May 2020: The Month in Review

After all the new developments in April, May marked a promising start to the summer for cellular agriculture. Cellular agriculture is the field of producing animal products, like meat, dairy proteins and animal fats, directly from cells without requiring animals to make them. Compared to conventional livestock agriculture, cellular agriculture offers an alternative and more sustainable way to produce the same animal products to meet the growing demand for animal products globally. 
 
And this May, cellular agriculture companies continued to make progress to advance the field. From new investments to new food product launch, we take a look at all the highlights of what happened this May in cellular agriculture.

Investments

Cubiq Foods

Cubiq Foods announced that the startup raised €5 million ($5.5 million) from Blue Horizon Ventures to complete their latest funding round. Based in Barcelona, Spain, Cubiq Foods is a startup that uses cellular agriculture to produce a sustainable and healthy source of cultured fats, such as omega-3 fats, through their proprietary system.
 
The venture round brings Cubiq Foods’ total funding to €17 million ($18.6 million). In January 2019, Cubiq Foods raised €12 million from Moira Capital Partners SGEIC, a Spanish private equity boutique firm. 
 
 
In a previous interview, Cubiq Foods co-founder and CEO Andrés Montefeltro shared that he and Dr. Raquel Revilla, co-founder and CSO of Cubiq Foods, weren’t happy with their current food options and were looking for a solution. Enter cellular agriculture. 
 
“We found cellular agriculture as the next step to produce healthy, nutritional and great food in a sustainable, scalable and environmentally friendly way. The beauty of this approach is that we can help people and the environment at the same time. How we feed the people determine in which way we transform the environment. 
 
Bringing a real solution to the environment and great food for people is what motivated us to start Cubiq Foods.”
 
Cubiq Foods plans to use the new funding to accelerate the production and scaling of their cultured omega-3 healthy fats. The Spanish startup aims to make its cultured fats commercially available to companies around the world by the end of this year.
 

Integriculture

IntegriCulture announced that the company raised JPY 800 million ($7.2 million) to complete their Series A funding round. Founded by Yuki Hanyu and Ikko Kawashima, IntegriCulture is a Japanese startup that uses cellular agriculture to produce cell-based meat, specifically foie gras. The latest funding round brings IntegriCulture’s total funding to JPY 1.1 billion ($ 10.2 million). In May 2018, IntegriCulture announced a seed funding round of JPY 300 million.
 
IntegriCulture shared that the company will use the funding round to further advance their research around cell-based meat and their cell culture technology. After showcasing their first cell-based foie gras in 2017, IntegriCulture plans to launch a cell-based foie gras product as early as next year. Following that, IntegriCulture aims to release other cell-based meats, such as processed meats and steaks, by 2023 and 2025, respectively.
 
 
IntegriCulture has also developed technologies to help other companies produce their own products via cellular agriculture. Earlier this month, IntegriCulture announced the launch of its “Uni-CulNet” framework to standardize infrastructure for the cellular agriculture industry. By using CulNet, a general-purpose large-scale culture system, IntegriCulture aims to empower companies around the world to sustainably produce their own cell-cultured products.
 

Perfect Day Partners with Smitten Ice Cream for N’Ice Cream

Perfect Day announced that the company partnered with Smitten Ice Cream to launch an animal-free dairy ice cream. Called N’Ice Cream”, the Smitten Ice Cream product is made using Perfect Day’s flora-based dairy proteins and is now available in the San Francisco Bay Area (nationwide shipping will start in June).
 
At the time of launch, Smitten Ice Cream announced 4 flavours for the N’Ice Cream line: Fresh Strawberry, Brown Sugar Chocolate, Coconut Peacan, and Root Beer Float. It’s notable that the prices for the N’Ice Cream pints, $12 per pint or $13 per delivery, are on par with the prices of other animal-free ice cream products.
 
After launching a limited release of their own ice cream last summer, it’s great to see Perfect Day partner with Smitten Ice Cream to launch a new product line with their flora-based dairy proteins. In regard to labeling, the N’Ice Cream packaging includes a ‘Perfect Day clean-label base’ to the ingredient list of each co-branded frozen dairy dessert. The ice cream pints are also labelled ‘vegan’ and ‘lactose-free’.
 
Instead of launching another product like their own ice cream, Perfect Day aims to become an ingredients supplier to companies in the food and beverage industry to bring their flora-based dairy products to market. To support that goal, Perfect Day shared during their massive funding round that they will announce new commercial partnerships in 2020 to expand manufacturing and commercialization on multiple continents.

Bond Pets Launches Dog Treat Snack

Bond Pets announced that its first product, a dog treat bar, is now available for pre-order on their website for a limited time. Founded by Rich Kelleman and Pernilla Audibert, Bond Pets is a pet food startup that uses cellular agriculture to produce sustainable pet food.
 
Called the Protein-Packed Dog Treat Bar, Bond Pet’s first product is made with a novel dried yeast protein as the foundation of its recipe. Considering that America’s dogs and cats consume around 25% of all meat sold in the country, there clearly needs to be a more responsible way to feed all our pets the healthy diets and snacks they deserve as well as be environmentally responsible. And Bond Pets is one of several pet food startups using cellular agriculture to offer that solution.
 
 
Bond Pets first shared their plans to launch a pure yeast dog treat bar after raising their seed round in December 2019. While the company aims to produce pet foods using cultured meat proteins in the future, Bond Pets hopes their debut product will start a conversation where pet owners will be more open to the idea of feeding cultured pet foods to their pets down the road.
 

US GAO published report on Cell-Based Meat Regulation in the US

How will cell-based meat production look like at scale? 
 
The US Government Accountability Office (GAO) released a report this month reviewing how the US Department of Agriculture (USDA) and Food and Drug Administration (FDA) could incorporate leading practices to effectively regulate cell-based meat in the US. Considering that this is will be the first time where both agencies are in charge of regulating a field of products, it is not surprising that the GAO was asked to review their collaboration to ensure the inter-agency framework functions as efficiently and smoothly as possible.
 
Through the report, the GAO highlighted areas where the USDA and FDA could improve their practices and enhance their collaboration, such as defining outcomes. For example, according to the basic regulatory framework, both agencies announced that they will jointly develop principles for product labeling without describing how agencies will track or monitor their progress. It is also interesting to note that, according to the GAO report, the FDA announced that they will regulate all cell-based seafood other than catfish, which will regulated by the USDA (which already regulates catfish in the US).
 

Breakthrough Institute: US Government support can create 200,000 long-term jobs

How can the US government support the alternative protein startup ecosystem? 
 
As the Covid-19 disrupts impacts economic activity around the world, many alternative protein startups in the US lost key revenue sources through the closure of food service outlets across the country. Coupled with investors looking to wait out the next few months, this could spell trouble for foodtech startups looking to raise funding and stay afloat during the pandemic.
 
The Breakthrough Institute published a report highlighting the programs and opportunities where the US federal government can support the alternative protein ecosystem during these challenging times to create jobs. By supporting the novel foodtech ecoystem in the interim, the Breakthrough Institute projects that the alternative protein industry (including cellular agriculture) could create over 200,000 long-term jobs in the United States .
 

Meat the Future: The First Featured-Length Documentary about Cell-Based Meat

 This month, Canadian filmmaker Liz Marshall announced that her new documentary, Meat the Future, premiered on May 7th in Canada. 
 
Chronicling the birth of an industry, Meat the Future is one of the first documentaries to track the growth of the cell-based meat field in the United States and its pioneers. In particular, the documentary follows the field through the lens of Dr. Uma Valeti, the co-founder and CEO of cell-based meat company Memphis Meats
 
 
Filmed between 2016 and 2019, Meat the Future shares Memphis Meats’ story as the company led the field's commercialization efforts and garnered global media attention, from the first cell-based meatball and poultry to high-profile investors.
 
Interestingly, Meat the Future also follows the field’s regulatory journey by filming the joint public meeting by the US Department of Agriculture and Food and Drug Association in Washington D.C. in October 2018. At the event, the documentary films both cellular agriculture leaders as well as ranchers, farmers, and meat lobby groups as they discuss both regulatory and labeling questions for the emerging field.
 
In a recent interview with Cellular Agriculture Canada, filmmaker Marshall shared that she was fascinated by all the different players helping make the field viable, including incumbent meat industry players.
 
“That part of the story [of the meat industry investing in cell-based meat] is really of interest to me because it’s not a David and Goliath story. It’s much more nuanced and interesting. It’s not a black-and-white story. It’s not about the startups that want to disrupt the entire system of meat making. They actually want to work with the meat industry to transform the system. I find the nuances and intricacies of that story line to be very interesting.”
 

CellAgri is Shuttleworth Funded

CellAgri is excited to share that we received a Flash Grant from the Shuttleworth Foundation for our work in promoting the future of food with cellular agriculture. The Shuttleworth Foundation supports organizations and individuals that promote openness about future technologies, and CellAgri is grateful to be recognized for our work to raise awareness of the field. The grant will help CellAgri accelerate the development of our upcoming virtual projects to further promote conversations about the emerging field, including an updated website. CellAgri would like to thank Isha Datar, Executive Director of New Harvest and Shuttleworth Fellow, for nominating CellAgri for the Shuttleworth Flash Grant.
 

FDA Allows Ingredient Change Without Label Change

In light of strains in the food supply due to the coronavirus pandemic, the FDA announced that food companies and manufacturers can make minor formulations and ingredient changes to their products without changing or adjusting their labeling.
 
According to the FDA guidance, label changes are still required if the substitution adds a commonly allergenic ingredient, if the substitution ingredients makes up more than 2% of the weight of the finished food product, if the missing ingredient is a key characteristic of the product, or if the missing ingredient impacts the health claims of the final food product.
 
 
While the temporary policy is intended to help food manufacturers adjust for ingredient shortages during the pandemic, the policy has concerned many consumers and may make them lose trust about what is really in their food products. For example, if someone is allergenic to an ingredient that is not a common allergen, how can they confidently purchase a food product if that ingredient substitution may not have to be labeled?
 
Ultimately, it will be important for the different food brands and food producers to be open and transparent with their consumers about any changes they may make to their ingredients list due to the pandemic. Public trust and perception is essential in food products, and, without further communication from companies or regulators, it will be interesting to see how the FDA’s regulation will impact consumer trust the labeling process in their food system. 
 
In the long term, it may impact how consumers trust the FDA’s system to regulate cellular agriculture products, including co-regulating cell-based meats alongside the USDA.
 

The Meat Supply Chain is Broken 

Last month, John Tyson, the Chairman of the Board of Tyson Foods, published a letter stating that “The Food supply chain is breaking”. 
 
And now, the US Department of Agriculture and Department of Justice are investigating whether the meatpacking industry is fixing or manipulating prices. According to Politico, the US Department of Justice is looking into the four largest US meatpackers - Tyson Foods, Cargill, JBS, and National Beef. These four meatpacking companies control about 85% of the US market for slaughter and packaging of beef.
 
 
While the price for consumers has gone up in April 2020, (the average retail price for fresh beef was $6.22 per pound, 26 cents higher per pound than the month before), the average purchasing price of beef cattle from farmers fell below $100 per hundred pounds. The five-year average for the same week at the end of April was $135 per hundred pounds.
 
From consumers all the way to farmers and ranchers, the consequences of Covid-19 have continued to be felt throughout the meat industry supply chain in the US, particularly meat processing plant workers. By May 15th, more than 14,271 meatpacking workers have been sick due to the coronavirus. Meat processing plants have now been deemed hot spots for the coronavirus in the country. After being declared as an essential service, both the US government and meatpacking companies need to step up their efforts to ensure that social distancing protocols and procedures are followed along with protective equipment and regular testing for the workers.
 

Conclusion

After no new investments during the month of April, it is promising to see investments in two cellular agriculture companies in May, especially in the context of the coronavirus pandemic. While it may be difficult for new startups in the field to raise capital to get started, it appears like investors are continuing to support established cellular agriculture companies that have previously raised funding rounds.
 
It is also step forward for the field to see the launch of two new cellular agriculture products on the market. After a limited release last summer, Perfect Day’s partnership with Smitten Ice Cream is currently the only cellular agriculture food product commercially available on the market. This is a great achievement for the company that can highlight a path to market for other cellular agriculture companies.
 
While Perfect Day launches on the market, the GAO’s report highlights how the FDA and USDA should seek to improve their communication and collaboration practices to best jointly regulate cell-based meat in the country. Considering the current state of the meat supply chain in the country, cellular agriculture can offer a viable way to improve how we currently produce animal meats.
 
The Covid-19 pandemic continues to highlight weaknesses in the centralization model of the US meat supply chain, especially for workers at meat processing facilities. Compared to the current supply chain, cell-based meat (and cellular agriculture food products overall) can offer a way to develop a new supply chain that allows for smaller, decentralized model of producing meat that would avoid the same issues that have been exposed by the coronavirus pandemic. For the future of food.

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