The Resurgence of Protein-Driven Agriculture in Europe Amid Big Food's Stagnation

The global food system is undergoing a seismic shift. As consumers increasingly prioritize health, sustainability, and ethical consumption, Europe's protein-driven agriculture sector—encompassing dairy, poultry, and alternative proteins—is outpacing traditional consumer packaged goods (CPG) firms. This realignment reflects a broader trend: investors are rotating into sectors that align with evolving dietary demands and supply-side innovation, while legacy CPG players grapple with stagnant growth and margin erosion.

Demand-Side Drivers: Health, Sustainability, and the Protein Premium

Europe's high-protein diet market has surged between 2023 and 2025, fueled by a confluence of factors. Consumers are now more health-conscious than ever, with 28% of shoppers in 2024 actively increasing their protein intake. This demand is not limited to bodybuilders or athletes; it spans demographics seeking muscle maintenance, immune support, and weight management. Plant-based proteins—pea, soy, and quinoa—have gained traction, particularly in countries like Belgium and Austria, where flexitarian diets are mainstream.

Sustainability is another critical driver. The environmental toll of animal agriculture—deforestation, water use, and greenhouse gas emissions—has pushed consumers toward alternatives. European Union policies, such as the Farm to Fork strategy, further incentivize this shift by promoting sustainable farming and reducing reliance on imported soya beans (which account for 96% of the EU's high-protein feed).

Supply-Side Innovation: From Feed Additives to Fermentation

Dairy and poultry producers are responding with groundbreaking innovations. In poultry, Cargill's Biostrong™ Dual—a blend of postbiotics and phytogenics—has improved broiler performance by 100g per bird in trials, while reducing antibiotic use. Such advancements not only enhance productivity but also align with consumer demand for cleaner labels.

Dairy producers are capitalizing on the protein premium. Cottage cheese, for instance, saw a 26.2% value growth in 2025, driven by its 13g of protein per serving and appeal to meal-preppers. Kefir yogurt, with its probiotic benefits, surged by 37.1% in value. These products cater to a demographic seeking natural, minimally processed foods—a stark contrast to the ultra-processed offerings of many CPG giants.

Meanwhile, the EU's protein market is projected to grow from $5.68 billion in 2024 to $9.26 billion by 2033, with a CAGR of 5.6%. This growth is underpinned by investments in fermentation-derived proteins (e.g., precision fermentation for casein) and plant-based crops like fava beans. The Dutch Protein Farmers Network, for example, is cultivating local protein sources to reduce import dependency, a move that strengthens both economic and environmental resilience.

The CPG Conundrum: Margins Under Pressure

Traditional CPG firms, meanwhile, face a perfect storm. The European grocery sector reported a meager 0.2% volume growth in 2024, with EBITDA margins contracting from 6.9% in 2019 to 6.2%. Inflationary pressures and low volume growth have forced retailers to rely on private-label products, which now account for 39.1% of grocery sales. While this strategy offers cost advantages, it lacks the innovation and differentiation seen in protein-driven agriculture.

Plant-based CPG brands, once darlings of the market, have also faced headwinds. After a $425 million investment in Oatly in 2023, the sector stabilized in 2024 with $181 million in funding—a 37% increase but far below peak levels. Cultivated meat, despite its long-term potential, saw a 59% drop in funding to $52 million in 2024, highlighting the sector's reliance on regulatory and technological breakthroughs.

Investment Implications: Rotating Into the Protein Ecosystem

The data is clear: protein-driven agriculture is outperforming traditional CPG. For investors, this presents an opportunity to capitalize on a sector poised for sustained growth. Key areas to consider include:

1. Alternative Protein Producers: Companies like Formo (Germany) and Vivici (Netherlands) are scaling fermentation-based proteins, backed by EU grants and private investment.
2. Sustainable Feed Innovations: Firms developing phytogenic and postbiotic feed additives (e.g., Cargill's Biostrong™ line) are addressing both animal health and environmental concerns.
3. Dairy Diversification: Brands pivoting to high-protein, functional dairy products (e.g., cottage cheese, kefir) are capturing premium pricing power.

Conclusion: A New Era for Food Investing

Europe's protein-driven agriculture sector is not just surviving—it's thriving. By aligning with global dietary shifts and leveraging supply-side innovation, dairy and poultry producers are outpacing traditional CPG firms. For investors, this represents a strategic rotation into a sector that combines growth, sustainability, and resilience. As the EU's protein market nears $10 billion by 2033, the time to act is now.

The next decade will belong to those who recognize that food is not just a necessity but a dynamic, innovation-driven industry. And in Europe, protein is the new frontier.