“Farm to table is so 2020….”
The year is 2025. A new type of restaurant has taken root in hip neighborhoods populated by Gen Z professionals born in the late-90s and early-2000s. Unlike the farm to table joints of yesteryear boasting chalkboards covered in the names of small family cattle farms and fisheries, this new crop of eateries offers diners new information about their burgers and smoked salmon toast: the names of labs, regulatory certifications, and the amount CO2 and water saved per dish by using no animals at all.
It’s strange to imagine a world of meat without animals and food without farms (farms with barns, tractors, and fields that is) but it may be closer than we think. As millenial and baby boomer consumers continue to shell out billions for meat labeled organic and free-range, it’s worth asking: will Gen Z lead the lab-grown meat revolution?
What is Lab-Grown Meat?
While lab-grown meat sounds icky at best and like something out of a horror sci-fi novel at worst, the concept is fairly straightforward. Lab-grown meat (also known as “clean meat” or cell-based meat) is just that – meat that is grown in a lab. Researchers have isolated stem-cells in animals that make up the parts that we eat. By replicating these stem-cells in a lab (think: literally growing them in a petri dish) researchers can create a shrimp, chicken breast, or even a beautiful slab of Texas rib-eye. The process is a bit more complicated than that of course, but increasingly, investors are pouring money into lab-based meat and seafood startups like MosaMeat, Memphis Meats, Finless Foods and Wild Type. So far venture capital investors are the ones supporting the development of these new-age meats and many of their investments rest on a critical question: will Gen Z buy this stuff?
The Bull (Optimistic) Case: Healthier, Sustainable, and More Humane
It’s no secret that Gen Z is interested in vegetarian and vegan food options, with many citing ethical reasons as their motivation. 41% of 18-25 year-olds worldwide list climate change as the most pressing issue facing our planet and it shouldn’t surprise us that many are shunning meat given its position as a top source of global carbon emissions. Marketing aggressively to environmentally-minded consumers, Impossible Foods and Beyond Meat have seen blockbuster success in the plant-based meat category (with Beyond currently trading at a $5.3 billion market cap). And the growth doesn’t show signs of stopping; analysts project that the global alternative meat market could hit $140B in the next decade. This success is directly driven by the younger generation; a recent survey found that over half of millennial and Gen Z respondents consumed plant-based meat at least once a month, compared to just one-fifth of U.S. adults ages 55 and up. In other words, Gen Z consumers care about the environment and spend money according to their values.
Lab-grown meats provide a healthier meat alternative, especially to Gen Z consumers who are mindful of what they put into their bodies. Gen Z has established themselves as a group with a clear focus on physical fitness, mental health, and healthy eating. And meat hasn’t always been seen as the “healthy” choice: over the past decade, there have been a variety of medical research headlines claiming meat may cause heart disease, diabetes, and cancer among other health issues. Plant-based diets have had more than their 15-minutes of fame, with “health reasons” being a commonly cited motivation for people to switch to vegetarian or vegan diets. (If Forks Over Knives on Netflix didn’t scare you into eating only greens, I don’t know what will.) Even the plant-based products that started the new-age alternative meat movement — the Impossible Burger and Beyond Burger — have ignited backlash for being too processed. The lack of intense processing is why lab-grown meat will likely win out over plant-based meats in the long-term, as it already feels and tastes like meat. Lab-grown meats are also significantly cleaner and healthier than processed traditional meats, which typically include significant amounts of antibiotics and trace amounts of contaminants from the slaughter process. Cell-based meat, also called “clean-meat,” is generally just that — cleaner than a traditional cut of meat, while providing consumers the corresponding health benefits.
Treatment of Animals
68% of vegan consumers choose to avoid animal products because of concerns around inhumane treatment of livestock. Countless documentaries depicting factory farming conditions illustrate the morbid state of the food industry in America: animals crammed together, unable to move; animals being pumped full of fattening foods, antibiotics, and human-growth hormones; and illnesses and injuries going untreated due to high animal-to-worker ratios. This is a particularly sensitive issue for Gen Z; PETA is one of the top 10 organizations receiving charitable donations from this age group.
Each generation brings its own wave of social and morally acceptable guidelines. Given Gen Z’s perceptions of the way we treat livestock today, it is entirely possible that fifty years from now, our grandchildren will ask us how we ever thought it was acceptable to raise livestock in cramped quarters and poor living conditions for the sole purpose of food production.
It is estimated that animal agriculture contributes to roughly 15% of all human-driven global carbon dioxide (CO2) emissions. An Environmental Science & Technology study found that the average American’s meat consumption creates 1,984 pounds of CO2 emissions annually. Additionally, repurposing land for ranching and pasture lands is the leading cause of Latin American deforestation. (An estimated 65% of deforestation in the region is driven by this.)
To say meat production is negatively impacting the environment and global climate would be an understatement. The skyrocketing demand for meat in developing economies means this trend shows no signs of stopping. Cell-based meats will lead to substantially fewer carbon emissions, require miniscule amounts of physical space compared to cattle farming today, and allow land that is currently being used for livestock to be cultivated for other purposes, like reforestation. This aspect alone could be a huge draw for Gen Z to try cell-based meats.
The Bear (Pessimistic) Case: Expensive and Icky with Regulatory Unknowns
There’s clearly an argument that lab-grown meats are well positioned to become the star of future menus and disrupt the $1 trillion global meat market, but what could derail this scientific protein’s march on to our dinner plates?
Tough Unit Economics
The key risk to this market and Gen Z adoption is unit economics. While MosaMeat has reportedly gotten their cost of production down to $10/lb, that cost is still significantly higher than what most Americans pay for a pound of meat in the grocery store (somewhere between $3–$7/lb). Until these companies can manufacture efficiently and at scale, they will not be seen as a real alternative but rather a pricier pseudo-meat offering.
Regulatory concerns surrounding how lab-grown meat is evaluated by governments also are posed to delay or derail its success. Domestically, the United States Department of Agriculture (USDA) regulates meat production and advocates for agriculture. The potential conflict of interest surrounding lab-grown meat left both the U.S. Food and Drug Administration (FDA) and USDA in charge of oversight of alternatively grown meat — something these agencies are currently ill-equipped to evaluate. Additionally, the meat sector is the largest employer within U.S. agriculture, and the rise of cell-based meats could create chaos and eliminate jobs across the entire meat production value chain. This threatens lobbying from “Big Meat,” which could slow market arrival of these alternative cell-based options. Additionally, the European Union has shown a strong willingness to regulate scientifically-modified foods in the past and it’s unlikely to drop this stance for proteins grown entirely in a lab setting.
After all the trend analysis and market forecasts are said and done, one question will define the fate of lab-grown meat: do Gen Z consumers actually like this stuff? So far the jury is out and it remains unclear whether today’s consumers are willing to broadly adopt (or even try) something like lab-grown meat. Massive question marks exist around how lab-grown meat will be branded, marketed, and sold. How will companies encourage consumers to try their product? Will lab-grown options be marketed as an alternative to traditional meat or as a product to be “blended” with real meat?
Until these questions are answered, we probably won’t be eating lab-grown burgers at McDonalds or cell-based steaks at Morton’s. But one thing’s for sure, if current trends around health consciousness, environmental sustainability and the treatment of animals continue, Gen Z is likely to give lab-grown meat a shot and drive adoption when it does come to market.
What do you think about lab-grown meat? If you are a student founder working on a company related to lab-grown meat, we’d love to hear from you! Please get in touch at email@example.com.
Written by Angela Winegar, DRF Investment Partner (Boston). Follow her on Twitter and Medium.
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