Meat Me In The Middle
By Owen Yinling
Ten years ago in London, standing before a handful of journalists, food critic Hanni Rützler took a bite out of a stem cell-cultured hamburger patty—a burger that cost $300,000 to produce. Rützler proclaimed, "This is meat to me." In the decade since, investors have staked over $2.7 billion in companies promising to scale up lab-grown meat production to compete with and eventually surpass the conventional meat industry.
Humans currently utilize more land for livestock than any other activity. Meadows and pastures account for 26% of the Earth's ice-free terrestrial surface. The demand for meat consumption also leads to the need for other resources, with almost one-third of water usage in the US dedicated to growing crops for cattle feed. If fewer people were interested in consuming traditionally farmed beef or mutton, it would be feasible to reduce the global agricultural land requirement by half. It is worth noting that cattle farming, due to its land use and emissions, is responsible for a significant environmental burden. According to University of Oxford researcher Joseph Poore, even though it produces only 5% of the world's food calories, it contributes to 40% of the environmental impact.
There are currently over 150 publicly announced cultivated meat companies spread across every inhabited continent, with investments pouring in on a daily basis. However, among these companies, only one, Eat Just, is actually selling cultivated meat. Presently, they have only one restaurant in Singapore, the only country thus far to approve cultivated meat for human consumption. Nonetheless, the FDA granted the startup Upside Food a "regulatory green light" in 2022. Considering the remarkably rapid growth of the cultivated meat industry, it may appear unfair to identify factors that could be "hindering" its potential. Still, it is crucial to discuss the actions that governments and companies themselves must take to solidify the future of lab-grown meat.
While the pace of research into cultivated meat has accelerated rapidly and costs have come down exponentially, much more will need to be done before cultivated meat has any chance directly competing with conventionally sourced meat products—Eat Just notoriously sold $50 individual chicken nuggets, while prices have dropped since then, multiple industry reports make it clear that cultivated meat must be sold at a steep premium compared to conventional meat if there is any hope of profitability for private companies. Ultimately the barriers that keep cultivated meat uncompetitive stem from a single source: scale.
For instance, in order to produce cultivated meat, companies need to purchase costly growth factors and recombinant proteins from biotechnology companies.
Why are these so expensive?
Because their production pipelines were set up long before cultivated meat existed and were instead geared for much smaller scale technical and medical usage. Until the market adjusts to accommodate the surge in demand and production scales up, cultivated meat companies will face a significant price bottleneck when it comes to acquiring these essential products.
Labor costs pose a challenge for cultivated meat companies, particularly due to the specialized laboratory-like environment that requires higher wages compared to the traditional meat industry. Additionally, the initial capital investment needed to construct a cultivated meat facility further complicates the commercial viability of these companies as they aim to directly compete with the conventional meat industry in the near future.
There are still a number of ways that companies can reduce costs in the near future. For example, most cultivated meat companies are currently vertically integrated, but as the industry develops and different companies begin to specialize in various aspects of the production process, the technology will cheaper—e.g. companies will no longer have to design their own in-house bioreactor or source it from an unrelated biotechnology company and make modifications. And, important potentially cost-reducing research is still being carried out, particularly in finding the best cell lines to work with and increasing cell volume so that more meat can be produced in reactors, lowering energy costs and equipment demands. Additionally, looking at industry development more broadly, because of the sheer number of cultivated meat companies, it is almost certain that the largest and best financed companies will be able to collect a wealth of diverse talent and technology through mergers and acquisitions as in the industry begins to consolidate, further strengthening the cultivated meat industry’s position as a competitor to the traditional meat sector.
But, the primary way that cultivated meat competes against traditional meat will probably not be in a pound for pound price competition—it’s quite likely that many people will pay a significant premium for cultivated meat, whether for its environmental benefits or the novelty, as they already do for organic food products.
The most economically viable model for cultivated meat in the next five to ten years may be the concept of "hybrids." These are meat products that combine cultivated meat with plant-based substitutes. Research has demonstrated that even small amounts of cultivated meat in plant-based products can greatly enhance their similarity to the meat they aim to replicate. The ability to adjust the proportions, gradually increasing the percentage of cultivated meat from 20% to 50% or 70% as prices decrease, makes these "hybrid" meat products particularly appealing for private companies seeking to run profitable lab-grown meat operations. This is where government regulation may be crucial.
How much lab grown meat does a product need to have before it can be labeled as “meat?”
How overtly must cultivated meat products display that they are not “natural” meat and were produced in a lab?
The labeling requirements are fairly ambiguous right now since no products have entered the US market, the FSIS only says that they will ensure that “the labels clearly differentiate cell cultured products from slaughtered meat and poultry products.”
Unfortunately, label regulation in the cultivated meat industry could potentially replicate the conflicts seen between the dairy and plant-based milk sectors regarding the use of the term "milk." It may also resemble the prolonged contest that took place from the 1860s to the 1960s between butter producers and the emerging margarine industry. These historical battles over labeling rights serve as examples of the challenges and disputes that can arise when established industries feel threatened by innovative alternatives.
The margarine-butter conflict is a particularly concerning case because it illustrates the extent to which entrenched interests can influence government policy in an incredibly anti-competitive manner—by 1898, 26 states had made the sale of colored margarine illegal as a way to make it harder for margarine to compete with butter. The federal government got involved too: in 1902 Congress passed a law imposing a ten cent tax on colored margarine but a quarter cent tax on uncolored margarine. It took until 1950 for the federal government to repeal the 1902 Act and Wiscousin did not repeal their anti-margarine laws until 1967. The 1902 Law cut annual consumption of margarine by more than 50% — from more than one hundred twenty million pounds a year to less than fifty million. While the growth in demand for margarine eventually overpowered the constraining regulatory environment, this scenario highlights the immense impact that entrenched interests can have on the adoption of new products, even if they possess significant advantages over existing ones.
Looking at the standards for Food Labeling today, the specificity that the government requires from canned tomato sauce products could be a glimpse into the taste pallet requirements for synthetic beef in the future. Who’s to declare what a T-bone should taste like? Probably the FDA.
6. SALIENT CHARACTERISTICS. Traditional flavor tomato-based pasta sauce must have a robust tomato flavor and must include discernible pieces of oregano, basil, onion, and garlic. 6.1.2 Smooth with pulp or crushed or chopped tomatoes. Consistency 2, smooth with pulp or crushed or chopped tomatoes are tomatoes that are crushed, ground or pulped when appropriate in accordance with Codex Stan 13.3.
At the end of the day, even inauspicious regulatory decisions regarding cultivated meat like the ones mentioned above, not even considering the threat of targeted regulations brought on by entrenched stakeholders, could have an enormous impact on this growing but still very fragile industry.
The business mistakes of early firms could also trigger strict regulatory action. Plant based protein company Beyond Meat has come under the gaze of regulatory agencies for food safety violations that seem to have been at least partially caused by a desire to keep costs to a minimum. Considering the lure of lower costs in the cultivated meat industry and the need for strict sanitary standards, companies may have to balance their short term market position with the long term risks of operating as cheaply as they can.
It is essential to the future of eating and perhaps even humanity’s ability to sustainably feed itself in the near future, that the government lets cultivated meat companies compete in a fair but open environment where they can innovate and broaden consumer options.
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