This company could take lab-grown meat mainstream thanks to a green light from the FDA

Health, Fitness & Food

A look at Upside’s prepared chicken product.
Upside Foods

When Amy Chen took her first bite of chicken meat grown directly from cells in a lab, her initial reaction was a cliché one-liner: It tasted like chicken. 

That bite was years in the making.

Chen is the operating chief at Upside Foods, a Berkeley, California-based food-technology company that’s been working to bring what’s known as cultivated meat to the American mainstream since 2015.

Chen’s unusual dining experience, which she calls “the most remarkable and most unremarkable” of her life, could become a lot more common in the years to come. In November, the Food and Drug Administration cleared Upside’s cell-cultivated chicken as safe for human consumption, marking the first time the agency has given that designation to a lab-grown meat product. 

The FDA green light brings Upside to a major inflection point, Chen said. Since 2015, the company has largely been a scientific endeavor. Now, the next chapter of Upside’s story is whether that credible science can turn into a functional business model. 

Upside Foods’ pivotal moment also comes at a key moment in the alternative meat industry. Demand for plant-based meats, once the darling of meat alternatives, has largely cooled as an influx of products crowded the market. Yet the environmental concerns that drove their rise to popularity persist: Global emissions from food production are expected to rise 60% by 2050, with livestock a major driver of that increase.

Big name backers, such as Bill Gates and Richard Branson, plus industry leaders like Chen, hope that cultivated meat, which doesn’t require the land or livestock-related emissions that comes with traditional meat production, could be the solution.

But getting consumers on board — and the products on grocery shelves — promises to be a steep climb.

Will the public dig in?

The cultivated-meat industry could have a wider consumer base than previously introduced alternative meat products, because unlike plant-based meats, it’s “real” meat — minus the slaughtered animals.

If the taste is up to snuff, as Chen felt it was, Upside’s products could potentially appeal to both conflicted carnivores and vegetarians who avoid meat for environmental or animal-welfare concerns. The challenge for companies like Upside is getting the public on board with eating meat made in a lab from animal cells.

While some vegetarians might be willing to partake, Chen said Upside is “laser-focused” on targeting “improvers,” or people who recognize the current food system is unsustainable and want to make it better — but still eat meat, maybe occasionally or maybe daily. “When you think about that consumer [group], it’s actually a pretty decent part of the population,” she said. 

Chen jokes with her team that their current task is merely getting “people past thinking that this is a science project.”

To the untrained ear, it certainly sounds like a science project: To make its chicken product, Upside first takes a small amount of cells from a fertilized chicken egg. Then, its scientists select the best cells to develop a cell line. Those cells are placed in a cultivator, where they’re fed nutrients like water and amino acids in order to multiply. After a few weeks, the meat is removed from the cultivator and separated from the cell feed so it can be shaped into a chicken fillet. 

That’s a far cry from the comparatively simple process for making plant-based meats. And, accordingly, some traditional meat companies have expressed interest in the burgeoning cultivated-meat industry, which one day could become a competitor.

Tyson Ventures, the venture capital branch of Tyson Foods, for example, was an early investor in Upside.

“That sort of perspective from a meat company says a lot about how they view the potential consumer base,” said Elliot Swartz, the lead cultivated-meat scientist at the Good Food Institute, a nonprofit think tank focused on improving the global food system. The organization, which advocates for alternative protein innovation, has been funded by Silicon Valley startup accelerator Y Combinator, according to Crunchbase. Y Combinator has also funded cultivated-meat company Micro Meat.

Chef Dominique Crenn at work in her kitchen
Upside Foods

Rather than thinking of other alternative meat companies as Upside’s rivals, Chen regards the company’s main competition as the status quo, since meat eaters can already get what they’re looking for at a low price.

An Upside Foods representative said it expects to enter the market at a “price premium” but the company’s “aspiration” is to achieve price parity with traditional meat in the next five to 15 years.

There are plenty of other companies in the cultivated-meat space, which could also sway prices. Swartz said there’s about 150 companies worldwide developing cultivated meat or helping build the industry’s future supply chain. Other companies, like Finless Foods, BlueNalu and Fork & Good, are also developing various cell-cultured meat products in the U.S.

A Fork & Good representative said the company expects to “sell at the cost of meat of the same value,” while a BlueNalu representative said it aims to “offer products at or close to price parity,” but says it’s “not in a position to provide details around cost” since it has yet to bring a product to market.

But despite these signs of growth, customers may not be able to try cultivated meat for some time. Upside plans to debut its chicken products in restaurants, starting with Michelin-starred Atelier Crenn, helmed by chef Dominique Crenn, in San Francisco, because of a marked tendency to try new dining experiences outside of the home.

That debut can’t occur, however, until Upside gets the full regulatory go-ahead. Chen added that the company will keep its meat exclusively in restaurants “for some time” before expanding to consumer products. 

That’s been a common go-to-market strategy for similar companies, Swartz pointed out, adding that Impossible Foods took that approach in 2016 when it launched its products at David Chang’s Momofuku Nishi in New York City.  

“I think it will be a near-ubiquitous strategy in this industry,” he said, especially since most cultivated-meat facilities lack the production volume for much more at the moment.

“You cannot, with the existing infrastructure, get these products onto grocery store shelves,” Swartz added. 

Beefing up

The entire cultivated-meat industry faces a problem of scale. While hailed as a climate-friendly meat alternative, the products can only realize that truth when they can be shipped in cost-efficient volume in order to compete with the traditional grocery fare on store shelves.

In fact, cultivated-meat companies may never compete with traditional meat in price, Swartz said, but in order to demonstrate true proof of concept, they’ll have to at least demonstrate that they can make products in accordance with their estimated pricing models. 

“What drives consumers really comes down to price, taste and convenience,” he said. “Convenience implies operating at massive scale, and one of the limiting factors for the industry is going to be building new infrastructure.” 

There isn’t a supply chain in place for cultivated meat, and the blueprint is being created in real time by companies like Upside Foods.

In 2021, Upside opened its first production facility in Emeryville, California, a 53,000-square-foot space powered entirely by renewable energy. At that facility, Upside tests new technologies and processes to determine what changes need to happen in order to scale up, Chen said.

The plan is to transfer those models into Upside’s eventual larger facilities, she said, adding that its first commercial plants will likely open later this year. 

Upside’s 53,000 square foot Emeryville, CA facility is powered by renewable energy.
Upside Foods

“When we talk about scale, especially with respect to the food system, it’s still really, really small scale,” Swartz said of existing cultivated-meat facilities, including Upside’s. As the industry grows, he said he expects it to take a similar path to another once-fringe, now-ubiquitous, innovation: electric vehicles. 

When electric vehicle companies started out, the cost of batteries was tremendously high, so much so that batteries were often the most expensive part of producing a given vehicle. Electric vehicle companies worked around that by introducing hybrid options “where the cost is diluted by the existing product that’s on the market,” Swartz explained.

Some cultivated-meat companies are taking a similar approach, mixing cultured animal cells with plant-based proteins to keep costs down and increase the range of available products.

After Upside launches its first consumer product, the cultivated chicken fillet, its next debut will be ground products made up of both animal cells and other ingredients, including vegetables and plant-based proteins.

Industry prices could be influenced by other companies taking the same hybrid approach, but some cultivated-meat companies, like BlueNalu, have expressly said they have no plans to bring plant-based proteins into their mix.

Another crucial boon for the electric vehicle industry was governmental funding, in which agencies invested in research and encouraged incentives for building new electric vehicle infrastructure. The cultivated-meat industry will need a similar boost if it’s ever going to become a grocery store staple, Swartz said.

Upside is part of a multi-member coalition, the Association for Meat, Poultry and Seafood Innovation, that lobbies on behalf of cell-based meat interests, with a particular focus on working with regulators to create a transparent pathway to market.

Within the past decade, investors already poured billions of dollars into cultivated-meat companies, but that’s just “a drop in the bucket compared to what’s going to advance this still nascent technology,” Swartz said. To get cultivated meat on grocery store shelves at a reasonable price point, it’s going to take “many, many, many more billions of dollars,” he added. 

Red meat for regulators

One other factor is keeping cultivated meat outside of supermarkets: government clearance. While the FDA milestone last November was a watershed moment in the cultivated-meat industry, Upside still has a number of regulatory hurdles to get over before its products enter the U.S. market.

The FDA’s clearance was a voluntary premarket consultation, which means the agency has no further questions about the safety of Upside’s products. Now, Upside must meet the same stringent FDA requirements as any other food product, including registering its facilities, an agency official told CNBC via email. 

In March 2019, the FDA and the U.S. Department of Agriculture agreed to a joint regulatory framework for handling foods made with animal-cell technology. When regulating companies like Upside Foods, the FDA will oversee cell collection, cell banks and cell growth and differentiation. In the cell-harvest stage, oversight will shift to the USDA-FSIS, which will oversee post-harvest processing and product labeling. 

The joint regulatory structure means Upside’s manufacturing establishments need a grant of inspection from the USDA-FSIS in addition to meeting FDA requirements. Additionally, its food products will need a mark of inspection from USDA-FSIS before they can be sold in the U.S. FSIS stands for the Food Safety and Inspection Service. 

A USDA representative told CNBC that Upside’s grant of inspection application is currently under review and “proceeding normally.”

Upside Foods’ office space
Upside Foods

The grant process requires discussions between the company and the USDA to ensure all meat and poultry products are safely produced and properly labeled, according to the representative. That makes it unclear when products could be OK’d for sale.

Chen says Upside is “optimistic” it’ll happen this year, and the company is conducting its internal planning with that timeframe in mind, while ultimately deferring to the agencies. “That process is thorough and ongoing,” she added. “We’ve had really productive conversations going on with the USDA.”

While curious consumers who’ve known about cultivated meat for awhile might be impatient for their first taste, Swartz noted that “for a technology that incorporates different aspects of biotech, it’s a very fast timeline to get government approval.” 

Though Upside Food was the first to get the FDA’s premarket seal of approval, a second entity, GOOD Meat, Inc., a cultivated-meat company that received regulatory approval from the Singapore Food Agency in 2020, made the grade in March.

These moves have paved the way for others. While the FDA doesn’t typically discuss the status of ongoing consultations, the agency says it’s already in talks with other companies working to make food from animal cells.

Chen, for her part, is excited for what’s to come. “This is the moment where cultivated meat comes to the world, and comes into its own,” she said. 

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