Lab-grown meat maker Eat Just unable to capitalise on Malaysia chicken ban

For US start-up Eat Just, which was authorised in Singapore to sell lab-grown meat in 2020, a chicken export ban imposed by neighbouring Malaysia could have been a perfect opportunity.

But 18 months after its chicken nugget became the world’s first lab-grown or “cultivated” meat to be sold commercially, the lossmaking company’s products are not in shops, underlining the sector’s struggle to scale up production.

“We don’t have sufficient capacity to help solve this immediate challenge”, said Eat Just chief executive Josh Tetrick.

“If your interest is maximising profitability in the early years, you should never start a cultivated meat company,” he said.

Cultivated meat, made from real animal cells grown in bioreactors, is touted as the cutting edge of technology intended to provide consumers with slaughter-free protein. With increasing focus on the environmental impact of livestock rearing, it has been heralded by alternative protein entrepreneurs and investors as the future of meat.

But despite hundreds of millions of dollars being poured into start-ups such as Eat Just, they have yet to achieve production on a commercial scale. Other cultivated meat start-ups around the world, including Upside Foods in the US and Future Meat in Israel, are racing to gain regulatory approval and scale up output.

“Cultivated protein start-ups face headwinds, including murky regulatory processes in many countries, technology challenges limiting commercial-scale production and high manufacturing costs,” said Alex Frederick, senior emerging technology analyst at corporate data firm PitchBook.

Singaporeans have been served Eat Just cultivated chicken at pop-up events and two upmarket restaurants, 1880 and Madame Fan, in the downtown area. Yet those hungry for a taste are unlikely to get it elsewhere.

Despite gaining attraction among environmentalists and food tech investors, there is low consumer awareness, said Carman Allison at retail data group NielsenIQ.

Some researchers and biologists are sceptical of cultivated meat’s economic viability. Pat Brown, founder of plant-based meat group Impossible Foods and a renowned biochemist, said cultivated meat was “way too expensive to be competitive in the food market” and had “zero chance” of competing against animal meat.

Tetrick said it would take years to become profitable, giving a wide timeframe of “in the next three to 10 years”.

“There’s so much investment in research and development and manufacturing that needs to be made upfront. It’s a high-risk, longer-term project,” he said.

The company was losing “millions of dollars” every year, he said, adding that it made a loss on every sale as manufacturing costs were high but the products were priced competitively.

Although the sector rode the wave of venture capital money in recent years, start-ups face the risk of investors pulling back amid a global market rout. In 2021, venture capital funds’ investments into cultivated proteins more than quadrupled from a year before to $1.9bn, according to PitchBook.

The high research and development and start-up costs may have been easy to fund in a low interest rate environment, said Frederick, but he warned: “We expect many cultivated protein start-ups to struggle to meet steep fundraising targets in an economic downturn”.

Tetrick said he is “not too worried” about venture capital drying up, and added that the company was in talks with more state funds after it received backing from Singapore’s Temasek and the Qatar Investment Authority.

The company’s chicken product is being reviewed by the US Food and Drug Administration, and it is also developing a cultivated ground beef product that it will submit to Singaporean regulators for approval before the end of the year, Tetrick said.

Eat Just partnered with US agricultural trader and processor Archer Daniels Midland in May and this month the company broke ground on a facility in Singapore.

The plant will produce “tens of thousands of pounds” of lab-grown chicken per year from 2023, Tetrick said. The company expects to sell less than 1,000lbs this year, but wants to increase annual production to 30mn lbs by 2028.

Eat Just, which started life as Hampton Creek in 2011, has faced hurdles before. In 2014, Unilever filed a lawsuit alleging the company’s egg-free “Just Mayo” misled consumers. Unilever later dropped the lawsuit, although in 2015, the US FDA ruled it could not be called mayonnaise.

A year later, US regulators launched an investigation into its practice of using company money to buy back some of its products from retailers, although the start-up said no wrongdoing was found. The purchases were made because of “quality issues”, Tetrick said.

Eat Just was also in the spotlight in 2017 after firing three senior employees. Several board directors, including representatives of big investors, also quit as Tetrick moved to assert greater control of the company.

Ultimately, the entrepreneur looks forward to the day when cultivated meat is ubiquitous, adding that his goal was for it to become “the boring, everyday meat that we all consume”.