Investments in plant-based meats have cooled off in the last year with many venture capitalists turning their attention to lab-grown meat.
Lab-grown meat, also called cultured meat, cultivated, or cell-based protein, is made using stem cells harvested from a living animal, with no slaughter necessary. Instead, harvested cells are introduced to a culture medium containing the necessary growth materials and placed in a bioreactor, ultimately producing a final product that looks and tastes similar to traditional meat.
Venture capitalists invested $2 billion in cultivated protein last year.
Sovereign wealth funds and meat industry giants, like Tyson Foods and JBS, are all betting on cultivated protein, CNBC reported (July 16). This influx of funding marks a shift away from the plant-based craze that peaked in July 2019, when shares of Beyond Meat hit their all-time high.
“We’re seeing flattening sales growth by some key players such as Beyond Meat,” Romie Basra, National Sustainable Tech Practice Leader SVP at Wells Fargo, told The Food Institute. “Part of their sales slowdown is increased competition as the sector matures.”
Both cell-based protein and plant-based meats are believed by many to be more environmentally conscious than traditional meat. But for investors, cultivated meat is presently more exciting than plant-based alternatives for one key reason: the opportunity to own intellectual property in an emerging market with massive potential.
Meat producers who were late to the plant-based craze are placing early bets on the cultivated meat industry. And it is still very early, as cultured meat faces a long road of regulatory, scaling, and consumer challenges ahead.
At present, cultivated meat is only available for purchase in Singapore, as Good Meat (a subsidiary of Eat Just) became the first cell-based protein company to gain regulatory approval for their cultured chicken there late last year.
It’s unclear how long it will take for cell-based meat to become available in the U.S. “The regulatory hurdles are still unknown,” Basra noted.
The cultured meat industry must also find ways to bring production costs down before cell-based protein can become a feasible option for the average consumer. That remains a work in progress.
Earlier this month, food tech startup SCiFi Foods announced a research breakthrough enabling the company to drastically lower the cost of growing beef cells by using large-sized bioreactors.
CONSUMER SENTIMENT UNCLEAR
Scientific innovations aside, the big question remains: will consumers buy lab-grown meat?
Karol Aure-Flynn, Food & Agribusiness Industry Advisors Sector Analyst VP at Wells Fargo, told The Food Institute, “both sectors discover what the real market wants through sales, and we can always depend on the unpredictability of the customer.”
Both Basra and Aure-Flynn added that it’s unfair to compare the investment boom in cell-based meat to the decline in plant-based funding, due to their entirely different stages of development.
“The growth curve and maturation of the cell-based market will be interesting,” Aure-Flynn said, but “the consumer’s desire to invest in foods with a sustainable footprint is here to stay.”