This week's guest on Cleaning Up is entrepreneur, author and philanthropist Jim Mellon. Jim is Executive Director at Agronomics, one of the world’s leading investors in cellular agriculture, or lab-grown meat. Bypassing traditional agricultural methods with precision fermentation could have huge implications for CO2 emissions and the climate, and in 2020 Jim wrote Moo’s Law as a guide for fellow investors into what he calls the ‘new agrarian revolution.’
Jim and Michael discuss the latest developments in cellular agriculture - from pet food to leather goods and restaurant-grade sushi - and how far we are from finding lab-grown products on our supermarket shelves.
Michael Liebreich Jim, tell me, what's the driver for this revolution in agronomics, in foodstuffs? What do you see as the key driver?
Jim Mellon Well, we all know that food has a very major negative environmental impact. There's lots of debate about what percentage of emissions are caused by agriculture, but it settles around 25%. The main motivating factor for me is the reduction in the cruel practice of intensive farming. But for other people, it may be the very negative impacts on the environment of an unsustainable food supply chain. Now, technology has evolved, largely out of biotech processes, that allows us now in a very short space of time to make food in laboratories that don't have any animal linkage, except for the original stem cells, and it's happening at lightning speed. The reason I called my book Moo's Law - it's obviously a rip-off of Gordon Moore's law on semiconductors - is because as the scale goes up of the production of these products, the price comes down. And ultimately, the price of at least some of these products will come down below the price of conventionally farmed foods and materials. It’s also worth considering that 70% of all crops grown around the world go to feed animals. And the deforestation that we are all familiar with, is largely due to growing soybeans to feed animals. So, if you can reduce the percentage of crops that go to animals, then maybe there's more for biofuels.
ML So, basically there are multiple, very substantial, very powerful drivers. Let’s get some definitions. So, what is cell ag? And what is precision fermentation?
JM Cell ag in the pocket that I'm talking about is where you take a stem cell and you amplify it, differentiate them into what you want them to produce, feed them with the same sort of feedstock that they would get if they were an animal, and then, after a certain amount of time you harvest them, put them all together, and you've got a food. A cow will take in 25 times more protein over its lifecycle than it puts out in the form of meat as protein. In our process, it's two to one. Over 40 days, one little sample from my fingernail of stem cells can produce seven or eight cows' worth of meat, which is 3000 kilos, in 40 days. Almost no environmental impact, and obviously, no cruelty, and no hormones, no antibiotics, no contaminants. And so, what's not to like about it? When it comes to the feedstock, until recently, there were very, very specific growth factors that were supremely expensive. But in the last few years, the price has come down by 99%. Hence Moo's Law, right?
ML Let's move on to precision fermentation. So, what is precision fermentation?
JM Basically, it's a brewing process. So, it's using organisms like yeast to produce novel proteins. The problem is that precision fermentation has been used for biotech for the last 50 years, and so the fleet of fermenters is very old, and it's very limited in capacity. So, we have to build capacity, which is what we're doing. And our first factory is being built and will open by the end of next year in Indiana, in the United States. Precision fermentation companies are producing, for the most part, dairy products, and they're producing the key components of cow's milk, which are whey and casein, in this brewing process. And egg products - 60% of eggs go into baked goods, and are not seen, so you don't see the shell or anything like that. So, there's replacements for those. Both categories are approved, they're on sale in the United States, but there just isn't enough production capacity. Dairy is the biggest emitter, whatever way you look at it, on the planet, in terms of animal husbandry, and it's one of the cruelest industries. And it's completely ripe for disruption. It's about a trillion-dollar industry. So, it'll be multiple generations before it is completely eradicated, but it's happening now. And the resistance to that is not very strong. Next year we'll probably have 600,000 daily litres of dairy product. I think within 5 years, we could capture 5% of the market for precision fermentation products. So, dairy and for eggs.
ML On the cultured cell foods, is it just people in lab coats eating it with journalists and saying it really does taste good, honestly, it does? How close are we to getting not pie-filler and hamburger meat, but actual slabs of meat?
JM Well, I thought that it would be several years before we got to the stage we're at now, but in the last couple of weeks, two of these chicken products have been approved by the FDA in the US with no questions asked: Upside Foods and Good Foods. As for actual slabs of meat, I think that's years away. Because the costs are still very high to produce what you would regard as a steak or a shaped chicken breast or anything like that. In terms of fish, you mentioned that, it's a really interesting area. We have an investment in a company called BlueNalu. By next year, they'll have their tuna fish product on the market; they've already got the off-take with Japanese sushi chains, so all of it will be sold straightaway. They have gone - which is what we like - for the very highest margin product, which is otoro tuna cut, which is $85 a pound, and they can produce it at $25 a pound. So, they'll be instantly profitable on quite large volumes of production. And fish is a market that we really like because there's no really effective cartel that's against it. With meat, there is already an organized lobby against this, and there'll be increasing amounts of it.
ML Is cellular agriculture something that's of interest only to a few hundred million very rich people? Or is it truly going to be a global thing?
JM It will be a global thing eventually, but I think in the early stages, it will be the early adopters who are in the rich countries. Everything is about displacement. This is going to be a multi-generational industry. So, it's going to chip away at the conventionally farmed foods over a long period of time. By displacing the way in which conventionally farmed foods are produced, you are allowing the prices of conventionally farmed foods to remain relatively low or to go down. So, yes, it's only going to apply to a few hundred million people to begin with, but those few hundred million will allow displacement, which will be beneficial to other countries.