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In the past few months, we have witnessed a number of groundbreaking moments that represent a transition in the sector as companies move from R&D validation toward commercialisation.
November 2022 saw the FDA issue a ‘no questions’ letter to Upside Foods for their cultivated chicken product. We anticipate the USDA to be working closely with the FDA to approve the cultivated chicken in the coming year, which will represent the first company to achieve regulatory approval in a major jurisdiction. We expect this to be the first of many cultivated meat companies to achieve approvals in the US, and further there could be additional jurisdictions moving forward by establishing their own regulatory pathways for the approval of cultivated meat.
Finding sustainable alternatives to agricultural commodities is fast becoming a key priority for major jurisdictions as they work toward reaching ambitious 2030 climate targets, as shown by the EU’s agreement in December 2022 to implement new restrictions ensuring goods placed on the EU market are not contributing to deforestation and forest degradation in the EU and elsewhere in the world. Of particular focus are products such as palm oil, coffee and cocoa. Companies in our portfolio such as California Cultured and Clean Food Group are developing solutions which can directly address these deforestation concerns through their robust plant cell culture and fermentation platforms. We believe the entire cellular agriculture ecosystem stands to benefit from increased regulation and scrutiny in the coming years surrounding unsustainable supply chains, which needs to be addressed if global climate targets are to be met.
Highlights
Here, we bring you the highlights from our portfolio in Q4 2022:
Agronomics co-led the seed investment round of precision fermentation contract manufacturer Liberation Labs. The final tranche of the committed US$ 7 million was completed on 5 December 2022 and, on 30 December 2022, the Company announced the close of Liberation Labs’ $20 million seed funding round.
On 25 January, Liberation Labs announced that the company has acquired the land for its launch facility, which we believe will be the first dedicated, purpose-built, commercial scale, precision fermentation plant globally for food production. The new facility, which will have a fermentation capacity of 600,000 litres with a fully dedicated downstream process (DSP), will be located in the Midwest Industrial Park in Richmond, Indiana.
On 26 October Solar Foods, Agronomics’ Finnish food technology portfolio company, announced its sustainable protein produced from CO2 and electricity, Solein, received its first regulatory approval in Singapore by the Singapore Food Agency. On 23 December 2022, Solar Foods also announced that it had received a €34 million grant to support the build of their first fermentation facility and start preparations for their full-scale facility.
On 05 December, portfolio company Clean Food Group, focused on producing sustainable alternatives to palm oil via their proprietary fermentation platform, received investment from Doehler Ventures, the venture arm of Doehler Group GmbH, a global producer, marketer and provider of technology-based natural ingredients and ingredient systems for the food and beverage industries. This strategic partnership will see Doehler support Clean Food Group in the scale up of their palm oil alternative.
On 10 October, Meatable, Agronomics’ Dutch cultivated pork and beef portfolio company, announced that it was partnering with Esco Aster, the first and only commercially licensed cultivated meat manufacturer, as part of its first international expansion to Singapore. This partnership will facilitate the production of Meatable’s cultivated pork products, which are aiming to be launched in select Singaporean restaurants by 2024.
What is cellular agriculture?
Cellular agriculture is the direct production of agricultural products from cells, removing animals from supply chains:
- Cell culture – cultivated meat, seafood and materials such as leather
- Fermentation – inclusive of biomass and precision fermentation – the modification of microbes to produce valuable molecules such as proteins, fats and oils
- Enabling technologies – bioreactor manufacturers, low-cost growth factor methodologies, biodegradable or edible scaffolding for cultivated meat and large-scale contract manufacturers for cell culture and precision fermentation
These technologies aim to provide more sustainable methodologies for the development of such products, reducing greenhouse gas emissions, antibiotic requirements, land use, water use, energy use, improving animal welfare and mitigating climate change.
Portfolio breakdown
Portfolio breakdown by Net Asset Value (NAV) contribution shown below. Agronomics currently has ~£29.8 million in cash reserves for investments in new and existing opportunities within cellular agriculture.
Agronomics has a global mandate, investing predominantly in US and European companies. The majority of the portfolio is currently at the Series A stage. Agronomics focuses largely on cell culture and precision fermentation technology companies.
Portfolio in the news
Liberation Labs
Mega Factories Target Cow-Free Milk and Cheese to Plug Shortage: Bloomberg reports that Liberation Labs raised $20 million of funding in January to build a factory in, Indiana, which should start commercial production by the end of 2024. The article discusses whether precision fermentation companies would be able to win over sceptical consumers by making cow-free dairy taste like the real thing. Bloomberg notes that these companies have a chance to address the underwhelming response to existing offerings. (26 January 2023)
The EVERY Company
Anne Hathaway Backs Precision Fermentation Platform for a ‘Better Future’: Actress Anne Hathaway has reportedly invested in The EVERY Company, a leading precision fermentation platform focused initially on producing animal-free egg protein. In her first B2B investment, the actress has backed Every with an undisclosed funding amount. (02 February 2023)
Formo
Framing the futures of animal-free dairy: Using focus groups to explore early-adopter perceptions of the precision fermentation process: Formo funded a paper reporting on the findings from a series of virtual focus groups that explored consumer perceptions of animal-free dairy produced using precision fermentation. The findings suggest that the key to the future of these products as a viable market option will depend in large part on the extent to which it can clearly demonstrate that it is preferable to conventional dairy or its plant-based competitors, particularly in the arena of taste, but also across considerations of health and safety, nutrition, environmental effects, and animal well-being. (03 October 2022)
Solar Foods
A factory will soon start making green food from air and electricity: The New Scientist reports that Solar Foods will grow bacteria using carbon dioxide from the air and hydrogen produced by renewable energy, a process more efficient than growing plants. It reports that the company is building the first commercial-scale factory, near Helsinki in Finland, that will be able to make food directly from CO2. It will produce 100 tonnes per year, enough for 4 or 5 million meals, he says. “We are a bit behind schedule, but production may start just about in 2023,” says Solar Foods’ Pasi Vainikka. (28 December 2022)
BlueNalu
The first lab-grown seafood will be fancy: Vox reports that San Diego startup BlueNalu is looking to put San Diego “back on the culinary map” — by growing fish cells in bioreactors. The article notes that BlueNalu are developing Pacific bluefin tuna toro — the prized fatty belly portion of the near-threatened fish, which fetches over $100 a pound on the retail market. (14 December 2022)
Good Dog Food
Would you switch your dog to eating lab-grown meat?: BBC News asks its readers whether they would be willing to feed their dogs cultivated meat. The article focuses on London-based Good Dog food, a company formed by Agronomics. The majority of dog owners welcomed the idea of swapping to cultivated meat, citing the environmental benefits of switching as a main driver. (12 December 2022)
Wider sector news
Gourmey
Gourmey raises €48m to build Europe’s largest cultivated meat hub: Sifted reports Parisian cultivated meat startup Gourmey has raised €48m in new funding. The article focuses on what the funding achieved will be used for and a brief outline on what Gourmey is currently working on, such as its foie gras produced via culturing stem cells. (05 October 2022)
Vow
Sydney cultured meat startup Vow raises $73.5 million Series A: Start Up Daily reports Vow, an Australian cultivated meat company has achieved a record for a series A raise in the cultured meat industry. It reports that the first Vow-engineered product was made available to taste in Singapore restaurants at the end of 2022 under its brand Morsel. (15 November 2022)
Change Foods
Change Foods reveals plans for animal-free casein facility in Abu Dhabi: The Vegconomist reports that US-Australian alt dairy company Change Foods is looking to open a manufacturing facility for the production of animal-free casein in Abu Dhabi, United Arab Emirates (UAE). (21 October 2022)
Cell Industry Associations
US, EU & APAC cultivated food associations announce major global alliance to boost industry: Green Queen reports, three leading cultivated food industry associations hosted the first-of-its-kind meeting in Singapore to formalise the launch of a global alliance to advance cultivated foods on the global stage. The article states the alliance is made up of the US based Alliance for Meat, Poultry and Seafood Innovation (AMPS Innovation), the APAC Society for Cellular Agriculture (APAC-SCA) and Cellular Agriculture Europe (CAE), representing 31 of the leading cultivated meat, seafood and dairy companies. (24 October 2022)
FDA Consultation
FDA completes first pre-market consultation for human food made using animal cell culture technology: The FDA reports in November it completed its first pre-market consultation for a human food made from cultured animal cells. The constituent update reported they evaluated the information UPSIDE Foods submitted to the agency and have no further questions at this time about the firm’s safety conclusion. The pre-market consultation with the firm included an evaluation of the firm’s production process and the cultured cell material made by the production process, including the establishment of cell lines and cell banks, manufacturing controls, and all components and inputs. (16 November 2022)
Perfect Day
Perfect Day expands global footprint and owned manufacturing capacity in India: Perfect Day announced the company has secured regulatory approvals in India and purchased state-of-the-art research, pilot production and manufacturing facilities. Perfect Day’s products have now been approved in Hong Kong, Singapore, India and the US. The company also acquired Indian biotech manufacturer Sterling Biotech Limited for $78.1 million, one of the world’s largest gelatin manufacturers. (30 November 2022)
Remilk
Israeli protein giant drops construction of giant factory on Zealand: Food Supply reports Remilk is walking away from its Danish business venture just 9 months after announcing it. The article reports the plan to build the world’s largest precision fermentation plant on a 72,000 square meter industrial site in Kalundborg has been shelved indefinitely. We believe this highlights the risks facing precision fermentation companies attempting to raise huge sums of capital to build their own large scale production facilities, demonstrating the value proposition of outsourcing this to contract manufacturers such as Liberation Labs, who’s first 600,000L facility will be operational by 2024. (12 January 2023)
Ivy Farm
From pig cell to fork. Does lab-grown meat pass the taste test?: The Sunday Times’ Louise Eccles went to taste Oxford-based Ivy Farm Technologies cultivated meat product. Agronomics’ Anthony Chow was quoted in the article discussing the production process: “Cell-based meat emerges as a sludge, it’s a slurry kind of thing. Your readers probably don’t want to hear that, but it is a liquid with lots of cells in it. You rinse the cells and you’ve just got a kind of paste that you can put into sausages, meatballs, whatever you want.” Anthony points out that scenes from an abattoir would be a far worse sight: “People are willing to put slaughterhouses out of their minds when they eat meat, why not sterile bioreactors?” (08 January 2023)
UN Food and Agriculture Organisations
The UN Food and Agriculture organisations assesses safety and regulations of cultivated meat: The Vegconomist reports that the United Nations Food and Agriculture Organisation (FAO) is now assessing important food safety and regulatory concerns regarding cultivated meat. The article states the organisation released several documents discussing food safety aspects of cultivated meat products, including language and terminologies, common production process, and regulatory frameworks. (16 November 2022)