The Ministry for Primary Industries is backing a $20 million effort to capitalise on growing global plant-based protein demand.
Agriculture Minister Damien O'Connor announced an $8 million contribution to a pilot leaf protein programme in Lincoln, near Christchurch.
Lincoln-based company Leaft Foods plans to sell a protein concentrate made from leafy crops grown by farmers in the region and was driving the five-year project to develop the necessary technology.
The company is investing $12 million of its own funds towards the research and development programme, hoping to eventually produce edible protein in the form of powder or gels.
The government investment has come from MPI's Sustainable Food & Fibre Futures fund, given to projects and businesses the ministry thinks will deliver long-term environmental, social, economic, and cultural benefits.
O'Connor said Leaft had not promised any returns within the next five years but there was economic potential in the sector.
"As a food producing nation we have to look to the tastes and the values and the trends that are taking place internationally to make sure we don't miss out," he said.
He said the programme could present an option for farmers who wanted to change their practices.
"[It] does offer another opportunity for farmers that want to run mixed-farm models, or may have to make some adjustments to their current farming systems because ... they want to reduce their climate change emissions, or they simply want to wind back what they're doing and change their lifestyles," he said.
Maury Leyland Penno co-founded Leaft with her husband, John, and said she left dairy farming to invest in alternative agricultural methods.
"People are shifting their diets. I think whether you look at it from a health aspect, an environmental aspect, or many other angles, people have many reasons for wanting to have more plant-based foods in their diet.
"In New Zealand there'll be, generally, at least one member of a family who's looking to move in this direction so that's a trend that as a country we need to pay a lot of attention to," Leyland Penno said.
She said the ministry backing would allow the company to quickly take advantage of the plant-based sector's growth.
"This is an area a number of other countries around the world are putting a lot of money into. We think we're towards the front of the pack but if we can't go fast that will change, so I think this gives us the opportunity to really be a leader in this field," Leyland Penno said.
The company aimed to take leafy crops, such as lucerne, extract their liquids, then that plant juice would be refined into a protein powder.
Leftover plant matter, with most of its protein extracted, would be used as an animal feed it hoped would reduce nitrogen emissions and increase animal production.
"One of the challenges that we face in New Zealand is we grow leafy green crops so well that the protein content is actually higher than the animal needs.
"So when the animal digests that they take the protein they need for growth then the rest is excreted in urine so we end up with the nitrates and the issues in our waterways.
"We'll get the same performance as a higher protein feed but with less excess ... so a quality feed that animals perform really well on but with lower environmental impact," Leyland Penno said.
She wasn't sure when the company would start commercial production but it would decide its next steps after the pilot programme.