The decision by US regulators to approve the sale of cultivated chicken is a game changer. It’s already been added to the menu in one high-end California restaurant.
Still, the cultivated meat industry faces many challenges, including how to lower costs, raise funds to achieve economies of scale, and win the trust of consumers.
The So What
Alternative proteins are an effective strategy to produce food more sustainably and achieve climate goals by reducing emissions. Animal agriculture is responsible for 15% of global emissions.
More on Alternative Proteins
More on Alternative Proteins
BCG’s alternative proteins consulting team helps clients seize opportunities in this fast-growing industry—and create a more sustainable future.
Alternative dairy products have appealed to mainstream consumers more successfully than alternative meats have. Here’s how companies of both kinds can step up their marketing.
- Cultivated meat is created by harvesting cells from animals and growing the cells in large bioreactors. That novel technology means production costs are still far from parity with conventional meat production.
- Singapore is the only other country in the world where cultivated meat is already on sale. Companies there are partnering with high-end restaurants and famous chefs to endorse their products.
Companies in the US will likely opt for a similar strategy, targeting customers who are prepared to pay a premium, either out of curiosity or for environmental reasons, according to BCG’s Malte Clausen, who advises clients on cultivated meat business development.
“That doesn’t yet make it a viable business for the mass market,” he explains, “but it does mean there is an opportunity to bring the product to market and an opportunity for consumers to try these products.”
As people begin to experience lab-grown meat, companies will grow more informed about customer likes and dislikes.
“Companies will now be able to gather the data needed to build a strategy for success in terms of branding and labelling. It will also help inform product development,” Clausen says.
Financing the transition
- Significant investment is needed in order to build the infrastructure that will allow economies of scale and a reduction in cost per product sold.
- Large venture capital firms will expect to see rapid revenue growth before increasing their investments.
The public sector may decide that alternative proteins are an essential part of the transition to sustainable food, and decide to support the industry’s expansion.
“It will take many years to raise sufficient funds if companies rely exclusively on the private sector and venture capital. But public sector support could accelerate the sector tremendously,” Clausen says.
- Other countries are likely to follow the lead from the US, and decisions from regulators in the EU, Israel, and the UK will be key milestones to look out for.
- In addition to chicken, more companies will develop other types of cultivated meat for sale.
- Cultivated meat firms must prove they are sustainable and show that their energy use is either renewable or significantly less than the energy and resources used in conventional agriculture.
- The firms must also overcome people’s perception of cultivated meat as unnatural and demonstrate the health of the product.