Two Clean Meat Companies Lead the Way on Social Media

A while back we took a look with Underhood how insect companies are doing online on different social media platforms and the results were mostly appalling. The statistics show most companies are lazy to reach out to their audiences. You can find the article here. Underhood (underhood.co) is a Finnish startup that is measuring social performance of thousands of brands. Currently, there are about ten thousand companies, organizations or other brands analyzed daily on the service.

Another emerging new food business is Clean Meat, meat produced in bioreactors without the need of rearing and slaughtering of animals.  Clean meat- industry has a lot in common with insect-for-and-feed business: Both are high protein food sources that are offering a more sustainable alternative for traditional animal agriculture. Moreover, both are unknown to the wide audience and are facing the challenge of how to convince people of the safety and benefits their products offer.

Here below are 10 clean meat companies ranked by Underhood. Brands are analyzed by their social performance (language analysis, engagement numbers, and visibility) and given a social score. The scale is from 1 to 10 and you can click on any brand to see the full social analysis. The score is updated daily, the data shown below is from 11th of November 2018.

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Underhood’s ranking as in 11th of November 2018

The two largest companies in the field are also the best-performing companies in social media. Scoring above six tells of a good social media strategy that is being executed consistently. Just is updating their social media channels almost daily and they have a good number of likes on Facebook; over 300.000. Looking at Just’s numbers it can be seen that Just is very consistent how to they are communicating, but what doesn’t work so well is that people are not reacting to the posts.

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What is an interesting difference between Just and Memphis Meats is that Just is succeeding nicely in Facebook, while Memphis’s most successful posts are on Twitter. Twitter is nice and good to have, but Facebook is clearly the most important platform that should be priority number one.

Looking closer to New Age Meats- company interesting things can be found that others could learn from. From the top ten posts that have collected most likes, shares, and comments nine were done by New Age Meats.

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Top 4 posts in the past 30 days from the 10 listed companies as in 11th of November 2018. All four were posted by New Age Meats.

Where New Age Meats is not performing well is how they are responding to comments:

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At the other end of the scale, things look pretty abysmal and it is obvious that social media is not considered important at all. Aleph farms- company doesn’t even have Facebook or Twitter- page.

As we see it, it is crucial that brands of this new industry get active on social. There are a couple of companies doing it well, but the majority are not doing their part. There is no way we can convince people to take on new food habits if we do not spread the word in the most personal media, meaning Facebook, Twitter, Instagram, and other platforms. It seems the industry players are not taking full advantage of the excellent and cost-effective opportunity to market their new and exciting products. The revolution needs to have evangelists!

 

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Clean Meat Supply Chain Faces a Unique Set of Risks. These Two Things Must Be Considered.

The Clean Meat industry is on the verge of commercialization as products are expected to hit the market in the coming few years. In fact,  Just-company is promising to bring it’s products out already during 2018. While the Clean Meat companies are preparing their products internally, external companies in the supply chain are facing increased risk environment when operating in this new and special industry. What makes the situation very special is that we are talking about a completely new type of material that is not available today. Something very similar is happening in edible insects or IFF (Insects for Food and Feed) field where also new technology is producing a new type of raw material.

Supply chains can be visualized as a stream of supply where the goods are flowing down the river starting from the raw material producers to end product manufacturing and finally to end customers through wholesalers and supermarkets. When looking upstream towards Clean Meat producers a high level of supply risk can be identified. Supply risk, the risk that products are not been delivered, is higher than many other industries because of two reasons: Lack of horizontal integration and limited knowledge.

Lack of horizontal integration means that there is a very limited number of companies able to produce e.g. clean cow meat. There are numerous places to get slaughtered meat if your first option fails to deliver, but what will you do when your primary Clean Meat producer faces delivery issues? A serious production issue will leave downstream without promised products and no chance of buying replacing products as there simply isn’t anyone else to buy from. What makes the supply risk exposure even higher is the limited knowledge of the clean meat production the producer has. No one in the world has ever produced clean meat in industrial scale. It is very likely that during the first years of industrial-scale production unexpected operational risks will occur that will lead to some level of delivery issues simply because of the lack of experience.

What is different between the IFF and Clean Meat industries is that unlike the IFF side, it seems that most of the Clean Meat companies are not only producing the raw material but also making the end product. In supply chain terms the level of vertical integration is different. This way the supply risk is carried internally and in case of production difficulties the consequences are seen first internally, not at the end product producers’ factory. The risk of failed deliveries to supermarkets still exists, but in this case, a supermarket could fill their shelves with something similar like clean pork. This is not ideal but acceptable. Instead, an end product producer cannot do the same and for this reason, unlike supermarkets or wholesalers, they cannot accept as high supply risks.

Another way to reduce the risk exposure in the supply chain together with shifting the degree of vertical integration is increased horizontal integration. Eventually, the supply will increase when competing companies appear, but the increase of horizontal integration can happen also internally within a company by dividing production capacity to multiple locations and production units. When the whole production capacity of a company is not relying on a limited number of machines and operators an occurrence of an operational risk (that are likely due to the limited knowledge) does not jeopardize to complete production capacity of the company.

The Clean Meat industry is still working on bringing the production cost down, but the IFF companies are already in the markets and facing the supply chain challenges today. There are no simple and easy answers, but when the time comes for wide market entry for the Clean Meat companies could look at the fellow alt-protein industries for key learnings.

 

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To look deeper into the risk profile of emerging industries’ supply chain check out my thesis Supply Chain Risk Management in Entomology Farms. The thesis is available also in all major audiobook platforms like Audible.  You may also see my presentation on the topic here.

The Two Compromises Limiting Alt-Protein Product Development

Future proteins, meat alternatives, sustainable proteins. The category of new products entering the market to replace the traditional and unsustainable meat in our diets has many names. Latest big article on the topic calling it the alt-protein sector was released in The Guardian on 30th of April 2018. You can read the article here.

In the article, some of the main players in the industry are interviewed. The main message given by the companies is clear: The most important thing in attracting large audiences and saving the planet is the taste.

“I don’t think mayonnaise, even ours, is healthy at all,” “I’d much rather people have a box of carrots if they are concerned about health, without question.” Josh Tetrick of Just.

“From our perspective, health is not the point,”  Bruce Friedrich of Good Food Institute.

The widely accepted approach shared by the interviewees seems to be that two clear compromises must be accepted in order to introduce these better options for meat eaters.

Compromise no 1: Healthiness

These modern food companies like the interviewed Just and Impossible Foods have a clean slate to do almost anything imaginable in the field of food technology but they have selected a path where healthiness is not the main factor. Is this really the best way? These companies might answer no, but at the same time, it is a must in order to attract large masses. Obviously, everyone would like to do very healthy products, but it has been accepted that as long as the taste is good, health- questions can be put aside.

Compromise no 2: Variety

When looking at companies like Just, Impossible Foods and Beyond Meat, there is another question that they have accepted as fact: For wide customer base acceptance, their products must resemble known animal-based products they are aiming to replace. The products are aiming to resemble animal-based products not only by taste but also by how they look, feel and smell.

The thinking behind these compromises suggests that it is easier to market people familiar, but inferior product instead of unfamiliar superior one. It is important to notice here that we are not talking here about cost as the motivation for these compromises, but marketing.

These two compromises might be well justified, but they are very limiting from product development’s perspective. The management of these companies are telling their R&D- departments:  “let’s do a sustainable product and tastes good but it must look, feel and taste like this other thing”. When working from the point of view where you are copying something, not making the best possible product, you are incentified to sacrifice not only health but also the optimal environmental impact.

What if the management’s message to R&D would be the following: Let’s do a product that is sustainable, tastes good and is healthy? What kind of amazing products could these companies create if they would work without these listed compromises?

The clean meat industry is a bit different story. Clean meat- companies are not copying animal-based products, they are making the original thing but in a more sustainable way. Producing muscle-cells in bioreactor instead of rearing an animal brings an impressive list of improvements in comparison to the traditional method of producing animal flesh: No manure-derived issues, no use of antibiotics, the end product is free of animal-based pathogens to name a few.

The justification for the need of clean meat products comes from the well-founded assumption that people must have a meat option and to provide that to them the bioreactor way is clearly better way than rearing the full animal.

Clean meat- companies and the “plant-based meat imitators” are in the same line in the way that both want to introduce meat alternative to meat eaters. It is absolutely clear that there is a huge demand for this. In clean meat’s case, we don’t need to think of the issue of the product being familiar or not because the end product is the very same meat we eat today.  In the plant-based product’s case, this conclusion that product quality should be sacrificed for marketing purposes should be seriously questioned. If the imitator- companies follow the chosen path they are bound to find it to be a dead end. Eventually, the clean meat technology matures and the products hit the market shelves with comparable prices to the imitators. At this stage, the plant-based meat imitators have nothing on clean meat when marketing to meat eater audience.

For more detailed comparison of clean meat, plant-based meat imitators and plant-based meat replacements read my earlier blog post here:  https://ilkkataponen.com/2017/07/27/imitators-replacements-and-clean-meat/

 

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Imitators, Replacements and Clean Meat

There is no questioning that people are eating too much meat and high meat consumption leads to enormous problems globally. While there is growing interest in sustainable alternatives, it seems that the substitute products widely available in the market today are not attractive enough to quickly bring down meat consumption. Multiple new food industry branches are growing to answer the demand. One of the future branches that have gathered a lot of media attention during the past few years is insects. Even though insects are exciting and clearly better protein source than conventional meat, for me it has become clear that insect does not hold the highest market potential nor are they the best ecological solution when comparing to the other new alternatives. You can read my earlier blogs here and here for my reasoning.

The top three options to replace the modern meat industry are Plant-Based Meat Imitators, Plant-Based Meat Replacements, and Clean Meat. Plant-Based Meat Imitators are products that are 100% plant-based but aim to resemble meat as much as possible. Plant-Based Meat Replacements are products that resemble meat’s nutritional content, in particular, the high-protein level.

These three categories have a lot in common. They all aim to replace conventional meat in human diets with same sales arguments: All are more sustainable, ethical and healthier choices over meat.

To better understand the differences between the categories I made a simple Pugh-matrix. In the matrix, the weight is the multiplier that tells of the importance of that factor. The multiplier can have a value between 1 and 5. The value that each factor gets is selected between -3 and +3. The higher the total number the better. Further, I categorized the factors (the lines) into three parts:

  1. Slow Changing Factors. Marketing is the only line here.
  2. Changing Factors. Regulation and Production Cost.
  3. Unchangeable Factors. Ethics and Nutritional Factors.

The categories are rough and they could be named or categorized in many different ways, but I chose these ones the serve this quick look at the topic. The numbers in this matrix are based on my personal evaluation.

Marketing means how difficult it is to introduce this category to the markets. Conventional meat would get a high score because people are used to it and it has been accepted to be part of a weekly diet. I gave marketing clearly the biggest weight because in the end facts have little to do with our food choices, there are countless examples of this.

Regulation is the law environment that either allows or restricts operating in the markets. Production costs is self-explanatory. These two factors are given small weight because they will not be a deciding factor of the fate of the different industries. The two will either slow it down or help on the way. Also, regulations and especially the production costs can be changed for the better relatively quickly if there is significant market demand. Production cost is the part that is the most difficult to evaluate and the one that keeps on changing the most.

Nutritional facts and Ethics form the “Unchangeable Factors” line. Ethics are a nice plus, but have the least impact of all the factors on the overall score. Nutritional facts are the core of the product on which the marketing is based on. I was thinking hard between giving the nutritional facts 2 or 3, but in ended up to 3 because I wanted to give it more weight than production cost and regulation.

The Matrix

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Before analyzing this one, lets jump to the future where there are no regulatory barriers and production costs of clean meat have decreased significantly:

Capture25.7future

The differences are not very significant, especially in the case where regulatory factors are not considered and clean meat production cost has decreased significantly. It is hard to make a clear conclusion other than that the Plant Based Meat Imitators- category will flourish only until Clean Meat technology advantages enough. Yes, the Imitators will get better imitating as well but it cannot escape its fundamental issue that is visualized in the line Nutritional facts and health. No matter if Imitators would become 99% like the real thing, there are always some trade-offs when aiming for the imitation and this we will see in the raw material choices, amounts of additives, sugars, fats and salt. Also, having (unnecessarily) complex product increases the production costs.

Conclusion

When looking at the remaining top two categories we see that the total score is almost the same, but that the score is coming from different factors. The main question is what is more difficult, introducing new products to people’s regular diet or bringing down the cost of producing clean meat at scale? Answering this will tell you which of the categories holds more potential.

If we should decide what people should eat based on science, we would give them a plant based diet including Plant Based Meat Replacements. But when we are talking about food that has strong cultural connections we must consider the bigger picture. The only reason why Clean Meat and Plant Based Meat Imitators are on the same line is not the product itself, but people’s associations to them.

 

Impossible Foods Must Ask Harder Scientific Questions

Techcrunch posted a very interesting interview on 22nd of May 2017, titled “Impossible Foods CEO Pat Brown says VCs need to ask harder scientific questions”. After reading the article, I had to check that I wasn’t reading The Onion.

In the interview, Pat Brown attacks the clean meat industry and VCs with claims that were all proven untrue in a great reply by VC Seth Bannon. The aggressive tone of the interview did not bother me as much as the lack of knowledge shown by Mr Brown. Yes, answering the question “Why not try clean meat?” by saying “The simple answer is because that is one of the stupidest ideas ever expressed” already makes you sound like Donald Trump, but when you back up your claim with untrue statements, things start to look very bad.

Mr Bannon did good job at answering the false claims, but I will continue by looking at two additional points of the interview.

Mr Brown said that with clean meat technology, “you buy into, at best, the same limitations that a cow has.” This statement is very interesting when looking at Impossible Foods’ product. The company is trying to mimic meat as much as possible using plant based raw materials. Isn’t this approach buying into the limitations of the cow? It’s possible the company is looking to go beyond meat at some point, but to an outsider it seems that the product development’s main goal is not to make the best tasting or the best nutritional value having product, but a product that looks, tastes and feels like cow. Yes, the way Impossible Foods are aiming to do it is more efficient and ecological cow rearing, but they share the same goal with the clean meat companies.

The second thing that especially struck my eye was Mr Brown’s demand that VCs should ask harder scientific questions to understand e.g. that clean meat “is one of the stupidest ideas ever expressed”. While demanding deeper studying and understanding from VCs, Mr Brown himself obviously has limited understanding of substitute technologies that his own company is using.

I think the founder has more tendency to have skewed view on his or her business than the outsider. Maybe it is actually Impossible Foods and Mr Brown who need to ask the harder scientific questions?

ps. While you are here you might want to read my related post 5 Questions an Investor Should Ask Before Investing into a Insect Farm from June 2015.