Alt-seafood: the point of view of a strategic advisor

Lab-grown seafood is likely to provide a major source of global animal protein within a decade, putting conventional seafood producers and processors at risk of extinction.

Paul Cuatrecasas

© Photography Charlotte Knee

So thinks Paul Cuatrecasas, founder and CEO of Aquaa Partners, convinced that we are on the verge of a second agricultural revolution – one in which a large part of animal-based protein will be replaced by plant-based and cultured protein. in laboratory. alternatives.

Cuatrecasas, author of Switch to tech or switch offis something of an alternative protein evangelist and sees the sector as awash with opportunity – in terms of food for the world’s growing population, in terms of improving the sustainability of food production, and in terms of significant income.

“Investors sat up and took notice after Beyond Meat’s IPO — it put the alternative protein on their radar,” he explains. “And through further research, they realized that the cell meat and seafood process isn’t rocket science either. Apply the exponential technological cost curve to food items and it now boils down to exponential advances in precision fermentation – it’s been around since 1982 when people started making insulin (Humulin) for diabetics. And further advances can be made with the adoption of new technologies such as CRISPR.

Cuatrecasas is clearly not alone in his beliefs, and he notes the rise of a wide range of highly credible cellular seafood companies.

“There is a proliferation of companies in the field and there will be more and more. There’s a lot of different IP, and more will be developed, and there’s room for a lot in the space. You have Wild Type, which focuses on salmon at one extreme, and Blue Nalu which produces bluefin tuna at the other extreme – that’s good news for investors, there are many different types of product,” observes he.

While many people have heard of some of the major players in the alternative meat industry, Cuatrecasas believes seafood companies are moving just as fast — and have the potential to reach market even faster.

“Meat sellers get more attention because it’s a much larger market – worth between $1.3 billion and $3 trillion a year – but [alt] seafood products are much more advanced in terms of regulations. In the United States, for example, cellular seafood only needs FDA approval, but cellular meat needs both FDA and USDA approval. This potentially gives seafood producers a huge advantage,” he says.

While some consumers may have reservations about eating fish that has been raised in a lab instead of fish that has been raised in the ocean, he considers this to be a relatively small proportion. In the meantime, he notes that a new wave of consumers feels otherwise.

“I disagree that it will be hard for people to imagine eating lab-grown meat and fish. Vegans can stick to plant-based products, some will mix it up. Different textures will allow new foods to develop – it won’t be one size fits all. People have ridden horses for thousands of years. When the automobile arrived, they might have thought it was huge, scary and dangerous at first, but it didn’t take long for people to change. My children don’t want to kill animals to eat them,” he says.

Cellular Coho Salmon, as produced by Wild Type
Cellular Coho Salmon, as produced by Wild Type

© Wild type

Although there are still hurdles to overcome – in terms of taste, price and regulation – Cuatrecasas does not consider them to be long to overcome.

“It will probably depend on cost – can we get precision fermentation cheap enough – combined with taste. Beyond that, health is probably the second most important thing. But if cellular seafood tastes as good, is purer, has higher yield, a stable supply chain and no toxins, it will be considered the freshest of fresh produce,” he says.

Currently, cellular seafood companies are still largely in the start-up stage. Their likely development is under debate, but Cuatrecasas believes it is vital for them to secure serious investment quickly.

“They need to use current financial markets to hire people and grow, build teams, work with regulators…but what happens when financial markets close? Most of us have experienced several stock market crashes and there will probably be another in the next four to five years. Most mobile companies are unlikely to come to market before 2025, but they will need to raise as much capital as possible by then, as it will be difficult to raise the next round (in the event of a crash),” he predicts. .

Looking ahead, he thinks the most successful startups will join the establishment as the decade progresses.

“Some will become companies – like Beyond Meat and Impossible, which are now essentially too big to acquire – others will be acquired. Bell Food Group [a leading European food processor]for example, holds a minority stake in [cultured meat company] Mosa Meat,” he explains.

However, he warns established food and feed companies not to be complacent if they hope to buy into the sector.

“Tyson and Cargill have positions at several alternative protein startups. What I would tell them is to be careful assuming you can make an acquisition whenever you want – the value of these companies can go up very, very quickly,” notes Cuatrecasas.

“We think linearly – very few people, very few scientists, would have believed that a Covid vaccine could be developed in a year – but the pace of technology is phenomenal. As soon as the approval passes, their value will skyrocket,” he adds.

And Cuatrecasas’ warning goes further.

“By 2030, most conventional food companies will be bankrupt or will have acquired one or more companies. The Rethink X report suggests that the majority of the meat industry will then be cell- or plant-based. The challenge for conventional fish and meat producers is to realize that their business model is on the way out. They’re already operating on thin margins, and when they start losing sales volume, it’ll be over because they can’t cut costs fast enough,” he warns.

However, he adds that while the long-term situation for cellular protein producers may be promising, medium-term growth is unlikely to be too rapid.

“Investors are going to have to be patient, they have to close their eyes – there is still a long way to go,” says Cuatrecasas.

Much of the criticism of the alternative protein sector has to do with the price of the products, which makes them well beyond the budgets of most consumers, not just those in the Global South. However, Cuatrecasas believes that low-income people stand to benefit the most from the expansion of the sector.

“By 2030, I expect seafood alternatives to be more widely adopted in developing countries than in the West, as the cost of precision fermentation will be low enough to deliver to these markets,” he predicts.

This is one of the many benefits he sees from lab-grown meats and seafood.

“They need less energy, water, land and fewer animals themselves. This is very promising for the developing world. It’s also pure food, without the bad guys, and you can even design the nutritional content of the food, which is exciting for your health,” he adds.

Once the companies have obtained regulatory approval and the products are ready to go to market, it remains to be seen how they fared. But Cuatrecasas notes that they could strive to emulate leaders in plant-based beef.

“It all depends on the brand and global presence. Beyond Meat and Impossible sell direct to consumer – that’s pretty powerful. Most have gone to retailers, but with the changes in food delivery – via drones and robots – there are huge opportunities for strong brands,” he explains.

Rob Flecher

Editor-in-Chief at The Fish Site

Rob Fletcher has been writing about aquaculture since 2007, as editor of fish farmer, Fish farming specialist and The fish website. He holds an MA in History from the University of Edinburgh and an MA in Sustainable Aquaculture from the University of St Andrews. He currently lives and works in Scotland.

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