The Challenges and Potential Benefits of Animal-Free Lichun Huang, Hal Giuliani Gordon, and David Zilberman

Innovations in science have Food systems around the world a significant expansion of the dietary led to the emergence of plant- account for about 30% of the world’s options of consumers. based substitutes for animal total energy consumption. As the The introduction of animal-free meat products. This article human population continues to rise, systems will require investment in provides an overview of some food production would be a signif- research, but may result in cost and icant contributor to an estimated of the emergent products and environmental savings over time. 80% increase in global agricultural argues that their diffusion may Impossible Meats, a leading producer, greenhouse gas (GHG) emissions. An be gradual and dependent upon spent nearly five years on the research increase in energy conversion effi- technological improvements and and development before releasing a ciency in the food production system consumer preferences. These product, then needed three more years will have a crucial impact on food products have the potential to before they received the FDA’s per- security, global health, climate, and the reduce greenhouse gases and mission to sell their product in grocery environment. the environmental side effects of stores rather than just restaurants. The agriculture, but further research is Recently, innovations in food pro- investors believe that low-cost pro- required to quantify their impacts. duction make producing plant-based duction in the future and improved meat, substitutes that closely mimic quality resulting from research make the taste and appearance of meat, these investments profitable. possible for the first time in human The current innovations are the culmi- history. Pound for pound, a plant- nation of advancements in molecular based diet has higher conversion biology, , and cell biology. efficiency than an animal-based diet as The production methods follow two it removes an extra step of energy con- approaches: simulating meat products version from sunlight. Thus, replacing using plant components (plant-based meat consumption with plant-based meat) and culturing muscle cells using meat products would improve the effi- plant-based media (). ciency of use of feed inputs based on the percentage of energy input utilized Plant-based meat alternatives: in the production. These products closely mimic the The notion of improved input use unique tastes and textures for real efficiency is a key element of modern meat by creating molecules that agriculture. For example, both modern closely resemble those present in meat irrigation and precise fertilizer appli- by using or fermenting Plant-based meat alternative, Impossible cation technologies increase the fixed soy. They much more resemble the real is available in more than 1,000 Burger, cost of production. By increasing thing than tofu () and seitan locations in the U.S., including fast-food (wheat). restaurants such as . the efficiency of inputs, they have increased yields and decreased total Cultured Meat: These are actual costs, making them ubiquitous in muscle tissues grown in labs using modern agriculture. For example, stem cell biology and tissue engi- most animal meats require more neering. The technology involves like than that needed the extraction of stem cells from the to produce -based meat. The organism and transferring them onto diffusion of these new technolo- or into a suitable growth medium. The gies has been gradual, and the early product can be modified to contain adoption occurred at locations and proper fat and water compositions applications where the technologies and color, so it mimics the texture and had a relative advantage. If consum- flavor of meat derived from animals. ers eventually embrace animal-free The result is nearly identical to con- meat, its cost savings could result in ventional meat but avoids much of the

Giannini Foundation of Agricultural Economics, University of California 5 Table 1. Plant-based Meat, Cell-culture Based Animal Products and Cultured Meat Companies

Technology Product Technological Challenges Capital

Plant-based Imitating ground meat product Mimicking appearance, IPO in 2019 Meat Alternatives (, taco, ). texture, and flavor to Market cap in December 2019 (Use pea as the Available in restaurant meat products is valued at $4.65 billion source of ) and supermarkets

Plant-based Meat Alternatives Burger available in more than Mimicking appearance, mixed with 1,000 locations in the US, Funding estimated: Impossible texture, and flavor to soy-based structured including fast-food restaurants $600 million meat products (wheat, coconut such as Burger King. oil, and potatoes) Mimicking appearance, Plant-based Plant-based burger and sausages Acquired by Maple Leaf LightLife texture, and flavor to Meat Alternatives available in select supermarkets Foods in 2017 for $140 million meat products Mimicking appearance, Raised and Rooted Plant-based Plant-based nuggets and burgers texture, and flavor to Privately owned by Tyson (Tyson Foods) Meat Alternatives available in select supermarkets meat products Established 2011 Plant-based Available in some health food Developing attractive flavor Sophie’s Kitchen Investors: Spring Singapore Alternative stores and select supermarkets and texture imitating seafood and Food Future Co. Raised $161 million led Memphis Meats Cultured Meat Not available on the market Commercially viable scale by Japan Soft Bank (A big investor in new technologies) JUST $220 million led by Cultured Meat Not available on the market Commercially viable scale (Hampton Creek) Khosla Venture Cultured Fish Seed funding $3.5 million Finless Foods Not available on the market Fish cell culture (Bluefin ) USD by Draper Associates First Demo August 2015, lab grown Commercially Partnership with Nutreco Mosa Meat Cultured Meat meat. Not available on the market viable scale and Lowercarbon Capital Founded in 2018 in Singapore. Develop Cell-based Raised $4.6 million seed Shiok Meats Cultured Seafood Not available on the market not available in the market money

Source: Center for Sustainable Systems, University of Michigan (2019)

emissions associated with raising live- As a technology, cultured meat is still substitutes have relatively low CO2 stock. Cultured meats need to cross in its early stages. Currently, only a emissions (10-40% of products), cost and regulatory challenges before small-scale “proof of concept” has but we lack LCA estimates for the being ready for the market. been demonstrated for publicity; newer products, which makes com- The State of the however, the prospect of making meat parisons challenging. from authentic animal muscle cells Industry and Its Future There are significant differences without slaughter has attracted signif- in emissions among different beef The two approaches to produce ani- icant investment from venture capital categories, suggesting opportunities mal-free meat are at different stages of firms and large industry players like for reduction in emissions. Replacing commercialization. Table 1 provides a Cargill. Mosa Meats, JUST and Mem- beef has been the focus of work by list and details of companies employ- phis Meats are some of the early pio- both plant-based and cultured meat ing these approaches. Beyond Meat neers in this space. Cultured seafood technologies. Both Beyond Meat and Impossible Foods are two leading pioneers are motivated by the decline and Impossible Foods offer burger new plant-based meat companies. of the wild stocks (Finless for Bluefin with the look and taste of the The traditional American meat giants, tuna) or enormous market demands conventional product. Other ground Tyson and Purdue, have announced (Shiok for shrimp). plans to release their plant-based meat meat products, such as taco ground products, and Canadian meat giant Figure 1 presents results of life cycle beef and , are also avail- Maple Leaf has already entered the assessments (LCA) showing that able, as well as deli meats, sausages, market via acquisition of LightLife. sheep and beef meats have high rates and . Imitation or cultured In addition to meats, seafood alter- of CO2 emissions per kg of protein. chicken is a focus of investments by natives are becoming available in The GHG emissions of extensive chicken giants like Tyson and Purdue, grocery stores under brand names like beef (grazing) are smaller than that and Beyond and Impossible have Sophie’s Kitchen. of intensive meat (feedlot). Meat announced their intent to enter the 6 Giannini Foundation of Agricultural Economics, University of California market as well, focusing on sausages Figure 1. Carbon Footprints per Kilogram of Protein and “nuggets” that lack bones or other skeletal structures. Some ana- Beef Extensive 640 Beef Intensive lysts believe chicken will be the first Beef from Dairy Cows Data Point commercially available cultured meat Pig Meat product. Meat Sheep Meat 750 The development of plant-based Milk Eggs and cultured meat technologies has Seafood from Fisheries 540 followed the familiar stages of techno- Seafood from Aquaculture logical advancements—basic research, Vegetal Protein testing, upscaling, commercialization, Other Meat Substitutes and development of a supply chain. 0 50 100 150 200 250 kg of CO per kg of protein The cost of these products is likely 2 to decline over time as a result of Source: Nijdam et al., 2012. “learning by doing,” and their value to consumers may rise due to “learning successful product line Thus far, Burger King increased total by using.” in 2017 at many more supermarkets sales by adding the Impossible Burger, The introduction of plant-based before expanding to fast-food restau- but there was no significant impact meat alternatives is the culmination rants in 2019. The first movers invited on the consumption of meat burgers. of many years of research in food imitation. It is hard to imagine that While Impossible Foods boasts that sciences and molecular biology. The large conglomerates like Cargill and 90% of their customers are meat-eat- critical ingredient of Impossible Tyson would have made their invest- ers, it is not apparent that these Burger, recombinant heme from soy, ments without Beyond and Impossible consumers are substituting for meat was discovered by its founder during demonstrating the viability of the or older meat alternatives like tofu or a sabbatical from biomedical research product first. veggie burgers. at Stanford. Similarly, cultured meat Consumer Demand Many customers may try plant-based technology started from stem cell biol- and Political Economy meats because they perceive them to ogy initially developed for therapeutic The success of the novel meat alterna- be healthier, but while plant-based applications. The journey from proof- tives ultimately hinges on their accep- burgers are lower in , they of-concept in labs to the commercial tance by consumers. Cooking and are still just as high in fat, calories, and products has taken both Impossible consuming meat is culturally rooted sodium as the real thing. Plant-based and Beyond Meat four to five years. In and not likely to change overnight. alternatives are not able to provide both cases, small-scale processes pro- While plant-based meat products may the necessary amino acids found in duced novel products that impressed appeal to vegetarians and vegans, beef. Also, there has been a backlash both consumers and investors, which only 5% of Americans identify as such. against these products by consumers drove a virtuous product development Analysts believe that companies must who eschew highly processed foods. cycle to improve the quality and quan- attract meat-eaters, which may be a Advocates claim that plant-based tity of the product. tall order. diets are better for the environment Impossible Burger was initially (2016) and animal welfare, but such claims Plant-based burgers may be able to available in select restaurants before require further evaluation. On the gain cost advantages as they perfect it became a popular item in fast-food surface, they may provide meat with their processes, but they are chal- chains, and in 2019 was added to lower GHG emissions and a smaller lenged by meeting consumer percep- the menu at Burger King. Through agricultural footprint. However, their tions and taste requirements. Even research and learning by doing, the claims do not consider GHG emissions if plant-based meats can match real company recently released a new from alternative land uses, and range- burgers on taste, it may take much version of their signature burger, the lands provide essential environmental effort to attract customers to try the Impossible Burger 2.0, which more services. product if they have negative atti- closely resembles 80/20 ground beef tudes towards vegan foods. Producers The is also responding from cows. Beyond Meat first sold aimed to attract customers by making to the threat of this technology. For chicken products in 2013 at Whole their products as cheap and ubiqui- example, the Real MEAT Act of 2019 Foods, but then pivoted to a more tous as possible at fast-food outlets. requires labeling plant-based meat

Giannini Foundation of Agricultural Economics, University of California 7 Figure 2. Land Use per Kilogram of Protein development. These new technologies will require a well-compensated, high- Beef Extensive 2100 skilled workforce, but reduce demand Beef Intensive for agricultural labor in both grain and Beef from Dairy Cows Data Point production, and may neg- Pig Meat atively affect the economies of rural Poultry Meat areas both domestically and globally. Milk Eggs Summary Seafood from Aquaculture Vegetal Protein Plant-based meat is only in its infancy. Other Meat Substitutes If consumers will accept it as a close 0 50 100 150 200 250 substitute for meat, its seemingly m2 per kg of Protein lower input requirements, and GHG emissions contributions, it will change Source: Nijdam et al., 2012. the structure of agribusiness, the products as ‘imitation’ meat. In 2018, be penalties for the GHG emissions economics of food and agriculture and Missouri enacted a law requiring of the production processes. How- rural regions, and the environmental that only products that come from ever, we lack rigorous computation of impacts of food and agricultural pro- slaughtered animals can be marketed whether and to what extent these tech- duction. Assessing these changes and as meat. Furthermore, the listing of nologies are reducing GHG emissions, developing policies to impact them ingredients used in plant-based meats taking into account land-use effects will be the subject of substantial future may raise consumer concerns about and life cycle analysis. research. the alteration of natural foods. Suggested Citation: Figure 2 provides results of studies Huang, L., H.G. Gordon, and D. Economics of the Industry assessing the land-use effects of plant- Zilberman, “The Challenges and based meats vs. traditional meats, sug- The plant-based meat market is expe- Potential Benefits of Animal-Free gesting that grain production for feed riencing an explosive growth rate. The Meats.“ARE Update 23(4) (2020): 5–8. for meats is likely to be much bigger market has been estimated to be worth University of California Giannini than production for animal-free meats $12.1 billion worldwide in 2019, with Foundation of Agricultural Economics. that rely on legumes. Between pas- an annual growth rate of 15% and pro- tures and cropland used to produce jected $27.9 billion sales by 2025. The Authors’ Bios feed, 41% of U.S. land in the contigu- Swiss investment banking company, ous states revolves around livestock. Hal Gordon is a Ph.D. candidate in the UBS, forecasts that the market could Thus, animal feedstock acreage may ARE department at UC Berkeley. Lichun grow to reach $85 billion by 2030. decline—and lead to the emergence of Huang is an independent biotechnology However, these projections are subject alternative land uses such as biofuels, researcher and consultant. David Zilber- to much uncertainty. and some pasture land will revert to man is a professor, holding the Robin- The current price of plant-based meat wild land. A large-scale switch from son Chair of Agriculture and Resource is frequently more than twice as high animal-based protein may slow defor- Economics and UC Berkeley, and a Wolf as an equivalent meat. The Impossible estation and biodiversity loss in places Prize Laureate. They can be reached produced by Burger King like South America. Plant-based fish by email at [email protected], costs about 70% more than a regular replacements could relieve pressure [email protected], and Whopper. With the scale-up, improved on wild stocks while feeding growing [email protected], respectively. supply chain, “learning by doing,” human demands at the same time, but and maturation of food technology, it will increase demand for agriculture For additional information, the price of the plant-based meat alter- feedstock and agricultural land. the authors recommend: native and cultured meat is likely to The new industry demands highly Nijdam, D., T. Rood, and H. West- go down. These products may become skilled workers who have advanced hoek. “The Price of Protein: Review competitive on price due to smaller knowledge of chemistry and biology. of Land Use and Carbon Footprints variable costs and improved technol- The co-location of the high-tech talent from Life Cycle Assessments of ogy. The plant-based meat alternative pool ensures the adaptation of compu- Animal Food Products and their Sub- may enjoy a price advantage over con- tational tools, including artificial intel- stitutes.” Food Policy 37 (6) (2012):760- ventional beef if and when there will ligence, in the early phase of product 770.

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