Cultivated meat had a difficult run in 2024 particularly in Singapore where formerly frontrunning companies in the industry ran into issues, such as cultivated chicken firm GOOD Meat which hit major operational snags.
The millions of dollars of investment funding that were being poured into the industry also started drying up gradually in the past few years, bringing around a ‘funding winter’ that has been particularly obvious in cultivated meat due to the long, long timeframe required to see any ROI.
Sustainability has been the core marketing strategy used by many cultivated meat companies in markets like the US and Europe, with grandiose ambitions to change the global protein supply and eliminate the need for animal agriculture in as little as a decade.
But even before these troubles, companies in Asia had already had to make adjustments to this by prioritising health and nutrition due to sustainability being a far weaker purchase driver here – and considering the economic environment and inflationary pressures, this now carries even less weight when compared to food affordability.
“Way back when the cultivated meat sector first took off, sustainability was the main industry driver and it has remained so in some markets, but we have always been cynical about this being enough to change the world per se,” Andrew Janis from cultivated firm VOW Global told the floor during a ‘Exploring Marketing Strategies for Cultivated Meat’ panel.
“The reality of the situation always has been that this was a new area and we were going in without any conventional approach to follow, and we were creating it as we went along and initially people were very excited – but it was only after the novelty wore off that reality set in.
“Now when we look at moving the industry forward, we need to consider the fact that there are many steps between manufacturing and a consumer eating these products, from processing to packing to distribution to transportation to retail to preparation and so on – and every step involves very real costs which need to be considered in relation to the consumer.”
Cultivated foie gras firm GOURMEY CEO Nicolas Morin-Forest added that the time is not quite right for the sector to look at price parity as the goal.
“The fight for parity was great when looking at the first-generation products, but we have realised that now consumers are looking more at value, and to capitalise here there is no choice but to look at higher-end product segments like foie gras or beef right now,” he said.
“When we talk about making changes to the food supply chain being a major driver, this comes back to sustainability being a big enough draw – but unfortunately this is not enough to enable start-ups to transform their concepts into commercial success, which means there may not be even the opportunity to enter the food supply chain especially in markets like Asia.”
This was seconded by Cellular Agriculture Australia (CAA) CEO Sam Perkins, who stressed that at its heart cultivated meat is meant to be a food, and not a technological breakthrough.
“As a food business, the priority should always be on food first and foremost, and what makes good food,” he said.
“This will mean it must be inexpensive, healthy, nutritious, low cost and accessible – these are the factors that will appeal to the general consumer.
“If the sector still has its heart set in the long run on making a difference, companies need to start with focusing more on product desirability and not feasibility or else [it will be difficult to make any impact in markets like Asia].”
The Asia conundrum
Asia has always been a particularly price-sensitive market, and with economic instability and uncertain incomes having been a major concern in the region as of late, no amount of novelty or sustainability will be able to overcome affordability concerns for the general consumer here – but cultivated meat is far from being able to address these concerns.
“It is very important to remember that at the heart of any food or beverage sector, in the long run food needs to be cheap to be widely accepted, especially in a market like Asia, and firms need to accept that the margins are only so big,” Future Food Asia (FFA) organising firm ID Capital CEO Isabelle Decitre told us.
“The issue is that as a novel industry, many cultivated meat firms have had to prioritise answering to investors as a natural result of seeking investment, as investors of course will demand to see returns – but the reality is that progress has not been as rapid as hoped, and it has been an awakening for both the investors and the companies.
“Building a brand is always going to be very expensive, and companies can only exist if they can make a decent profit at a decent scale, but for this there must be a decent-sized addressable market.
“For cultivated meat companies, the first question that needs to be addressed is what this addressable market is – some are going down the niche, premium route but this will of course mean higher prices and limited access to the general consumer, so scaling up will take a different trajectory especially in Asia where again, food needs to be cheap to be widely accepted, consumed and purchased.”
Don’t beat them, join them
A potentially integrative option to the conundrum has been suggested by Meatable, which plans to work in-depth with conventional meat companies for meat production.
That said, this would by no means be a quick solution – Meatable estimates that it will be about five years before the first cultivated meat production line integrated into a conventional processing plant will be operational.
“The meat industry wants good, safe, high-quality meat and efficiency is paramount to them, so it actually makes a lot of sense to integrate cultivated meat production into their operations,” Meatable CEO Jeff Tripician told us.
“This would be just like a tech upgrade for them, and would serve to both act as a draw for younger consumers as well as meet their corporate ESG requirements – we have already had these discussions and found that this integration can represent at least five areas of relief for a meat company.
“It is also the most financially viable strategy for us and the consumers, as this takes product marketing out of the equation for us – this would fall to the meat company.
“And when produced at large scale, end-product prices will drop which then make these more accessible to and affordable for consumers, a crucial factor to consider in a market like Asia.”
