Date posted: 14/09/2018 10 min read

Is fake meat the way of the future?

As the cost to manufacture “laboratory meat” falls, the Australian and New Zealand meat industries are looking at how their products fit into the dinner menus of tomorrow.

In Brief

  • The cost to manufacture meat that does not involve the slaughter of livestock is falling rapidly.
  • Experts see “lab meat” coming to market within a decade.
  • The Australian and New Zealand meat industries will need to react by developing the advantages of their premium cuts.

The shoppers of the world don’t know it yet, and farmers are only just beginning to worry about it, but supermarket meat aisles are probably on the cusp of change. Another range of products will soon appear alongside the traditional steaks and lamb chops. They’ll be identical to what we know as meat, but with a major difference: they will have been made in an industrial-scale laboratory.

Dutch scientist Mark Post served up his first lab-grown beef burger in 2013, created from serum taken from an unborn cow and grown with a medium of calf’s blood. It’s variously called laboratory meat, clean meat or synthetic meat. Its distinguishing feature: it was never part of a live animal.

Post’s burger cost $US350,000 to make. However, the production cost of this lab meat has already fallen by a factor of 50 to about A$5000. Post believes it can soon fall to A$80 a kilogram. And Post is not alone. A growing group of food scientists and food companies believes we are about to enter an era when no animal needs to be killed and no land grazed to create meat. The economics are getting better and better. It’s good news for lab meat pioneers, vegetarians and animal ethicists. For the Australian and New Zealand meat industries, its effect may depend on how they react.

Vote of confidence

America’s largest meat company, Tyson Foods, gave the economics of lab meat a vote of confidence in January 2018 when it bought into lab meat startup Memphis Meats. It joined global food production giant Cargill, a company with annual revenue of more than US$100 billion a year. 

With these two industry giants now backing the lab meat push, development is likely to ramp up and costs are expected to come down. Lab meat could be on the menu even earlier than forecast. Most estimates now see it coming to market within 10 years.

When it arrives, lab meat will take its place alongside increasingly sophisticated plant-based “meat” products from companies such as Beyond Meat and the Bill Gates-backed Impossible Foods. Already, the “Impossible Burger” is available in 1000 restaurants across the US and in Hong Kong.

And though researchers started with beef, the serum technology and culture method that created Mark Post’s burger can be replicated across pork, lamb and chicken. Israeli startup SuperMeat is developing laboratory chicken and raised another US$3 million from investors in January 2018. Meanwhile, US startup Finless is working on creating a range of fish products from cellular biology techniques, without any fishing.

Mark Post holding the world’s first lab-grown beef burger, 2013.  Picture credit: Simon Dawson / Bloomberg / Getty Images

Steak without slaughter

For its advocates, this new range of lab meat will have major advantages over meat from animal carcasses.

Its production will be more sustainable, limiting habitat destruction and greenhouse gas emissions from livestock. Agriculture currently creates about 15% of global greenhouse gas emissions, most from livestock-produced methane. The UN’s Food and Agriculture Organization (FAO) estimates that 26% of the planet’s ice-free land is used for livestock grazing and 33% of croplands are used for livestock feed production.

Another positive for lab meat is that it will remove concerns about animal cruelty that spring from the rearing and slaughter of animals. And because its production is industrial rather than agricultural, production can be ramped up and respond to issues of food security, potentially anywhere in the world, without risk of supply problems caused by environmental factors such as drought. “Losing large quantities of resources by filtering them through an animal to create meat is a vastly inefficient process with an array of risks and negative externalities,” says Thomas King. He’s chief executive of Australian startup Food Frontier, an organisation formed to “grow the ecosystem for more healthy, humane and sustainable protein”.

At the University of Melbourne, Professor Robyn Warner from the School of Agriculture and Food argues that producing food from animals can be efficient. “Grazing animals (ruminants) have the ability to convert plant food that humans cannot eat, and convert it into muscle, and this is a very valuable part of what animals do,” she says. “Some of the pasture which can support livestock is not suitable for crops.” But King says we will be unable to feed the global population by mid-century using the current system of industrialised animal farming, at least if we are to prevent catastrophic climate change.

Facing the challenge

Lab meat challenges the livestock industry. New Zealand technology strategist Ben Reid set out the worst-case scenario for Australasian agriculture in 2016, when he declared: “New Zealand is in danger of fast becoming the Detroit of agriculture, a rust belt left behind after production has moved elsewhere.”

Industry bodies set out a much less dramatic change. A March report from Beef and Lamb New Zealand (B+LNZ) offers the reassuring view that “there is still a strong future for the NZ red meat sector. There is still an untapped demand for naturally raised, grass-fed, hormone-free and antibiotic-free red meat with consumers prepared to pay a premium for such products,” the report says. In the US alone, retail sales of labelled fresh grass-fed beef reached US$272 million in 2016, up from US$17 million in 2012. Sales are doubling every year.

B+LNZ notes that the NZ agricultural industry produces enough to feed around 40 million people a year, against a global population expected to grow by another one billion by 2030. “We can’t and don’t want to try to feed the world,” the report says. “Alternative proteins will have a place in this growing market, as will red meat.”

In Australia, which has a A$17 billion meat industry, Meat & Livestock Australia sees lab meat cutting into the market for mincemeat and hamburgers, but not higher quality “primal cuts”. Even so, this has the potential to affect an industry it says operates on margins of 5%. Warner also does not see lab meat as a terminal threat to meat produced from animals.

Expansion markets such as China, where average meat consumption is at 55 kilograms a year (Australia is the world’s highest at 90 kilograms), have potential for growth, but Australian consumers are traditionally resistant to change. This is a nation which roasted 27 whole bullocks at a celebration in Melbourne to mark the end of the 1934 London-to-Australia air race.

Warner cites a study by her colleague Hollis Ashman that shows about 60% of Chinese consumers are considered “lead users” who are open to try innovative products, whereas in Australia lead users comprise only about 16% of the total. Australasia is also, in global terms, a small market. Scaling up production of lab meat in North America, a market of more than 300 million people, is more viable on a large scale than in Australia, with a population one-tenth the size, or New Zealand, with its even smaller population. 

So any Australian or NZ contribution to the early development of the industry is likely to be more research and science-based. While there will be an impact on export markets, domestic take-up is likely to be slower.

Upmarket or down-market?

Anna Campbell, the managing director of NZ agribusiness consultancy AbacusBio, takes the view that while lab meat is likely to make incursions into the mince and hamburger meat market, it will have little impact on the premium market, where NZ specialises. This is largely because the lab meat lacks the texture and some of the taste of a steak. 

Many people wanting lab meat will want it because they are advocates of sustainability and animal welfare, and they will see it as a niche premium product and could be prepared to pay more.
Anna Campbell MD of NZ agribusiness consultancy AbacusBio

While science can create a passable hamburger patty, it is yet to attempt a steak and is some way off doing so. All this, says Campbell, could play to NZ’s strengths and focus the domestic industry even more on premium product that is grass fed and ethically produced. 

Warner challenges the view that lab meat will exist at the lower end of the meat market, as mince does today. “Many people wanting lab meat will want it because they are advocates of sustainability and animal welfare, and they will see it as a niche premium product and could be prepared to pay more,” she says.

A new industry

Urbanisation, however, is working in favour of lab meat. Campbell believes that people who live in urbanised environments have “less of an emotional connection” to traditional meat products such as steak, a trend she says is more prevalent among female consumers. Looking to the future, her view is that the advent of new industrially created proteins should be a catalyst for positive change in the NZ livestock industry. “I see it more as a threat to the big feedlot operators who play that commodity game,” says Campbell.

“When you look at grass-fed product versus grain-fed, all the health and welfare claims are stacked in New Zealand’s favour, and I don’t think we’ve made enough of that.” Campbell draws a distinction between what she calls “redone”, which is lab and processed meat, and “undone”, which is traditional steaks and joints on the bone for roasting.

While NZ has a clear differential advantage in the “undone” category, she says, the country’s meat producers should not ignore “redone”, because the category is changing rapidly. Campbell says the meat industry has an opportunity to involve itself in work by food researchers to develop techniques to tailor food to individuals’ health needs – so-called “personalised food”. “This will require greater research and development, but if you put the NZ quality story behind some of these redone products, then I see that as an exciting opportunity.”

One example may be “functional food” for elderly people who are unable to swallow properly. There is an opportunity to combine meat and offal products with fruit to create high-end products full of quality protein as a solution to their needs, she says.

“We also need to be gearing our R&D towards developing these types of products, because there is a major opportunity for our beautiful NZ products to find new markets with high-end consumers.”

Lachlan Colquhoun has written for the Financial Times, the South China Morning Post, the London Evening Standard and The Australian.

CAs role in driving red meat profits

The Red Meat Profit Partnership is a collaboration between the red meat sector and the NZ government that aims to drive sustainable productivity improvements in the sheep and beef sector.

Read more