Category: DIET

Beyond Beyond Beef: Cultured Meat set to Compliment Ethical, Sustainable and Marketable Plant-Based options.

While plant based meat substitutes have been trialed this year at McDonalds, Burger King and other major retail food outlets, food tech leaders in the cultured meat sector are hot on their heels, reporting considerable capital investment. Israeli start-up, Future Meat Technologies, just secured $14m of seed funding to build the world’s first cultured meat pilot production facility.[1]

The need for healthier, sustainable, environmentally friendly and resource-efficient food supplies is driving extensive research and development in the food and agriculture innovation sector.  America alone consumes 26 billion pounds of beef a year[2], requiring a massive industrialized livestock system with ethical and environmental costs. One cow can consume up to 11,000 gallons of water a year[3] and livestock may be responsible for 15 percent of greenhouse gas emissions worldwide.[4] The prospect of commercially viable meat made from animal cells grown in a laboratory offers a solution palatable to many interest groups. “If only half of [the promise of cultured meat] becomes remotely true, it will be one of the most important advancements of the century,” said Kristopher Gasteratos, founder of the Cellular Agriculture Society, an international nonprofit organization that advances cellular agriculture.[5]

Creating Meat: The Science

Cultured meat is made by using small molecules to trigger fibroblast cells from an animal to turn into either fat or muscle cells. Once the fat or muscle cells begin to grow, they are put into a medium or resin that feeds the cells and allows waste materials to drain away. The first lab-grown burger was presented in 2013 by Maastricht University in the Netherlands and cost approximately $1.2 million per pound.[6] Future Meat founder and chief scientist Yaakov Nahmias claims that cultured meat is a strong rival for plant-based options, as it includes the fat cells naturally present in traditional beef. “The fat gives you the aroma and the distinct flavor of meat,” says Nahmias. “This is the missing ingredient in Impossible Foods and Beyond Meat .”[7]

The resin that is so essential for the cell growth has however, provided scientists with the greatest challenge in terms of commerciality. This is because it needs to provide the cells with salts, sugars and proteins, and has traditionally come from animal blood serums, in some cases fetal bovine serum, not a good selling point in the alternative meat market.[8] Cultured Meat companies have had to find alternative media to grow the cells so that the product is a truly animal-free meat.

Future Meat and others claim to have met that challenge[9] and can apparently grow about half a ton of meat and fat in about 14 days, in a refrigerator-sized bioreactor, avoiding all the costs and ethics of raising and slaughtering livestock. This would support growers producing the equivalent of two cows of meat in around one month (a cow usually takes 12-18 months to raise for slaughter).[10]

The Market for Cultured Meat

Future Meat Technologies, which was founded in 2018, received the backing in October, of S2G Ventures, a Chicago-based venture capital fund that invests in food and agriculture, Emerald Technology Ventures, a Swiss-based firm and Tyson Ventures, the venture capital arm of Tyson Foods, among others. It joins companies like Memphis Meats, Aleph Farms, Higher Steaks, Mosa Meat, Just and Meatable in the field (or the lab), although only Memphis Meats raised more seed money in 2017 when it received $17m from backers including Bill Gates, Richard Branson and Cargill. Sector leaders are currently following the Beyond Beef model of concentrating mainly on beef and targeting their initial sales to restaurants rather than individual retailers or consumers.

JUST, Memphis Meats and SuperMeat are all working on getting government approval for clean meat derived from animal cells, and on major industry partnerships to facilitate access to the products.[11] The Food and Drug Administration and the U.S. Department of Agriculture are expected to finalize rules regarding inspection and labeling this fall. The main challenges to market expansion are cost and scalability.  Earlier this year, Aleph Farms said it had reduced the cost of producing one pound of beef to $100.[12] Future Meat anticipates production costs falling to $4 per pound of a hybrid product using lab-grown fat and plant protein by 2021, and $10 for pure cultured beef by 2022.[13]

The latest seed investment in Future Meats indicates investor confidence that this sector is moving towards its ultimate goal of producing a low-cost rival to meat and its plant based alternatives, to give the consumer greater choice. Parallel developments in the fish market show that technology and market interest point in a similar direction: Finless food aims to start selling bluefish tuna grown in a lab by the end of 2019.[14]

The new Defiance DIET ETF offers investors cost-efficient exposure[15] to companies that recognize the food challenges and technological opportunities of tomorrow, including those supporting moves towards cultured meat. DIET tracks approximately 70 globally-listed stocks using the BlueStar Food and Agriculture Sustainability Index (BFOOD)*, to capture potential growth across this growing sector.

* The BlueStar Food and Agriculture Sustainability Index (BFOOD) is a rules-based index which seeks to include equity securities of leading global companies whose business activity, products, or services are related to the following industries: Agriculture irrigation systems and connected water meters, plant seed modification, fertilizers and pesticides, sustainable meat/poultry/seafood production, flavors and fragrances for the food industry, livestock feed, pharmaceuticals and veterinary supplies, farming machines and equipment, agricultural services, diagnostic measurement equipment and services for food production and safety, branded meat/poultry/seafood/healthy foods, or branded vegan foods.[16]

 

 The Funds’ investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read it carefully before investing. A hard copy of the prospectus can be requested by calling 833.333.9383 or visiting www.defianceetfs.com/diet.

Fund holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security.

Past performance does not guarantee future results. The fund is new and investment should not be made based on the performance of individual holdings

 Investing involves risk. Principal loss is possible. As an ETF, the fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. The Fund is not actively managed and would not sell a security due to current or projected under performance unless that security is removed from the Index or is required upon a reconstitution of the Index. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk. The Fund is considered to be non-diversified, so it may invest more of its assets in the securities of a single issuer or a smaller number of issuers. Investments in foreign securities involve certain risks including risk of loss due to foreign currency fluctuations or to political or economic instability. This risk is magnified in emerging markets. Small and mid-cap companies are subject to greater and more unpredictable price changes than securities of large-cap companies.The food industry and agriculture related companies can be significantly affected by factors including consumer trends, the environment, government regulation, economic conditions, commodity prices, consumers preferences and weather conditions.

[1] “Future Meat Technologies raises $14m in Seed Funding”,  JLM Biocity, October 14, 2019 https://jlm-biocity.org/future-meat-technologies-raises-14m-in-seed-funding/

[2] National Cattlemen’s Beef Association, Industry Statistics. https://www.ncba.org/beefindustrystatistics.aspx

[3] “How much water do cows drink per day?” Dr. Rick Rasby, (July 19, 2016), Institute of Agriculture and Natural Resources, University of Nebraska-Lincoln. https://beef.unl.edu/amountwatercowsdrink

[4] “By the numbers: GHG emissions by livestock,” Food and Agriculture Organization of the United Nations. http://www.fao.org/news/story/en/item/197623/icode/

[5] “From lab to table: Will cell-cultured meat win over Americans?”, Laura Reiley, The Washington Post, May 4, 2019. https://www.washingtonpost.com/business/2019/05/03/lab-table-will-cell-based-meat-win-over-americans/

[6]  “From lab to table: Will cell-cultured meat win over Americans?”, Laura Reiley, The Washington Post, May 4, 2019. https://www.washingtonpost.com/business/2019/05/03/lab-table-will-cell-based-meat-win-over-americans/

[7] “Lab-grown meat could be on store shelves by 2022, thanks to Future Meat Technologies,” Jonathan Shieber, TechCrunch, October 10, 2019. https://techcrunch.com/2019/10/10/lab-grown-meat-could-be-on-store-shelves-by-2022-thanks-to-future-meat-technologies/

[8] “Lab-Grown Meat Is Coming, Whether You Like It or Not,” Matt Simon, Wired, May 16, 2018. https://www.wired.com/story/lab-grown-meat

[9] “Future Meat Technologies raises $14m to commercialize cell cultured meat: 'We see a path to reality here, it’s not just something on a Power Point presentation,' says S2G Ventures,” Elaine Watson, October 11, 2019. https://www.foodnavigator-usa.com/Article/2019/10/11/Future-Meat-Technologies-raises-14m-to-commercialize-cell-cultured-meat#

[10] “Lab-grown meat start-up raises $14 million to build production plant,” Amelia Lucas, CNBC, October 10, 2019. https://www.cnbc.com/2019/10/10/future-meat-technologies-a-lab-grown-meat-start-up-raises-14-million-dollars.html

[11] “2019 Could Be A Turning Point For Plant-Based And Cultured Meats,” Jenny Splitter, Forbes, December 18, 2018. https://www.forbes.com/sites/jennysplitter/2018/12/18/plant-based-cultured-meats-turning-point/#7b4da6e420a7.

[12] “Lab-Grown Meat Gets Closer to Consumers' Plates,” Victoria Campisi, The Food Institute, May 6, 2019. https://foodinstitute.com/focus/lab-grown-gets-closer

[13] “Lab-grown meat start-up raises $14 million to build production plant,” Amelia Lucas, CNBC, October 10, 2019. https://www.cnbc.com/2019/10/10/future-meat-technologies-a-lab-grown-meat-start-up-raises-14-million-dollars.html

[14] “Lab-Grown Meat Is Coming, but the Price Is Hard to Stomach,” Mischa Frankl-Duval, Wall Street Journal, May 2, 2019. https://www.wsj.com/articles/lab-grown-meat-is-coming-but-the-price-is-hard-to-stomach-11556805600?mod=searchresults&page=2&pos=1

[15] 0.30% expense ratio

[16] In most cases, at least 50% of a given company’s annual revenue must be derived from one of these sectors. For exceptions and more details, see the Fund prospectus.

 

Want to work with us?

A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot.

Contact us