Thursday, September 28th 2023


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Justin Reynolds


Is the Future of meat in a plant?

The world’s relentless demand for energy gets most of the blame for the pressures placed on a warming planet. But our insatiable demand for meat and dairy produce is hardly less sustainable.

The global industrial agriculture sector contributes around 15% of the Earth’s total greenhouse gas emissions. It’s also bad for the animals – and for us.

We keep around 40 billion animals for food, often in appalling conditions. The current pandemic, which has its origins in meat consumption, provides a visceral illustration of the health risks of factory farming. Densely packed animals are pumped full of antibiotics to which bacteria responds ever more ingeniously. The problem extends to seafood, as oceans become increasingly contaminated by toxins, pathogens, parasites, and plastic micro-particles. 

Revolutionary cells

Fortunately, remarkable technologies enabling the cultivation of meat, seafood, milk – and even leather – from cells are rapidly approaching commercial viability.

The revolutionary promise of cell-cultivated foods consists in their ability to cater for customers unwilling to settle for plant-based substitutes: the meat, seafood and milk produced in the lab is exactly the same as that from a pig, fish or cow. A future world fed by cultivated food would use 99pc less land, 96pc less water, 45pc less energy, and reduce greenhouse gases by 96pc.

AIM-listed Agronomics Limited (ANIC), headquartered in the Isle of Man, is an increasingly significant European investor in biotechnologies. The company, whose board includes Innocent Drinks co-founder Richard Reed and serial investor Jim Mellon, has switched focus from biopharmaceuticals – medicines produced from biological sources – to the building of a portfolio of start-ups researching and producing a broad range of cell-cultivated products.

In the past year Agronomics has rapidly scaled its capacity to invest through multiple placings, doubling its investable capital to more than £17m. It now has stakes totalling £14.5 million in more than a dozen companies focused on both cell-cultivated and plant-based foods.

The best known, perhaps, is New Age Meats, owned by Simply Foods, whose products include, as its website puts it, pork sausages made ‘from a few cells from a pig named Jessie’.

Rebellyous Foods makes plant-based chicken nuggets, patties and strips that cook like traditional breaded chicken products, which it hopes to sell to schools, hospitals, corporate cafeterias, and restaurants.

Bond Pet Foods produces cultured chicken proteins providing the essential amino acids that dogs and cats need, which can be dried and blended into a variety of pet food products.

BlueNalu is exploring the possibilities of ‘cellular aquaculture’, making fresh and frozen seafood products by isolating living cells from fish tissue.

Legendairy Foods produces dairy based on milk proteins produced without cows – the dairy farming industry is a surprisingly significant polluter, the biggest 13 dairy corporations together emitting the same greenhouse gas emissions as the UK, the world’s sixth largest economy.

VitroLabs Inc makes animal hides with the same qualities of traditional leathers, extracting cells from a one-time biopsy on a living animal which then self-regenerate indefinitely.

Closing the commercial gap

Cell-cultivation has been a viable technology for some time, but the high price of cultivated and plant-based foods has been a barrier to wide consumer acceptance. But demand has been increasing rapidly over the past couple of years, a trend accelerated by the lockdown.

According to consumer data group Nielsen there was a 265pc growth in the eight weeks to mid-April in the US for cultivated and plant-based meat, compared with 39pc for fresh meat. Sales of plant-based milk, the largest category of plant-based foods, totalled $2bn, taking it to a 14pc market share: oat milk is the fastest-growing plant-based milk, with dollar sales soaring by 690pc in 2019.

The pandemic has highlighted the vulnerability of the meat industry, leading to the closure of large slaughterhouses in the US and Europe. Supply chain issues have led to a sharp increase in wholesale meat prices, closing the price gap with biotechnology alternatives. Last month the Financial Times reported that more money was invested in companies making plant-based or cell cultured meat, eggs and dairy in this year’s first quarter than in the whole of 2019. The $930m invested in the sector in Q1 2020 was up on the $824m raised in 2019. There has been substantial multinational investment in the last six months with, for example,  Unilever buying natural food suppliers Graze and The Vegetarian Butcher, and Mars purchasing sports German nutrition maker FoodSpring. The compelling ecological and health benefits opened by the cell-cultivated food sector make it a solid long term investment. But it is moving into focus as a shorter-term play.

A good place to begin

With its diverse portfolio and a management team with proven marketing flair Agronomics seems to offer a good option for investors exploring the sector’s possibilities.

The company’s most recent financial statement, published in April, reported a Net Asset Value at 31 March 2020 of 5.53 pence per share, with net assets standing at £18.3 million including investments of £14.5 million and un-invested cash of £3,890,306. Its half yearly report for the six months to 31 December 2019 reflected the company’s round of investments, reporting a net loss for the period of £493,493 as compared to a 2018 loss of £16,357. The company’s investment income, including loan interest and net unrealised gains, was £84,262, operating expenses £577,782, incurred mainly through spending on professional fees relating to the investments and fundraises during the period.

It’s relatively early days for Agronomics and the cultivated and plant-based foods industry. The price gap with conventional foods needs to close further for full take-off. A ‘Protein-Packed Dog Treat Bar’ sold by Bond Pet Foods, for example, is advertised on their website at $20.

But a virtuous circle is spinning: consumer demand is rising as prices fall, stimulating further investment and lower prices in turn. Agronomics is betting on the sector’s future, but with a share price hovering just under 7p, seems a solid starting place for investors seeking to foster positive change and realise a decent return.

Here, Proactive London’s Andrew Scott sits down with Richard Reed from Agronomics

the author was paid but has no shares in the company