Mike von Massow
A recent report predicts that the North American beef and dairy cattle industry will be significantly disrupted by the development of cellular meat products. It states that the industry will be half its size and virtually bankrupt by 2030. Those are bold predictions. We rarely look back to see if predictions come true and my expectation is that to a significant degree, they are taking this provocative stance to push the discussion of the future of meat to the fore. It’s worth considering whether the future is as bleak for livestock production as they say.
The driver for this disruption is the emerging technology of cellular agriculture which allows for the growth of “animal proteins” without actually raising animals. There are companies busy fine-tuning the technology for beef, pork, chicken, and seafood. We know that the technology exists to produce milk proteins (casein and whey) using a yeast fermentation process. There is clearly going to be some uptake on these products. That begs the question if the outlook is as bleak as the report suggests.
How will consumers respond?
The work to date has shown a variety of responses from individual consumers. These studies are all done in the absence of exposure to real products so the reality may be different, but they can be informative. Points of resistance include a perception of “unnaturalness.” This may be confounded by a mistrust of science. It is unclear whether this will prevent adoption by a significant group of consumers or simply slow down the rate of adoption. We will likely not know definitively until product comes to the market. The early days will be critical, and the trajectory of the narrative will impact success.
How fast will the technology deliver?
Cellular beef has been produced. The cost is still very high, although it is coming down. The price point will be an important factor in determining adoption and final share. There will be some consumers who are willing to pay a premium - see Beyond Meat now - but some will be price driven. The rate of cost reduction will drive the rate of adoption. My guess is that 10 years is too short a horizon for a mature market, but I could be wrong.
It is also worth noting that the beef technology is currently able to produce muscle cells but not muscle fibres. This means that we can produce a ground beef burger but not a steak. That is an important distinction. Technology may eventually get us to a steak, but that is likely much further away. This is compounded by the fact that an important part of a steak is the intramuscular fat. That drives flavour and mouthfeel (texture). We can add additional fat to a burger, but it is much more difficult to do to a steak.
We are also currently able to produce casein and whey which are important components of milk. A much touted “ice cream” has been launched in the US but it remains expensive and is really not ice cream. We have frozen desserts in the grocery store today. Some of these have milk ingredients and some do not but none of them have real milk fat – the cream in ice cream. We don’t eat ice cream for the protein, so it seems to me we’ve divided the frozen dessert market here but not launched a real competitor for ice cream. The fat element is important for dairy products. Casein and whey are important for cheese production but it remains to be seen how we incorporate other fats into cheeses – especially higher fat cheeses. Fluid milk (other than skim) will be difficult and butter is so far completely out of the question. The path to a full portfolio of dairy products is not clear at all yet.
So, what happens next?
It is clear that the technology is coming, and costs are falling. There is little doubt that cellular protein product will find a place in the market. How big that place is will depend on the arc of cost reductions and the breadth of new products the technology allows. The 2030 timeline is, in my view, wildly optimistic. I expect the authors of the report know that and that they are trying to spur a wider discussion as to how this market evolves over time. It will be interesting.
Recommended citation format: von Massow, M. "Apocalypse Cow?”. Food Focus Guelph (61), Department of Food, Agricultural and Resource Economics, University of Guelph, September 26th, 2019.