A new report from investor network FAIRR (Farm Animal Investment Risk and Return) calls on food companies to diversify their protein sources away from animal proteins in order to effectively meet consumer demand.

The report, Feeding Change: Building a Resilient Food System Through Protein Diversification, found that many global food businesses are not effectively meeting demand for nutritious and sustainable protein sources.

FAIRR noted that the industry’s over-reliance on animal protein is limiting the growth of the plant-based category and weakening the resilience of food supply chains, despite the business opportunity offered by plant-based proteins.

Published yesterday (28 October 2025), the report contains results from the second year of an investor engagement with 20 of the world’s largest food retailers and manufacturers. It is supported by 73 investors with $11.5 trillion in combined assets.

The eight F&B manufacturers included are Conagra Brands, Danone, General Mills, Kraft Heinz, Mondelez International, Nestle, The Hershey Co and Unilever. It also includes 12 retailers: Amazon, Ahold Delhaize, Carrefour, Coles, Costco, Kroger, Loblaw, Sainsbury's, Target, Tesco, Walmart and Woolworths.

The whole food opportunity

With scrutiny of ultra-processed foods (UPFs) on the rise, demand for fresh, whole foods is increasing. The latest EAT Lancet Commission found that a global shift toward more plant-rich diets, aligned with its recommended Planetary Health Diet, could prevent up to 15 million premature deaths annually.

Despite this, only three of eight brand manufacturers have launched a plant-based whole food product in the past year, FAIRR observed, instead favouring more processed alternatives to animal products.

By focusing on plant-based whole food proteins that align with consumer preferences, retail group Carrefour exceeded its target of over €500 million in plant-based sales – originally set for 2026 – in 2024, and expanded its goal to €650 million. In 2025, Ahold Delhaize expanded the scope of its target for all its European retailers to achieve 50% plant-based protein sales by 2030.

But FAIRR’s report showed 75% of companies are yet to acknowledge the sustainability and nutrition potential of substituting animal ingredients with plant-based options. Only one of the companies, Nestlé, was found to have quantified the emissions mitigation opportunity so far.

Innovation gaps

Of the plant-based product launches seen over the last year, FAIRR identified room for improvement. Only 25% of companies in the engagement had surveyed their consumer base to better understand their preferences, leading to a misalignment between product launches and market demand – two companies acknowledged that some of the plant-based meat products launched in the last year were already discontinued due to low sales.

Access and affordability remain key barriers to consumer adoption, but just 60% of companies disclosed evidence of working to improve either of these factors. Woolworths has added vegan and vegetarian filters to its online product search, and Tesco has replaced everyday items in its Express stores with cheaper options, including plant-based product lines.

The report also highlights consumer dissatisfaction with plant-based proteins’ taste and texture, further preventing wider uptake. Despite this, just 40% of the engagement cohort dedicated resources to increase product innovation – which could include R&D, partnerships and venture investment – compared to 45% in 2024.

Additionally, while 70% of companies identified health and wellness as one of the most material issues to their businesses, just 30% have nutrition expertise at the board level. 25% of companies currently have no dedicated health strategy.

Dana Wilson, manager of research and engagements for protein diversification at FAIRR, said: “Shoppers are looking for affordability, great taste and healthiness in 2025, yet food companies are investing too little in product innovation to cater for consumer expectations”.

“By engaging customers towards nutritious and sustainable plant-based proteins, proactive companies can harness a significant market growth opportunity, as well as build a more resilient product portfolio.”

Increasing supply chain resilience

Only 40% of the companies had assessed the transition risk of failing to respond to changing consumer preferences for plant-based products, and the impact of physical climate risks on animal agriculture supply chains.

FAIRR pointed out that diversifying away from animal proteins has many benefits in mitigating supply chain risks, highlighting this year’s avian influenza outbreak – which led US egg prices to almost double – as an example. Meanwhile, US cattle herds have fallen to their lowest levels since 1973 due to drought, interest rates and feed costs.

Almost all of the companies involved overlook the supply chain implications of protein diversification, FAIRR said. It identified Danone as the only company reskilling its workers to support a transition to more sustainable diets – the company has supported its factory staff in Villecomtal-sur-Arros, France, to produce oat milk at the factory, which has shifted away from producing dairy yogurt products.

Sophie Kamphuis, senior advisor for responsible investment at Dutch asset manager MN, said: “The findings point to a sizable gap in the market at the intersection of whole food, high-protein and reduced meat diets”.

“Added to this, we have also seen a number of shocks to animal protein supply chains this year, due to changing weather patterns, macroeconomic conditions and zoonotic diseases. Diversification into plant-based proteins is a key strategy to increase resilience and meet climate goals, as well as to tap into a burgeoning market.”