Studying economics in France, Working in a startup in Israel
Have you ever tasted a veggie burger? Are you a vegan? You have a vegan friend, should you turn vegan? Did you ever thought about stop eating meat? Are you aware of animal slaughtering?
You’ve heard these questions, everybody did.
But do you really know what underlies these questions? Have you ever thought why the ‘meat-subject’ is now so trendy?
A team of food experts, including Bruce Freidrich, Co-founder & Executive Director at The Good Food Institute, tried to answer such questions at Startup-Nation Central, a major innovation hub located in Tel Aviv.
Back in the 1800’s, cars didn’t existed and whoever wanting to travel had to hop on a carriage. This means of transportation was so popular, that a staggering 100,000 horses were needed to serve New York.
But this means of transportation had a problem: MANURE. All over the streets. Daily carriage operation process in New York amounted for above 1000 tons of manure. Literally, the streets started to poison people, causing the ‘Great Horse Manure Crisis’.
This insurmountable ‘shitty-problem’ was tackled during a 2-week summit in 1894, which ended up a dead-end. Only in 1908, Henry Ford came with the alternative to horses: cars.
The car is a ‘solution as fast of faster than the horse, which produces as much or less waste’.
This is Bruce Friedrich’s moto, applied to today’s world.
Friedrich is Co-founder & Executive director at The Good Food Institute (GFI). GFI is a NGO, developing effective ways of consuming meat. Its main focus is to create plant-based meat for less energy than animal meat. It also provides strategic support to FoodTech companies, runs in-lab research, and advocates the ‘eat-less meat’ cause.
The other guests were all specialists in the industry. Liron Nimrodi runs ZeroEgg, an Israeli start-up providing a product that ‘tastes, looks, and function like a real egg’. Dider Toubia runs one Aleph Farm, a leading cell-grown meat producer in Israel. Samuel Rausnitz is a research analyst at Startup-Nation Central.
Michal Drayman, Partner & CFO of rockstar-VC fund JVP, asked them questions about their industry…
First of all, why would someone eat cultured meat?
‘We walked on the moon, but we are still slaughtering animals’ was Didier Toubia’s first answer.
But for him, the main concern is not about animal slaughtering, either it’s food-security: 795 million people in the world suffer from hunger.
Main reason for that is the lack of reliance on local resources (water, space). Cultured meat (in vitro cultivation of animal cells) resolves this problem: it could be produced at anytime, anywhere and without any reliance on local resources. According to BeefCentral 1kg of beef meat requires between 2000 and 15,000 litres of water (depending on measurement method), when cultured meat reduces this consumption by 82%.
Cultured meat is to be distinguished from textured vegetable protein: the first is about in-lab growing animal cells, while vegetable protein are created from soya chunks, or other vegetable sources.
Who are the big players in the industry?
20 companies lead the ‘2.0 meat’ industry. Meatless, Beyond Meat, Impossible Foods are names you may be familiar with. These firms are backed by philanthropists funds, such as Rockefeller Foundation or Bill Gates’ fund.
The Good Food Institute raised $250,000 in 2018, and is now working closely with the Technion, the major tech research university in Israel. According to Liron Nimrodi, from ZeroEgg, universities are key drivers in the shift to cutlured-meat.
Sam Rausnitz notes that over 30% of 2019’s AgriTech start-up funding in Israel was dedicated to Alternative Protein, while only 4% back in 2016, turning the ‘Start-up Nation’ in one of the greatest R&D center in this industry.
In 2018, investments in cultured meat and vegetable proteins startups accounted for $900 million, in mostly early stage investment (see report from consutling firm ATKearney).
Which challenges face this industry?
The four speakers agreed when L.Nirmodi explained replacement-meat industry is more complex than any other: its value chain is one of the most-controlled one in the food market. It includes production, distribution, testing ingredients, quality control, and ends up in the consumers’ belly.
She only swears by ‘Mouthfeel’, which is her product’s core value.
Because yes, eating is definitely about feeling. You can’t give to consumers a product that tastes bad, or smells bad. For most people, taste is above saving the environment. Keeping the end consumer in the loop is paramount to the business. Either ‘the product sucks’, said Friedrich.
He later explained that in most people mind ‘plant-based meat sucks’. Friedrich’s theory is that the ‘vegan stemple’ makes sales plummet.
To him, the only key to success in the Meat 2.0, is to design a product ‘that tastes the same or better, and that costs the same or less’ than actual meat.
Currently, no product is able to meet this expectations: Beyond meat ‘beefsteak’ costs almost $24, while a genuine beef steak is about $15…
Not only a tech-challenge…
Another yet most obvious challenge for the following is persuading people to limit their meat consumption. Friedriech, who turned vegan years ago, does not support a 100% vegan diet for everybody. As he tells in a TED talk, he’s only concerned about efficiency and habits. Changing habits for millions won’t be an easy task, but he thinks the industry is going in the right direction.
The current MVPs are not a complete fit to the market. As said above, costs are too high compared to animal meat, but one should expect this cost to go down in a few years.
Actually, the main challenge is to reach out to millions of people, show them the potential savings that could be done, and democratize these products to the global markets, including third-world countries.
This column is inspired by ‘The Future of Protein’ meetup, given on November 6th 2019 in Tel Aviv. This talk was hosted by Startup-Nation Central, a major innovation hub in Israel, and moderated by Michal Drayman, CFO at JVP. Guests included Bruce Freidrich, Samuel Rausnitz, Didier Toubia and Liron Nimrodi, experts in the Israeli Foodtech industry.