Richard Gill, CFA, reviews “Billion Dollar Burger”, a book that explores the clean meat sector, its history, potential benefits, challenges and the group of entrepreneurs and scientists on a mission to bring cultured meat to the masses.
According to the Food and Agriculture Organization of the United Nations, in 2014 an estimated 50 billion chickens, 1.5 billion pigs, 500 million sheep and 250 million cows globally were killed for their meat. And these figures have been growing rapidly. While the world population has doubled over the past 50 years, meat production has more than quadrupled as incomes increase and individuals adopt more protein-rich westernised diets. With the United Nations forecasting that agricultural production will have to rise by 70% by 2050 to keep pace with rising populations, the world has a huge challenge to deal with.
The first ’synthetic’ burger, a five-ounce patty of cow muscle grown in a laboratory, was created back in 2013.
The current situation, combined with ethical concerns about animal welfare and rights, has led in the past few years to the development of a fascinating new industry − one which is looking to create an alternative, or cultured, ’meat’ in a lab. The first ’synthetic’ burger, a five-ounce patty of cow muscle grown in a laboratory, was created back in 2013 by Dr. Mark Post, a Dutch researcher at the University of Maastricht. It was made from cow stem cells, with the extracted animal cells cultured in a nutrient broth before being assembled for consumption. The burger was two years in the making and cost an estimated $325,000 – financed by Google founder Sergey Brin.
At a tasting event in London, opinions on the burger were mixed, with some lauding the credible appearance but criticising the taste and texture – perhaps because the burger contained no fat. Despite the criticisms raised at this unique lunch, the seed was planted for the cultured-meat industry.
Almost seven years on from the tasting, the cultured-meat industry has exploded, with a number of firms around the world now looking to develop their own products for both ethical and commercial reasons. In Billion Dollar Burger, author Chase Purdy takes a look at this emerging sector, its history, potential benefits, challenges and the group of entrepreneurs and scientists on a mission to bring cultured meat to the masses. Purdy is a New York-based writer covering future foods and cellular agriculture. His stories have appeared in The New York Times and other publications in the US.
Much of the book covers the author’s conversations with and the activities of Josh Tetrick, co-founder and chief executive of JUST, a San Francisco-based firm which already has a range of plant-based foods and is looking to commercialise its own ’clean meat’. At JUST, Tetrick is exhibiting true entrepreneurial spirit, combining his animal-welfare beliefs with business opportunities.
On the benefits of cultured meat, Dr. Mark Post has claimed that consumers will one day be able to grow their own meat at home. Perhaps most importantly for some people, including Josh Tetrick, Dr. Post estimates the global cattle population could be reduced from 500 million to around 30,000 if cultured meat replaces traditional meat, massively reducing the need for their slaughter. The huge resources needed for their husbandry could also be substantially reduced, as could the vast environmental impact, with an estimated 14% of global greenhouse emissions linked to meat production.
Dr. Mark Post has claimed that consumers will one day be able to grow their own meat at home.
As the classic Tim Vine joke goes: “So the butcher said to me: “I bet you £5 you can’t reach those pieces of meat on the top shelf”. ”I’m not gambling!” I said: “The steaks are too high”. The stakes are high too for the first company to successfully develop and commercialise a viable cultured-meat product, with the global meat market estimated to be worth $1.8tn – about the same as the annual GDP of Canada.
While the benefits of cultured meat are clear, there are still many challenges for the industry to overcome – as yet there is no commercial product on sale. In 2013, the first lab-grown burger cost around $1.2m per pound to produce. As the scientists refine their processes, this has now fallen to around $50 per pound. That’s a 99.996% fall but production expenses are still far too high to create a mass commercial product – four ASDA extra-special beef burgers weighing a total of a pound can currently be snapped up for just £2.50.
But cost isn’t the only problem the industry faces. Questions still have to be asked about whether consumers will accept meat grown in a lab as a regular part of their diet, with many having already branded it as fake and unnatural.
Additional ‘real-world’ challenges come from meeting the stringent rules of the raft of food regulators and governments around the world. Quoted in Quartz magazine in May 2019, Chase Purdy said: “The technology is ready—the science has been there for a while. It’s really all about governments around the world figuring out how to regulate these products.”
While not an investment book as such, Billon Dollar Burger frequently covers the economics and commercial potential of the food industry and will no doubt help readers to identify interesting food- technology companies looking to take advantage of the move away from traditional meat. In the US for example, plant-based meat brand Beyond Meat listed on the NASDAQ in 2019, raising $240m, with the shares having risen from $25 to the current $158. Investors are keenly awaiting a mooted IPO of rival firm Impossible Foods.
Billion Dollar Burger is a fascinating read, written by an author who is passionate about the subject and who has a journalistic flair that some books written by investment professionals often lack.
Meanwhile in the UK, AIM-listed food-technology investor Agronomics recently invested €1m in Meatable, a Dutch, cultivated-meat company aiming to deliver at scale cultivated meat that looks like, tastes like and has the nutritional profile of real meat. At the time of the investment, chairman Richard Reed of Innocent Drinks made the prescient observation: “… coronavirus has highlighted that the exploitation of animals for their meat could be a major risk for human health and perversely the stability of the food supply chains”.
Overall, Billion Dollar Burger is a fascinating read, written by an author who is passionate about the subject and who has a journalistic flair that some books written by investment professionals often lack.