Are investors only after pound of alt-meat flesh?
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What do Bill Gates, Richard Branson and Leonardo DiCaprio all have in common?
Aside from vast wealth and fame, all three are backing “alt-meat” — a fake meat they say has all the taste but none of the climate problems that come with traditional cattle farming.
“If you’re able to create a product that tastes, smells, looks and costs the same as ground beef, yet is made from plant-based materials, it’s a very large market,” said venture capitalist Samir Kaul.
Kaul is a partner at Khosla Ventures, which along with Microsoft founder Gates, has invested millions of dollars in Impossible Foods, which produces the Impossible Burger.
Impossible because it is not meat, but part of a growing market in products that, unlike bean or Quorn burgers, simulate meat rather than just replace it with a veggie option.
The meat substitutes market will be worth nearly US$6 billion by 2022, according to research. But industry analysts are cautious about the potential.
The United States is a nation of meat eaters — 98 percent eat it at least once a week, according to Darren Seifer, a food consumption analyst for the NPD Group, an American market research company.
“For success in the food industry you have to be patient. What we eat and drink is culturally based and habitual. It might take as long as a decade to see if there is any moving the needle,” Seifer said.
Actor DiCaprio has previously invested in tea that provides an income to indigenous Amazonian families and in a farmed fish company, citing over fishing and collapsing marine ecosystems. Gates has also invested heavily with the environment in mind.
There are a few international companies like Impossible producing meat that does not involve slaughtered animals, deforestation or production of greenhouse gases. Impossible says its burger creates 87 percent less greenhouse gas emissions than a meat equivalent.
About 80 percent of all agricultural land is dedicated to grazing or growing feed for animals, the United Nations says. The livestock industry consumes 10 percent of the world’s fresh water, while generating methane and other planet-warming emissions, and causing large-scale deforestation. In December, Beyond Meat announced they had received investment of US$55 million from investors with meaty credentials.
Tyson Foods, which produces a fifth of all animals eaten in the United States, was one. The other was Cleveland Avenue, a venture capital firm run by the former McDonalds Corp CEO Don Thompson.
Beyond Meat and Impossible Foods have now seen investment of more than US$300 million. Yet, some people questioned their environmental motivation.
“Venture capitalists have pinpointed a growth area and the only thing they are looking for is a return,” said Simeon Van der Molen of Moving Mountains, a plant-based burger company in Britain.
A vegan who has sold eco-friendly products for 17 years, Van der Molen will launch his own plant-based burger next month, effectively going into competition with the venture capitalists. “For me venture capitalists are only after their pound of flesh,” he said.
He is aiming to keep the company independent. While motives might be questioned, there is no disagreement over the growing interest. Market research company Mintel saw a 257 percent rise in new products labelled as vegan-friendly between 2011 and 2016.
In less than a year, the Impossible Burger (made of wheat, coconut and potato) has gone from being available in 11 restaurants to 500 in the US. That’s still a fraction of the market. Beyond Meat, which makes chicken and sausages as well as burgers from pea protein, sells into 19,000 US stores.
Van der Molen says his target consumers will be flexitarians — people who eat meatless meals once a week or more. He said: “There are 500,000 vegans in the UK and 22 million flexitarians. We want to get carnivores to convert.”
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