The Van Trump Report

Everyone in Ag Should Read and Fully Understand… Your Future Might be Impacted!

If you look at the forces driving Cellular Agriculture you can see that it is scaling quickly. Just four short years ago, there were really only two players in the lab-grown meat game, today there are +80, and with rapidly evolving consumer interest, it could soon be +10% of the meat market. This year alone venture capital investment in cultivated meat startups has jumped about +116% compared to last year’s total, according to PitchBook data. 

Ron Shigeta, co-founder of science accelerator IndieBio and former chief scientific officer of plant-based pet food brand Wild Earth, recently said, “the scaling up of lab-grown meat and its corresponding decrease in cost is steeper than Moore’s Law, which happened to be the golden rule for the internet age dictating that the speed and capability of digital tech would increase every few years while it becomes cheaper for consumers. Taking a close look at the chart included below you’ll see that the slope shows a price drop that is faster than some of the most powerful technologies that we have ever seen.

The wave of lab-grown meat announcements just this year is indicative of how fast the industry could scale. Mission Barns, for instance, recently launched a taste test of its cell-based bacon around San Francisco Bay Area restaurants, while Memphis Meats is using its cash injection to build a pilot production site ahead of a product roll-out. This past week we learned that McDonald’s is in the process of rolling out its “McPlant” burger. 

The BIG takeaway is that as each day passes Wall Street is throwing more and more money at lab-grown meat. With more money, they are able to improve their technology, make the meat taste better and reduce production costs. At the same time, costs for conventional livestock owners are working higher and higher as government regulations and guidelines become more cost-prohibitive.       

It’s worth mentioning, lab-grown meat companies will certainly face their fair share of hurdles and hiccups along their journey and goal of gaining more market share, i.e. how fast or how many times a cell can divide, how small of a space can they be grown in? How quickly can manufacturing and infrastructure be built out? Other headwinds facing the growing industry will be the government’s framework and regulatory structure that is certain to change as the world learns more. 

In summary, I’m not saying we are going to see massive change in the blink of an eye. In fact, for most in the livestock business, it probably won’t feel like much change is happening at all. But I always remind myself of the famous Hemingway quote… He was once asked how he went bankrupt? Hemingway responded, “Gradually, then suddenly.” Like most everything in life it happens gradually, then it feels like all at once! As the more companies enter the lab-grown meat space and are being given money by big Wall Street investors they are going to hire very smart young people who have a different way of looking at things and solving problems. This will allow them to quickly get more efficient and improve their overall processes ultimately driving down production costs and improving quality. From my perspective, cheaper cost and better-tasting lab-grown meat could be big headwinds ahead for traditional livestock. 

I certainly don’t have all the answers, but I know we have to be paying close attention! There are sources on Wall Street that believe alternative meats could have over +50% of the market share by 2040. If that were to be the case, some of us may need to be making new relationships with exporters or alternative end users. I worry that if lab-grown meat continues to gain market share it could eventually disrupt the supply chain for many in agriculture. Think about all of the dominoes that might ultimately have to be realigned… If you are delivering cattle to a certain feedlot, but that feedlot starts to feel the downhill pressure as consumer demand shifts, i.e. they have contracts in place with businesses that are being adversely impacted by lab-grown meat, that could ultimately mean fewer cattle in the feedlot. That could also mean less demand for feed like corn, DDGs, and meal. There are just a lot of moving parts we need to be thinking about, this is NOT something to ignore.  I believe “cellular ag” is here to stay! (Source: Medium, Pitchbook, Agfunder)

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