Tyson Foods, the nation’s largest meat producer, is investing more in companies that are creating meat from animal cells with the stipulations that it tastes good and it’s inexpensive.
Tyson Ventures, the parent company’s investment arm, now holds a minority stake in a Jerusalem-based startup company that wants to reduce the costs associated with the cellular production of meat.
Tyson, among other food and technology companies, took part in a recent $2.2 million investment round for Future Meat Technologies, a startup focused on creating fat and muscle cells. The startup plans to use the funding for engineering and biological research development. It is hiring engineers, chefs and scientists.
This is Tyson’s first investment in an Israeli company. The amount Tyson spent was not disclosed in Wednesday’s announcement.
“We’re excited about this opportunity to broaden our exposure to innovative, new ways of producing protein,” Justin Whitmore, Tyson’s executive vice president of corporate strategy and chief sustainability officer, said in a statement. “We continue to invest significantly in our traditional meat business but also believe in exploring additional opportunities for growth that gives consumers more choices.”
While the investment can seem counterintuitive, Tyson must consider alternatives to traditional meat protein, said Ken Shea, senior food and beverage analyst at Bloomberg Intelligence.
Shea compared Tyson’s interest in meat alternatives with large tobacco companies’ interest in smaller e-cigarette manufacturers.
“It’s almost like keep your friends close, keep your enemies closer,” he said. “Aside from the commercial potential, they want to know what’s out there that can threaten them.”
The meat-alternatives market, estimated at $4.63 billion this year, is projected to reach $6.3 billion by 2023, according to global market data.
Such products are 1 percent of the global meat-processing industry, but Tyson needs to be in on development of new products, Shea said. That’s what Tyson Ventures has done. Since establishing a stake in vegan-friendly Beyond Meat in the fall of 2016, Tyson has increased its company share. Memphis Meats, a company developing lab-grown meat products, also received money from Tyson earlier this year.
Israeli food conglomerate Neto group, S2G Ventures of Chicago, China’s BitsXBites and Agrinnovation, an Israeli investment fund, joined Tyson in the recent round of investment in Future Meat Technologies.
While it is difficult to imagine an affordable price point, Yaakov Nahmias, the company’s founder and chief scientist, said he is optimistic that his goals — a quality product and a fair price — are attainable. The main one being to reduce average production cost from about $4,500 per pound for substitute meat to $2.25 to $5 per pound by 2020.
After a manufacturing redesign, it now costs Future Meat Technologies about $362 to create a pound of meat derived from animal cells, Nahmias said in a news release Wednesday.
He applied his research at the Hebrew University of Jerusalem to Future Meat’s technology. This includes a way to produce animal fat, that “makes our mouths water,” without killing animals or modifying genetics.
Business on 05/03/2018
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