The a16z Show - a16z Podcast: Old Food, New Tech -- 'Clean Meat'

Episode Date: November 23, 2016

You’ve heard the numbers or some statistic like this: By the year 2050, we’ll need to feed 9.7 billion humans on the planet. Our current production and meat-making methods -- growing crops to feed to animals to turn them into food -- can’t keep up … not to mention it’s not very good for the environment. Yet meat is at the center of the plate for most meals, for most people. So how do we go from where we are to where we need to be? Especially since food is fundamentally an emotional experience! You can’t browbeat consumers into doing the "right" thing by selling on the rational benefits. You have to make them taste it … and crave it. In this episode of the a16z Podcast (continuing our annual Thanksgiving and ongoing food x tech series) Uma Valeti, CEO of Memphis Meats; David Lee, COO of Impossible Foods; and Bruce Friedrich, Executive Director of The Good Food Institute discuss -- in conversation with a16z partner Kyle Russell -- different methods of making meatless meats or “clean meats”. More broadly, we’re beginning to see a new era of food, and with it, radical transparency around understanding where our food comes from and how it’s made … something most people currently don’t know (or don’t want to know). From making to marketing, what will it take to turn the world's oldest food production tradition into an entirely new one? Could a personalized, local “meat brewery” be the future of food? Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi everyone, welcome to the A6 and Z podcast. This year, we're continuing your annual Thanksgiving series with another podcast all about food, only this time it's about meatless meats or rather clean meats. Joining the episode are Uma Valletti, CEO of Memphis Meats, David Lee, C.O.O. of Impossible Foods. And Bruce Friedrich, executive director of the Good Food Institute. They are in conversation, moderated by Kyle Russell. Hello, everyone. This is Kyle Russell. I'm a member of the deal and research team here at Indreason Horowitz. And today we're talking about meatless meats. Looking forward, we're going to have to feed 10 billion people globally over the 21st century.

And that's going to involve not only scaling up existing production techniques to address that demand, but also looking at new ways to handle the production and distribution of food. A major part of billions of people's daily diets consists of meat. That's a big vector that we're going to have to address. So first I'm going to go to Bruce Friedrich from the Good Food Institute. What are some of the reasons people are looking at this space? Is it efficiency? Is it what we hear from vegetarians and vegans of not wanting to eat meat?

Well, we're coming at it from primarily the inefficiency of cycling crops through animals, as well as the environmental global health and animal harm. So if you were looking at a way to create food, you really couldn't do much worse than growing crops to feed them to animals so that the animals convert them into meat. We're looking to feed 9.7 billion people by 2050. We're not going to do that with animal agriculture. The most efficient meat is chicken. And according to the World Resources Institute,

it takes nine calories in the form of corn or wheat or alfalfa or whatever you're feeding the chickens. It takes nine calories into a chicken to get one calorie back out. So it's 800% waste. Got it. Additionally, climate change and other environmental. problems are addressed by shifting away from animal product consumption. According to the United Nations, about 14 to 15 percent of all climate change is attributable to the inefficiencies of raising animals for food. The least climate change inducing meat, again, it's chicken. And yet on a per

protein calorie basis, chicken produces 40 times as much climate change as legumes like soy and peas, which are two of the primary plant-based meat substitutes. Also literally tens of billions, not millions, tens of billions of animals, were treated in ways that would warrant felony cruelty charges if these were dogs or cats or other protected animals. And then there are a variety of global health issues that stem from the intensification of animal agriculture. So, for example, in the United States, that 80% of all antibiotics that are produced by

pharmaceutical companies, about 80% of them are fed to farm animals, which means that these bacteria are learning how to get around the antibiotics, and they may be ushering in an end to the era of antibiotics working in human medicine with catastrophic consequences. So is this something we should do, or is this something we really, you know, looking forward, have to do? Absolutely. We're going to have to be doing this because of the climate change issue and because of the sustainability issue. We just can't feed 9.7 billion people by 2050 with the inefficiencies of animal agriculture. And we're not going to be able to meet our Paris Agreement obligations. According to Chatham House, the foremost think tank in Europe, it's a literal and scientific impossibility that we keep climate change under 2 degrees Celsius by 2050 unless meat consumption goes down.

And right now it's going up. Eric Schmidt, the CEO of Alphabet, just a couple of months ago, was asked for six technological innovations that are going to transform life for humanity in a point. positive way by a factor of at least 10-volt in the fairly near future. He led with plant-based meat. But that's not the only path going forward. We're joined also by Uma from Memphis Meets, who is taking another approach. Can you tell me more about how you're going about addressing some of these problems? Sure. Thank you, Kyle. Delight to be here. My name is Uma Valletti. I'm the CEO and founder of Memphis Meets. Our approach is basically guided by the principle that, you know, we're all very interested in living a safe and sustainable food system for future generations. Meat is being

such an integral part of our culture for thousands of years. It's the center of the plate for any gathering that happens around food. In any culture you think of, 90% of the world's population eats meat. So thinking that the world could become vegetarian or vegan in the near future, we believe that it's very unlikely. Our innovation is growing meat, just to point that it's not meatless meat. A number of people are calling us clean meat. We're growing meat directly from animal cells. We take high-quality animals like cows or pigs that are converted into beef or pork. We take cells from these animals and we grow them in a very clean and nutrient-rich environment so that these cells become meat. And we harvest the meat, whether it's early in the process or late,

depending on how tender we want the meat to be, and produce products that Americans love to eat, like hot dogs, burgers, meatballs, sausages. In terms of practical challenges. We get meat from animals that were alive and walking around on a pasture, and therefore the meat becomes firm because they were getting exercise and the muscles were stimulated. That's one of the things I've seen in the past when looking at this kind of approach is the meat ends up coming out mushy because it wasn't from a living animal. How do you get around those kinds of challenges? How do you actually get that meaty material to be something that's recognizable? Really good question. And it's something that we are continuously looking at and our scientific team

and our Scalip team is working on producing meats of different types of texture. So, you know, if you want meat that is really soft and tender, not very textured, then there's a particular cultivation process we have that will let the cells grow and become muscle bundles and fibers. And we harvest them at a stage where, for example, the meat from wheel, with a small calf, 12 to 24 months when a cattle is slaughtered, the meat in there is really tender and soft. If you want to have meat that has properties like you talked about, which is really exercised, there is ways of exercising these meat that we're growing on our cultivation platforms. So as we start doing more and more on the scale up side, I think we'll know more.

But I can only talk about what we've seen so far. And from the meat that we've harvested so far, we've made things like meat balls and fajitas. And it's virtually indistinguishable from whether it comes from a grocery store or from a conventional meat market. So I can't say we've solved all the problems, but we see a very clear roadmap that is realistic. We think about solving these issues. David, at Impossible Foods, you're taking another tact. You're taking plant products and turning into something that would be familiar to someone who's eating a burger made from it. There have been veggie-based patties that people could buy in the market for quite a while now.

How is that different from what you are doing? I think the biggest difference, aside from the fact that the product really does cook, smell, taste like a burger from a cow is that our approach as a company is not to appeal actually to the vegetarian or those who are conscious of the environmental impact of meat. Our product is made for the love of me. I'm a meat eater. My job is to appeal to people like me. If they begin to just substitute one burger from a cow for a delicious impossible burger, you'll save 95% of the land that's consumed to make a burger from a cow, a quarter of the water in eighth of the greenhouse gases. So our approach is a market-based approach. Give consumers a delicious option and let them want to have a burger

that makes them feel like they're making a difference. So people aren't necessarily entirely rational in their decision-making when it comes to food. A lot of recipes where this has been in the family for decades, people have a very strong emotional attachment to food. Looking at GMO specifically, for instance, people get legislation passed to label products that are GMO because they're afraid of the new. When you look at how that's happened over the last decade, how are you thinking about angling the company to make people feel confident in their purchases. It's a great question. Listen, food is unique. It's fundamentally an emotional experience. You cannot browbeat rationally any consumer to do, quote unquote, the rational or correct thing.

You've got to make people crave your product. That's a threshold issue. And, you know, when you pick an iconic form of a product like the burger, it's a high standard. It's something that people taste, and either they say it tastes like a burger or not. So first, the product has to be able to deliver on taste. That's that simple. If you're not making a decision based on going to the experimental restaurant trying it out, but walking down the aisles of a grocery store, is that enough to shift people towards you versus the patties they've been buying for the last decade? Your question is, how do you get people to try something new? So a few things. One is, you have to leverage the credibility of particularly who the millennial trusts. He used to be in food.

He came up with a new product and you pushed it in the grocery aisle and he did a tremendous amount of advertising and you push your marketing through. We believe that the millennial, who is determining food trends, who uses social media, who, by the way, is a largest consumer of burgers in the U.S., they are actually very interested in being pulled to a product because they see a celebrity chef they trust, a highest arbiter of taste like chef David Chang at Womofuco or Tracy Desjardan, actually wants to serve it. And they're excited to experience it in a restaurant. nail this credibility issue on taste, and then all of the rational benefits we find follow. So, Uma, I think everyone is pretty familiar with our ability to grow entire living beings.

We've cloned animals. We also are now exploring things like cloning different organs. It's kind of in the popular consciousness that this is a capability that we have. But in terms of making something that's edible, and specifically it's something that's as appealing as what you get from the animal that came off the farm, Is there a breakthrough that occurred in the last five or ten years that actually made this possible? Why are we seeing this surgence of companies in this space? I think the answer is a mix of many of the things you've just stated. The long-term trends have always been there for the last two decades,

the environmental disaster with the intense animal agriculture, risks to massive human health disasters, and also the incredible economic and efficiency of current meat production, despite the amount of subsidies that are ongoing. with the projected increase in population and the demand, these are long-term trends that have been well entrenched for the last couple of decades. My background is I'm a cardiologist.

I was injecting stem cells into patients' hearts to regrow heart muscle and being very interested in food security and a sustainable food system, I just ask the question, can we grow food directly from cells? And that's kind of where the investigation started. A group of experts that have been pursuing research on skeletal muscle biology, food science, biomaterials, and tissue engineering, started realizing that the components of what we really need to grow food directly from cells in a very safe way are already there.

But some of the scientific breakthroughs really started happening in the last decade, which is how do we start growing them in conditions that let the cells become the muscle that we really enjoy in meat? We've had some breakthroughs last year in terms of converting it into meat that taste identical to what is grown in an animal. If you really dissect this out, when you eat a piece of steak, that is a few billion cells sitting on your plate. In order to grow those few billion cells, you have to grow an animal that has like 30 trillion cells. You throw away two trillion of those cells, skin, bones, hair, or other tissue, and you just take the choice cuts. We ask

the question, what if you can just grow the types of food that people really enjoy eating, like a tops or loin or a lamb chop and reproduce only that portion of it. We're only growing a portion of an animal. It's really expensive to produce it. But if you compare this with technological breakthroughs with sequencing, the first human genome sequencing took about $3 billion. Now it's done for $3,000, all in the span of, what, 15 years? That's a million-fold reduction in costs.

And our goal is it's very realistic to have products on the market in the next five years. Doing it in efficient ways to lower costs is where our entire focus is right now. Something I'm curious about, given the fact that certain meats that people like to eat came from certain parts of the body, are you getting the cells from those particular parts or is a generic muscle tissue and then based on the circumstances in which you grow it in? How's that work? We do take cells that already are in areas that people enjoy eating, but we also have other cells, which can reproduce and self-renew themselves and become very high-quality muscle tissue. we're still learning which are these cells from the highest quality meat from a nutrient perspective and from an efficiency of growth perspective.

Something that we talk about is the importance of the microbiome. As you're going this meat, how important is managing those conditions to growing something that feels like the real deal? Is that something you have to maintain or are you more so going for a controlled, nothing else is in there but the cells

were growing environment? To answer that, you have to think about what is in the meat now, right? If you take an animal, let's walk in on a firm, and you just slaughter it and you take the meat out, the meat should not have any bacteria in there. The reason bacteria gets in there is because you're in the process of slaughter, that's fecal contamination. Or when you have an animal not fully washed before slaughter, that's how E. coli or salmonella get in there. And then they multiply because meat is food and they multiply into millions and billions of bacteria in there.

The entire meat production processing system is set up so that you lower those counts of bacteria by various curing or processing. or types of sterilization that they go through. So I don't know if there's a lot of benefit to having all of those in there added after the animal is slaughtered. Producing meat detaches them from fecal contamination from slaughter or from getting contaminated during the processing, growing it in a sterile environment,

offers benefits that the current meat just cannot. So, David, are you kind of okay with just sourcing plants from the kinds of farms and other places they come from today? How do you think about moving up the stack in terms of the plants that go into the plants that go into the production of that meat. Do you think, well, now we're actually going to do indoor vertical farming for those

specific ingredients and we'll optimize production of those as well? Let me give an example. Potato has a protein that's thrown away today in the processing of starch. Well, we found that that particular protein is really great at creating that bind and that caramelization on a burger when you put it on a flat top grill. Or this protein that we source from wheat because it was plentiful and there's a global market for it. We also want a product that through its suburbia.

supply chain would not require reinvention. Pat Brown, our founder, says, we won't be successful unless our impact can be seen from space. Well, if we're going to have that impact of scale, we have to have a product that's cheap and available. But how do we leverage the existing infrastructure? It took us approximately five years of very carefully evaluating our science platform before we made several discoveries. The biggest one is this thing called heem. Heem is the exact same molecule in our product that makes a burger from a cow red. And more than the color, it is when you cook red meat from a cow, it's the flavor catalyst. We just happen to be able to do it sourced from a plant and made at scale in a way where, you know, we use a fraction of the resources and as a result,

will be really efficient in producing the product. Just the same way that many Belgian beers are made, just the same way that many cheeses are made. I think that people eat meat despite how it's produced. Nobody is choosing to eat meat because of the environmental harm or the unsustainability or the harm to animals. Pretty much everybody makes their food choices on the basis of price, taste, and convenience. If you go to a restaurant or you go to a grocery store and you ask people, why did you buy that? Everybody's going to talk about the price. Everybody's going to talk about the taste. Convenience is critical. I think as the price comes down and as these products expand and become more convenient, they are going to compete for market share with animal-based meat, regardless of whether

people understand that they're also making the world a better place by buying these products instead of conventional animal products. Plant-based milk right now is about 9% of the milk market in the United States. Plant-based milk didn't say, look at how badly dairy cows are treated, or look at how unsustainable dairy production is. They competed with animal-based milk on the basis of the factors that actually govern consumer choice. So along that line, given the number of people who it's not just is this convenient readily available for me, but I'm making purchasing decisions for my weekly diet based on can I fit it into my budget. How do meatless or cellularly grown meats comparing price today,

given the advantage that the traditional approach has with scale? What does the path to scale look like. We have to be cheaper at scale than the alternative, or at least at the same cost at scale. We don't have to make any more leaps in technology to get there. The bottom line is we use 95% less land and a quarter of the water. We fundamentally use less resources to make it. I think that's true of all of the plant-based meat companies, and it's certainly going to be true of the clean meat companies as well. These products require exponentially fewer resources, and they require significantly fewer stages of production. So once they're at scale, they will be cheaper. I guess part of what I was also curious about regarding scale is where does production end up going?

Do you stick with the centralized production approach that we see from traditional meat industry or because you're taking these different plants and putting them together in that way? Could you do maybe more decentralized approach, manufacture a little bit closer to the final destination? scaling demand is a very big part of the equation as well. So if there isn't a worldwide increase step up in the demand for products that taste great, then no matter how you increase your supply chain or manufacturing footprint is moot. We have no ideological need to own all of the supply chain vertically and all the CAPEX. The reason why we love using fermentation, aside from the fact that it's being used already for food,

it's an industrial global scale capability. and there are plenty of other folks in the world who operate fermenters, for example, that we can leverage. We see the technology scaling up in a way that does not require any downstream innovation because the whole distribution change for existing meat exists already. So what we have to do is to supply all the people that are processing and distributing meat into various products. The current process requires you to raise animals in multiple stages of their life

from their earlier stage to a calf stage to a feed stage to point. polishing stage and then processing and you have to truck them all to a slaughterhouse and then truck them back to a distribution location. But we see manufacturing to be done where distribution also starts. So it cuts out a lot of environmental impact that we have with current meat production. And it also cuts out in a lot of cost. What do you think the angle of attack is for getting people to get exposed to clean meat and feel like they can trust it, wrap their heads around what it is? How do you get that across to people? One of the fundamental things that people have to really embrace this concept is to really taste it. The second thing is, how often can you

have people tour a place that is making their meat? Like Bruce said earlier, people are eating meat now despite how it's made because they're able to close their eyes and dissociate themselves from the process of how meat gets to the table. Right now, animal agriculture is literally passing state laws to make it illegal to find out what happens on some of these factory farms. and what happens in these slaughterhouses. So if you ask people, would you eat chicken from chickens who grew seven times as quickly as they would naturally, which is how chicken production happens now? Everybody's going to say no, but they don't know because the process is so thoroughly obfuscated.

If a middle school kid or a college kid or one of us walks through and says, hey, I see your clean meat production facility, I'm seeing the ingredients going in there, I'm seeing the meat growing and being harvested off, and all of that is done in glass walls, that completely changes it because there's radical transparency. One of the really great things about both plant-based meat production and clean meat production is that the process is completely transparent. And it basically looks like a brewery, fermenters or bioreactors. You're basically talking about replacing what farms and slaughterhouses look like now

with essentially your friendly neighborhood meat brewery. Sure, but how do you actually expose people to that? I feel like that is not information that most people are actively seeking out in their day. How do you get that exposure? You know, who's seeking it out, we found, is the millennial. I know everyone uses this term. But what's really interesting about all of us who are trying to transform food is the technology on how you go to market, how you inform, how you provide transparency is as interesting as the product itself.

So the millennial, more than any other demographic, really wants to be able to experience and know about the origin of food. Also happens to be the largest consumer of, for example, ground beef. So not only are they setting trends, are they using social media, are they looking for origins of their food, they're also just a very large part of the market. The other point to make is the goal today is very different for marketing food than it was even five years ago. The goal today is not to tell your story as it once was.

The goal today is to get others to tell your story on social. media and create poll. I give you an example. In January, we did a taste test. We had someone just captured like 45 seconds worth of it and posted this video and it just went viral. It's people talking about the product. That's what's creating the poll.

If at all there is any stress on us, it's how fast can we get this to market? It's not, how can we convince people to eat it? The fact that clean meat is going to come to market will accentuate for people the differences between clean meat production and conventional meat production. Once clean meat is produced, then people will have choices, and that will, I think, raise the issue. Right. The existence of the alternative makes you consider the original default. Well said, yeah. So something that we look for in emerging areas, I think that gets this really excited is Moore's Law like curves.

You know, a doubling of the number of transistors and chips, a significant drop in the cost of, you know, decoding a genome. Is there a curve like that that's going to fundamentally impact what food looks like five, ten years out? Yeah, I think that in five, ten years, you're going to find a radical transparency on the origin of food, the impact it has beyond the person who consumes it, but on the environment. And as well, you know, what it means, what statement food brands mean to the consumer beyond the nutritional value. Technology will allow us not just to make great tasting, you know, burgers from plants or clean meat, but a lot of, also give us a chance to let everyone know instantaneously where the food comes from, what they're actually eating, what its health benefits will be, and what statement it can make on who they are. That's been very opaque in the past. I think it's going to be radically transparent in the future.

One of the things I've been most excited about is looking at the way that the plant-based meat companies and the clean meat companies are all working together because they recognize that right now they are creating a market sector. a rising tide lifts all boats. They see themselves as competing with the conventional meat industry. As we start thinking about 10 years out or 20 years out, I think it's going to be unimaginable that we were okay with enslaving billions of animals and doing food production despite the harm it was causing to the human health environment or the economic inefficiencies.

Just to draw an analogy to what's happening in front of us, the transition. from cars that we drive to driverless cars, people realize that you could cut down the accidents or people dying by thousands or tens of thousands every year. It's very similar, but the scale is going to be, what if you could save millions of human lives and billions of animal lives? Just by slightly shifting how we're going to look at food, think about the things that are coming in terms of longevity. People are living longer and longer every year. or every decade, despite not having any innovation in food at all. That's been an area that's been virtually untouched.

Now, think about what if you start innovating food to make it safer, make it healthier, and also a lot more personalized. That's a big leap in longevity. I think we'll see a lot of companies coming in that area. The future is just starting for our industry. I want to thank you all for your effort towards letting me have a burger or barbecue going forward forward without that tingea guilt with each bite. Thanks for joining for the podcast.

Thank you very much, Kyle. Thank you.