How will regulation approvals affect investments in alternative proteins?

Two cultivated meat companies recently received approval from the US Department of Agriculture (USDA) to produce and sell their cell-cultivated chicken in the USA. Both UPSIDE Foods and GOOD Meat (a division of Eat Just, Inc) made their announcements on 22 June 2023, and it was an exciting development for the entire cell ag industry. So, with regulators in the USA and Singapore now signaling cultivated meat is a safe alternative to slaughtering animals, policymakers worldwide should be springing into action so as not to miss out on the huge economic and environmental opportunity presented by this nascent technology.

It’s hard to imagine the impact that USDA decision will have on the worldwide food industry. Before we begin to unpack the possible implications, though, there are a few points to consider.

Cell-cultivated technologies can be used to grow meat, dairy, seafood and related protein ingredients.

The technology is not owned or controlled by the largest companies in the meat, seafood, and dairy industries, but is being developed by several smaller companies worldwide.

The global meat industry alone was estimated to be ~US$1.4 trillion in 2022, which is expected to rise to US$1.6 trillion by 2028, exhibiting a CAGR of 2.3% between 2023-2028 according to IMARC Group predictions.

We may well be experiencing the beginning of a brand-new food category that could significantly affect the market shares of even the biggest food corporations worldwide.

Regulation is a milestone, but there are still challenges to be solved until we see these products in every grocery store, restaurant and as a pervasive ingredient

Here are some of the possible implications the recent product approvals may have on the market.

More investment: Strategic and opportunistic investors will be back. This decision is expected to have a significant impact on the food industry and its global repercussions may not be fully mitigated by the macroeconomic environment. Moreover, if other countries follow suit, the impact could be even greater.

More corporates will jump in: Corporates’ strategic focus will likely evolve, with some either increasing their alt protein strategies, and others including alternative proteins for the first time. Ideally this will lead to the best traditional protein companies partnering with innovators in the cultivated areas.

An opportunity for economic development: The forward-thinking governments will increase their investments and support for domestic alternative protein innovations and their production. Alternative protein hubs such as Singapore will be developed in strategic centers around the world. This is the moment when countries, cities and regions have the opportunity to become leaders in new technologies, which will determine how we produce the world’s food in decades to come. Embracing these technologies can not only enhance food security sustainably but also give an upper hand to the leaders in the international economy by offering promising job prospects in novel technologies.

Time to be the smartest in the room: Investors need to work with partners (such as Big Idea Ventures) who have deep expertise across the entire alternative protein category as not all alternative protein companies are equal.

Early days/upside still available: Scaling cultivated technology through solving science-based problems, significant infrastructural and capital investments will be required. It will take time to change a trillion-dollar industry.

We need to do it right: Cultivated companies shouldn’t skip steps and must continue to prioritize producing bioidentical meat, seafood and dairy products at price parity to the traditional methods.

By all means, reach out to us if you have any questions about any of the above opinions. And, as always, everything you have just read is not investment advice!

Andrew D. Ive is the Founder/Managing General Partner, at Big Idea Ventures. He is an advisory board member for Tufts Nutrition Council, is a Friedman School Entrepreneurship advisor, Harvard Business School graduate, Procter & Gamble brand management trained, and has spent a number of years as an entrepreneur growing companies. This article is republished from the July/August 2023 edition of Protein Production Technology International, the industry's leading resource for alternative proteins. To subscribe to all future editions, please click here