Cultured meat: Implications for businesses
Many business sectors will be affected by the rise of cultured meat companies as they try to take over market share in the coming years. The extent to which the new players will impact these sectors depends on certain key variables, such as the cost and acceptance of the new technology.
A new way of self-sufficiency
A breakthrough of Cultured Meat (CM) on the food market, especially if accompanied by a widespread proliferation of private bioreactors, would be yet another instance of a trend that is making consumers increasingly self-sufficient in their own homes. Just as 3-D printing is revolutionizing the business of hardware maintenance and spare parts, just as photovoltaic panels on roofs are reducing homeowners’ dependence on energy utilities, and just as ubiquitous IT connectivity has given rise to the concept of the “home office”, the ability to synthesize meat in a refrigerator-sized device in every kitchen would further enhance the autonomy of the individual consumer.
The industries most affected by a robust and competitive CM industry are likely to be Agriculture & Farming; Food, Beverages & Tobacco; Retail & Distribution; and Transport & Logistics. How far-reaching such a transformation would be and how rapidly it would affect each sector depends on a number of factors, including the cost and acceptance of the new technology.
“The challenge we face is how to feed humanity without destroying the planet.”
Agriculture & Farming
In the short term, the corporate farming sector will be closely observing consumer attitudes to CM to determine whether synthetic meat products are accepted as equivalent to slaughtered meat, and will analyze the price structures of the new product in detail. The meat industry will also be tracking regulatory developments and legal requirements regarding the commercialization of in-vitro meat.
In the medium term, provided that lab-grown meat becomes commercially viable and is approved by regulators, it will likely provide considerable competition for the traditional meat industry. The future market share of CM is difficult to predict, as it will be determined by consumer choices and prices; but it is easy to imagine a scenario where the traditional meat industry rapidly loses ground to a new product that is cleaner, cheaper, more ethically and environmentally sustainable, and can be conveniently grown at home, assuming that private bioreactors are commercially available.
“To avoid obstruction from threatened incumbent interests, we need to bring meat corporations on board.”
In the long run, livestock farming may be replaced by CM either swiftly or gradually, entirely or partially, and possibly reduced to a niche market position as an expensive luxury item (“meat from locally sourced live animals”). The effects would be felt particularly in those national economies where meat production accounts for a significant share of GDP (all figures for 2018):
China: 86.5 million tons of meat/year
EU: 49 million t/year
USA: 46.7 million t/year
Brazil: 27.5 million t/year
Retail and Distribution
In the short term, the food industry too will no doubt closely monitor and try to shape consumer and regulator attitudes to CM. How disruptive the technology proves to be for supermarkets will hinge on a key question: Will consumers simply buy cultured meat in their local grocery store, or is it safe to assume that every household will own a bioreactor soon after the technology gets market approval? In the first instance, it would simply be a matter of replacing traditional with cultured meat in the display shelf. However, if consumers switch altogether to homegrown meat from the bioreactor, the disruptive effect for the food and retail industries would be significantly greater.
“Making cellular agriculture widely available in Africa could be as transformational as cellular communications has been in those countries.”
In the medium term, provided CM takes off, major food corporations will likely make efforts to gain a foothold in the CM market, either directly as purveyors of CM or as suppliers of components (stem cells, growth medium, scaffolds, bioreactors, etc.). On the positive side, they may be able to develop new customer groups as some consumers return to meat consumption. They could make efforts to improve the taste, consistency, nutritional value etc. of lab meat marketed under proprietary brands.
In the long term, the food industry may switch from selling meat to a more service-based business model, providing basic components as well as assistance for the operations and maintenance of private bioreactors. Such a shift from centralized to decentralized, distributed production would mirror the situation that energy utilities faced when grid deregulation led to increasing private electricity generation.
Transport & Logistics
The global market for food logistics was worth US$100 billion in 2018, with meat and seafood accounting for the majority of market share.1 If CM achieves breakthrough, local production of synthetic meat may eliminate or strongly reduce the need for logistics and distribution along the entire supply chain for meat as we know it today. A radical decline in demand for haulage and freight capacity would hit smaller transportation companies hard and most likely lead to market consolidation.
“If you want to achieve abundance without destroying the world, you need to change the technology.”
On the other hand, the ongoing trend towards more home delivery shopping could offset some of those losses and stabilize the utilization of logistics and haulage capacities. In any case, a decline in the transportation of perishable goods would go a long way towards reducing traffic congestion, which is a major problem in cities and on highways today, with positive effects for the transport and logistics industries.
Cultured Meat – Future milestones and expert predictions
2023 – The first country makes cultured meat commercially available (Lejjy Gafour)
2024 – Cultured meat first appears on a restaurant menu (Erdem Erikçi)
2024 – A minimum viable version of a scaffold is developed for cultured meat (Matthew Anderson-Baron)
2026 – Cultured beef costs no more than US$5 per pound (Erdem Erikçi)
2027 – Cultured meat becomes commonly available in both restaurants and supermarkets (Nina Buffi)
2028 – Cultured chicken meat with the same nutritional value as slaughtered poultry is commercially available (Mirko Betti)
2030 – High-quality structured cultured meat without genetic modification is available at costs comparable to traditional meat (Luke MacQueen)
Companies to watch
- Mosa Meat (Netherlands)
- Memphis Meats (California)
- Mission Barns (California)
- Aleph Farms (Israel)
- Future Fields (Canada)
Memphis Meats: Record investment announced
In a breakthrough round that marks the largest funding moment in the history of the cell-based meat industry (Forbes), Memphis Meats on 22 January 2020 raised US$161 million in investment from the latest round of financing. The company has developed a way of cultivating cell tissue without the use of fetal bovine serum as a growth medium, seen as a key advantage over the competition. Investors include: tech-focused holding company SoftBank Group, Norwest Venture Partners, and Temasek; Bill Gates and Richard Branson; meat corporations Cargill and Tyson Foods; and other partners including Threshold Ventures, Kimbal Musk, Fifty Years, and CPT Capital.
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