Cultivated Meat: What will the 2020s bring?

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Cultivated Meat: What will the 2020s bring?
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Master Investor Magazine Issue 57

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As Australia burns, the world is beginning to sit up and take notice of the challenges posed by climate change. While no-one should underestimate the scale of the problem, there are at least some reasons to be hopeful: one of them is the rise of clean meat. 

Climate change is hot right now. It’s hot because our planet is burning: the extended bush fire season in Australia has caused the deaths of approximately half a billion wild animals and counting, while an estimated 15.6 million acres of land has been devastated and many homes and habitats abandoned. All five of Australia’s hottest years have occurred in this century, the hottest being 2019. We can expect these extreme weather cases to occur at an increased intensity and frequency during the next 10 years.

But climate change is also hot in an investment sense, as green stocks will become the mega trend of the 2020s as we seek investments in sectors that will help to slow climate change whilst supporting the 8.5 billion people living on the planet by the end of this decade. As pointed out by Blackrock CEO Larry Fink, the climate crisis will reshape finance. The rise of conscious capitalism will endure.

Investments in technologies such as electric cars, AI and machine learning, solar, wind, nuclear, circular economy enabling tech, crop improvement using CRISPR, new sources of protein – plant-based, fermentation-produced and cultivated meat – will become mainstream. All will facilitate the world adapting to there being more mouths to feed and fewer habitable places.

Veganuary

The beginning of the decade, as with other years, sees many shift their diets for a full vegan month – Veganuary. Joker actor Joaquin Phoenix recently called out the meat and dairy industry for their impact on climate change.

Numerous start-ups, restaurants and supermarkets are all flooding into the meat-free sector due to low barriers to entry and limited technology required. Marks & Spencer (LON:MKS), Waitrose, Asda, Tesco (LON:TSCO), Morrisons (LON:MRW), Sainsbury’s (LON:SBRY) and Aldi have all boosted their vegan ranges to aid the 370,000+ people who have signed up to the vegan pledge this month thus far.

It seems every other advert on London billboards features a meatless creation. Subway’s launch of its Meatless Marinara, Greggs’ ‘drop’ of its Meatless Steak Bake and KFC’s Zero Chicken Burger are all being publicised.

However, vegans beware, the KFC chicken-less chicken burger looks so convincing, even staff members have mixed up orders, serving up the real deal to customers accidentally. Imitation meat has also become visually more realistic thanks to NovaMeat’s recent 2.0 meatless steak: 3D printed and made only of vegetable proteins. Improvements will only continue.

Impossible vs. Beyond: the war continues

Beyond Meat’s (NASDAQ:BYND) stock is up by 54% since the beginning of 2020, did Snoop Dogg help? The ‘Snoop Dogg-Dunkin’ partnership’ is a campaign to promote the ‘Beyond D-O-DOUBLE G Sandwich’ at the Dunkin’ Brands Group Inc (NASDAQ:DNKN) restaurant chain.

Or is it perhaps the murmur from the company that they intend to expand to mainland China this year?

Not only does BYND have its eye on the Chinese market, Impossible Foods has unveiled an animal free version of their favourite meat, pork. At CES 2020, Impossible Pork was revealed, made from all plant-based ingredients, soy, sunflower, coconut oil and its infamous recombinant heme protein. A decent nod in the right direction as we saw 40% of the pig population in China die in the wake of the African Swine Fever outbreak.

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Master Investor Magazine Issue 57

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Also at CES 2020, was Meatable, the latest addition to the Agronomics (LON:ANIC) portfolio. Meatable is one step ahead of Impossible Foods, since they are growing genuine pork meat using cells grown in bioreactors. However, CES attendees will have to wait till next year for cell-based pork prototypes.

Agronomics update

ANIC’s share price has climbed 100% in the past month and the portfolio now comprises nine companies – seven of which exist in the cultivated meat sector. The company co-led LegenDairy Food’s Seed Fundraising round in December alongside M Ventures, Merck’s strategic venture arm.

US companies Borden Dairy and Dean Foods have both filed for bankruptcy in the past few months, reflecting the decline in liquid milk consumption and intensified competition from plant-based milk alternatives such as Oatly. LegenDairy Foods will be producing casein and whey proteins found in cow’s milk, which will be used to create a completely new category of cheese – made efficiently and cleanly, with no cow involved.

Looking at the cultivated meat sector, I predict 2020 will see total capital provided double at a minimum as many companies complete Series B fundraising rounds in order to facilitate the development of manufacturing facilities across the world. Companies will begin seeking regulatory approval, with commercial products then launched in 2021 at a small scale.

Laura Turner

Laura Turner is an analyst at the AIM-listed investment company Agronomics, which targets life science investments such as the emerging alternative food technology. She graduated from the University of Oxford, with a Master’s degree in Chemistry. 

Laura@agronomics.im

For twitter updates follow @AgronomicsLtd

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