19 Mar The future of protein in the age of pandemics
The recent downturn in financial markets on the back of the global coronavirus outbreak, as well as the economic malaise caused by African swine flu, avian flu, ebola, HIV-AIDS and H1N1 over the past decade, have begun to expose just how devastating the risk of pandemics can be on the global economy. These outbreaks have had one crucial element in common; they were all incubated or hosted in animals consumed for food. Whether it was bushmeat in Africa (Ebola) or a seafood market in China (COVID-19), the risk of viruses jumping hosts is going to persist as a material financial risk for the foreseeable future. Our close relationship with animals in our economic system has created opportunities for deadly viruses to either mutate or share genetic material with already human-relevant viruses so that they can ultimately infect humans. Furthermore, the widespread use of antibiotics in the food industry has left organizations such as the WHO extremely worried about the threat of antibiotic resistance in humans. Since 80% of the total consumption of medically relevant antibiotics are actually in the animal sector, there is a very real threat of antibiotic-resistant bacteria causing the next major pandemic.
At Lever VC, we are investing in the world’s best new alternative protein companies—those producing healthy, sustainable protein without the need for live animals. Alternative protein companies are far less susceptible to the supply chain risks of animal agriculture (such as those caused by last year’s African swine flu), and alternative protein production has virtually none of the risks of incubating dangerous diseases that comes with conventional animal agriculture and wildlife protein consumption.
Alternative protein companies are already producing delicious meat and dairy products in controlled and sterile environments where animal protein can be grown using fermentation or cell cultivation, without the need for live animals and the diseases they can carry. Examples from our portfolio include Bond Pet Foods (producing chicken and other meat protein from fermentation), Avant (producing seafood and marine proteins from cell cultivation), TurtleTree Labs (producing milk from cell cultivation), and Mission Barns (producing pork meat and fat from cell cultivation). Other alternative protein companies are using plant protein to replicate the taste, texture, nutrition, and functionality of animal protein without any of the downsides. Examples from our portfolio include Better Meat Co (producing a plant-based protein blend that replaces pork, chicken or beef), The Good Spoon (producing gourmet eggless condiments), Marvelous Foods (producing plant-based yogurt), and Good Planet Foods (producing plant-based cheeses).
Not only are these cultivated and plant-based protein companies far less susceptible to future supply and demand shocks that we could face in a new age of pandemics, but they will also benefit from the tailwinds of a public increasingly concerned with the food safety, nutrition, and the provenance of their food. While all of this holds true in the United States and Europe, it will be particularly true in Asia, where only 57% of companies have some level of certification from the Global Food Safety Initiative and rapidly rising consumer demand will boost animal protein consumption by nearly 20% over the next 8 years, according to OECD-FAO data.
Alternative protein companies will continue to play an increasingly large role in creating a safe and secure global food system, filling the “demand gaps” generated by the combined increase in demand for protein and the increased consumer awareness of the personal and public health risks with the way conventional animal protein is produced today. We at Lever VC are happy to be helping our portfolio companies fill that need, a need that has become only more clear in the wake of COVID-19.