The financial plight of cell-cultured aspirant meat producers was highlighted at the recent Future Food-Tech Innovation Summit held in London. Data assembled by Preliminary Ag Fund indicated that venture capital inflows peaked at $1 billion in 2021 dropping to $800 million in 2022 and then falling to $180 in 2023. Only $50 million has been raised year-to-date.
The tightening of purse strings by venture capital investors is attributed to the failure of startups to achieve commercial scale production using bioreactors.
An early entrant, Mosa Meats of Holland is still receiving an inflow of financial support but Robert Jones, VP global public affairs observed, “There’s a valley of death we are not going to cross as an industry without a massive infusion of public investment.” There is some interest in using public funds to support producers. Jones noted $65 million designated by the Government of Holland in 2022 that has yet to be disbursed. Great Britain appears disposed to support research on alternatives to meat although direct funding of individual companies appears unlikely.
Peter McGuinness, CEO of Impossible Foods a producer of plant-based meat alternatives opined that the emerging cell cultured meat industry was responsible for self-inflicted harm with unsubstantiated claims and hyping projections of future demand. From inception, cell-cultured meat has been a case of over-promise and under delivery.
Apart from the technical restraints to achieving commercial-scale production, a number of nations in the E.U. including France and Italy have passed laws banning sale of cell-cultured meat. The perceived threat to conventional beef, pork and chicken production has motivated state laws in the U.S. banning sale of cell-cultured meat or imposing onerous labeling requirements.
McGuinness is correct in his assessment that “the early rhetoric was good for raising money in a VC context but at the same time the language being used was inflammatory and was really not received well by a lot of actors in the conventional industry.” Negative publicity followed revelations of deception by Upside Foods, successor to Memphis Meats. The egregious self-promotion of companies including Eat Just operated by Josh Tetrick did not help image of cell-cultured meat. After termination of activities in Singapore his enterprises are mired in lawsuits over breach of contract and failure to pay for equipment designed and fabricated by suppliers. Creditors of companies supplying aspirant manufacturers should have performed due diligence and exercised the principle of caveat vendor.
Going forward there will be a lot of stainless steel tanks, tubes and paraphernalia selling for cents on the dollar.