Start-ups from the meat industry are outdoing each other in adding products to the menu | Jobs Recent

The clock is ticking for Uma Valeti. A few years ago, a cardiologist turned entrepreneur promised to celebrate his daughter’s high school graduation with fried chicken from his meat-farming start-up.

Valeti is now one step closer to delivering on its promise with the U.S. Food and Drug Administration’s decision last month that Upside Meat’s chicken fillet is safe for human consumption. The company still has to jump past other regulatory hurdles, but Valeti believes it will revolutionize his industry after years of skepticism about such products.

Several other lab-grown meat products are under review by U.S. and Singaporean health authorities. Consultants at McKinsey project the category to be worth $25 billion by 2030, while Barclays predicts it to be worth $450 billion by 2040.

“Farmed” or “raised” meat can currently only be legally sold to consumers in Singapore after the first beef burger was produced in 2013 in the UK.

Greater consumption of plant-based products made from soybeans and peas, as well as lab-grown meat and insects can contribute to a more sustainable food system. The traditional meat and dairy industry is responsible for most of the emissions from food and agriculture.

But the regulatory bow comes as consumer interest in plant-based meat appears to have waned and sales growth has slowed.

“The plant-based meat was disappointing in terms of taste and texture, and was generally too expensive compared to [real meat]said Alastair Cooper of venture capital firm ADM Capital, whose investment portfolio includes lab-grown and plant-based meat startups. “Consumers have also been put off by some plant-based products, which they perceive as highly processed,” he added.

According to consumer data groups Spins and Kantar, growth in plant-based meat sales, which rose more than 40 percent in both the US and UK in 2020, has slowed somewhat. Retail sales fell 1.6%. in the first 10 months of 2022 in the USA. In the UK they increased by 5%. compared to 14 percent. a year before.

The news from the industry is also discouraging. Shares in Beyond Meat, a Nasdaq-listed plant-based meat group, fell as it lowered its revenue forecast amid sluggish sales. Its stock price, once at $239.70, is now around $15.

Dollar stock price line chart showing Beyond Meat stock troubles

Meanwhile, JBS, a leading Brazilian-based meat group, shut down its U.S. plant-based meat company Planterra, while Canadian company Maple Leaf also downsized its venture.

A growing number of food technology investors believe that lab-grown meat will help improve the current offering as well as improve the taste of plant-based products, increasing their popularity. “His technology has the potential to transform the average plant-based product,” said Rosie Wardle, co-founder of Food-Tech VC Synthesis, which supports Upside and plant-based meat company Redefine Meat.

“We don’t think 100% farmed meat is mainstream,” she added. “The way things are going is with hybrid products. [Adding] only 5-10 percent of farmed meat is significant for a plant-based product.”

US start-up Eat Just’s, a chicken product that is on the market in Singapore, is made up of 75 percent lab-grown meat and the rest plant-based.

While food companies await broad approval from U.S. regulators, many are relying on diversifying their products with techniques such as 3D printing.

Israeli start-up Redefine Meat has developed a 3D-printed plant-based meat range that includes steaks and pulled pork, and has partnered with high-end restaurants in Israel and Europe. Its products are offered in around 1,000 outlets, including one London restaurant, where a realistic plant-based steak costs £32.5 a plate.

Vegetable sandwich with meat
Israeli start-up Redefined Meat has developed a 3D-printed plant-based meat line © Redefine Meat

“We need more versatile products and a broader offering,” said Edwin Bark, senior vice president, Redefine. For new foods, “never [a path] linear growth,” said Bark, a former executive at Nestlé who was responsible for the plant-based offering in Europe. It highlights the urgent need to create more alternative meat products as the world’s population and demand for meat grows.

Food industry experts are also wary of how consumers will react to lab-grown meat, with some executives concerned it could put them off. “People don’t eat technology,” said Julian Mellentin, director of New Nutrition Business, a consulting firm. The investment community may be excited about innovation, but “when it comes to putting things in their bodies, [technology] is a barrier [for consumers]he added.

Concerns about consumer acceptance are big for Unilever ice cream executives, who work with start-ups Remilk, Perfect Day and Algenuity. These companies produce lab-grown proteins using precision fermentation methods where microbial hosts such as yeast are used as “cell factories” to produce ingredients such as dairy proteins.

The multinational, whose plant-based products account for 10 percent of its total ice cream sales, expects to introduce synthetic dairy ice cream under one of its international brands – such as Magnum, Ben & Jerry’s and Wall’s – within one to two years.

Matt Close, president of the ice cream division of the group, which is the world’s largest producer of ice cream, said: “We really need to think carefully about how we position this industry for consumers to see it as a positive choice. and the force of good, and not . . . some kind of Frankenstein science monster, he said.

A column chart of retail sales growth by value (%) showing a fortune reversal for plant-based meat growth in the US

According to some surveys, several respondents believed plant-based meats like Beyond Meat were lab-grown, said Alex Frederick, an analyst at corporate data group PitchBook.

Close agreed that the key challenge was getting the products to market the right way. “There is a positioning challenge. And I don’t mean [that] consumers don’t like to think about it, but consumers don’t really know what it is.”

Even after a significant increase in 2019 and 2020, plant-based meat represents a small fraction of the total market. If the meat industry reaches its projected increase in production capacity to 450,000 tonnes in five years, it will still account for less than 0.1 percent of global meat production, Frederick said.

Bar graph of retail sales growth by value (%) showing tool change for UK plant-based meat

Some analysts believe that consumer acceptance and the ability to scale production will limit the growth of plant-based and lab-grown meat. “This market is likely to be a premium for an extended period of time and will be niche,” Mellentin said. “It takes people a long time to adopt really new foods.”

Proponents of alternative proteins are unfazed. “This is the whole transformation of the food system that will happen over the next decade. It’s not going to happen overnight,” said Wardle.

At Upside, Valeti is happy to introduce the start-up’s products to consumers. It initially plans to sell farmed meat in restaurants, then move to retailers in three to five years.

“If we do it right, farmed meat has unlimited growth potential,” he said.

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