The nascent cultivated meat industry will struggle to survive unless there is a “massive infusion” of capital from governments that see strategic value in making ‘real’ meat without animals, delegates were told at the Future Food-Tech innovation summit in London last week.
While funding for many agrifoodtech segments has fallen sharply since early 2022 as generalists have fled the sector, private capital going into cultivated meat has almost dried up. Preliminary AgFunder data shows that funding peaked at $989 million in 2021, dipped to $807 million in 2022 and then fell precipitously in 2023 (-78%) to just $177 million, against a backdrop of a 50% drop in agrifoodtech investing that year.
And worryingly for startups in the space, there is little evidence that things have picked up in 2024, with just two notable rounds in the sector to date (Mosa Meat’s $43 million raise in April and Ever After Foods’ $10 million raise in June).
Against this backdrop, firms have been slashing headcount, consolidating, and in the case of New Age Eats and SCiFi Foods, calling it quits (click here and here). Others have become embroiled in battles with co-manufacturers over allegedly unpaid bills.
Looking ahead, “There’s a valley of death we’re not going to cross as an industry without a massive infusion of public investment,” said Robert Jones, VP global public affairs at Dutch startup Mosa Meat, during a panel session at last week’s summit.
To some extent, this is already happening, noted Jones, highlighting the €60 million ($66 million) earmarked by the Dutch government in 2022 to support the formation of an ecosystem around cellular agriculture. But given the drop off in private capital, it’s still just a drop in the ocean, he acknowledged.
His comments were echoed by Andrew Ive, founder and managing general partner at Big Idea Ventures, which has made multiple investments in the cultivated meat space. Speaking to AgFunderNews at the sidelines of the event, he said CapEx for largescale commercial facilities is not going to be funded by VC money.
“I think it’s going to take someone like the Netherlands or the UAE, Abu Dhabi perhaps, maybe Dubai, maybe Saudi Arabia. It could be Tokyo, Japan.”
Messaging: ‘We did some self-inflicted harm’
Successive speakers at the summit also stressed the importance of an efficient regulatory process for cultivated meat, with Owen Ensor at UK-based Meatly noting that “There will be nothing to regulate if we take too long,” especially in Europe.
That said, Jones said he was a little tired of seeing Europe presented as a “whipping boy” for the rest of the world when it comes to food regulations, adding: “I’m actually a huge advocate for the novel foods framework. It is slow, but it’s in statute, it’s protected, it’s clear.”
When it comes to communicating with the public, meanwhile, the industry has learned to refine its messaging in the face of political and cultural pushback, he claimed.
Echoing comments made by Impossible Foods CEO Peter McGuinness on the messaging around plant-based meat, he said, “I think we’ve realized as an industry that some of the wave one companies and some of the early rhetoric was really good for raising money in a VC context, but at the same time, the language we were using was inflammatory and was really not received well by a lot of actors in the conventional industry.
“And so we did some self-inflicted harm, and some of the political challenges we face today, we caused. But I think we’ve gotten smarter about that by talking about what the value proposition is for the industry, and that we are a compliment to the existing protein system. We’re trying to get away from some of the ‘replacement’ language.
“What people are focused on now in terms of the political narrative is around ensuring European competitiveness, focusing on food security, and so on.”
Meatly: ‘We’ve reduced media costs from £700 per liter down to £1 per liter’
The panel did not focus on the technical challenges of scaling cultivated meat, but stressed that this is a technology that will take decades, not years, to make a meaningful dent in the conventional animal agriculture industry, assuming it is indeed scalable.
According to Ensor at Meatly: “Wave one companies were very hyped, raised a lot of money and weren’t able to fulfill that hype, and now we have wave two companies, including us, that are finding lower cost, faster ways to do this.”
Meanwhile, “not having unlimited funding means we’re more innovative,” he claimed. “We’ve reduced media costs from £700 ($916) per liter down to £1 ($1.30) per liter and we’re now working on bringing that down to under 10p (13c) per liter. We’re also doing the same on our CapEx, so we have just filed a patent on low-cost equipment, which means that, again, we can scale up in a much lower cost way.”
He added: “I think sometimes we lose sight of this, but cultivated meat is a dramatic change in how we produce protein. And if we get this right, and we make this work, it is going to be the cornerstone of our protein production for decades and potentially centuries to come. And so saying we failed to hit a target this year is kind of missing the point. I know it’s important we hit our targets, but it’s important that we maintain that long term perspective as well.”
Jones added: “We need to be talking about this in terms of decades, not the next three, four or five years. There’s going to be some consolidation, for sure, but that’s a natural part of disruption, right?”
Cultivated meat as an ingredient
At Mosa Meat, said Jones, “We tightened our belts, we went back to the drawing board on the long-term strategic plan and got more focused. And I think the industry as a whole is starting to embrace more of an ingredient approach and thinking more creatively about blends [of cell-cultured ingredients with plant-based or animal-based meats].”
Ive at Big Idea Ventures added: “For me, what makes sense is cultivated with traditional meat. A bit like adding ethanol to gasoline for cars. So I think the way this will ultimately be rolled out in the marketplace will be where 20% of the meat content of a dumpling in China, for example, will end up being cultivated meat, as opposed to traditional meat.”
