South Australia, and there are a few companies that have built their own in-house, small-scale processing capability to address capacity bottlenecks, the sector could support at least 10 commercial processing facilities to meet current and future demand.

The current shortage of processing facilities has created a substantial bottleneck for plant-based protein manufacturers, with many needing to import more costly products from overseas. Establishing this onshore capability would also prevent the lucrative opportunity for Australian farmers to sell their pulse and grain crops into the value- added domestic supply chain, where significant demand is already growing for locally- grown produce and avoid selling into volatile global commodity markets.

The establishment of more dedicated alternative protein R&D facilities would also enable greater investment into advancing the sector’s various alternative protein processes and technologies to optimise for product quality, production efficiency and supply chain sustainability.

Summary

The APC welcomes the Government’s commitment to transform and diversify Australian industry through the NRF. Beyond the NRF, innovative businesses in the early life-cycle

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Cellular Agriculture Australia (CAA) White Paper (August 2022)

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phase of initial commercialisation also need support, compensating for discontinued programs and shoring up a pipeline of NRF program ready businesses.

With a global population edging toward 10 billion by 2050 and potential for a quarter of all food to be made from alternative proteins over the next couple of decades, the alternative proteins industry in Australia, with government backing, is well placed to diversify and transform the protein sources we produce, consume and export.

Globally, development of the alternative protein sector is moving rapidly. Governments around the world are leading the way and offering attractive incentives to the alternative proteins sector to establish in these countries. The challenge for Australia is to determine its role in supporting a domestic alternative proteins industry or risk missing the opportunity.

A coordinated alternative proteins plan should be considered and policy framework designed that outlines the national strategic position. The APC recommends Australia takes learnings from the various international initiatives and create an investment attraction program to support onshoring, advanced manufacturing capability, skill development and to underpin capacity building in the sector to meet the growing demand.

Without doubt, the alternative proteins industry presents a significant opportunity to
Australia’s economy, through value-adding in agriculture and food.

End

For more information please contact:

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Appendix 1: Membership of the APC

Australian Plant Proteins

All G Foods

Cellular Agriculture Australia (CAA)

Change Foods

Coco and Lucas Kitchen

Eden Brew

Fry's Family Foods

Food Frontier Institute

Harvest B

Nestlé Australia

Proform Food Group

Rogue Foods v2food

Vow

Woolworths

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