The development of “cultivated” meat, dairy and seafood is gathering steam in the US – as is Big Food’s interest in the emerging market. But how might the food go mainstream? just-food’s US columnist Victor Martino takes a look.
Attempts at paradigm shifts are rare in the food industry, and when they do happen they’re measured in decades rather than years.
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Processed foods, which is arguably the biggest technological paradigm shift the industry has seen to date, were introduced in the US in 1910 and didn’t reach mainstream status until the end of World War II, when a plethora of brands, most featuring trans-fats, flooded grocery store shelves. Ironically, we’re only seeing a serious consumer backlash against trans-fats and processed foods today, over half a century later.
Additionally, organic foods, which have been widely available at retail for 40 to 50 years, still only represent about 5% of total US grocery sales. And in the eyes of the food industry establishment, organic has only become mainstream in recent times.
The US food industry is traditionally a conservative industry that takes a gradual approach to major changes.
But that approach appears to be coming to an end – or at least a major pause – when it comes to the phenomenon of “lab-produced” or “cultivated” (more on that new term later) meat, seafood and dairy. Instead, traditionally conservative, ‘Big Meat’ and ‘Big Food’ are jumping into the petri-dish with both feet and fists full of investment dollars.
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By GlobalDataA case in point was the 2nd annual Good Food Institute (GFI) conference earlier this month in San Francisco, the go-to event for those involved and interested in the alternative meat, seafood and dairy segments.
Last year’s event was an intimate affair, attended mostly by founders of start-ups in the plant-based, and to a lesser degree “lab-based” segments, along with investors and members of the media. Additionally, “lab-based” meat, seafood and dairy received little attention compared to plant-based meat alternatives.
What a difference a year – at least in faux meat time – makes. At this year’s conference representatives from a who’s who of global big meat and food companies – Tyson Foods, JBS, Smithfield Foods, Kellogg, Nestle and Hormel to name just five – attended and participated in the conference.
The bottom line: the huge success of Beyond Meat with its May IPO and in grocery stores – the company says it’s sold over $165m of product in the last 12 months – and Impossible Foods, which has sold a lot of beefless-burgers in restaurants and launches its Impossible ground beef in grocery stores on 20 September, has the attention of the larger players.
And that attention is now turning in a major way to the next iteration in animal-free food products: lab-produced meat, seafood and dairy.
Plant-based dairy and meat is mainstream in the US. (Because plant-based seafood remains tertiary, it’s too marginal to be given mainstream status.) Grocery giant Kroger’s announcement at the GFI conference that it’s launching an entire line of plant-based food products under its hugely popular Simple Truth brand is a pretty good bookend to my assertion that plant-based has become a mainstream category in the US.
Conversely, no lab-based meat, seafood or dairy products have yet reached grocery store shelves, although start-up Perfect Day did launch a limited-edition ice cream produced using the principles of cellular agriculture earlier this year.
The 1,000 pints of ice cream, which sold online for $20 a pint, sold out in a couple weeks. The California “lab-based” dairy start-up produced the ice cream to demonstrate proof of concept. It doesn’t plan to be a branded food company but rather to work with others. It recently signed a deal with food and agribusiness giant Archer Daniel Midlands (ADM), for example.
Despite the current absence of commercially-viable, branded products, “lab-based” meat, seafood and dairy are generating as much – and perhaps even more – excitement and buzz as I recall organic getting in the 1980s through 1990s. In fact, it took Big Food much longer to show an interest in organic (and plant-based foods, too) than it is showing in “lab-based” foods.
However, the use of biotechnology to create animal-free meat, finless-fish and cow-free dairy is filled with promise and uncertainty. It’s truly the food industry’s wild west paradigm. And its success or failure ultimately rests on five key criteria.
Commercial viability
The jury is still out on whether or not the well-funded start-ups can bring to market “lab-produced” meat, seafood and dairy products at price-points competitive with similar traditional and plant-based products. And even if they can, will they be able to make a profit at the margins required to do so?
The first “lab-produced” meat, a burger patty produced five years ago by the start-up Memphis Meats, cost $300,000 to make. Today the company says it’s producing it for about $2,400 a pound. That’s a huge cost reduction but there’s still a long way to go in cost of production in order to be commercially viable.
Need for market speed
There are so many “lab-based” start-ups in the meat, seafood and dairy spaces that once they all launch their products we’re likely to see almost immediate market saturation.
As such, the industry and its investors, including big food companies, need to start creating a market today. Perfect Day’s limited-edition ice cream was a start at such an effort. Others should follow suit.
Regulation
The US Food and Drug Administration and the US Department of Agriculture don’t have rules to approve or formally regulate “lab-produced” meat, seafood and dairy. Instead they require companies to submit information, which they rule on.
This is the case with Impossible Foods, which has received approval for its use of soy leghemoglobin or heme (the ingredient makes the burgers taste like meat) and the related biotechnology.
A formal regulatory framework is needed in order to set clear industry-wide rules and regulations. Additionally, there will be challenges from these companies from traditional meat, seafood and dairy companies just like is occurring with plant-based meat and dairy. A regulatory framework will help deal with the uncertainties these challenges are sure to pose.
What to call the food
“Lab-produced,” “lab-grown,” “cultured-meat,” “cellular-meat,” “clean-meat” and others. The terminology surrounding biotechnology-produced foods is all over the place.
This not only has the public confused, it’s causing confusion within the industry itself. A common name needs to be agreed on. The Good Food Institute proposed the term “cultivated meat” at its conference this month. I suggest the industry adopt it.
It’s based on some pretty solid research and allows the industry to move away from contentious terms like “clean meat”, as well as terms like “lab-grown,” which has a Frankenfoods sound to it.
Consumer acceptance
Consumers will have the final say in whether or not “cultivated” meat, seafood and dairy products succeed. The above factors all are important points of focus on the road to this ultimate and final step.
Having Big Food involved as investors and direct participants in this animal-free paradigm shift and experiment is important to its ultimate success.
GFI executive director Bruce Friedrich echoed this sentiment at The Future of Meat conference last week. “Progress has been stunning,” he said in reference to the huge interest in faux meat, seafood and dairy over the last year, “and I don’t think anything is more exciting than having Big Meat and Big Food involved.”
Big food companies should also consider launching their own research and development efforts in the area. Millennials and Gen Z are open to alternative meat, be it plant or lab-based. Taking the potential future of food into their own hands is something most big food companies have neglected over the last couple decades, instead outsourcing R&D to startups through investments and acquisitions.
just-food columnist Victor Martino is a California-based strategic marketing and business development consultant, analyst, entrepreneur and writer, specialising in the food and grocery industry. He is available for consultation at: victormartino415@gmail.com and https://twitter.com/VictorMartino01.
