Could lab-grown ingredients could be the future of food?

The UN food commodities price index rose the most in February since 1961 after an already staggering 23.1 per cent rise in 2021, putting the most vulnerable populations at risk.

The gauge that tracks the price of meat, dairy, cereals, oils and sugar is impacted by the crisis in Ukraine and sanctions on Russia on top of the existing Covid-related factors such as supply chain disruptions, logistic strains and pent-up demand. One of the long-term impacts will be an acceleration of the adoption of new technologies as they help to increase the yields while reducing the impact on the environment.

Lab-grown food is also a clear beneficiary, as the price parity with conventional agricultural products will be easier to meet in an inflationary environment.

Lab-grown food: From fiction to reality 
Lab-grown meat is produced by in-vitro cell culture of conventional animal cells. While the first tasting of a burger is not yet 10 years old, the idea and science behind cellular agriculture is not new. In his 1931 essay Fifty Years Hence, Winston Churchill wrote: “We shall escape the absurdity of growing a whole chicken to eat the breast or wing, by growing these parts separately under a suitable medium.”

In 2008, PETA, the American animal rights organisation, offered a $1m prize to the first company to bring cultured chicken meat to consumers by 2012. Many searchers worked on it, but the deadline eventually expired without a winner. However, awareness was ignited. Just a year later, Mark Post, professor of tissue engineering at Maastricht University in the Netherlands, created the first cultured beef burger patty. It was made from over 20,000 thin strands of muscle tissue, cost over $300,000 and needed two years to produce.

The burger was tested on live television in 2013 and the food critic who sampled it said: “There is quite some flavour with the browning…it’s close to meat, it’s not that juicy, but the consistency is perfect. This is meat to me…”

The market debut really started in 2020 with the first sale of cultivated meat in Singapore. Twenty-three startups were created in just the year 2020, representing more than $350m of investment, nearly doubling all the cumulative previous investments, according to the Good Food Institute.

Is it the future of food? 
A study conducted by Post, who made people test the products, revealed that the vast majority of people are ready to buy them even at a premium of 40 per cent compared to traditional meat. However, the ultimate goal is to get taste and price parity. Regarding the taste, we have unfortunately not yet been able to try the products.

When it comes to pricing, the Israeli company Future Meat Technologies announced in December 2021 a cost for a chicken filet of $17 per kilo compared to an average price of $8 per kilo for farmed chicken. In order to reach parity, price would need to go down by more 50 per cent to include all the other relevant costs, such as packaging and transportation. The number one reason why people are ready to buy it at a premium and why the world needs lab-grown food is the environmental footprint of this new technology.

According to Future Meat Tech, this production method leads to yields 10 times higher than the industry standard while generating 80 per cent less greenhouse gas emissions, using 99 per cent less land and 96 per cent less freshwater all while delivering the same nutritional value as traditional meat. Another favourable argument for lab grown is the fact that is it much less exposed to contamination and the resulting diseases such as African swine flu.
The number two reason is obviously animal welfare.

By removing animals from the food value chain, the need for intensive agricultural practices, battery farms and slaughterhouses disappears together with animal suffering. According to the FAO, it is estimated that more than 70 billion land animals are killed annually for human consumption.

By taking animals out of the food process, issues related to animal welfare like mistreatment, poor living conditions and disease outbreaks could be avoided. In the future, lab-grown meat could become an accessible and cheap protein source, and even be used to address food security issues and food shortages that have been recently exacerbated by the Covid-19 pandemic and crisis in Ukraine.

We are still a long shot from seeing lab-grown food in our supermarkets. Governments would need to authorise the commercialisation of such products and industry specialists anticipate that it could be this year in the US and Israel.

Clement Maclou is the senior thematic portfolio manager at ODDO BHF Group