A race to market as Bell steps up investment in cultured meat innovator Mosa Meat
Bell revealed today that it is participating in Mosa’s next financing round with an investment of €5m. This comes on top of Bell’s initial €2m investment in Mosa Meat back in 2018. Bell said it already supports Mosa Meat's ‘development and research work’ with its expertise and know-how as a producer and marketer of meat and charcuterie products in Europe.
Through this latest capital raise, Mosa Meat aims to raise money for the construction of an industrial production plant and ‘drive forward’ the development and scale-up of cultured meat technology.
In 2013, Dr Mark Post of Maastricht University – and founder of Mosa Meat – produced the first burger grown from cultured animal cells.
The process sees a sample of cells taken from a live animal and put into a bioreactor. Inside the tank, the cells are fed a growth medium - a nutrient-rich soup that enables them to grow and divide.
In this way, trillions of cells can be produced from a small sample. Once enough cells are produced, they are turned into developed muscle and fat cells through a process called 'differentiation'. Standard food processing technologies are then used to form the final product – meat.
Nevertheless, cultured meat still has a long way to go before it appears on our dinner tables.
The first cultured burger famously cost $280,000 to produce. Costs have come down significantly since. But price is still a challenge.
The major production expense in cultured meat is the growth medium, which can cost around $400 per litre. To put this in context, a conventional bioreactor requires up to 600 litres to produce 1 kg of meat.
By building out scale production, Mosa Meat hopes to drive expenses down.
The company’s first pilot production plant will commence operation in 2021. In the course of 2022, the first industrial production line will start and the first products will be launched on a ‘small scale’ in selected restaurants in test markets in and possibly outside Europe. In addition, plans are in place to commission the first high-volume production plant by 2025.
Race to the plate
According to Switzerland’s Bell, ‘Mosa Meat wants to be the first company to launch a cultured meat product on the European market’.
But while Mosa Meat may have been the pioneer in cultured meat, it is certainly not the only player in the space. The number of cultured meat companies has grown rapidly, as international start-ups compete to be the first to bring a cultured meat to market. Alongside Mosa Meat, contenders include Memphis Meats, JUST Meat and Aleph Farms, among others.
Mosa’s ambition to scale up production and establish its supply chain is an area that other cultured meat start-ups are also making headway on. For instance, JUST Meat had set a target to make a first commercial sale by the end of 2019 and Aleph Farms has said it will start building ‘large, clean bio-farm facilities in 2021, working towards a ‘limited launch' in 3-4 years.
Mainfirst equity analyst Gian Marco told FoodNavigator that he believes the race to bring affordable products market is an important one to win.
He noted that while the first cultured meat burgers might be served in selected restaurants in 2022, high production volumes are not possible before 2025. Previously, Mosa had targeted serving burgers for CHF10 by 2021 – an ambition that looks under pressure. “I think speed to bring products to the shelf is essential in this race. Therefore, every news about delays raises concerns in my view,” he told us.
The search for innovative proteins
Arguably, however, the underlying trends propelling innovators in cultured meat will mean that the category will become large enough to accommodate all.
As Bell pointed out, according to a number of studies global meat consumption will rise significantly by around 3% per year up to 2030. “Current production methods will no longer be able to sustainably meet this increase in demand,” the meat producer said.
Bell noted that cultured meat could achieve a market share of 10% by 2030.
Indeed, according to some pundits, this forecast is relatively modest. By 2040, 60% of the meat we eat will either come in the form of ‘novel vegan meat replacements’ (plant-based meat analogues with the sensory properties of meat) or will be created through exponential cell growth in bioreactors, a recent report from AT Kearney predicted.
The consulting firm noted the ‘predicted triumph’ of cultured meat is based on the sustainability of the process and its ability to deliver ‘tailor-made nutrition’ through meat products.
AT Kearney forecast that cultured meat will, in the long run, act as a major disruptor to the conventional meat sector. Indeed, cultured meat companies have captured the imagination of high profile investors, including Bill Gates and Richard Branson, as well as conventional meat manufacturers, with the likes of Cargill, Tyson and PHW Group all putting money into start-ups in the space.
“With the investment in Mosa Meat, the Bell Food Group wants to support the long-term development of new production methods that offer a possible alternative to consumers who are re-evaluating their consumption of meat for ethical reasons,” Bell concluded.
MainFirst’s Marco believes that such investment, while small in scale, is important to Bell’s long-term strategic positioning in the meat sector.
“Bell Food Group invests over CHF215m every year in its expansion and facilities. The additional €5m is therefore marginal. I see such small investments in potential game changing companies as necessary to diversify from the traditional meat processing business,” he explained.
Nevertheless, from an investment perspective, he stressed priority should be given to investing in other areas of Bell’s business, such as its convenience food division. “It is way more important to strongly invest into convenience food as the potential of this category is higher versus the traditional meat business and is more reliable to predict versus one of the Petri dish alternatives.”