Meat Alternatives on the Move
An FAO estimation says we are on track for a 9 billion-person planet by 2050, and along with the people comes a 50% increased appetite for protein. Traditional protein for human consumption comes from animals and fish, with soy increasingly part of the landscape. The non-traditional or alternative proteins market ($4.2 billion in 2016) is around 1% of the traditional protein market, but is expected to grow more than 25% by 2022. The drivers are both perceived health benefits and acknowledgement of environmental costs of traditional proteins.
The growth of plant-based alternatives is causing pinch points in the supply chain, drawing both investment and innovation. Investment is occurring in expanded processing infrastructure and new sources of protein, while innovation is focusing on ingredients, flavorings, and alternatives to existing processing.
The burgers are looking great, but where are the steaks? Clean meat developers (meat grown through animal cell replication) is an earlier-stage industry with key manufacturing hurdles to overcome. The required knowledge is more often found in bio-pharmaceuticals, which does not naturally coordinate with food innovation.
Alternative Proteins: Value chain with business activities and examples
Plant based demand outgrowing supply?
Key processing machinery, such as wet extruders for plant-based protein, are at capacity, and it is therefore difficult to find production line-time. A typical lead time to build this capacity in-house is at least one year and cost millions. One of the most recent supply chain delays hit the Beyond Meat and Tesco channel partnership, which has now been delayed indefinitely.
Established sources of protein such as wheat, soy, and pea are receiving investment to increase capacity and introduce specialization. For example, Ingredion is investing $140 million in key pea protein manufacturing capacity in North America, as well as $60 million in clean-label specialty starches and texturizers in Asia.
While others are working on the extruder pinch point, there is also a growing interest in the additives, flavors, and other ingredients that make up finished protein products. Givaudan, a Switzerland-based developer of flavors and fragrances, launched MISTA, an innovation platform based in a 7,000 sq foot facility in San Francisco, CA. With its founding members Danone, Mars, and Ingredion, MISTA is looking to provide a pipeline of key alternative protein ingredient providers for itself and its corporate sponsors. Similarly, Givaudan has co-launched the Future Food Initiative with Bühler, Nestlé, ETH Zurich, and Ecole Polytechnique Fédérale de Lausanne to accelerate the development of healthy food products, with its first focus on plant-based nutrition and ancient plant varieties.
Putting a steak on the table
With some plant-based alternatives maturing – Impossible Foods being the first non-energy-related Global Cleantech 100 North American Company of the Year and Beyond Meat’s upcoming IPO – attention is turning to steaks and specifically large, lab-grown pieces of ‘clean meat’ (such as this effort from Aleph Farms). However, this is a much less developed technology and is still only found in the lab.
Some of the essential tools such as the growth medium recipe (the juice that cells feed on to replicate) and the scaffolding (the shape that the meat cells grow into) and key talent and experience exist in the bio-pharmaceutical industry. Merck’s participation in Mosa Meat’s $8.8 million Series A round in July is one example. Most clean meat startups are facing the challenge of hiring the right talent from a small pool of scientists that specialize in this field, or navigating potential partnerships between a food startup and a bio-pharmaceutical company – an uncommon fit.
Israel has emerged as hub for the clean meat industry in part due to the strong institutional support from the Israel Innovation Authority and the Israel Export Institute, combined with the $300 million deal with China to help support the industry. Companies such as Aleph Farms, Future Meat Technologies, and SuperMeat are all basically doing the same thing, except that SuperMeat is focused on chicken rather than beef, and Future Meat Technologies is working towards a decentralized model where smaller retailers and even consumers can locally grow protein on demand.
Keep an eye on…
Fungus. One of the most successful alternative protein companies in history is based on a fungus: Quorn, using mycoprotein. The ecosystem is starting to grow out of the shadows. MycoTechnology, a developer of mushroom-based products, announced a $30 million round at the end of January, with S2G Ventures, ADM Capital, Tyson Ventures, Bunge Ventures, and Kellogg’s Eighteen94 Capital, among others, participating in the round. Products include ClearTaste, a bitter-blocking ingredient, and PureTaste, a plant-based protein which aims to solve both nutritional and sensory challenges that many alternative proteins face. Similarly, keep an eye out for Terramino Foods, a developer of fungi-based salmon products, which raised a $4.5 million seed round last summer.
Seafood. While there are plant-based seafood alternatives already available with the likes of Good Catch and New Wave Foods, there are some clean meat innovators who are finding fish an easier cell to work with than beef, with a higher potential price point for their product. Finless Foods is working on a blue fin tuna replacement, keeping both options of either selling a branded product or licencing its production technology. Wild Type is looking to create a branded clean meat product, believing that consumers do not trust big food brands, and with a new product that comes with labels like ‘frankenmeat,’ innovators would like to control the marketing in the same way Impossible Foods or Beyond Meat were able to. It is interesting to note that the first clean meat developer in Asia, Singapore-based Shiok Meats, is also focused on seafood, as it is such a core part of Asian cuisine.
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