Speaker 1: Hey, Dana, So alternative protein or fake meat? Have we
Speaker 1: tried it? Yes? And how was it? It was great?
Speaker 1: I've had beyond burgers, impossible burgers. I even had some
Speaker 1: delightful sausages that weren't actually sausages just earlier this week.
Speaker 1: I am what you would call a flexitarian, so somebody
Speaker 1: who generally avoids meat but will still buy it and
Speaker 1: eat it from time to time. I once went a
Speaker 1: whole year without any red meat at all, and I
Speaker 1: must say the thing that I missed the most that
Speaker 1: year was a hamburger. So when I started seeing fake
Speaker 1: burgers showing up on menus and at the grocery store,
Speaker 1: and I'm not talking about a veggie patty but something
Speaker 1: that actually resembles a hamburger, I was pretty excited about it. So, yeah,
Speaker 1: I take it you like these they cut the mustard
Speaker 1: no pun intended. Okay, So years ago, my then girlfriend,
Speaker 1: no wife, and I would go to this vegetarian restaurant,
Speaker 1: a Sunflower in Vienna, Virginia. If you know it, you
Speaker 1: know it's fantastic place. But it always struck me as
Speaker 1: odd the attempts at replicating meat with like things like
Speaker 1: satan and like I thought it really wasn't worth the effort.
Speaker 1: I still don't, certainly not good enough to be worth
Speaker 1: the effort. But I've tried the impossible burgher and all that,
Speaker 1: and it seems fake meat has really come a long
Speaker 1: way since then. And that's what we're here to talk
Speaker 1: about today, This alternative to animal protein, be that poultry, fish, beef,
Speaker 1: or pork, and what it means to be fake meat,
Speaker 1: whether made of plants or actual animal tissues growing in
Speaker 1: the lab. So today we speak with Hume Bromley, who
Speaker 1: looks at consumer trends here at B A E F,
Speaker 1: and he's going to talk to us about a report
Speaker 1: titled Alternative Proteins Fake It Till You Make It. The
Speaker 1: full report is available on the Bloomberg terminal, at BENF
Speaker 1: dot com or on BNF's mobile app. And as always,
Speaker 1: BENF does not provide investment or strategy advice, and you
Speaker 1: can hear a full disclaimer which will play at the
Speaker 1: end of today's show. Now, let's hear about alternative proteins.
Speaker 1: I'm Dana Perkins and I'm Mark Taylor, and you're listening
Speaker 1: to Switch on the BENF podcast. Hi, Hi, thanks for
Speaker 1: coming on the show today. Yeah, thanks having to be back.
Speaker 1: So the title of the no that we're talking about today,
Speaker 1: it's about, well, we're going to call it fake meat,
Speaker 1: but alternative proteins fake it till you make it. So
Speaker 1: I want to know how fake is it. I have
Speaker 1: a friend who actually refers to these, um, these alternative
Speaker 1: hamburger patties that they actually have in the United States
Speaker 1: is frank and food. So does it resemble the real
Speaker 1: food that we interact with or is it something that
Speaker 1: I wouldn't even recognize due to the processing. Look, I've
Speaker 1: had to try a bunch of things through you know
Speaker 1: what you call market research. I guess for this this report, right,
Speaker 1: and you know it's all it's all subjective, it's all
Speaker 1: going to be individual opinion. But I mean, I think
Speaker 1: the best ones I have tried that the best companies
Speaker 1: that faking meat and the best ones are cooking it
Speaker 1: afterwards probably do the same job as really poor quality beef.
Speaker 1: Right now. You know, they might get better over time,
Speaker 1: but no, certainly, no one's doing that I've tried has
Speaker 1: done a great job of replicating, you know, a great hamburger.
Speaker 1: And and no one's anywhere clotis on on replicating a
Speaker 1: steak or anything like that. But what are they actually
Speaker 1: made of, Like, what's it comprised of? Most of the
Speaker 1: stuff out there on the supermarket shells, but at the
Speaker 1: moment are are plant based, right, So they'll typically use
Speaker 1: either a soy protein or a yellow p protein. So
Speaker 1: basically you're growing that crop, you're extracting the protein from it,
Speaker 1: you're basically running it through a big macerator and eventually
Speaker 1: extruding it's mixing it with other ingredients and extruding it
Speaker 1: like you would pasta or cereal into a form factor.
Speaker 1: We recognize, you know, something that looks like like ground beef,
Speaker 1: or if you've turned into a paddy, it might kind
Speaker 1: of look like you can squint, you know, a chicken
Speaker 1: fill it. I was just to get back when I
Speaker 1: used to go to vegetarian restaurant and they would have
Speaker 1: fake meat back in the day, made out of like
Speaker 1: satan and stuff like that. I don't know, it was
Speaker 1: just not good. My conclusion back then was, you know what,
Speaker 1: let's get it. Just give me the veg. I'm good. Look,
Speaker 1: I don't I don't disagree that there's new products out
Speaker 1: there for decades, right at least or MILLENNIU if you
Speaker 1: count things like tofu. There's been an alternative as protein,
Speaker 1: alternatives to animal meats out there for for people that
Speaker 1: don't need it. What's different about this, what's different about
Speaker 1: plant based meeting the culture, the lab growing meats that
Speaker 1: are coming, is that they're not trying to offer a
Speaker 1: new product of vegetarians and vegans. Really they want to
Speaker 1: win over the omnivores or at least the flexitarians, but
Speaker 1: but ideally the omnivores or other people who eat meat.
Speaker 1: It's got to look, taste, feel, smell just like meat
Speaker 1: to do that, because otherwise, you know myself and you
Speaker 1: will have that response. Just give me a vegetable, give
Speaker 1: me meat, don't try and trick me. I mean, this
Speaker 1: was fifteen years ago too, and you know, I'm sure
Speaker 1: technology has approved. I've had a what beyond burger or whatever,
Speaker 1: and I thought it was good, it was great. I'm
Speaker 1: really excited for this actually to happen. I would call
Speaker 1: myself one of the flexitarians or I haven't even heard
Speaker 1: that word, but I'd say that's what I am. You
Speaker 1: are at the target market, I think I am. Actually yeah, definitely,
Speaker 1: you and me both so This is a bit of
Speaker 1: a departure for benf Why did we actually choose to
Speaker 1: write about alternative proteins. It's a good question, but being
Speaker 1: has been involving for a long time now right where
Speaker 1: we're no longer just a clean energy research firmly moved
Speaker 1: into transport industry decoganization, and I guess the common narrative
Speaker 1: here is that we have these century old industries and
Speaker 1: supply chains that are being threatened and disrupted by by
Speaker 1: new incumbents, and those new incumbents are enabled by technology,
Speaker 1: you know, whether that be falling prices of solar panels
Speaker 1: or or or electric vehicles, or whether in this case
Speaker 1: it's you know, the potential cost reductions of making plant
Speaker 1: based or lab grown meats that will disrupt you know,
Speaker 1: some of the biggest trading commodities of the planet meat.
Speaker 1: And the only thing that leads that's come with all
Speaker 1: of them is is massive emission reduction potential if this happens,
Speaker 1: and if the company's offering plant based meat and cultured meats,
Speaker 1: get it right, So you mentioned just now cultured meat,
Speaker 1: and actually the very beginning of December, I saw an
Speaker 1: announcement that Singapore approved the very first lab growing meat
Speaker 1: to be sold for regular people like you and meat
Speaker 1: to consume it. So my question is about that, how
Speaker 1: is it made and what are some of the concerns
Speaker 1: around the lab grown and cultured meat that have made
Speaker 1: it kind of lead us to the market. That hasn't
Speaker 1: been on the shelves for fifteen years, it's been on
Speaker 1: the shelves for maybe fifteen days. It's really interesting stuff
Speaker 1: and exciting stuff that we finally have a product on
Speaker 1: the market of coming to market soon in Singapore. Lab
Speaker 1: grown meats, cultured meats, clean meats are sometimes called very
Speaker 1: different plant based. So you haven't tried this stuff before.
Speaker 1: It's only been tasted in kind of experimental settings. And
Speaker 1: what it is is basically, it's it's real meats. It's
Speaker 1: just grown inside inside an incubator inside a machine. So
Speaker 1: it's where you're basically extracting animal cells from a live
Speaker 1: animal from from a from a placenter, growing in a
Speaker 1: machine by feeding it this kind of concoction of kind
Speaker 1: of what you call food culture and basically exercising that
Speaker 1: inside this machine to make it grow like muscle would
Speaker 1: grow muscle and that tissue and then when that's you know,
Speaker 1: whether that's finished growing inside this machine and you're you're
Speaker 1: scraping it out and you know, and using it like
Speaker 1: you would ground beef. Eventually, maybe down the track you
Speaker 1: could even grow up an entire fiel it inside. So
Speaker 1: you know, it's it's a it's a process that they're
Speaker 1: basically lifted from medical science. Not that uncommon at all,
Speaker 1: but clearly very costly um and clearly new for the
Speaker 1: food industry. The development Singapore is a company called it
Speaker 1: Eat Just. They're certainly at the forefront of of the industry.
Speaker 1: They're working across a whole bunch of different animals. The
Speaker 1: development in Singapore looks to just apply the chicken right now,
Speaker 1: but it's it's the first step in bringing these products
Speaker 1: to market. So when people are talking about potentially growing organs,
Speaker 1: this is a similar technology they're using to grow the
Speaker 1: meat that will go on our plates. Yeah, very similar. Obviously,
Speaker 1: you've got different cells, different culture every animal you grow,
Speaker 1: and it requires a different environment, so different different temperature,
Speaker 1: different culture. Obviously different cells that you're extracting, and different
Speaker 1: timelines as well. But that it's it's just the same
Speaker 1: as what you're seeing in some of those some of
Speaker 1: those therapeutic or generative medicine practices. This feels very futuristic
Speaker 1: to me. It does, look at it is futuristic. It
Speaker 1: comes with that futuristic price tag as well. You know
Speaker 1: that the original burghers that were being process this way,
Speaker 1: we're costing something like a hundred thousand dollars a burger. Supposedly,
Speaker 1: there's certainly companies out there that's you know, you're still
Speaker 1: paying kind of hundredfold of premium of what you would
Speaker 1: for for animal meats. But there are companies out there,
Speaker 1: but certainly hope to bring that down to something that's
Speaker 1: you know, more more like tenfold in the next few years.
Speaker 1: Really costly. No reason why those costs couldn't come down.
Speaker 1: Not you know that there's many reasons to beleeve the
Speaker 1: costs should come down, just like we kind of I
Speaker 1: said before, you know, very similar to solar panels or
Speaker 1: batteries and e v s. You know, you've got this
Speaker 1: cost curve, You've got a process that's infinitely scalable. You
Speaker 1: just need to make more of these incubators, you know,
Speaker 1: put more cells inside machines and you get more and
Speaker 1: more product. A lot of the costs at the moment
Speaker 1: comes from the culture. So you have specialized firms are
Speaker 1: basically brewing up this culture to feed your your cell
Speaker 1: lines and grow the meat that would need to come down.
Speaker 1: But it's got to have a learning rate behind it.
Speaker 1: It's way too early to even put a number on
Speaker 1: what that learning rate might be right now, but you know,
Speaker 1: it's it's a very scale, little repeatable process that that
Speaker 1: that that that should come down. And you contrast that
Speaker 1: to a very inefficient sector putting animals out to pasture
Speaker 1: for for months or or years at a time to
Speaker 1: grow meat, you know, and and wasting the male metabolic
Speaker 1: cycle to work to grow an animal that then butcher
Speaker 1: it to then waste a decent chunk of the carcass.
Speaker 1: There is a whole lot of old waste there that
Speaker 1: that can be undercut by a futuristic, mechanical, automated process.
Speaker 1: How is it going to be rolled out in these
Speaker 1: first adopters in Singapore? You know, is it going to
Speaker 1: be high end restaurants with people waiting out the door
Speaker 1: to get a shot at this, or is it going
Speaker 1: to be you know, through more I guess fast food
Speaker 1: chains or places that'll sell this. Look. I imagine in
Speaker 1: Paul with this cultured chicken, it's got to be high end.
Speaker 1: There is this disconnect between costs and price. When it
Speaker 1: comes to plant based meat, yes, it's price that are premium,
Speaker 1: but cost you could argue should be the same or
Speaker 1: lower than animal meat. When it comes to cultured meat,
Speaker 1: it's costly and its pricey, and it's probably going to
Speaker 1: stay that way for a while. So that there's the barrier.
Speaker 1: They're kind of trying to find enough people willing to
Speaker 1: sample it at that cost, and then you know, where
Speaker 1: do you grow from there? Every country you go into
Speaker 1: after Singapore you need to jump, you know, really strict
Speaker 1: and high regulatory hurdles. You know, in the US we're
Speaker 1: going through that process right now. And because it's a
Speaker 1: meat product but also an agricultural product, you're basically regulated
Speaker 1: twice by the FDA, the Food and Drug Administration, and
Speaker 1: by the U S d A, the U. S. Department
Speaker 1: of Agriculture, so all of which already have processes in
Speaker 1: place for regulating livestock, for regulating meat and butchering, and
Speaker 1: for regulating basically all food supply chains. And you've got
Speaker 1: to meet all those existing hurdles, even though your product
Speaker 1: might look and behave very differently. So that's specifically in
Speaker 1: the United States. How about an other parts of the world.
Speaker 1: Does the FDA have the most stringent standards and therefore
Speaker 1: they translate over to other countries or you know, I've
Speaker 1: had a beyond Burger here in London's I mean, there
Speaker 1: definitely is an equivalent here in the UK. What's the
Speaker 1: view on these products in other parts of the world. Well,
Speaker 1: I think you see these companies kind of pushing for
Speaker 1: some sort of consistency amongst different regions and how they regulators,
Speaker 1: But it is an entirely different process right now. If
Speaker 1: you want to go into the EU, you need to
Speaker 1: go through the regulator. If you want to go the US,
Speaker 1: you go through the USD, usd A and f d A.
Speaker 1: They're pushing for consistency, but at the same time, they
Speaker 1: really want to protect their their secret source, protect their processes,
Speaker 1: protect protect their recipes, so they can't be open book
Speaker 1: with their competitors. The push for industry stands across the
Speaker 1: world because they're trying to be market leaders at the
Speaker 1: same time. Now, for a very short break, stay with us,
Speaker 1: so let's talk about adoption of alternative proteins. Both kinds
Speaker 1: the plant based and then maybe someday the cultured meat
Speaker 1: coming to a plate near you. In this research note,
Speaker 1: you talked a lot about the United States, and my
Speaker 1: question also has to do with whether or not that
Speaker 1: is the primary market for these products at this point
Speaker 1: in time and where the real growth is coming from,
Speaker 1: because what immediately comes to my mind is, you know,
Speaker 1: the consumer preferences in Asia, for example, are really gravitating
Speaker 1: increasingly towards animal proteins and meats with raising GDPs and well,
Speaker 1: I mean the maybe taste are changing as well. Can
Speaker 1: you give us some color on that. There's a couple
Speaker 1: of questions in there, right, But first of all, where
Speaker 1: where's this stuff being trial today? Who's eating it? If
Speaker 1: you look at the leaders companies like Beyond Meat or
Speaker 1: Impossible Foods and where they're actively marketing and selling their products,
Speaker 1: it is certainly biased towards the Western hemisphere. They target
Speaker 1: North America, US and Canada a target primary markets, certainly
Speaker 1: the European Union UK in the preferences are changing there,
Speaker 1: there's healthy decisions being made. And in some other places
Speaker 1: like like like Australias on their radar as well, you
Speaker 1: do see a lot of announcements coming out of Asia.
Speaker 1: Sometimes it's the same firms moving into Asia. A landmark
Speaker 1: deal with Starbucks recently struck in China. But you also
Speaker 1: see a lot of local firms as well, local startups
Speaker 1: getting traction in places like Japan and career in China.
Speaker 1: In Singapore, we've seen these firms pop up. And these
Speaker 1: are countries they're the more, but I guess the more
Speaker 1: they're the wealthier Asian countries. It's still with changing consumer
Speaker 1: preferences and servicing the greater Asia market. With with growing
Speaker 1: meat appetite. The challenge there I think will be one
Speaker 1: the meat attachment levels and outside of China and the
Speaker 1: countries Malaysia, Singapore, meat attachments or not all that high
Speaker 1: meat consumption the past has not been all that great.
Speaker 1: And what you see when you look at kind of
Speaker 1: meat consumption over decades and generations as an economy comes
Speaker 1: with wealthier certainly the rate of meat intake, the annual
Speaker 1: the per capita intake of meat increases. But if you
Speaker 1: start from a very low base, you don't catch up
Speaker 1: to the US, you don't catch up to Western Europe.
Speaker 1: You just grow from your lower base. You start at
Speaker 1: a high base, you know now I'm thinking kind of
Speaker 1: Latin America, maybe you will catch up to the US
Speaker 1: on a per capita basis, but they're small, population small,
Speaker 1: but populations with growing wealth. So really the opportunity is
Speaker 1: huge my population perspective in those countries. But chances are
Speaker 1: they one don't have the meat attachment because they haven't
Speaker 1: had as much meat in their diets historically. As their
Speaker 1: meat appetite grows, it's just not going to be the
Speaker 1: same level as what you see in kind of in
Speaker 1: the West. I mean this has a lot to do
Speaker 1: with cultural factors. When you say meat attachment, I mean
Speaker 1: it has to do with like the recipes that somebody knows, Right,
Speaker 1: So if I'm going to make something for dinner, I'm
Speaker 1: going to go to a recipe that maybe my mom
Speaker 1: taught me, and that may not necessarily involve animal protein.
Speaker 1: Are there other things that come into play here that
Speaker 1: maybe I don't know about. There's certainly trends happening in meat.
Speaker 1: Let's let's put plant based on cultured meat aside for
Speaker 1: a moment, But just the big trends happening and meat
Speaker 1: right now are consumers are making healthier decisions, They're switching
Speaker 1: from bread, meat, beef and lamb, and some extent poor
Speaker 1: chicken and seafood. That's a trend that's happening already, or
Speaker 1: the eating smaller portions in Europe for example, in some
Speaker 1: case of the US. So they're making those healthy decisions
Speaker 1: regardless of alternatives that are that are available to them,
Speaker 1: and certainly they're looking for convenience. So yeah, you're seeing
Speaker 1: the majority of meat I think you meant for most
Speaker 1: animals being consumed in your prepackaged, preportioned individual cuts. It's
Speaker 1: actually quite rare now to go and take a whole
Speaker 1: chicken home in many of these countries, or bring home
Speaker 1: a whole whole cut of lamb or beef. You know,
Speaker 1: people are looking for convenience, and that's great news if
Speaker 1: you are a supplier of alternative meat, because it means
Speaker 1: you don't need to make your product look like an animal.
Speaker 1: You need to make it look like the regurgitative product
Speaker 1: that comes out of the end. Can you tell us
Speaker 1: a bit more about who's involved in who's producing these
Speaker 1: alternative proteins, and who's investing in them, so people are
Speaker 1: generally familiar with the real market leaders here and possible
Speaker 1: foods and beyond meat, and those firms have got enormous
Speaker 1: traction off one know, I p o S and secondly
Speaker 1: through announcements and partnerships with fast food chains in many
Speaker 1: cases with McDonald's, with Starbucks, with Burger King. But there
Speaker 1: are others out there. I mean, certainly if you're sitting
Speaker 1: in the UK, be familiar with corn. It's been around
Speaker 1: for decades now, Good Catch foods, doing seafood, you know, Primaries,
Speaker 1: Alpha Foods. There's lots out there. These are the brand
Speaker 1: names that are selling the alternatives, but actually what's interesting
Speaker 1: is what's behind them right as some are still venture backed.
Speaker 1: The top six players here have raised about two and
Speaker 1: a half billion dollars since eleven. A lot of that's
Speaker 1: come from venture, you know, from really big name venture
Speaker 1: as well, also Richard Branson, Bill Gates, Jeff Bezas, Jay
Speaker 1: z Serena Williams. Really broad pool of venture that it's
Speaker 1: backing these companies. I guess. More recently we've seen a
Speaker 1: wave of acquisitions and internal business units being started by
Speaker 1: massive food conlawance. You know, Kellogg's has a stake here,
Speaker 1: Maple Foods, Nestle, Craft, Hyn's, they're all getting in on
Speaker 1: this space early really, but before we see massive baptech. Okay,
Speaker 1: so you just mentioned Serena Williams, and I can't help
Speaker 1: but immediately think. You know, she's a professional athlete. She
Speaker 1: has got to have an extremely healthy diet, and she's
Speaker 1: looking at this and she may have had the same
Speaker 1: thoughts that I originally did when I went to take
Speaker 1: a bite into my first beyond burger, which is, oh,
Speaker 1: it's made of plants, so therefore it must be healthier.
Speaker 1: Is that the case? It's complicated right to start with.
Speaker 1: So certainly when you asked why they would choose or
Speaker 1: become interested in plant based meat, the most common reason
Speaker 1: they site is health. And then there's other attributes like
Speaker 1: environmental you know, lower emissions or land use or water,
Speaker 1: animal welfare they might care about, but health is certainly
Speaker 1: number one. Firstly, what's interesting is if you are concerned
Speaker 1: by health, is a greater chance you just eat less
Speaker 1: meat than you you'll eat plant based meat. So if
Speaker 1: there's complicating fact to number one. But secondly, let's talk
Speaker 1: about the health of plant based meat, and it's really
Speaker 1: debatable is whether it's healthier or not. You know, in
Speaker 1: many cases you'll see that plant based meat has higher
Speaker 1: fat content necessily saturated fat content. But if the higher
Speaker 1: fat content, then meat lower protein content, and depending on
Speaker 1: how you look at it, you know, higher sodium. What's
Speaker 1: really complicated about this stuff is when you go and
Speaker 1: buy some plant based meat off the shelf at a
Speaker 1: test you or your local supermarket, it's already been mixed
Speaker 1: with all these other ingredients to make it kind of
Speaker 1: a final product, so it's already loaded with the sodium
Speaker 1: or arrest of it. You're going by a container of
Speaker 1: mints off the shelf next to it, and it's not
Speaker 1: it's a raw ingredient. So quite often consumers are comparing
Speaker 1: kind of a raw ingredient with a process ingredient, the
Speaker 1: plant based. When you start comparing plant based products like
Speaker 1: burger patties and sausages to meet burghers and sausages and
Speaker 1: over comparing ingredients to products or comparing products to products,
Speaker 1: then it starts to look a little bit better. Still,
Speaker 1: the protein content is lower. Still, the fact content killed
Speaker 1: can be higher, but suddenly the sodium would worry a
Speaker 1: whole lot of consumers. Tends the balance out. Okay, so
Speaker 1: we've spent a lot of time already today talking a
Speaker 1: lot about this in terms of ground beef, and this
Speaker 1: raises another point around what these alternative proteins actually are
Speaker 1: what they're looking to mimic. So we're talking about what
Speaker 1: we've got. You mentioned sausages, so we're talking pork, beef, chicken.
Speaker 1: I think I've seen a toe fur ky in the past,
Speaker 1: but maybe that doesn't fall into the scope here. And
Speaker 1: then also fish, if you could give us a little
Speaker 1: bit of insight into what this fish is like and
Speaker 1: kind of what the potential uptake is of that. Sure,
Speaker 1: so if you can name and animal, chances are there
Speaker 1: there's a fake version out there. Most of the attention
Speaker 1: to date has been around ground beef products. I think
Speaker 1: one it's because there is That's where I'm most health
Speaker 1: concerned lives. Secondly, it's because actually it's pretty easy to replicate.
Speaker 1: You know, it's already highly processed, so therefore you know
Speaker 1: you've mashed up all your vegetables or your plant into
Speaker 1: this paste and arrive at something that isn't too similar
Speaker 1: to ground beef. And further, I guess there is that
Speaker 1: environmental impact as well, beef resulting a whole lot more
Speaker 1: emissions than these other livestock animals do. That's why they
Speaker 1: get attention, and hype has been around beat today. But
Speaker 1: if you look at what's available on the shelf, and
Speaker 1: you look at kind of sales by value out there,
Speaker 1: and it broadly alignes with meat sales. You know, about
Speaker 1: a third of it is beef in the US, about
Speaker 1: a quarter of it is fake chicken, Nearly a quarter
Speaker 1: of it is fake pork and fake bacon, and then
Speaker 1: there's kind of this mix of other stuff. And that
Speaker 1: other stuff you're right, includes fish, includes turkey, includes duck,
Speaker 1: and often nondescript kind of you know, here's some fake meat.
Speaker 1: Moculan animal name. Fish is a really interesting one. Actually,
Speaker 1: see food more broadly is really interesting. I've seeing fake shrimp,
Speaker 1: fake prawns, fake fish out there, and it's interesting because
Speaker 1: from a plant based perspective, sure, you're basically doing it
Speaker 1: the same why you're mashing together proteins, adding some different
Speaker 1: ingredients to make it seem more like like fish or
Speaker 1: sea food than than others. But when it comes to
Speaker 1: cultured meats, it starts to get really interesting, really strange
Speaker 1: because fish is a cold blood animal, and it's the
Speaker 1: only cold blood animal we we we listed there in
Speaker 1: terms of animals that humans consume. It's actually much easier
Speaker 1: to grow in an artificial environment as much less energy intensive,
Speaker 1: and it can be faster, so you can incubate the
Speaker 1: as so long as you have the settings right, you
Speaker 1: can grow them inside these artificial artificial environments for potentially
Speaker 1: a lower cost than you could for for any of
Speaker 1: these other farmed livestock. The complicating fact you're here is
Speaker 1: that fish are not growing. You know, they're caught in
Speaker 1: almost every you know, basically ever in any country in
Speaker 1: the world. There's no massive supply constraint apart from over
Speaker 1: fishing and which is which is huge, but there's also
Speaker 1: not the same emissions consequence as you get from beef
Speaker 1: and from pork. Over fishing problems. Definitely, I'd love to
Speaker 1: solve that. I mean, as a consumer, I am now
Speaker 1: you're our get market for the fish when I also
Speaker 1: think of diseases associated with farm grown fish as well.
Speaker 1: Instead of farm growing fish, get me some lab grown fish.
Speaker 1: You know what's amazing about fish is most people that
Speaker 1: covered this stuff don't look at fish because the only
Speaker 1: c D and IRONPHO stuff. When they look at meat,
Speaker 1: they not fish and seafood they just think about red
Speaker 1: meat and poultry basically and look at appetite over over time.
Speaker 1: And if you do that, you see economies like you're
Speaker 1: peeking out a few years ago in terms of meat
Speaker 1: consumption per capita and starting to fall. Now it's only
Speaker 1: once you add seafood back on top of that, but
Speaker 1: you realize they're not peeking in their meat consumption, they're
Speaker 1: just switching to seafood um. So there is growing demand there.
Speaker 1: And it was taking a lot of data assemble to
Speaker 1: put this together so we can look at meatst land
Speaker 1: based meats and seafood in one report and realize, actually
Speaker 1: the trends totally different. Common misconception because I definitely didn't
Speaker 1: even think about fish until we got ready to prepare
Speaker 1: for this show today. So I feel like the other
Speaker 1: side of it, that side of the coin has to
Speaker 1: have something to say about this, right, So the meat
Speaker 1: and fish lobby, right, they've got to be having something
Speaker 1: to say about alternatives to their product, right. Yeah, And
Speaker 1: the meat lobby groups are enormous and powerful. They're certainly
Speaker 1: watching this space. But you know a lot of the
Speaker 1: data is coming from there. You know in the US
Speaker 1: that cattleman's Association saying look at look everyone, it's okay.
Speaker 1: Only point three percent of meat consumed or substitutes, only
Speaker 1: half percent of beef. It's it's it's small. You know,
Speaker 1: it's nothing to worry about yet. But Mark, I mean
Speaker 1: you're you're back there for in yours and then in
Speaker 1: the mid two thousands as well. Around is it's it's
Speaker 1: it's very familiar, small numbers, industry being potentially being disrupted,
Speaker 1: technology changing all the time, and an enormous powerful incumbent
Speaker 1: lobby groups. I think what's different this time around is
Speaker 1: that energy companies in an economy were big and they
Speaker 1: could be disrupted, but we kind of knew that knew
Speaker 1: the extent of the of the scope. When you talk
Speaker 1: about livestock, you know where I where I'm sitting right
Speaker 1: now in Australia, I think animals a year, some of
Speaker 1: them are ark for our second or third biggest export.
Speaker 1: It's it's enormous and enormous late you know, enormous from
Speaker 1: a labor perspective as well, in terms of farmers and
Speaker 1: and and rural and agricultural community, enormous in land holdings,
Speaker 1: enormeless in money, enormous in trade um enormous in foreign investment.
Speaker 1: This actually, I think in many cases is bigger than
Speaker 1: energy and has more powerful voices. Okay, so if you're
Speaker 1: saying it's that big, then I think you've confirmed that
Speaker 1: this is a place for some potential huge growth. Those
Speaker 1: who maybe haven't interacted with this in the past probably
Speaker 1: will in the future. My question really revolves around how
Speaker 1: quickly do we see this happening? Because it is consumer lead.
Speaker 1: I know there's no science to predicting the future, but Hugh,
Speaker 1: what do you think is this going to be ubiquitous
Speaker 1: in five years, ten years, fifty years. Yeah, you've really
Speaker 1: put me on the spot there. I think in the
Speaker 1: it's there's a lot of really interestreme developments happening here.
Speaker 1: Falling castle as ingredients and said that could lead to
Speaker 1: massive disruption. If you look at what's happening today, you
Speaker 1: know you've got about forty of US adults. I don't
Speaker 1: think it's that different. In Western Europe have tried the stuff.
Speaker 1: Very few say they don't like it in anyway you
Speaker 1: know that they're all okay with it. There's lots of
Speaker 1: repeat sampling, repeat purchasing happening, but but very few Abanity
Speaker 1: meat and if they are, they're they're not switching to substitutes.
Speaker 1: They're kind of mixing this into their diets. So it's
Speaker 1: a small proportion of their diet. Maybe that will grow
Speaker 1: over time. Maybe the proportion of people that try it
Speaker 1: will and eat it will grow over time. But basically
Speaker 1: where we are today is that we have a number
Speaker 1: of market leaders who control who control the industry really essentially,
Speaker 1: and they're pricing this at a premium to everything else
Speaker 1: that's out there, and generally for most of these animal times,
Speaker 1: we're talking about kind of twice the cost of animal
Speaker 1: meat at the supermarkets of reach out pricing now, and
Speaker 1: that really doesn't lend itself to massive growth. Where we've
Speaker 1: kind of got the Tesla strategy here that it's sell
Speaker 1: this to people who care about these, you know, these
Speaker 1: aspirational qualities of health for animal welfare, but not expect
Speaker 1: a huge amount of growth. I think in that scenario,
Speaker 1: you know, I've kind of said it's somewhat similar to
Speaker 1: kind of fair trade products or fair trade coffee. You know,
Speaker 1: we might get you know, from where we are today
Speaker 1: point three percent and meat to something like you know,
Speaker 1: one and a half, maybe maybe a cup four percent
Speaker 1: of meat sales over the coming decades. What would really
Speaker 1: become interesting if the pitch changes that that pitch at
Speaker 1: the moment is justified by the way it's justified because
Speaker 1: their supply constraints. There's not enough in particular p protein
Speaker 1: out there to make the address or market any bigger.
Speaker 1: But what happens if there is What happens if these
Speaker 1: bottlenecks to kind of are are untied or solved, and
Speaker 1: then it becomes really interesting because this stuff could get
Speaker 1: really cheap. We could we could be you know, grinding
Speaker 1: up plant based proteins inter pace performing into into meats
Speaker 1: that if they can get the recipes right and make
Speaker 1: it seem like meat could be the same cost or
Speaker 1: less than animal meats and could have all these aspirational
Speaker 1: qualities at no cost to consumers. It's free or or
Speaker 1: even a discount to to meat products. And that's where
Speaker 1: the numbers will really start to move. In our view.
Speaker 1: We started looking at parallels. There two things like genetically
Speaker 1: modified corn at the far extent, you know that that
Speaker 1: you know, just a couple of decades has become the
Speaker 1: dominant plant to crop across the US. And in the
Speaker 1: middle of something like diet soda. I think they're really
Speaker 1: strong and ourlogy here with diet soda cost the same
Speaker 1: desoda when it's sugar field soda when you go to
Speaker 1: the store, but you're getting that aspirational quality of health
Speaker 1: and healthy is aspirational, by the way, it's not it's
Speaker 1: not universal. Um, I was going to say, diet soda healthy.
Speaker 1: I don't know. You yeah, but but it's it's something
Speaker 1: that you don't necessarily need. You could just not have soda.
Speaker 1: Same with meat, you could not have meat, or you
Speaker 1: could go to the alternative if it's the same price.
Speaker 1: But if you can get at that same price, you
Speaker 1: diet service suggest that you get kind of twenty five
Speaker 1: to the market. If you can sell a product for
Speaker 1: the same price as the competitor, that's roughly close enough
Speaker 1: to the real thing to convince convince consumers to buy it.
Speaker 1: At the moment, were certainly on a pathway towards single
Speaker 1: digit percent of meat sales. We really need the price
Speaker 1: to change, Maybe the technology costs to come down a bit,
Speaker 1: but really priced your marketing strategies to change if you're
Speaker 1: to see really high bunch levels and therefore the emission consequence.
Speaker 1: So you. This was a lot of fun. Thank you
Speaker 1: very much for coming on the show today. And I
Speaker 1: think it was a lot of fun just because I
Speaker 1: sudly love the shows where we get to talk about
Speaker 1: stuff that I'm actually going to get to see and touch.
Speaker 1: While I do love the electricity that is powering my
Speaker 1: computer right now, and that is a compelling topic. I
Speaker 1: am also really interested in what I'm having for lunch today,
Speaker 1: So you've You've closed the loop for me, Hugh, Thanks
Speaker 1: for joining us. Thanks very much, great to be here.
Speaker 1: Today's episode of Switched On was edited by Rex Warner
Speaker 1: of Gray Stoak Media. Bloomberguin e F is a service
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