(estimated reading time: 6 minutes)
Our last newsletter (hyperlink) offered insight into a unique sector of the rapidly growing plant-based protein industry – mushrooms and the fascinating potential of fungi in the human diet. We opted to dive into a more nuanced sector of plant-based proteins due to the abundance of media attention and venture capital funding on plant-based alternatives to traditional meat products. Beyond Meat, Impossible Foods, and Hampton Creek, the three most prominent plant-based meat startups, have collectively raised over $500 million from Silicon Valley’s most reputable firms. Surprisingly, companies that produce lab-grown meat – or “cultured meat,” as we will refer to it – have received significantly less capital and experienced comparatively slower growth. This newsletter will explore the realm of cultured meat to unearth and explain the technology, active players, and its place in the lucrative meat market alongside plant-based competitors.
The Meat Industry & Cultured Meat’s Rise
Table 1-3: Meat consumption, per thousand tonnes
(All data collected from the OECD)
Statistics abound surrounding the continuous impact the meat industry has on the global economy. Raising livestock consumes 70% of agriculture land (30% of all ice-free land), around 10% of global freshwater, and is responsible for between 15-20% of global greenhouse gas emissions. As only one component of the global agriculture landscape, these figures are astronomical – but unsurprising. After all, the global meat and seafood market is valued around $844 billion, up from $741 billion in 2013. Various research reports expect that value to crest $1 trillion in the beginning of the next decade as the global population grows unremittingly. With the global livestock supply effectively maxed out, a supply and demand mismatch has emerged. Enter plant-based and cultured meat alternatives. While cellular and tissue engineering have been modestly understood and practiced fields since the late 20th century, the breakthrough for its use in creating a mainstream product occurred in 2013, when scientists from Maastricht University premiered the first live demonstration of eating cultured meat. The production cost for that project exceeded $300,000, leading many to believe that profitable commercial scale was infeasible. Despite the critics, these scientists and others pressed on – there are now three relevant companies operating in the space, to be discussed further in our next newsletter: Memphis Meats, Mosa Meat, and SuperMeat. Startups in both plant-based and cultured meat have been encouraged by an oft-cited study from 2011 that reveals tremendous environmental benefits from a shift away from conventional meat products (Figure 1). However, leaders in the meat and agriculture industry are also cognizant of their output and have shifted their attention appropriately – Memphis Meats received backing from Cargill, one of the world’s largest companies, while PHW, the third largest supplier of poultry in Europe, backed SuperMeat.
These investments from major players indicate an explicit shift in focus moving forward – analogous to the car industry’s focus on electric vehicles.
In its simplest form, the present cultured meat process involves the extraction of cells from an animal, the nurturing of those cells with proper inputs, and the growth of those cells into tissue fibers. Adult stem cells have been a common target for companies active in the space – these cells have frequently made scientific headlines as potential cures for certain types of cancer. Stem cells have the capacity to divide and grow indefinitely, while retaining the ability to take on distinct cell types. That combination makes them attractive for companies looking to grow muscle fibers and connective tissue, as well as the many other cell types found in traditional meat. Once extracted, cells are placed into a growth medium, often a bioreactor, where they can grow and multiply into a tissue ready for extraction. The vision for commercial production is large rows of bioreactors – picture a beer brewery with dozens of tanks. One of the major drawbacks to both the industry’s growth and credibility, however, is the use of fetal bovine serum (FBS). FBS is extracted from the fetus of cows and is used to support and spur the growth of young cells. Active players in the industry have faced scrutiny over its use – since it involves the killing of cow fetuses, an equally, if not more, gruesome act than traditional slaughtering methods of adult cows. Memphis Meats announced last year that it has developed and tested an FBS alternative, though any details of that alternative remain to be elaborated upon. Much of the uncertainty detracting from the initial hype of cultured meat comes from an absence of public knowledge surrounding the production process. Since there are a few firms operating in the same space that started around the same time, competition is fierce and a willingness to share key insights remains to be seen, for obvious reasons. As the industry grows and alternatives to FBS become more widely accessible, it will be easier for researchers and investors to gauge both the industry’s real impact on the environment, as well as its interest from consumer bases all over the world.
Stay tuned for our next newsletter as we are going to look closer at the three companies mentioned above: MosaMeat, SuperMeat and Memphis Meats.