Cell-Based Meat: Moonshot or Pipe Dream?
Last week, Eat Just (who recently began selling cell-based chicken to consumers in Singapore) announced that their meat division (Good Meat) had received an additional $97 million in investor funding. This now marks Eat Just’s funding as the largest ever raised for a cell-based meat company. The announcement also included the addition of former USDA Secretary Dan Glickman to Good Meat's advisory board. Also, Jim Borel, former executive vice president of DuPont, is joining Good Meat's board of directors.
The Good Food Institute (GFI) announced last week the start of their $5 million Competitive Research Grant program. The program has awarded funds to spur R&D research into alternative protein development for climate change. The company said 22 international companies would benefit from the grant, including 13 focused on cultivated meat, two on fermentation, and seven on plant-based meat.
So What?
Investigative food website The Counter published and eye-opening profile of ex-pharmaceutical executive Paul Wood and his quest to uncover the truth behind the claims of cell-based meat. Wood, who has a PhD in immunology and started up Pfizer’s Animal Health division, is highly skeptical of the projections of cell-based meat startups and those by such groups like GFI. So much so, in fact, that Woods hired an experienced consultant (pharmaceutical bioreactor designer Huw Hughes) to investigate one of the seminal GFI studies that optimistically reported that cell-based meats would have a massive effect on climate change and be cost-competitive (and likely spurred the investment we see today). What Hughes found was that the GFI report “projected unrealistic cost decreases, and left key aspects of the production process undefined, while significantly underestimating the expense and complexity of constructing a suitable facility.”
In fact, a previous study completed by the chemical engineer David Humbird for the group Open Philosophy had concluded the same thing. Speaking to The Counter, Humbird summed up his findings regarding bringing cell-based meats to scale by saying, “it was hard to find an angle that wasn’t a ludicrous dead end.”
So, what’s really going on here? Are we just hearing the grumblings of myopic technologists? People who can’t see the multitude of breakthroughs right around the corner due to the Manhattan Project of venture capital in alt meat? Or are we on the precipice of a food industry revelation that will reverberate like Theranos did through bio-tech, potential collapsing the entire cell-based meat industry?
If I had to guess, I’d say a bit of both. Cell-based meat is an over-zealous area right now. Too many hopes are being pinned to its success. Everyone from environmentalists to industrialists are claiming it’s the panacea that will usher in cleaner air, safer food and faster supply chains. We should all be wary of any nascent technology that promises so much, to so many, so early.
The truth is, cell-based whole meat analogs, at scale and price parity with animal protein is probably 20 years away, if not longer; not in the perpetually ‘next few years’ that these companies promise. However, that doesn’t mean its not a worthy effort. But its not going to be ‘the solve’ for all of humanity’s issues. Like all endeavors like this, it will likely be scaleable but expensive for a very long time. An all cell-based meat 5-star restaurant is undoubtedly right around the corner, where the rich and famous can feel great about doing their part for the environment while eating $600 alt-filet mignon (the complete opposite of Quorn’s new all-plant-based nugget pop-up shop that opened in London: SmugNugg) .
What should be more interesting to the food industry right now is why cell-based meat captures so much attention and hope. What are the drivers and motivations of this zeal and how can companies direct it toward plant-based and other products that have a better chance of reaching scale and price-parity in the next few years? Even if cell-based meats deliver in 10 years, that’s likely too long for today’s cell-based consumer evangelicals. Plant-based companies should be worried that when the excitement of cell-based lapses, will it bring down plant-based with it?
Chobani Jumps the Perimeter
Chobani announced last week that they were partnering with non-profit company Edesia (makers of Plumpy’Nut, the profoundly impactful nutritional supplement for malnourishment) and donating all profits from their new peanut butter spread to the company’s relief efforts.
So What? Initially, this seems like an odd move for yogurt-maker Chobani. Even with their recent brand stretch moves from yogurt to oat milk and coffee creamers, with these efforts there was at least a cold chain and dairy through line that kept their story consistent. Moving to center of store, with a product they have no experience with, seems strange. So much so that, in a recent interview with FoodDive, the company’s president, Peter McGuinness, came out and addressed the elephant in the room, "There is nothing random about this [new product]. This is a very deliberate thing around an important issue we care very deeply about."
I believe them, there is nothing random about this. Chobani’s move to be this generations’ Newman’s Own makes logical sense. It fits with the brand persona they’ve cultivated over the years of being a big, small company that cares about delivering on authenticity and social issues before the bottom line.
However, it also is a ruthless strategic play to differentiate themselves against the incumbants in the category and an attempt to not make the mistakes they made previously with child-targeted marketing.
Let’s be honest, this is a shot across the bough specifically at Kellogg’s RX protein spreads and every other peanut butter player. Yogurt category sales have been dropping precipitously for years, with only alternative dairy seeing any signs of growth. While Chobani has made valiant efforts in oatmilk yogurt, they realize that real growth is only going to come with diversifying their portfolio. With a brand that stands for clean protein, nut butter makes sense for Chobani, but they recognize that it is the proverbial red ocean of major players.
My guess that Chobani saw an opening in delivering a ‘cleaner’ peanut butter product for kids through high protein fortification, but they needed to do it in a way that separated them from the inevitable RX expansion of their protein spreads with the RX Kids brand. Their branding on the previous launch of Gimmies, and even their current Little Chobani Probiotic, are very similar to RX Kids. Without an additional hook to grab parents at shelf, they’d likely stand no chance of succeeding. However, all things being equal, the ‘give back’ promise along with the ‘clean’ fortification may be enough to clear a path for the yogurt-maker in this new realm. RX Kids should be mindful—if this proves successful, bars are mostly likely next.
The Battle for Customer Relationships (i.e., data)
Albertsons announced last week that they would be the first major grocery chain to launch shoppable video experiences and livestreaming with their partner Firework. The platform will allow the company and consumers to create video content with shoppable, embedded links for enhanced interactivity. Firework boasts an ecosystem of 1 billion active monthly users.
Walmart announced last week a new partnership with media giant Meredith Corp. The new deal will allow consumers to shop and plan meals via content on Meredith’s portfolio of media brands (e.g., EatingWell, Allrecipes, Parents, Better Homes & Gardens, and Real Simple). Using Meredith’s AI-driven tech, consumers will receive personalized ads and recommendations. The tech extends to smart assistants like Google Hub and to shoppable TikTok videos.
So What? When Netflix first started, sending DVDs to your house, the major movie studios were more than happy to support the new platform. Just like their agreements with other rental companies (e.g., BlockBuster), the studios were happy to collect their fees and weren’t concerned with the future direction of the startup. So, when Netflix made the controversial leap to streaming (yes, it was controversial at the time), the studios just continued to ride the gravy train and collect their cash.
However, about five years ago, studios started to question this strategy. With Netflix making their own content, winning awards and drawing fans, was it a good idea to continue to support a company that could be your potential competitor? While it likely was hard to financially swallow in the short term, companies like Disney, eventually pulled their titles off the streaming service and launched their own platform. Now they control the relationship with consumers and, much more importantly, they get the first-party data from the interaction.
What happened with Netflix and Hollywood studios is now happening with grocery retailers and media platforms. Companies like Albertsons and Walmart know that every customer interaction via media platforms that they don’t control represents data they can’t see or fully use. As customers become more reliant and comfortable with digital tech, companies like TikTok or Facebook start to gain too much gatekeeping power. Instead, these retailers know they need to carve out their own, unmetered flow of customer contact or risk losing control of the situation.
I also suspect that these retailers are playing catch up before Amazon really gets serious about customer interactive shopping. The amount of money and influence Amazon could wield in this space could radically alter the grocery landscape.
Of course, the situation retailers now find themselves in with media companies should feel familiar to them. It’s the same leverage they’ve had over manufacturers for years. Now that retailers are feeling the squeeze, it is possible they might be more amenable to partnerships with bigger CPG companies—or not. It will be interesting to see how this turns out.
Brands I’m Watching
Iconic salad dressing/dip brand Hidden Valley Ranch is going all in this year…for Halloween?! The brand is offering a HVR costume so that you can dress like your favorite dressing. Going as a couple? The company also sells a pizza costume to compliment, for those that are into that sort of thing. However, the most surprising launch is a pumpkin-styled bag of tiny pouches of dressing, ready to slip into the bags of waiting trick-or-treaters.
So What? I know that the Hidden Valley Halloween treat pouches are likely just brand swag, akin to their Holiday onesies or pet harness. However, what if the move reveals a little of Hidden Valley’s longer term strategy?
My guess is that Hidden Valley has a serious private label problem. Yes, people love lowercase ‘ranch,’ but they’re not always asking for uppercase Hidden Valley Ranch. In fact, for younger generations, they might not really know there is a difference. If you look at HVR’s homepage, with its TikTok recipes and new plant-powered options, it’s clear the brand is trying to appeal to the young Millennial mom or older Gen Z. So, HVR treat pouches might just be an ironic attempt at brand fun for this target. However, I’m also thinking this might be a clever tactic to get young kids familiar with the brand. If HVR can associate their product with a treat, it might instigate ‘kid nag’ for the brand and halt brand erosion. Now, I don’t think some Halloween treats alone will do that, but if they follow it up with consistent campaigns aimed at ‘being the good mom’ for getting the dressing that makes kids happy, it could move the needle.
KFC is offering Premium Biscuits for a limited time only at their Japanese stores. The biscuits are made with cultured butter and are said to be especially flavorful and crispy on the outside. The new biscuits go for $2.10 each, a significant upcharge for the flavor.
Japanese ice cream maker Akagi Nyugyo Co. is launching a new stick bar called kajiru batā aisu, which literally translates to "ice cream like nibbling on butter." Made from cultured butter, which is having a moment right now in Japan, the bar has been selling out at grocery and convenience stores.
Popeye’s Chicken is launching a new meal in their Singapore restaurants, Fizzy Pop Chicken. The fried chicken comes with a special sweet, spicy and savory sauce that's made with a mix of tomatoes and chilies. The chicken also comes with a packet of fizzy seasoning (basically Pop Rocks) that is meant to be sprinkled on top prior to eating.
Japanese snack retailer Bokksu is offering an innovative new treat to their site and subscription boxes. Chocolate-infused strawberries reverse the typical confection and, instead of dipping berries into chocolate, the company freeze-drys them and ‘pushes’ chocolate inside. The result is a uniquely smooth and crunchy texture.
So What? When I run a product ideation for US or European CPG clients, I almost always include a stop at an Asian grocery store. The problem with defaulting to a local Kroger or Asda is that everything in these stores was developed within the echo chamber of corporate development. Kellogg’s looks at Nestle, General Mills looks at Campbell’s and ideas and inspiration just end up being a giant rat king of recycled trends.
However, Asian manufacturers are working with a different set of inputs. Research has shown that while Western cuisines tend to lean toward pairing flavors together that are complementary and share components, Asian cuisines pair flavors that are opposed. While the Western approach makes sense, the Asian approach offers a wider palate to play with. On top of this, Asian cuisines tend to be more adventurous with texture. Anyone that has been to an amusement park in China can attest to the fact that dried jelly fish would not be snack you’d see at DisneyLand.
Western companies need to pay attention to Asian sensory trends. Not just for global portfolio expansion, but to break out of the sameness that can infect their thinking. The old innovation saying “Get out of the building,” should be refined to “Get out of the continent.”