We continue to dig into the Cellular Agriculture industry, finding out more on the ‘meaty' topics for companies and end users, such as environmental impacts and regulation. In our second blog, we look at associated costs for both production and end users.
As in most industries, costs decide the feasibility of a project or service – when you are dealing with cutting-edge science, it is always very important to bear this in mind. As a company that has grown out of an academic scientific background, at Roslin Tech we strongly believe in fostering an environment that allows scientists to operate in this specialised field, whilst also being conscious of the costs to industry. This means that scientific progress can flourish without research being constrained by finances. However, once a scientific idea enters the commercial sphere, the simple laws of economics become reality: a project will not take off if the costs are too high.
Working out the feasibility of a proposition is not about a one-off figure calculated at a single timepoint. Especially in scientific research, research and development costs are spread over time – and the time value of money is critical in assessing the commercial worth of projects. This is what investing is about, putting aside some money now with the expectation that the scientific advances achieved will release profits to the investor further down the line.
The cultured meat industry is still in early research and development stages. A detailed cost sector analysis produced by the Good Food Institute anticipates that the underlying production costs of cultured meat will decline, making commercially viable products in the coming years - the timeline of this is both important and debated however. The GFI's production costs publication (2020) states that "it is likely that cultivated meat can achieve price parity with mainstream conventional meat once produced at industrial scale.”
While some may see this as an unsupported claim, the investment landscape agrees – a large amount of money ($300 million in 2020, six times that of 2019) has been invested in the sector, which indicates that investors think this is a viable industry going forward and the cost issues will be overcome. With individuals such as Bill Gates saying that some companies do have viable cost-effective production processes, and stating as a certainty that Western countries should focus on eating cultured meat to reduce their environmental impact, it's clear that the weight of informed investment opinion believes that the industry is at a stage where it can anticipate a cost-effective future. Ultimately the value of a company is based on what the market places on it; with the amount of money that has been invested into the cultured meat industry to date, the market as a whole clearly believes in the proposition.
Another positive element is to recognise that costs generally fall for a technology as it becomes embedded in the mass-market. We have only to look at the vast array of technology available now to appreciate just how rapidly things can change. The power of the cheapest smartphone on the market today is far superior to some of the most advanced computers from only a couple of decades ago. The sheer number of vloggers on YouTube shows just how cheap and easy it is to produce a TV-quality programme these days, compared to the technical cost and human input that was needed only a few years back. It is almost a law of nature the costings should decline significantly, and the faster they’ll decline, the more money is invested into research. This is the cultured meat equivalent of Moore’s Law: as the speed of cultured meat production increases, costs decrease.
$300 chicken nuggets box?
For the moment, costs still play an important restraining role in the industrialisation of the cultured meat industry. While the creation of individual items has fallen from the hundreds of thousands of dollars down to the thousands of dollars, or even less in some cases, it is clearly not yet anywhere near a viable and sustainable cost level for most producers.
The truly momentous regulatory approval in Singapore of Eat Just’s cultured chicken has yet to be replicated in any other country. With just two restaurants – for now – serving cultured meat, SuperMeat’s 1880 in Singapore, and Eat Just’s testing kitchen The Chicken in Israel, alongside other companies such as Mission Barns holding taster session, prices are already falling rapidly compared to their 2019/2020 levels: 1880 offers a trio of cultured meat sample dishes for $23, a far cry from the previous $60 price point for a single chicken nugget. The high price points are coming down to a more palatable level for consumers.
There has been also significant progress made which should be highlighted. The sourcing of required materials for production has shifted from scientific grade inputs, to check the scientific rigour and potential in an experimental fashion, to those more akin to being used in a commercial catering environment (although the cost of growth factors remains stubbornly high). The shift away from animal sourced media such as foetal bovine serum (FBS), which a necessity for any product to claim meat-free qualities, has also reduced costs. Scientists at Roslin Tech have created a growth media that is animal extract-free and comes in at a fraction of the cost compared to FBS. While media creation is not our area of expertise, it is useful in allowing us to keep the costs of developing our unique induced pluripotent stem cells (iPSCs) at a low level.
The GFI and its sector analysis amply explore the different ways that media costs can drop, and there are obviously a number of companies tackling this challenge, alongside other issues such as fermenter optimisation.
iPSCs lower costs
At Roslin Tech, we are strongly contributing to minimising the cost issue through the development of our iPSCs and their scalability combined with reliability. The further the science is moved along its development course, the more the unit costs of production can decline exponentially – Moore’s Law for cultured meat. With the significant progress that we have made in our stem cell lines, we believe were making a strong contribution to moving costs down to both a manageable and palatable level, for companies and the end users.
Importantly, we believe the reliability of our iPSCs when compared to other methods to produce cultured meat gives us an edge on reducing costs for clients. The fact that our cells are both robust and stable means they can faithfully adhere to the desired cell type, providing confidence and reliability in the end product, whilst importantly ensuring consistency of inputs to the production process. The chance of a tainted batch, which could push up the overall costs of production, is therefore dramatically reduced with our novel technology.
Finally, the longevity that is inherent in our iPSC cell lines, as opposed to mesenchymal stem cells, means they are capable of continued passages without concerns of cell senescence or molecular instability, providing long-term resilience of outputs for commercial food-grade processes, a huge advantage when aiming to scale-up production.
In conclusion, it is clear that costs are still an issue in the industry, but the investment landscape and the belief of key commentators indicates this can be overcome in a matter of years. Even pessimistic observers believe the cost challenge will be overcome within a decade. While the costs of media are the most significant and outwith our influence, Roslin Tech is contributing strongly to other areas of cost reduction through our advanced science and product reliability.