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Why are some of the world’s largest meat processors investing in lab-grown meat?

James Nason, September 11, 2017

A lab-grown meat burger made from Cultured Beef.

SOME of the world’s largest meat processing companies say recent decisions to pour funds into small start-ups developing lab-grown meat, or plant-based alternatives to conventionally farmed meat, is a response to growing consumer demand for sustainably-produced food.

In August US-based meat giant Cargill was one of several investors, including Microsoft founder Bill Gates and Virgin Group founder Richard Branson, which helped lab-grown meat company Memphis Meats to raise $17 million.

Memphis Meats described the successful fund-raising round as “a historic milestone in bringing real meat – without the animal – to the table.”

Cargill’s decision to invest in the unconventional meat producing business, followed a similar investment by US beef, pork and poultry giant, Tyson Foods, which in late 2016 acquired a five percent stake in plant-based meat company Beyond Meat.

Memphis Meats uses a process of growing meat in tanks by feeding oxygen, sugar, and other nutrients to living animal cells.

The California-based company says it is yet to commercialize a product but has already produced beef, chicken, and duck from animal cells.

The company has reportedly reduced the cost of producing a pound of meat so far from $18,000 to $2400, according to reports in Meatingplace and The Wall Street Journal, and says it will use the latest $17m it has raised to accelerate product development and further reduce production costs.

Why invest in businesses seemingly determined to destroy conventional meat production?

So, why would major meat companies want to invest in businesses that seem determined to destroy the conventional meat farming and processing sector upon which their own businesses are based?

That question was recently put to the Tyson Foods CEO Tom Hayes by a Fortune magazine journalist in a web-broadcast video interview.

The Tyson CEO’s response reflected a bigger picture view that Tyson is not just in the meat business but rather the protein business – whether it be animal or plant-based protein – and is very focused on continuing to satisfy changing consumer preferences.

“I would say they do not want to totally destroy us,” Mr Hayes said with a chuckle when asked why his company was investing in a start-up some would view as a direct competitor.

He further explained:

 “We believe that protein is going to continue to be in demand. We don’t think of just animal protein, 96pc of consumers in US eat animal protein, but all kinds of protein. So it could be vegetable based, it could be any sort of emerging protein… We’re focused on the consumer and what they want. We have set up a team that focuses on either new technologies with new food types like Beyond meat or it could be sustainability technologies, things that get food waste out of the system. So that has been a big focus for us and we are looking for other investments that will bring us up the curve in terms of sustainable food production at scale.”

Asked how big he thought the alternative meat production business could be, Mr Hayes said it was small today, and animal-based meat was still the most-efficient way to deliver protein.

However, plant based meats were growing now, and a lot of good work was being done in that space.

This was not something Tyson was “trying to propel”, he said, as much as “being behind it for all the right reasons which is satisfying consumers”.

‘Our goal is to provide a complete basket of goods to our customers’

Cargill, in a statement announcing its investment (the amount of which was undisclosed) in Memphis Meats, took a similar line, explaining that its investment reflects a commitment to growing its protein portfolio and “offering protein choice to its customers and consumers”:

“Our goal is to provide a complete basket of goods to our customers. We will do this by growing our traditional protein business, entering into new proteins and investing in innovative alternatives” Cargill Protein group leader Brian Sikes said.

“Our strategic alliance with Memphis Meats is an exciting way for Cargill to explore the potential in growing the cultured meats segment of the protein market. As a leading and trusted source for wholesome, sustainable and responsibly produced protein, this investment fits nicely with our customer-first approach to grow our portfolio.”

Cargill emphasised that it remained fully committed to growing its traditional animal protein business, reinforced by recent investments of nearly $600 million in convention protein operations in North America alone. These investments underscored Cargill’s “overarching commitment to animal protein”, the company statement said.

“At Cargill, we recognize that meat is a core part of consumer diets and central to many cultures and traditions,” Mr Sikes said. “We believe consumers will continue to choose meat as a protein source, and that is why we are focused on bringing it to their table as sustainably and cost-effectively as we can. Our traditional proteins, as well as new innovations like cultured meats, are both necessary to meet that demand.”

Cargill executive vice president Todd Hall said the company had chosen to invest in Memphis Meats because “its proven technology and potential to commercialise set it apart in the cultured meat protein space”.

“Memphis Meats shares Cargill’s mission to strive to provide sustainable protein options, as they provide sustainable cultured meats (beef, chicken and duck products), produced from animal cells.”

Beyond Meat: ‘we both intend to serve the changing consumer’

The startups themselves also see value in investment from traditional meat companies. Beyond Meat CEO Ethan Brown wrote in a recent blog that he “doesn’t expect to change Tyson, and nor does Tyson expect to change me”:

“Instead, we both intend to serve the changing consumer. On my own beliefs, I want to be clear. I believe that plant-based meats have human health (World Health Organization) and climate benefits (Goodland & Anhang) benefits…. Do I think Tyson and its executives are the enemy because they have a radically different view of our relationship to animals? I don’t. I realise that this may disappoint many people. In fact, I’ve found the Tyson executives with whom I’ve interacted to be principled and constructive people. It is true, their beliefs don’t comport with mine on animals. Yet neither do those of my broader family, the vast majority of my friends, colleagues, neighbors, and many others I greatly respect, all of whom eat animal-based meat. The good news is that Tyson and I can-and do—agree on many other things including: the need for sustainable protein for a growing global population; that innovation can fuel growth and profit; and that business best serves the consumer by offering choice.”

 “Clean meat”

Dr Mark Post with his cultured beef patty in 2013.

When the first lab-grown beef burger was introduced to the world four years ago some headlines branded the petri-dish creation “Frankenbeef”.

However, in a sign that the lab-grown meat movement is gaining an edge in the public relations battle, a new term is now appearing in media articles about artificially-grown meat: “clean meat”, which implies by extension that meat from livestock grazed naturally on farms is ‘dirty’.

Many news articles reporting on the rise of companies such as Beyond Meat and Memphis Meat accept without apparent challenge the view that conventional livestock production is bad for the planet, animals, and human health, despite the ready availability of many sources of information challenging these claims.

One source still often-cited to underpin statements that livestock farming is bad for the planet is the 11-year-old FAO Livestock’s Long Shadow report, which produced a widely-reported conclusion that farmed livestock production is responsible for more greenhouse gas emissions than all the world’s cars, planes, trucks, ships, and trains combined.

This is despite the credibility of the 2006 report having come under serious challenge from other scientists who demonstrated that to reach that conclusion, the report’s authors unfairly attributed all direct and indirect greenhouse-gas emissions associated with meat production to farmed livestock, including fertiliser production, land clearance, methane emissions and vehicle use on farms, while their transport figure only included the burning of fossil fuels.

Whether the names ”Frankenbeef’ or ‘Clean Meat’ stick, this trend is gaining momentum, with Memphis Meats indicating after its big fund-raising round that it hopes to have lab-grown meat commercially available by 2020.

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Comments

  1. Rod Dunbar, September 13, 2017

    We also agree with John Gunthorpe; the LPA and the NVD must be separated so we can all move and trade cattle without applying the LPA Contract and its draconian provisions

  2. Rod Dunbar, September 13, 2017

    Simon; but you’re saying just that! Your saying that with the NVD it is somehow a Law; well mate it is not!! The Rules re LPA are not law either in any State; LPA operates under a common law contract; the problem is that you are making an assurance under a Contract as a layperson.

    The question you should be asked is – do you personally have the qualifications to make the sort of assurance that you allege you can make on the NVD regarding pesticide residue, and/or any other contamination or diseases under the LPA Contract?
    More importantly do the 220,000 Australian cattle producers, who have been forced to comply with NVDs under LPA have the qualifications to legally make such assurances? I am absolutely certain that they do not!

    Have you sort legal advice on your exposure to the Indemnity (without Indemnity Insurance) contained within the Contractual arrangements of LPA? You see its not MLA or LPA that is guaranteeing you if you are in compliance with LPA; it is you indemnifying them if you are consequently found to be non compliant with LPA; your also indemnifying the processors and the exporters in Australia and the foreign importers and the foreign wholesalers, consumers … etc…, without limit.
    The proceeding to obtain the damages from you would also most likely be within that foreign country!!! The NVD will not prevent that proceeding; they only have to prove your Negligent and that could well turn on your qualifications to sign the NVD initially.
    That is the reason that RMAC and AMIC have enforced LPA/NVDs, it transfers their Liability back to us.

  3. Simon Frankston, September 13, 2017

    John – neither is you putting your hand on your heart and promising that your product is what you say it is. You cannot reasonably expect consumers in foreign countries to accept that what they are about to eat is safe just because you say so. I don’t understand the opposition to something that is not difficult, time consuming or expensive, yet gives us access to markets around the world.

  4. John Gunthorpe, September 13, 2017

    Our members call for LPA to be unlocked from NVDs so we can move stock without the need to complete an LPA. By making the Biosecurity Plan part of the LPA Cattle Council, Animal Health Australia and MLA are making it mandatory for 220,000 producers to prepare a plan. Don’t they understand producers already do all they can to reduce disease risk on-farm. Why introduce more red tape to our business. Cattle Council must act to stop this unnecessary and confusing intrusion into our business.
    Simon, the fallacy of your argument is that a piece of paper in the bottom drawer is not production assurance. Australia’s reputation is established over years of successful trade of quality beef products to meet overseas market requirements. I remind you that the Australian beef industry resolved the minimum residue level complaints from the USA in the 1980s over dieldrin and other organochlorides with a traceback system that relied on tail tags.
    John Gunthorpe
    Australian Cattle Industry Council

  5. Eion John McAllister, September 12, 2017

    Despite trying to put the lid on the opposition to the new LPA arrangements it still bubbles along. There is legitimate , reasoned and reasonable opposition to this move but it is not engaged with and the industry organisations simply steam roll on with their actions and expect people to suck it up. Contempt is displayed and contempt is engendered.

  6. Rod Dunbar, September 12, 2017

    Simon – your believing your own propaganda – none of our competitors have any such assurance – its there because MLA offered it free but at our, the producer’s expense -its primarily price that drives any market particularly when the country of origin’s Government guarantees the meat by regulation. Apparently you and MLA are saying that Guarantee does not exist??? – why do we have to do that as individual producers do you think?

  7. Simon Frankston, September 12, 2017

    Brad – every single overseas market that we sell to demands a level of assurance that our product is safe to eat and is of the quality that we market it as. To think that we can maintain market share without some level of quality assurance or system to guarantee our product is naive.

  8. Sam Burgess, September 12, 2017

    I think everyone is missing the point. The CEO’s behind the companies promoting this mush and the boffins that invent this “stuff” with natural or unatural nutrients won’t be eating it. It is for masses and the big end of twin will still enjoy a wholesome delicious Steak or Burger ! While telling us there no problems at all eating the mush!

  9. Val Dyer, September 11, 2017

    And from where are the additive nutrients derived? Naturally or chemically?

  10. Val Dyer, September 11, 2017

    Probably for the same reason that fuel companies invested in solar. To influence outcomes?

  11. Brad Bellinger, September 11, 2017

    Simon LPA did not help us when we were getting $1.20kg 3 years ago.
    LPA is irrelevant on the world beef market. USA is killing us in Japan. Indian buffalo meat in Indonesia and South America in China all without LPA.
    Ask your average housewife in Australia who is buying 40% less beef than in 98 if she thinks LPA is vital, hasnt even heard of it.

  12. Paul D. Butler, September 11, 2017

    Misguided thinking……..based on the old adage…….”what business are we in?”

    They got it wrong…….and will be in the “making the world sick” business……if they keep up their misguided efforts……no matter how much they spend.

  13. Simon Frankston, September 11, 2017

    Paul – LPA is the framework that lets us sell our beef to the world. I think that counts as a benefit. And for the record, a $0.95 NVD that allows you to sell a consignment of your cattle for $3.50/kg is hardly expensive, no matter how tight one is with money. Even the $66 fee to re-accredit for LPA over 3 years is half a carton of beer per year. Seems like a good deal to me.

  14. Richard Sellers, September 11, 2017

    Wonder if this could be MSA graded.

  15. Paul Franks, September 11, 2017

    If MLA got involved in it they could quickly shut it down through some LPA type system requiring lots of expensive paperwork with little benefit.

  16. Steve Barnes, September 11, 2017

    Maybe MLA can invest in it and match with their 3D mush printing machine!

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