By John Reynolds on Friday 12 November 2021
Derin Alemli talks to Future Food Finance about the company's recent $25m fundraise and how it aims to bring its first part-plant, part-cell-based products to market next year.
The CEO of Impossible Foods is “no stranger to controversy” but there will be a “long timeline “ until 100 per cent cultivated meat hits the market at scale, says an executive with a US startup making hybrid cultivated meats, responding to recent criticism about the prospects of cell-based meat.
Derin Alemli, chief operating officer, New Age Meats, spoke to Future Food Finance, following its recent $25m funding round, as it looks to bring its first part-cell, part-plant based products to the US market.
Addressing recent criticism of the cultivated meat sector, which included the plant-based Impossible Foods CEO damning cultivated meat as “vaporware”, Alemli said: “Pat Brown? Respect him, and love what Impossible has done. He does have his own company to protect. He is no stranger to controversy.”
On a highly critical article about cultivated meat in The Counter, questioning its viability and whether it was heading for a billion-dollar crash course with reality, Alemli said it was an "attack really levelled at 100 per cent cultivated meat products to which we say 'we agree'".
"I think it will be a long timeline until that [100 per cent cultivated meat] is functionally out in the market at any sort of scale," he says, citing it as being capital investive with high costs.
Instead of trying to bring entirely cell-grown meat to market, New Age Meats is opting for the hybrid approach initially.
Alemli says this is because “from our perspective plant-based meat does a lot of things really well but so does cultivated meat. But they obviously have their own challenges".
In particular, the cultured part apes the taste of animal meat while the plant part keeps the costs down and helps with texture, he says.
“Certainly over time, I think there is an argument to be made for higher inclusion rates of cultivated meat rather than plant-based," he says.
“We are a data-driven company, we will continue looking at the data and see what works best to optimise for that consumer taste as well as price.
“If you look at the external inputs, it is going to be some time before cultivated meat has a cost base that is really comparable to conventional meat.”
Alemli says the first product New Age Meats hopes to bring to market, the US market, is a variety of pork sausage “with a true pork flavour” which will provide it with "a lot of versatility".
The startup also has a “pretty tasty” pork dumpling product and long term will look to make “mass market products” such as chicken, beef and lamb.
He says he wants New Age Meats to be permitted to carry out public tastings, pre-regulatory approval, but regulators have stymied this.
On price point, Alemli says the sausage product would be sold as a modest premium product, which would target the foodservice market.
“You go to the grocery store, you take it home, have a bad experience, you burn it, you are not coming back,” he says.
"The nature of restaurants are that you can really preserve the experience."
New Age Meats is hoping to get its sausage product soon approved so it can go to market in 2022.
To date, no cultivated meat or hybrid product has been approved in the US, with Singapore being the only market to approve cultivated meat.
Alemli says he is confident that the product will be approved but airs a note of caution.
“I think that is an area of uncertainty for us all," he says, adding that the fact the US FDA has hitherto not approved any cultivated products “opens up some questions” in his mind.
“It is a situation that we don’t have a tonne of info at the moment," he adds.
Asked whether New Age Meats would look to other markets beyond the US, Alemli points out that the US has several advantages over other markets in terms of size of market and income levels.
Its recent $25m fundraise, says Alemli, will be used to help build a 20,000 square foot plant facility in California along with R&D investment while headcount is also expected to swell from being currently 30 plus to 50 plus individuals.
Hanwha Solutions of South Korea led the funding round along with existing investors SOSV’s IndieBio, TechU Ventures, ff VC and Siddhi Capital.
Its latest investment round, taking its overall funding to $32m, comes as investment continues to pour into cultivated meat companies.
According to the Good Food Institute, $366m was invested in cultivated meat firms in 2020—nearly six times the amount invested in 2019.
Alemli likens the industry to the electric car industry.
“It is obviously a long-term play.”
“Investors sort of see the same prospect. You have to invest a lot in Cap X to build the infrastructure to make this stuff. But over time you have a strong brand, good product and all that.
“I think that is how investors are looking at us, for sure. And for us, it is all about being capital efficient about how we do that.”
On future funding rounds, he said: "There is always a balance of, you want more capital, but you don't want to overvalue yourself at any given moment."