Hi Claire, I very much enjoyed reading your post. As you know from your time with us at GFI, we’re thrilled to have created many resources that allow for independent analysis of the alternative protein space — precisely the sort of analysis you’re doing here.
Your trajectory seems reasonable to me if things stay on their current path, where we are reliant on private money and private industry (the plant-based and cellular agriculture companies you spoke with), largely operating through start-ups that grow into larger companies. That said, I have some thoughts about how these dates might be moved up, and GFI is focused on doing exactly that.
Plant-Based Meat
I agree with you that it will be difficult, near-term, to achieve the same “texture, taste, aroma, appearance, and mouthfeel wholly from plants” for whole tissue-structured products, especially doing so using a highly scalable means of production. However, for ground meat products, it seems much more achievable. For instance, Impossible Foods was able to recapitulate the key sensory components of a beef burger — to the point that it can now fool many unsuspecting consumers — with only about 6 years of R&D (a single company starting essentially from scratch, as there was virtually no foundational research in the public domain when they started). As the plant-based sector picks up steam from all of the consumer, investor, entrepreneurial, researcher, and industry interest in recent years, there has been some growth in the amount of R&D funding devoted to plant-based meat products. While most of this has been happening privately within companies, some has gone toward open access research, which raises the floor of foundational knowledge for all subsequent companies, allowing them to achieve similarly impressive results with less time and money than it took the pioneering companies in this space. This is GFI’s focus — figuring out what will best help all companies and then getting it done.
So, in order to truly accelerate the pace of development industry-wide, we need vastly more open-access science (see: GFI’s Competitive Research Grant) to address questions of texture, taste, aroma, etc., across a variety of product formats and technological approaches. It is our belief that with continued public and private investment, plant-based meat will taste better, yes, but also cost less than animal-based meat in the relatively near future. The major explanations for the current premium pricing of plant-based meat products include the need to recoup R&D investment, a lack of competitors with greater scale, and a situation where demand exceeds production capacity, thus providing no incentive for lowering prices. The first two of those factors have been upended within the last 12 months, as demonstrated by the entry of virtually every major meat company launching their own plant-based brands — often after only a few months’ worth of R&D. These products thus far have been far lower quality, from a meat mimicry perspective, than products like Impossible. But the fact that these companies are producing reasonable “generation 1.0” facsimiles in a matter of months on which they can continuously iterate means that there will likely be steeper competition, thus driving down costs in the category while spurring additional efforts by brands to differentiate themselves via improvements in taste and texture. It is also worth mentioning that the now classic, premium pricing paradigm for the likes of Beyond and Impossible may quickly be changing.
To be clear, this is not to discount the tech challenges, especially wrt plant-based chicken, where we don’t yet have a product that tastes the same or better, and we are quite a ways away from something that also costs the same or less. We’re optimistic, but we’re also clear-eyed about the fact that this is not going to be easy.
Acellular Agriculture
I was excited to learn of Perfect Day’s recent “no questions” letter from the FDA for their fermentation-derived whey and the launch of their first commercial product (beyond their first limited release). This is a big step for the acellular dairy space. As it relates to the space more broadly, you raise some nice points about the difficulties inherent in increasing target protein yields and addressing CapEx needs as the industry scales. However, there are many examples of recombinant proteins that have achieved incredibly low price points through scale-up and host strain refinement. As you note, “Food enzymes such as amylase are currently sold for as little as $3/kg, which is already comparable to dairy and eggs,” but it’s worth keeping in mind that this price point is $3 per kg of pure protein. Milk and egg whites, on the other hand, are both about 90% water! So you’re only paying for <100g of protein for every kg of milk or egg you buy.
It’s also important to note that acellular dairy and egg products don’t necessarily require one-to-one substitution of their total protein content in order to recapitulate the functional properties and sensory aspects of animal-based dairy and egg. It may well be the case that a relatively minor fraction of the final product will be recombinant animal protein, reserving this production method for only the most highly functional, essential proteins, whereas the bulk of the product can be composed of plant-derived ingredients. The seminal example of this strategy is, of course, Impossible and their heme. However, you could imagine a similar approach for egg and dairy products.
In speaking with a variety of companies in the acellular agriculture space over the past four years, GFI is encouraged that there have been significant advances in titers for both egg and dairy-related proteins. And, increasingly, large life science companies (see: Evonik and Ginkgo Bioworks spinout Motif Ingredients, among others) that employ hundreds or thousands of fermentation scientists are investing millions of dollars to further optimize protein yield. In order to more speedily address CapEx and scaling needs, startups such as Perfect Day and Clara Foods are partnering with large food and distribution companies to ensure that their products are cost-competitive and broadly available to consumers in the next few years.
Cultivated Meat
As you’ve nicely outlined, there are a variety of key challenges that the cultivated meat industry must solve before achieving cost-competitiveness at scale. Doing so will require vast sums of money, substantial greenfield infrastructure, and deep technical expertise from cell biologists to process engineers. However, a lot of the true technical challenges are on the bioprocess design side, where we actually see progress on the main cost drivers — such as the media — being much more straightforward. I don’t think it will be the case that, “Significant time and investment are needed to bring cell culture media from a few hundred dollars per litre down to <$1/litre, which is approximately the price needed for cost-competitive cultivated meat.” Our impression has been that it’s more a matter of whether the market incentive yet exists for a company to hit this target, rather than fundamental technical challenges that remain. There is already at least one company targeting food-grade growth factor costs of a few dollars per gram, and this paper from Northwestern University showed that by making their own growth factors in small batches in-house, they were able to achieve 97% cost reduction. The path to cost reduction is actually quite straightforward for the media; it’s simply a matter of the CM market being sufficiently attractive for suppliers to hit that price point by catering to this industry, which can be a hard sell when these same suppliers are currently enjoying incredibly high profit margins with their existing pharma clientele.
Of course, this requires that an awful lot goes right, since a sufficiently attractive CM market requires broad distribution, and that’s going to require significant developments across the spectrum of CM scientific challenges (not the least of which is how we scale bioreactors in a way that enables CM cost-competitiveness). This is a bit of a chicken and egg situation: We need the cost to come down to create a market that will allow for media at a price point that allows the cost to come down. In any event, these are tough challenges, but we think they’re surmountable. It’s why GFI exists!
The industry will of course require a great many “tools” companies—from suppliers of cell culture media to engineering firms with expertise in cultivated meat manufacturing builds. This presents massive opportunities for both startups and, increasingly, incumbent industries. The involvement of major life science companies, specialty chemicals companies, engineering and bioprocess design firms, etc., can rapidly accelerate the commercialization of cultivated meat. Even the largest CM startup companies only have about 30-35 staff, and they were probably half that size two years ago. By contrast, a multinational life science company has tens of thousands of staff with hundreds of thousands of combined years of experience in the field. As soon as these companies take an interest in becoming solution providers to the CM industry, the technical challenges that would take decades of effort for a startup to solve can suddenly be addressed in a matter of months or years. Merck KGaA’s outspoken involvement has been a huge catalyst within the field, and it has been quietly spurring substantially more interest from incumbent life science solution providers. Most of them aren’t talking about it publicly yet, but there are far more partnerships happening today between CM startups and established industry leaders than, say, a year ago.
Force Multipliers to Compress Cost-Competitiveness Timelines
Funding remains a key bottleneck in this emerging industry, and public and private-sector investment in alternative proteins remains highly neglected as compared with, say, renewable energy. If our efforts to advocate for more public funding into alternative protein R&D are successful, an infusion of funding on par with even a single year’s worth of renewable energy R&D funding would increase the total public research in the field by several orders of magnitude. This would have an enormous impact on timelines. The Breakthrough Institute recently noted in its Federal Support for Alternative Protein for Economic Recovery and Climate Mitigation memo that “Coming out of the financial crisis of 2008-2009, the [U.S.] Department of Energy guaranteed $15.7 billion in loans” which ultimately “reduced the cost of renewable electricity generation by about 20%.”
Convincing governments to put R&D money into open access alternative protein science is a key focus of GFI in the U.S. and also through our affiliates in the EU, APAC, India, Brazil, and Israel — see for example our recent stimulus request in the US, and similar exercises in the EU. We are seeing some promising initial signs of progress, but there is far more that needs to be done, and we see lobbying for more public R&D as an exciting opportunity for highly-leveraged impact. (As well as seeking to accelerate the pace of technological progress on alternative proteins, we also see other important avenues to decisively influence the trajectory of the sector — for example in terms of regulatory authorization and consumer acceptance — in the years ahead.) As you know, GFI is working hard across all of these areas of influence.
I know you agree with this, but I would be remiss if I didn’t mention that creating alternatives that taste the same or better and cost the same or less as industrial animal products is our best hope, if our goal is to transform the meat production system. So even on the timeframe you lay out, this is a worthy endeavor and path forward. That said, we should do all we can to accelerate the trajectory, which is the fundamental reason that GFI exists.
I enjoyed thinking through your analysis and offering my thoughts. Thank you again for sharing, Claire!
Blake Byrne, Business Innovation Specialist at The Good Food Institute
Hi Claire, I very much enjoyed reading your post. As you know from your time with us at GFI, we’re thrilled to have created many resources that allow for independent analysis of the alternative protein space — precisely the sort of analysis you’re doing here.
Your trajectory seems reasonable to me if things stay on their current path, where we are reliant on private money and private industry (the plant-based and cellular agriculture companies you spoke with), largely operating through start-ups that grow into larger companies. That said, I have some thoughts about how these dates might be moved up, and GFI is focused on doing exactly that.
Plant-Based Meat
I agree with you that it will be difficult, near-term, to achieve the same “texture, taste, aroma, appearance, and mouthfeel wholly from plants” for whole tissue-structured products, especially doing so using a highly scalable means of production. However, for ground meat products, it seems much more achievable. For instance, Impossible Foods was able to recapitulate the key sensory components of a beef burger — to the point that it can now fool many unsuspecting consumers — with only about 6 years of R&D (a single company starting essentially from scratch, as there was virtually no foundational research in the public domain when they started). As the plant-based sector picks up steam from all of the consumer, investor, entrepreneurial, researcher, and industry interest in recent years, there has been some growth in the amount of R&D funding devoted to plant-based meat products. While most of this has been happening privately within companies, some has gone toward open access research, which raises the floor of foundational knowledge for all subsequent companies, allowing them to achieve similarly impressive results with less time and money than it took the pioneering companies in this space. This is GFI’s focus — figuring out what will best help all companies and then getting it done.
So, in order to truly accelerate the pace of development industry-wide, we need vastly more open-access science (see: GFI’s Competitive Research Grant) to address questions of texture, taste, aroma, etc., across a variety of product formats and technological approaches. It is our belief that with continued public and private investment, plant-based meat will taste better, yes, but also cost less than animal-based meat in the relatively near future. The major explanations for the current premium pricing of plant-based meat products include the need to recoup R&D investment, a lack of competitors with greater scale, and a situation where demand exceeds production capacity, thus providing no incentive for lowering prices. The first two of those factors have been upended within the last 12 months, as demonstrated by the entry of virtually every major meat company launching their own plant-based brands — often after only a few months’ worth of R&D. These products thus far have been far lower quality, from a meat mimicry perspective, than products like Impossible. But the fact that these companies are producing reasonable “generation 1.0” facsimiles in a matter of months on which they can continuously iterate means that there will likely be steeper competition, thus driving down costs in the category while spurring additional efforts by brands to differentiate themselves via improvements in taste and texture. It is also worth mentioning that the now classic, premium pricing paradigm for the likes of Beyond and Impossible may quickly be changing.
To be clear, this is not to discount the tech challenges, especially wrt plant-based chicken, where we don’t yet have a product that tastes the same or better, and we are quite a ways away from something that also costs the same or less. We’re optimistic, but we’re also clear-eyed about the fact that this is not going to be easy.
Acellular Agriculture
I was excited to learn of Perfect Day’s recent “no questions” letter from the FDA for their fermentation-derived whey and the launch of their first commercial product (beyond their first limited release). This is a big step for the acellular dairy space. As it relates to the space more broadly, you raise some nice points about the difficulties inherent in increasing target protein yields and addressing CapEx needs as the industry scales. However, there are many examples of recombinant proteins that have achieved incredibly low price points through scale-up and host strain refinement. As you note, “Food enzymes such as amylase are currently sold for as little as $3/kg, which is already comparable to dairy and eggs,” but it’s worth keeping in mind that this price point is $3 per kg of pure protein. Milk and egg whites, on the other hand, are both about 90% water! So you’re only paying for <100g of protein for every kg of milk or egg you buy.
It’s also important to note that acellular dairy and egg products don’t necessarily require one-to-one substitution of their total protein content in order to recapitulate the functional properties and sensory aspects of animal-based dairy and egg. It may well be the case that a relatively minor fraction of the final product will be recombinant animal protein, reserving this production method for only the most highly functional, essential proteins, whereas the bulk of the product can be composed of plant-derived ingredients. The seminal example of this strategy is, of course, Impossible and their heme. However, you could imagine a similar approach for egg and dairy products.
In speaking with a variety of companies in the acellular agriculture space over the past four years, GFI is encouraged that there have been significant advances in titers for both egg and dairy-related proteins. And, increasingly, large life science companies (see: Evonik and Ginkgo Bioworks spinout Motif Ingredients, among others) that employ hundreds or thousands of fermentation scientists are investing millions of dollars to further optimize protein yield. In order to more speedily address CapEx and scaling needs, startups such as Perfect Day and Clara Foods are partnering with large food and distribution companies to ensure that their products are cost-competitive and broadly available to consumers in the next few years.
Cultivated Meat
As you’ve nicely outlined, there are a variety of key challenges that the cultivated meat industry must solve before achieving cost-competitiveness at scale. Doing so will require vast sums of money, substantial greenfield infrastructure, and deep technical expertise from cell biologists to process engineers. However, a lot of the true technical challenges are on the bioprocess design side, where we actually see progress on the main cost drivers — such as the media — being much more straightforward. I don’t think it will be the case that, “Significant time and investment are needed to bring cell culture media from a few hundred dollars per litre down to <$1/litre, which is approximately the price needed for cost-competitive cultivated meat.” Our impression has been that it’s more a matter of whether the market incentive yet exists for a company to hit this target, rather than fundamental technical challenges that remain. There is already at least one company targeting food-grade growth factor costs of a few dollars per gram, and this paper from Northwestern University showed that by making their own growth factors in small batches in-house, they were able to achieve 97% cost reduction. The path to cost reduction is actually quite straightforward for the media; it’s simply a matter of the CM market being sufficiently attractive for suppliers to hit that price point by catering to this industry, which can be a hard sell when these same suppliers are currently enjoying incredibly high profit margins with their existing pharma clientele.
Of course, this requires that an awful lot goes right, since a sufficiently attractive CM market requires broad distribution, and that’s going to require significant developments across the spectrum of CM scientific challenges (not the least of which is how we scale bioreactors in a way that enables CM cost-competitiveness). This is a bit of a chicken and egg situation: We need the cost to come down to create a market that will allow for media at a price point that allows the cost to come down. In any event, these are tough challenges, but we think they’re surmountable. It’s why GFI exists!
The industry will of course require a great many “tools” companies—from suppliers of cell culture media to engineering firms with expertise in cultivated meat manufacturing builds. This presents massive opportunities for both startups and, increasingly, incumbent industries. The involvement of major life science companies, specialty chemicals companies, engineering and bioprocess design firms, etc., can rapidly accelerate the commercialization of cultivated meat. Even the largest CM startup companies only have about 30-35 staff, and they were probably half that size two years ago. By contrast, a multinational life science company has tens of thousands of staff with hundreds of thousands of combined years of experience in the field. As soon as these companies take an interest in becoming solution providers to the CM industry, the technical challenges that would take decades of effort for a startup to solve can suddenly be addressed in a matter of months or years. Merck KGaA’s outspoken involvement has been a huge catalyst within the field, and it has been quietly spurring substantially more interest from incumbent life science solution providers. Most of them aren’t talking about it publicly yet, but there are far more partnerships happening today between CM startups and established industry leaders than, say, a year ago.
Force Multipliers to Compress Cost-Competitiveness Timelines
Funding remains a key bottleneck in this emerging industry, and public and private-sector investment in alternative proteins remains highly neglected as compared with, say, renewable energy. If our efforts to advocate for more public funding into alternative protein R&D are successful, an infusion of funding on par with even a single year’s worth of renewable energy R&D funding would increase the total public research in the field by several orders of magnitude. This would have an enormous impact on timelines. The Breakthrough Institute recently noted in its Federal Support for Alternative Protein for Economic Recovery and Climate Mitigation memo that “Coming out of the financial crisis of 2008-2009, the [U.S.] Department of Energy guaranteed $15.7 billion in loans” which ultimately “reduced the cost of renewable electricity generation by about 20%.”
Convincing governments to put R&D money into open access alternative protein science is a key focus of GFI in the U.S. and also through our affiliates in the EU, APAC, India, Brazil, and Israel — see for example our recent stimulus request in the US, and similar exercises in the EU. We are seeing some promising initial signs of progress, but there is far more that needs to be done, and we see lobbying for more public R&D as an exciting opportunity for highly-leveraged impact. (As well as seeking to accelerate the pace of technological progress on alternative proteins, we also see other important avenues to decisively influence the trajectory of the sector — for example in terms of regulatory authorization and consumer acceptance — in the years ahead.) As you know, GFI is working hard across all of these areas of influence.
I know you agree with this, but I would be remiss if I didn’t mention that creating alternatives that taste the same or better and cost the same or less as industrial animal products is our best hope, if our goal is to transform the meat production system. So even on the timeframe you lay out, this is a worthy endeavor and path forward. That said, we should do all we can to accelerate the trajectory, which is the fundamental reason that GFI exists.
I enjoyed thinking through your analysis and offering my thoughts. Thank you again for sharing, Claire!
Blake Byrne, Business Innovation Specialist at The Good Food Institute