Climate Change and a $280,000 Burger

We need to both reduce our CO2 emissions and increase our food supply to meet the needs of our expanding population. Reducing our meat consumption could help us tackle this problem and a $280,000 burger might hold part of the answer.

Published in

Eye-to-Eye

10 min readFeb 7, 2021

The Problem

The start of 2021 had lots of points for celebration. A Democratic majority in the Senate and House, booming markets as a result, and a continued rollout of vaccinations to our most vulnerable to help curb Covid-19. But I found there was one piece of news that overshadowed all this. Despite most CO2 emitting industries being throttled last year, global average temperatures tied with 2016 as the hottest on record at 0.6°C above the long-term average. Europe, my home continent, hit an astonishing record of 1.6°C above the long-term average. To put this into context, the goal of The Paris Agreement is to limit global warming to well under 2°C and ideally under 1.5°C. Therefore, Europe is already failing.

Seeing this was a reminder we have never faced a more existential threat than climate change.

“Climate change is no longer some far-off problem; it is happening here, it is happening now.” — Barack Obama on Climate Change

14.5% of greenhouse gas emissions globally come from livestock, with beef accounting for 65% and other meats such as Lamb and Pork making up a significant proportion of the rest. This is all happening in parallel to a surging global population, straining our food supply chains. I’m not going into the details of the consequences of global warming in this article, but the list includes extreme weather patterns; species extinction (including us); rising sea levels; dirtier air; and higher ocean acidity.

With the numbers above in mind, if I asked you to find a way to grow our global food supply, whilst cutting our CO2 emissions, you would be hard-pressed to find a solution that didn’t include reducing our reliance on meat. Moreover, several reasons make now a better time than ever before to be launching a food-tech startup.

The Opportunity

Firstly, Government attitudes towards curbing global warming are changing, creating a favourable regulatory environment. The Paris Agreement signed in 2016 by 194 countries is the closest we have come to a globally unified effort to reduce our CO2 emissions. We are seeing countries commit to their most ambitious targets yet, with both the UK and the US committing to carbon negativity by 2050. Joe Biden has detailed out his plans for an injection of $1.7 trillion over the next 10 years into green technology, with a democratic majority in the Senate and House making his ability to push through these policies far more likely. The public sector will rely on startups to create new technologies and business models, with a favourable institutional and regulatory environment bolstering their chances of success.

Secondly, the dichotomy between profit and impact is gone, and food-tech is now recognised by investors as striking the most effective balance between impact and profit creation. Granted, many investors are put off by the longer times for a return in the food-tech space, but there are several new funds raised recently that have not been put off.

“Real innovation in the food industry is very rare, it will take longer, and it will be worth it.” — Laura Gertenbach, CEO of Innocent Meat in Germany

Astanor Ventures hit the headlines in 2020 after raising Europe’s largest agriculture and food fund of $325 million. One of its portfolio companies, Ynsect, raised a $372 million Series C to continue its efforts into creating alternative proteins made from insects. Moreover, there has been a swathe of Impact Funds popping up dedicated to funding startups trying to positively impact the planet such as Pale Blue Dot and Norrsken VC. Y-Combinator responded to a request for startup ideas and indicated their interest in funding clean-meat companies. All of this, coupled with a lot of dry powder in the market after 2020, means it may be easier than ever to raise capital for your impact startup in 2021.

Lastly and most importantly, positive consumer attitudes towards alternative meats are growing and as such, so is the total addressable market for startups looking to launch. Plant-based meat analogues (meat alternatives) have exploded recently, with companies like Beyond Meat and Impossible Foods racking up a joint market cap of around $20 billion and launching partnerships with some of the world’s largest food chains like KFC, Subway and Burger King. In 2019 the UK meat alternative market was valued at $489.2 million and is expected to hit $726.8 million in 2025, growing at an estimated CAGR of 6.8% between 2020–2025. In terms of revenue, this accounts for nearly 30% of the total European meat alternative market and in the UK alone, sales of meat analogues are predicted to grow by another 25% in 2021. This situation is what Kevin Hale at Y-Combinator would describe as an unfair market advantage, where your alternative meat startup is likely to grow purely by market growth alone.

Positive attitudes from governments, investors and consumers are laying the foundations for a ripe food-tech ecosystem. Of course, there are plenty of meat analogues stacking the shelves of our supermarkets already, from soy-based products to pea-based proteins, but I think one nascent industry, in particular, has the potential to have a serious impact on our meat consumption globally.

Enter Cultured Meat

Cultured meat, or meat grown from animal cells, first hit headlines back in 2013 when the first cultured burger cost $280,000. It was created by Dutch startup Mosa Meat’s founder Mark Prost and was funded by Google co-founder Sergey Brin. Cultured meat is part of a larger domain called cellular agriculture, which aims to produce products usually sourced from traditional livestock rearing through novel forms that require less animal involvement. Cultured meat is produced by in vitro cell culture of animal cells, where cells are placed into a growing medium within a controlled cultivator, producing meat that looks, feels and tastes like the real deal because, biologically, it is. So far, all the most popular forms of meat have been reproduced through this method including beef, pork, lamb and chicken.

Cultured meat growing in a lab — https://www.sciencenewsforstudents.org/article/new-spin-lab-grown-meat

The Major Benefits

Environmental Sustainability

Producing cultured meat involves approximately 78–96% less greenhouse gas emissions; 99% less land use; and 82–96% less water usage. Moreover, animal carcass wastage is a huge problem, but cultured meat means eradicating wastage. Of course, the technology is still in its infancy, so the overall picture right now is cultured meat will have less environmental impact than beef and pork, but more than chicken and plant-based proteins. However, as with any early-stage technology, this could change soon and is dependent on the source of energy used to power the labs.

Humanely Sourced Meat

It’s no secret the global livestock and agricultural sector is under pressure to reduce its slaughtering of animals. The push from the veganism movement and animal rights activists has already gained significant traction, especially in Europe and Israel (more on this below). Cultured meat, whilst not completely removing animal involvement, drastically reduces it. I want to make it clear here the most cost-effective way to collect samples is still through the slaughter of donor animals, albeit a lot less than traditional farming. That being said, entirely humane and cruelty-free methods of sample extraction do exist and it is only a matter of time before these are financially viable.

“Eventually, my vision is that you have a limited herd of donor animals in the world that you keep in stock and that you get your cells from there.” — Mark Post, Founder of Mosa Meat

New Market Generation

Slightly more novel (even more so than cultured meat itself), is the opinion that the cultured meat industry could create a new type of knowledge worker. This would be driven by strong competition and producers seeking to differentiate themselves through the creation of their own unique variants of meat, leading to the emergence of a new knowledge worker. Of course, there are possible negative effects on the existing labour force within the traditional agriculture market, as well as the risk of cash-rich enterprises pushing small and medium-sized businesses out of the market. Having said this, I do not believe this is any different to the process of digitisation and continuous extinction of current skills in favour of new skills. Despite anxieties about the effects this would have on the labour force, the market has learnt to re-purpose and re-skill workers to reflect these new demands. One of the great things about startups is not just their ability to solve some of our toughest challenges, but in doing so, unlock new business models and value streams, and I think cultured meat could do the same.

Price

The main reason the price of the first cultured meat burger was $280,000 was due to the serum they used to grow the meat cells in, known as fetal bovine serum (FBS). FBS is found in cows’ fetuses and a litre can cost between £300 and £700, meaning the price of growing cultured meat was extortionate. However, scientists at Mosa Meat (the first company to manufacture the burger), as well as other startups, have now managed to remove FBS from the process and substitute it for animal-free elements.

“Our team successfully removed FBS by ensuring that the essential elements of FBS are in the growth medium, but sourced animal-free.” — Sarah Lucas, Head of Operations at Mosa Meat

They have therefore managed to cut the cost of a cultured meat burger from $280,000 down to around $9, reducing it by 88 times in 8 years. Whilst this is still expensive, it is great progress and matches the price of British butcher’s meat.

Current Hindrances

Consumer Sentiment

In the context of a booming meat alternative market in Europe, you would have thought attitudes towards cultured meat would reflect this sentiment. However, a report done in the Trends in Food Science & Technology Journal (TFST) highlighted several limitations to consumer attitudes on cultured meat. It noted in two surveys carried out, whilst two-thirds of respondents said they would try cultured meat, only one-third of respondents said they would eat it regularly. This shows there is a negative sentiment held by most towards the idea of consuming cultured meat daily, and this will prevent the industry from moving forwards.

Definition & Secrecy

Underpinning the mixed attitudes of consumers towards cultured meat is the fact the industry is undefined and secretive. Due to the high level of competition and success being reliant on innovation to reduce the price-per-unit of cultured meat, startups have been notoriously secretive about their operations and progress. This has prevented consumer education on the topic. As a result, the TFST report points out there is confusion around the definition of cultured meat amongst consumers. The veganism movement has been largely negative towards the product, stating it only reinforces our relationship and reliance on meat and will magnify our meat consumption in the future.

“It is clear that some of the narratives on the potential benefits of cultured meat implicitly assume a ‘substitution effect’” — Trends in Food Science & Technology Journal

It is impossible to tell whether cultured meat will lead to a magnification or substitution effect on our consumption of meat. Regardless, consumer attitudes to cultured meat and how society decides to define it going forwards will be critical.

Regulatory Frameworks

Despite positive government attitudes to sustainability and food-tech startups, cultured meat is so novel frameworks are yet to be defined. That means any meat produced has to go through a European Novel Foods regulatory approval process, which can take between 1–2 years. This means current regulatory pathways are stopping startups from getting their products to market quickly, as they must work with regulators for longer periods of time to prove the safety of cultured meat. We see a similar pattern with blockchain, AI/ML and cryptocurrency technologies. Regulators are struggling to keep up with these technologies, preventing them from unlocking their full potential for consumers. It is evident that the regulatory environment around cultured meat has a long way to evolve before the products can be shipped to consumers, however, this can only be done if startups work closely with regulators to educate them.

The Cultured Meat Market

The cultured meat market is estimated to be worth $214m by 2025, growing at a CAGR of 15.7%. It isn’t a coincidence that some of the largest agri-tech funds are located in Europe, with Eric Archambeau of Astanor Ventures explaining Europe is a far better “cultural fit” than America in the agri-tech industry. As a result, some of the leading cultured meat startups are located in Europe. Isreal is a second hub, with it being home to the most vegans per capita globally, making it a perfect breeding ground for cultured meat consumers.

The industry is so early-stage that all startups are engaged right now in the cultivation and production of the cultured meat itself, however as the industry progresses, I expect new startups to emerge that fill other horizontals of the market.

Cultured Meat Market Map

Below is a current geographical illustration of the market. I have also included startups producing cultured fish-meat, another market segment appearing. Please be aware the below is indicative. If I have missed out any startups, please let me know so I can update it accordingly.

The Bottom Line

First of all, there is no silver bullet to solving the issue of increasing our global food supply, whilst reducing our CO2 emissions. The future will encompass several different solutions to our meat consumption and we are unlikely to remove our reliance on meat completely.

Cultured meat presents one potential piece to the puzzle and has shown some promising progress the past decade. A continued reduction in the cost of producing cultured meat, alongside an increasingly favourable regulatory environment, could mean us seeing cultured meat on the supermarket shelves soon. That being said, as with any new technology, there are some hurdles the industry has to tackle first. Most importantly, attitudes towards cultured meat remain uncertain and the industry is unlikely to make headway until society decides how to define cultured meat.

One thing is for certain, in light of the worsening climate crisis, investors cannot afford to underfund the impact sector any longer.