The USDA’s approval of cultivated chicken produced by Upside Foods and Eat Just provided a natural and optimistic focus at reThink Events’ Future Food-Tech Alternative Proteins conference in New York last week.
News the US had become only the second country – the first being Singapore – where consumers can purchase cultivated meat provided an encouraging boost to two days of discussions, which may otherwise have been weighed down by macroeconomic headwinds and the downturn in investor sentiment.
The event included panels dedicated to the manufacturing components of alternative proteins and cell-cultivated meat; the impact of recent criticism of plant-based proteins and roles of animal mimicry and sensory experience in shaping the category’s still-evolving consumer preferences.
Themes that emerged across discussions included calls for partnership to address key fermentation capacity bottlenecks; the need to attract a diverse array of capital types given the recently diminished appetite among venture and private equity investors, along with reminders that the challenges impacting alternative protein mirror the development of other cutting-edge technologies.
“We’re just in a classic Gartner hype cycle here. We were at an inflated peak, we’re coming down, but this [alternative protein] is not going away. There’s a lot of really great signs. If you look to the EV space, look at the solar space, this is very common. We’re going to get through this,” said Nick Toriello, VP and head of partnerships at The EVERY Company. “We see these multinationals we are partnering with and working with closely, who are doubling down on innovation, they are not going away. This is just a standard part of the curve.”
On a panel devoted to alternative protein valuations and investment strategies, New York and Hong Kong-headquartered Lever VC founder Nick Cooney made the case that a downturn seen over the past 18 months will prove positive for the overall development of alternative proteins.
“We see the companies that are hardest hit as being, generally, companies that were way overvalued in the past, or that haven’t performed that well,” he added. “We certainly see the branded, plant-based sector as being much more hard-hit than the technology-driven sector.”
Barclays managing director and head of VC banking and food technology Matt Spence said a key challenge facing alternative protein start-ups, is that most of the capital raised to date has focused on the start-up and venture stages and not the growth equity required for capital intensive expansions such as bioreactors.
“There really is this valley right now we are trying to bridge,” he said. “How do you really tell a compelling story that food and food technology is an essential part of sustainability? That’s hard to do with the current investment landscape where it is. The question is: what do you do about it?”
Spence cautioned observers not to focus too narrowly on current challenges facing the sector that include macroeconomic challenges facing all industries.
“In a few weeks, we’re going to be able to have cultivated meat, in the US, at a bunch of different restaurants,” he said. “We’ve sort of baked that in; that’s a pretty fricken awesome thing to have!
“It shows people worked really hard, our government got in a place to feel very good about that, and we can do that. What used to be in the zone of flying cars we can all do pretty soon. We shouldn’t lose sight of that being a great thing because there is a lot of work to do.”