Meet Your Meat: Why we invested in New Age Meats

Originally posted Februrary 22, 2019 by Jenny Friedman

New Age Meats’ sausage is the first cell-based meat to be made using both fat and muscle cells

Hi All! My name is Jenny Friedman and I’m a partner at Supernode.vc. I am stoked to announce this is my first post on Medium with the help of our rockstar Wharton MBA associate John Hammond — and couldn’t think of a better initiation than to explain our investment in New Age Meats, an innovator in the cell-based “cultured meat” industry.

If you’ve heard of the Impossible Burger you’re almost thinking on the right track. The simplest way to think of the Impossible Burger, Beyond Meat, and similar plant-based substitutes is to imagine a veggie burger that can emulate the look and taste of a meat burger more so than ever before (due to ingredients that replicate the texture and aroma of traditional meat i.e. heme, or a combination of pea proteins and beet juice, etc). Cell-based meat, however, leverages an entirely new, emerging technology — literally growing cell tissues in a bioreactor instead of in an animal’s body.

As Supernode.vc is a generalist fund, I’m sure you’re thinking “this girl [me, Jenny Friedman] must be a vegan, vegetarian, or some health conscious eater to dedicate so much time and energy to learning about ‘cultured meats’ and subsequently making an investment in the space.” Quite the contrary, actually, since my last meal on earth would probably be a #2 meal at McDonald’s — 2 cheeseburgers, large fries, and a diet coke. And while “saving the environment” is something every investor should keep top of mind, we’re not a social impact fund and I admittedly have never owned any variation of a Nalgene.

As a VC, I look for new, disruptive, and innovative technology. Apart from keeping my antenna up on the latest trends, I can’t remember exactly what sparked my interest to take this deep dive in a sector in which so much education and research was required. I like to think cultured meat today is what Bitcoin and Blockchain were in 2011: elusive and obscure. Humble reminder: an $100 investment into Bitcoin back then would be worth +$2,000,000 now.

I started gathering information, cold-emailing, and LinkedIn stalking all people & entities associated with Cellular Agriculture at the end of Spring 2018 — at which point the number of entrepreneurs, accelerators/incubators, sector specific VCs, academics, non-profits totaled fewer than 50. The nascency of the category made the quest all the more exciting, as I was able to connect with all fellow CellAg enthusiasts at the time. [Now almost 9 months later, that sort of outreach would definitely not be as manageable, as interest and involvement have grown exponentially.]

It wasn’t too long into my research when I realized just how dramatically impactful the whole CellAg movement would be on a global scale and, moreover, just how imperative it was that we take advantage of this opportunity and make an early investment in the most innovative company we could find.

I confidently believe this is the Food Revolution — and my grandkids (well maybe my kids, considering I’m currently single) — will be reading in history books that humans actually slaughtered other living mammals for food consumption.

The meat industry today is a radical combination of a massive, fast-growing business with devastating societal impact and production inefficiencies.

The Global Meat Market represents a $90 Billion industry. The 6 largest meat companies have a combined $60B in market capitalization and the market shows no signs of slowing down. The US Department of Agriculture projects that meat consumption will reach a record high in 2018: 222.8 pounds of meat per person for the year. With record meat consumption and an ever-growing world population that is projected to reach 9.7 billion by 2050, the current meat supply will be insufficient.”

Despite its scale, this industry is plagued by inefficiencies and is responsible for devastating impacts on our society. Every pound of beef we consume requires 26 pounds of animal feed to produce. Existing production standards damage our Environment, Health, and Animal Well-Being in a variety of ways.

• Environment:
  Industrial animal agriculture contributes around 15% of the earth’s total greenhouse gas emissions; more than all the world’s transportation systems combined.
• Human Health:
  Animal factory farming creates antibiotic-resistant bacteria. Humans are now using antibiotics of “last resort” to prevent deadly infections. More antibiotics are used on pigs per pound than on any other animal — 4x more than cows.
• Animal Well-Being:
  7.4 billion humans live on earth. We keep around 40 billion animals for food. Some of them live happy lives, but the vast majority do not. New Age Meats’ first pork sausages were made from a few cells from a pig; in the future, we will no longer need to extract any cells from animals to produce meat.

A study published last week in the Proceedings of the National Academy of Sciences, conservatively estimates that if people continue to follow current trends of meat consumption, it would cost the U.S. economy between $197 billion and $289 billion each year — and the global economy up to $1.6 trillion — by 2050.

The sheer magnitude of the meat industry combined with its obvious inefficiencies and societal impacts demands a response. Our current method of meat production is unsustainable; the introduction of cell-based meats is essential to avoiding devastating climate change and meeting the demand of a surging population.

There are many names for it: cultured meat, lab-grown meat, cellular agriculture, clean meat. Cells are extracted from an animal via cell tissue sample and grown in a lab (a bioreactor to be specific). That means meat can be created without harming an animal.

The first lab-grown burger was made and consumed in 2013 and cost $325,000. Today we’ve seen a major shift and huge momentum in the industry. Start-ups are now developing proprietary technologies to scale production, develop different meat types, and lower costs to be comparable with traditional meat. Demand for alternatives to traditional meat and animal products is evident in the commercial success of plant-based meat alternatives and other non-animal proteins with high-profile investments and acquisitions by large food corporations such as Tyson Foods, General Mills and Nestle.

Adoption of lab-grown “cultured” meat will alleviate pressures on the environment, end animal suffering, and produce sustainable protein for the growing world population.

Yet, the production costs of lab-grown meat today remain significantly higher than traditional meat.

Much of this discrepancy is attributable to the cost of materials required to produce cultured meat. Today, most companies create lab-grown meat by removing a small number of cells from a living animal, and transferring them into a bioreactor, where they’re bathed in a liquid containing serum and all the other nutrients they need to grow and divide. This serum is usually what’s calledFetal Bovine Serum (FBS) and can cost between $400–900 per liter. Mark Post, co-founder of Mosa Meat and creator of the world’s first cultured burger, estimated that it takes 50 liters of serum to produce a single beef burger (though the number is likely lower now).

New Age Meats combats this high cost of production with automation and data science to lower production costs, scale faster, and bring products to market sooner.

New Age Meats is developing cell-based pork beginning with sausage. Its sausage was the first in history to be made only from fat and muscle cells cultured and grown in a lab. The company is rapidly developing its product, and has developed an edible prototype. After a recent press tasting, Business Insider reported, “The flavor was smoky and savory. The texture was distinctly sausage-like. It tasted like meat. Then again, it is meat.”

This is notable praise. Companies can’t forget that abating the high-cost of production is moot if they don’t also tackle the “icky” factor in customer adoption — and that starts with taste.

Beyond the technology, we couldn’t be more excited to support the team behind this company. Brian Spears (CEO) is a chemical engineer by trade and former co-founder of Sixclear which created software and products to automate the research labs and production environments of customers such as NASA, Cisco Systems, Sandia National Labs, and GE Healthcare.

This team is focused on automation with an interdisciplinary approach in biosciences, an angle crucial to scaling and decreasing costs. Their background enables them to build proprietary in-house systems and remain largely self-sufficient.

Originally published at https://medium.com on March 15, 2019.