What You Need to Know: Helikon’s Analysis of the 2021 SynBioBeta Food and Agriculture Conference
Increased VC funding to start-ups and interest from larger companies may evolve the current business model into the M&A biotech/pharma model.
As the acceptance of cultured meat is growing, so is the money from both traditional sources such as venture capital and partnerships, and non-traditional sources such as NASA and TRISH (Translational Research Institute for Space Health). The Good Food Institute was represented by Dean Powell, who mentioned that VC funding for alternative protein companies has nearly doubled year-over-year since 2017. In 2017 it was approximately 250M USD, in 2018 approximately 520M, in 2019 824M USD, and in Q1 of 2020 it was already 930M USD. One of the first leaders of VC funding in this industry, Arvind Gupta, founder of IndieBio, discussed the companies started at IndieBio such as Clara Foods, Perfect Day, and Memphis Meats. These companies and others have undoubtedly paved the way for newer companies by revealing the avid consumer interest. In addition to cultivated meat, Jaleh Daie, Chairwoman of Band of Angels, provided insight into other industries that could be enhanced by synbio companies, including waste management, food waste, supply chain logistics, and direct delivery to consumers. James Hurry, CIO at TRISH, discussed his organization’s goal of investing in synbio technologies that could benefit space travel with non-diluted funding. Current focuses include cell based protein, aquaponics, and sustainability of humans in space. An interesting conversation between the speakers revealed how space travel drives innovation by focusing the technology advancements on the following parameters: minimal energy/power source requirements, closed ecosystem/recyclable materials, density and space optimization, growing cells/food with high nutrient content, and modifying texture.
The presence of a few large companies at this conference made me question: Will the cultivated meat industry business model follow a similar trajectory to biotech startups and biopharma M&A model? Generally speaking, in biopharma, small agile companies often VC backed drive innovation and larger companies leverage their scale and logistics to bring products to market. Large firms like BCG, P&G, BSF, Bayer, and Reliance Industries, normally focused on much larger markets, were present and showed interest in start-ups. They even led brainstorming sessions to identify new methods of scaling, a significant barrier to the industry’s growth. Their partners, Hello Tomorrow, a non-profit think tank focused on new tech, was also there. The business models of these companies are something to watch, and it is expected that they will use the partnerships/M&As of biotech and large pharma as a potential exit or source of growth. Although the current trend is to IPO (e.g. Beyond Meat, Memphis Meat), in the future large industrial food companies (Tyson - already invested in Beyond Meat, Purdue, etc) may be interested in M&As or very close partnerships.
Major takeaways from the conference:
Investment from both VC and large companies is rapidly growing into synthetic biology start-ups.
The business models of cultivated meat may begin to reflect the biotech/biopharma space as larger companies take notice and pursue M&As to expand their own portfolios.
Space travel may drive innovation in synthetic biology because of the unique needs of technology with minimal energy/power source requirements, closed ecosystem/recyclable materials,density and space optimization, grow cells/food with high nutrient content, and modify texture.
Integrating culture with new food technologies is critical to increase consumer adoption.
Many speakers stressed the importance of integrating culture with technological developments, since food is so personal and is incorporated with everyday life. Massimo Portincaso, chairman of Hello Tomorrow, and Christine Gould, CEO of Thought For Food, discussed strategies on how to maintain an open dialogue about synbio technology with people. The artistic and culinary communities, which can influence how people eat and see food, should be included in discussion from the R&D stage all the way to table service. This message was echoed and emphasized by many leaders throughout the day at various sessions. Arvind Gupta, founder of IndieBio, said “Food is comfort, culture. It’s not technology,” and continued to discuss how food impacts the everyday life of people. CEO of Finless Foods Micheal Selden said, “We don’t think the tech really sells the food. Our aim is to make food that is tasty, more nutritious, and convenient.” This strategy of integrating culture and technology has served other model companies like Impossible Foods, which debuted it’s burger at David Chang’s Momofuku Nishi in Manhattan NYC, very well.
Others echoed this message and suggested specific strategies that were aimed at demystifying cultured meat. Shannon Theobald, a consultant in the alternative protein space, mentioned that consumers were more likely to adopt the technology if the supply chain was transparent. Targeting younger demographics who are often adventurous could be a good strategy, since they have a lower bar for adoption. They will also grow into a large consumer segment as the industry grows, in the next 10 to 20 years. Understanding product placement at the grocery store (meat isle vs vegan isle) and how this impacts the pHelikon leverages its deep technical expertise to partner with leaders in frontier tech, synthetic biology, and cultivated meat. So, SynbioBeta’s Food and Agriculture conference really spoke to us! We were excited to see a wide range of topics including early-stage R&D, sustainability, new business models, and even synbio for space travel. As an Associate at Helikon, I attended the conference with the goal of understanding the emerging themes, trends, and challenges that the industry faces. Read below to see the major takeaways.
1) Increased VC funding to start-ups and interest from larger companies may evolve the current business model into the M&A biotech/pharma model.
2) Integrating culture with new food technologies is critical to increase consumer adoption.
3) Regulatory pathways should be considered preemptively/concurrently with R&D.
4) Synthetic biology must continue to identify and focus on where it can add unique value and minimize redundancy with current technology
Perception of the customer is also critical. “Flexitarians” may be more likely to choose cultured meat if it’s next to the traditional meat, but the opposite may be true for vegetarians. Geographic and local culture is also critical to understanding how to grow the alternative protein industry. This sentiment was echoed by Patricia Bubner, CEO of Orbillion Bio, who asked “How do we communicate to the consumer, what we are really doing? It’s important to tell the consumer the whole story.”
Major takeaways from the conference:
The keys to increasing consumer adoption of cultivated meat are:
Transparency in the value-chain and processing.
An open dialogue and education about the technology.
Maintaining the focus on the personal aspects of food and culture, not the technology
Strategic consumer selection, product marketing, and product placement.
Regulatory pathways should be considered preemptively/concurrently with R&D
The path to regulatory approval could be both complex and challenging but there are key lessons from leaders in the field that can help inform other cultivated meat companies. Josh Tetrick, CEO of Eat Just, described the regulatory approval path for cultivated chicken in Singapore. There were many factors associated with the company’s success, including selecting a forward-thinking consumer base/regulatory body, providing transparent information on their novel technology, and planning years in advance. One excellent example of preemptive planning is demonstrated by Atlast Food Company’s CEO Stephen Lomnes. Lomnes mentioned their deliberate use of simple, natural, and Non-GMO ingredients which should make regulatory approval straightforward. Another example of NON-GMO engineering which enabled relatively quick regulatory approval was Aleph Farms Ltd. Neta Lavon, VP of R&D at Aleph, mentioned that their company’s transparency and Israel’s geographic constraints on natural resources were key factors in their success. Recently, New Harvest, an incubator for cultured meat companies, in collaboration with the industry completed a very thorough report on safety of cultured meat. This report included many of the points discussed by the leaders at the conference and also included detailed information on assays that could be used to test the safety. In conjunction with GRAS regulations set forth by the FDA, these cultured meat companies are poised to develop well regulated, nutritious, and tasty food.
Major takeaways from the conference:
Some key aspects for regulatory approval include
Identifying and documenting key data for regulatory approval and collecting appropriate data concurrently R&D.
Planning for transparent and simple documentation.
Transparency with the technology and methods.
Minimizing and simplifying post-processing of the food.
Using Non-GMO ingredients where possible.
Identifying forward-thinking markets and regulatory bodies.
Synthetic biology must continue to identify and focus on where it can add unique value and minimize redundancy with current technology
Although synthetic biology can enable many new products, the speakers noted that it was critical to the field’s success that they focus on key niches where synthetic biology can excel and thrive in the market. Avoiding redundancy with optimized technology will be critical. For instance, an idea that was discussed throughout the day were "high value" products that are rare or require intensive processing, for example Vanilla. Conagen’s VP of Innovation, Casey Lippmeier, continued to explain that Conagen is partnering with global chemical giant BASF to scale-up fermentation of their novel product. Kathy Oglesby, Head of Flavors and Fragrance at Blue California, elaborated on their unique ability to generate new compounds with novel smells/tastes, another excellent spot where synthetic biology can shine. When asked about the limitations of synthetic biology, both Casey and Kathy noted that sugar is very unlikely to be made with synthetic biology, as current industrial methods are amply sufficient from both a quantity and cost perspective.
Major takeaways from the conference:
Synthetic biology can add tremendous value when
Desired molecules are hard to find, collect, or process via natural methods (e.g. wild mushroom foraging, but not sugar)
Standard chemical methods are very not efficient or costly. (e.g. vanilla synthesis)
New molecules are desired but are absent in nature. (e.g. extinct/novel flavors)
Local resource constraint exists (e.g. water, arable land, space, climate, environmental damage etc)
Written by Nandan Pandit, Associate at Helikon Consulting
