Last week, GFI published their annual state of the industry reports for the three major alt-protein technology ‘pillars’, plant-based meat, fermentation, and cultivated meat (and teased a fourth one).
Like many, I find the reports invaluable, as they are a good synthesis of the current scientific, regulatory, investment, and product evolution across the spaces.
The reports include an analysis of various industry forecasts, aggregating outlooks from research houses, industry analysts, and financial analysts. These forecasts for the alternative protein sector span over three decades and range from fairly conservative (Jeffries at ~$90 billion in 2040) to some bordering on wildly optimistic (Credit Suisse’s high forecast at $1.1 trillion in 2050).
As a former industry analyst, I appreciate the difficulty of forecast modeling future industries, especially ones that, like the alternative protein market, are still early stages. Each of the three alt-protein pillars falls into slightly different states of their evolutionary development: Plant-based meat can still be described as being in an early market phase, and newer forms of fermentation-based alt-proteins (such as precision fermentation) are still mostly nascent. Cell-cultured proteins, with the exception of some early trial rollouts, are still mostly non-existent on store shelves as of early 2023.
Market forecasting models inherently involve assumptions about various industry growth factors and inhibitors. In the report, GFI summarizes a few common forecast assumptions:
- Taste and price parity are essential.
- Consumer adoption is a limiting factor to market growth.
- Innovation brings more innovation, investment brings more investment.
While GFI examines each in detail, I am mainly going to focus here on consumer adoption as a limiting factor to market growth. It is self-evident that a market requires consumers, and if they don’t adopt a product, there is no one to sell to.
In the cultivated meat market report, GFI opens its analysis of this assumption with the following:
Most alternative protein market forecasts see growth as dependent on consumers wanting and buying alternative protein products, with market penetration naturally following. Jefferies, for example, identifies consumer tastes and adoption as key drivers of market growth, and Boston Consulting Group states that growth relies on consumers being convinced of taste, texture, and price competitiveness in relation to conventional meat.
So far so good. I think Jefferies is correct in that consumer tastes and adoption are key to growth, and BCG is also right in that consumers must perceive the taste, texture, and price of these products as being on par to animal-based products. GFI acknowledges that consumer taste perception and overall adoption are important but adds that it is also critical for the industry to achieve the scale needed to meet consumer demand, which is closely related to pricing, given that price is largely a factor of supply and demand.
However, what the GFI report and the various publicly available writeups from BCG or Jefferies do not attempt to assess or quantify is the increased risk to the alternative protein industry from industry and product-related misinformation. Misinformation refers to conspiracy theories, half-truths, and purposefully misleading information propagated daily on social media. Those against newer forms of protein are rapidly increasing the volume of misinformation.
Here’s an example from this week:
The tweet above – which has been retweeted 10 thousand times and viewed a million times – features a false headline from a site (People’s Voice TV) that is known to traffic in misinformation. The article refers to an article in a publication called Naturalnews.com, which is loosely based on a piece in Bloomberg (which itself has been panned) about the use of what are called immortalized cells by prominent cell-cultured meat startups like UPSIDE and Eat Just. While the Bloomberg article doesn’t say anywhere in it that these cells have been proven to cause cancer, that didn’t stop People’s Voice TV or tens of thousands of people on Twitter from spreading the false narrative that these products cause cancer and – somehow – that Bill Gates is involved as some part of a large-scale conspiracy to exert control through… a new form of meat.
Does not analyzing the rise of misinformation about the industry and its products make the analysis by GFI or the industry analyst reports they cite bad? Not really. Traditional forecast models factor in basic assumptions around growth drivers and inhibitors and often look to existing market analogs, such as the traditional meat industry in this case, to make assumptions about potential market size, cannibalization, replacement, etc.
However, by not addressing them, I believe industry experts are underplaying the potential for this industry, particularly the cell-cultured meat market, to become stillborn. All one has to do is look at the significant impact of the wave of misinformation on COVID-19 vaccines to recognize the potential that misinformation (or disinformation) could have on cell-cultured meat. Much of the language used by those criticizing culvivated meat is reminiscent of some of the wildest anti-vax conspiracies, often sharing the same anti-science or “evil funder” tropes.
While I don’t have an exact answer for how they should account for the impact, I’d point to other types of risk analysis frameworks employed by industries and organizations to quantify future risks. Cybersecurity or national defense security frameworks are often focused on cataloging all potential risks to an organization or enterprise. One example of the type of risk assessment model is the one created by NIST, the US Department of Commerce for information security risk assessment.
This is just one example. There are many others, often focused on IT or national defense risk, that have defined ways to assess and quantify risk. Many of them are built to actually derive a number, in the form of lost enterprise or monetary value, for an organization based on risks.
In the NIST framework, they look to identify all potential threat sources and events, identify an organization or industry’s vulnerabilities, determine how likely they are to happen, the magnitude of impact, and then assess the risk. If this were applied to the case of alternative proteins, it would be relatively easy to work through this framework and identify a number of risks of misinformation from a variety of sources. Whether it’s organized groups such as traditional animal agriculture trade groups, politically motivated actors trying to catalyze sympathy towards a cause, or just social media influencers spreading misinformed memes, it’s best to recognize where misinformation is originating and to use risk analysis to prepare and inoculate yourself against it.
Some in this space have told me that they don’t want to give these types of tropes oxygen; therefore, it’s best to ignore them. While I can see their point, I’m not sure ignoring them is the best strategy for long-term survival. Social media has a way of providing oxygen to bad information, and so the best response is to recognize threats early and develop strategies for dealing with them. While I don’t have all the answers, I think advocates for alternative proteins need to be prepared for the coming wave of misinformation, and the best way to do that is to try to calculate its impact and develop strategies for dealing with it head-on.
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