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Daily news and analysis about the food tech revolution

GFI

Investment in Alternative Seafood Startups Totaled $175 Million in 2021, Up 92% From Previous Year

According to a new report published by the Good Food Institute, investment in alternative seafood companies totaled $175 million in 2021. The total represented a 92% jump over 2020.

GFI’s new report, which looks at the entire alternative seafood category across plant-based, cell-cultured, and fermentation-based products, said 2021 investment brought the total invested in the category to $313 million from 2013 through 2021. Cultivated seafood startups commanded two-thirds of all investment in alt-seafood last year at $115 million, compared with $58 million invested in plant-based seafood startups and $2 million in fermentation-based seafood.

A few large investments dominated investment in alternative seafood startups, including a $60 million convertible note for Blue Nalu, which the company used to invest in their commercial production facility. Another $34 million was raised by Finless Foods, a startup developing plant-based and cultivated seafood products.

While a near-doubling of capital raised is impressive, the total for alt-seafood is just a fraction of the total amount for cell-cultivated meat investments. According to GFI, the total cultivated meat investment in 2021 was $1.38 billion, nearly 8x the total for the entire alt-seafood category and 12 times the size of the cultivated seafood. It’s worth noting, however, that a large chunk of that $1.38 billion was capital raised by a small handful of companies raising late-stage growth capital, including $467 million in Series F funding raised by plant-based/cultivated meat pioneer Eat Just.

Total deals were up 20% in 2021, jumping from 20 in 2020 to 24 in 2021. While nine investors were active in the category with two or more investments in alt-seafood, one investor – Big Idea Ventures – stood out with six investments in the alt-seafood space. Big Idea invested across all three categories, plant-based, cultivated, and fermentation. Aqua Cultured, a fermentation-based seafood startup that raised a $2.1 million pre-seed round from BIG and others, was the lone fermentation-based startup that raised funding in 2021 according to GFI.

Former US Defense Official: Cell-Cultured Meat & Other Future Food Technology is Critical For US National Security

Last week, the future food industry was abuzz with the news that China had put cell-cultured meat and other future food technologies in its five-year plan.

According to Matt Spence, the former Deputy Assistant Secretary of Defense for Middle East Policy under the Obama administration, this type of move shouldn’t be all that surprising given how critical many leaders in emerging economies view food innovation to their national security.

“What what used to keep me up at night when I was at the Defense Department running Middle East policy was what type of attack is ISIS is going to launch?” said Spence last month, speaking on a panel (moderated by yours truly) at the Consumer Electronics Show. “How to plan for war with Iran? How are we thinking about going after Osama bin Laden?”

According to Spence, who is now managing director for investment and advisory firm Guggenheim Partners, what worried leaders around the region was very different.

“When I talked to leaders in the region, what kept them up at night was ‘do I have enough food and water to feed my population?’. They are realizing they have a way of producing meat that people want more of as they get wealthier, and others are appetites and demand for luxury change. And the equation doesn’t add up unless we do something new.”

While Spence himself may have come away from these conversations with a greater conviction that food technology is an essential part of a national security framework, the US still has no comprehensive plan around building a food future nearly seven years after he left the State Department. That’s not to say some parts of the US government responsible for food regulation and policy haven’t been slowly progressing on regulatory frameworks for some future food. Still, like with many things driven by US agencies, it’s all relatively piecemeal, and there’s no real cohesive strategy to it.

Maybe that will change. There are signs, after all, that the US government sees this as important, such as the recent grant given to Tufts to create an alt-protein center of excellence. But again, these are small gestures compared to the all-in approach we’ve seen from China, Israel, Taiwan, and other countries.

But who knows? As the Biden administration takes another swing at a slimmed-down Build Back Better bill in 2022 and works on other spending priorities in the second half of his term, let’s hope he and others in his administration begin to work on developing a more comprehensive, forward-looking plan to build a more sustainable food future. I’ve even written down a few ideas he could use to get started.

According to Spence, the timing is good for cell-cultivated meat and other future food technologies to begin making a difference.

“There’s a technology and a change we can make every day by what we eat, and I’m hard-pressed to find other areas of national security that there is that type of ready solution available.”

Just click play below if you want to watch the Future of Meat panel from CES 2022 to hear Matt Spence and others.

GFI: $27B in CAPEX Needed by 2030 to Meet Global Demand for Plant-Based Meat

As the demand for plant-based meat grows, we’re gonna need a whole lotta infrastructure investment to serve up all those patties and nuggets according to a new report from the Good Food Institute.

The report, titled, Plant-Based Meat: Anticipating 2030 Production Requirements, breaks down how much money is needed for plant-based meat production over the next decade. GFI estimates the plant-based meat industry will require $27 billion in cumulative capital spending by 2030 for new plant-based meat manufacturing infrastructure and will require another $17 billion in annual operating costs.

So how do they come up with these numbers? It all starts with their assumption that the plant-based meat industry will account for 6% of all meat consumption by the end of this decade, translating to about 25 million metric tons (MMT) of plant-based meat consumed annually by 2030. That 6% estimate and the corresponding 25 MMTs are based on an assumed 18% year-over-year growth rate for plant-based meat consumption. While one could quibble with that growth rate given the recent slow down from the 2020 surge in plant-based meat growth, I don’t think it’s unreasonable over a longer time horizon.

According to GFI, the bulk of this CAPEX will go into facilities that can pump out the required amount of plant-based proteins to serve the overall demand. These ingredients will be made using modern ingredient extrusion technologies, which are used to process raw materials into structured plant-based proteins. The analysis factors in the building of facilities that employ modern extrusion technologies such as low moisture extrusion (LME), a production technique which results in products like minced and flaked plant-based meat, and high-moisture extrusion (HME), which makes more realistic products that mimic real meat cuts. It also factors in the addition of newer production techniques such as 3D printing.

GFI forecasts the industry will need to build a total of 810 new structured plant-protein extrusion facilities by 2030. They peg the price of operating these new facilities at $17 billion annually, a cost that includes labor, utilities, and the raw materials that go into making structured plant proteins.

While it goes without saying this is a lot of money, it isn’t out of line with infrastructure investments seen by other new and fast-growing industries. The GFI points to the renewable energy industry as an indication of what we should expect in terms of required capital for plant-based meats: It’s important to note that there is ample precedent for this level of infrastructure investment expansion. Global renewable energy capacity investments grew from $40 billion in 2004 to $282 billion in 2019, a 14% compounded annual growth rate.

Finally, it should be noted that all this new capital is only for plant-based meats, which is only one segment of the emerging alternative meat industry. Other alt-protein categories such as precision fermentation or cell-cultivated meat will require additional billions of dollars invested in infrastructure to meet expected demand.

The Counter Asks If Cultivated Meat is a Billion Dollar Boondoggle. It’s a Question Worth Asking.

Last week, The Counter’s Deputy Editor Joe Fassler wrote an article asking whether cultivated meat is the future of meat or just a billion-dollar boondoggle?

It’s a question worth asking. While many believe this new way of producing meat will radically change the food industry over the next decade, the reality is the technology required for scaling cultivated meat production to where it creates enough food to make a dent in the conventional meat market has yet to be invented.

Fassler starts his story with Paul Wood, who doubts the viability of cultivated meat as a traditional meat replacement. According to Fassler, Wood, the one time the executive director of global discovery for Pfizer Animal Health, couldn’t understand “how costly biomanufacturing techniques could ever be used to produce cheap, abundant human food.”

After years of wondering, Wood thought he’d get his answer early this year when the Good Food Institute (GFI) released a techno-economic analysis (TEA) about cultivated meat. The TEA from GFI broke down how the cultivated meat industry would tackle a series of technical challenges that they believed would eventually transform this early-stage technology into a volume producer of high-protein calories for the masses. The report, Fassler writes, “showed how addressing a series of technical and economic barriers could lower the production price from over $10,000 per pound today to about $2.50 per pound over the next nine years—an astonishing 4,000-fold reduction.”

Wood didn’t buy it. He thought GFI’s report trafficked in wishful thinking when it came to how the industry would address the hard technical challenges that needed to be overcome.

There’s some back and forth about the economics of cultivated meat production as Fassler wonders whether investors understand what advancements are needed for them to make their money back eventually, but perhaps the most interesting part of the story is when he looks at whether the science of cellular agriculture will support cell reproduction at the scale needed to make cultivated meat viable. New facilities are needed, and those facilities – called bioreactors – will need to be optimized to the point where contamination and bacteria growth do not ruin whole production runs and make cell-cultured meat production way too costly in the process. It hasn’t been done yet, and yet the entire industry is betting it can be.

I won’t recite the entire Counter article; you should read it yourself, since, after all, it’s an important and well-written piece of in-depth journalism. Instead, I’ll just say it makes a convincing case that viability of scaling cultivated meat production is the central existential question facing this industry, and it’s really THE only question that should be keeping investors in this space up at night.

In some ways, it reminds me of the decades-long debate about the feasibility of using nuclear fusion as a way to produce cheap, environmentally friendly energy for the masses. However, unlike nuclear fusion, investors are acting as if the science for cultivated meat is largely a solved problem. Because of this, money is pouring in, and aggressive timelines are being set.

Eventually, these same investors will insist they make a return on their investments, which means, more than likely, we won’t have to wait decades to find out if they are making a wise -or foolish – bet.

Good Food Institute Awards $4M to Scientists Forging the Future of Alt-Meat

The Good Food Institute (GFI), a nonprofit trying to promote the evolution of alternative protein, announced today that it had awarded $4 million to 21 research projects to advance the study of plant-based and cultured meat. The money came from GFI’s donor-supported Competitive Research Grant Program, which thus far has donated over $7 million since it was founded last year.

The selected projects hail from nine different countries. Eight are tackling cultured (which GFI called ‘cultivated‘) meat and Here’s a quick list of some of the cool projects the 2020 grantees are leading:

  • Faster, cheaper cultured meat production. Dr. Marianne Ellis of the University of Bath, UK is developing a smaller, more cost-efficient production system for cell-based meat. She hopes that this will make cellular agriculture more accessible, including for those in remote locations and developing countries.
  • Turning waste into plant protein. Dr. Marieke Bruins of Wageningen University in the Netherlands is using plant-based proteins upcycled from agricultural waste streams to make super sustainable meat alternatives.
  • 3D printed cultured meat. Dr. Sara Oliveira of INL in Portugal is working on a bioprinted model for cultured meat design. Called M3atD, the model will help her team explore how 3D printing can help accelerate cell-based meat production.

You can see the full list of grantees from 2020 and 2019 here, if you’re interested. But overall, it seems that the most recent crop of grantees are trying to improve four key areas for plant- and cell-based meat: cost, taste, texture, and scaling. As consumers continue to hunger for plant-based meat, and cell-based meat keeps trekking towards the market, these improvements will be necessary to keep flexitarians satisfied, attract new diners, and reduce the environmental footprint of alt-proteins.

Admittedly, alternative meat is probably not the issue at the forefront of everyone’s mind right now. But in a time when your newsfeed is full of articles about pandemics, social distancing and scary outlooks, it’s nice to be reminded that positive progress is still going on to help the planet, and help us eat better too.

GFI: Investment in Plant-Based Meat, Eggs, and Dairy Hits $16 Billion, No Sign of Slowing

Today the Good Food Institute (GFI), a nonprofit promoting alternatives to conventional animal agriculture products, released a report on the state of investment in plant- and cell-based meat and dairy companies. You can download the report and read it in full, but here’s the main takeaway: the alternative protein space is on a massive upward trend, with record amounts of capital invested and high rates of new companies and acquisitions.

While it’s important to be aware of the author here — GFI has a clear agenda to promote alternative protein products — the numbers (below) are convincing. And also, not all that surprising. In fact, it’s in line with what we’ve been reporting all year.

Data from the report shows that alternative protein investment began experiencing a real boom in the past 2.5 years. Of the $16 billion invested in plant-based meat, egg, and dairy companies over the past 10 years, GFI reports that $13 billion of that occurred in 2017 and 2018 alone. We can attribute that to a corresponding increase in consumer demand for plant-based food options, specifically dairy and meat, spurred by trendy startups making tasty-in-their-own-right products like Impossible Foods, Beyond Meat, and Oatly oat milk.

There has also been an uptick in acquisitions of plant-based companies: of the 19 acquisitions in the space since 2009, 10 happened in 2017-18. That number could certainly increase as Big Food companies decide to invest more heavily in alternative protein sources (Unilever purchasing The Vegetarian Butcher; Maple Leaf Foods buying Lightlife and Field Roast). Beyond’s over-performing IPO could also entice these big corporations to spend big bucks.

However, acquisition isn’t the only way to get a bigger piece of the plant-based pie, especially going forward. For example, Tyson decided to end its investment in Beyond Meat to focus on developing its own line of plant-based products. And with its aforementioned successful IPO, Beyond has proven that acquisition isn’t the only end game for alternative protein companies.

The reports also covered investment and growth in the cell-based meat space, though products in that space have yet to come to market so there’s less going on overall. GFI notes that a whopping 11 new cultured meat companies were founded in 2018, bringing the total number of companies to 27. Of course, none of those companies have actually made a public sale. But 2019 might be the year that JUST finally makes good on its promise and brings cell-based meat to market — keep your eyes on Asia.

The plant-based/cell-based investment space isn’t about to cool anytime soon. So far in 2019 Shiok Meats, the Singaporean startup developing cultured shrimp, has raised $4.6 million, Singapore is investing over $100 million in cell-based meat (and other food innovations), and plant-based dairy company Eclipse Foods also closed a seed round. Add in Beyond Meat’s wildly successful IPO and it’s no wonder investors are scrambling to throw money at the alternative protein space. And it’s only May.

You can download the full report here.

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