Paul Shapiro, co-founder and CEO of the Better Meat Co. in Sacramento, California, is more than just another food company entrepreneur.
He’s a committed animal rights activist, serving as Vice President at the Humane Society of the United States and is an inductee into the Animal Rights Hall of Fame. He’s also a veteran Ted X speaker and best-selling author of “Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World.”
The Better Meat Co. is an early-stage food-tech startup that’s focused on ingredients. The company makes plant-based protein formulas for meat processors to blend into their products, helping them use less actual meat. Shapiro says it’s comparable to putting ethanol in gas for cars. The car works the same, even if 15% of the fuel isn’t coming from fossil fuels. Better Meat’s formulas generally go into meat products at a 30% to 50% ratio.
Shapiro’s mission is to improve food sustainability, “That’s what’s driving me. That’s why our company exists. But I think these nuggets have the same amount of protein as regular nuggets, and much less saturated fat, less cholesterol, fewer calories, and more fiber are all important marketing claims. When you’re thinking about why, they can say, ‘If you feed this to your kid, they get a quarter cup of vegetables per serving. So, if you have a difficult time getting your kids to eat vegetables, you can serve these nuggets, and all of a sudden, they’re getting some cauliflower, they’re getting chickpeas, but it tastes and looks just like a regular nugget.’”
Shapiro sat down with TraceGains CEO Gary Nowacki on his CtoC podcast series to talk about his book, his company, and perhaps most importantly, how he sees the meat industry’s future, especially in the shadow of the growing alternative meat market.
Despite the emergence of this nascent industry, meat consumption is rising, especially in places like China, India, Brazil, and Mexico. Large countries with the fastest-growing economies, accompanied by burgeoning middle classes, eat more meat per person.
“On one hand, it’s great that people are escaping poverty and growing into the middle class,” Shapiro said. “But a side effect of that is people generally consume a lot more meat, which takes a serious toll on the planet.”
Shapiro illustrated his point in a Ted talk when he took the stage armed with a harpoon and spoke about America’s history as a whaling nation.
“We were the leader in the global whaling industry, and virtually every home in America was lit with whale oil lamps,” he said. “It was a huge commodity. Today we’re a whale watching nation. People still go out on boats to find and shoot whales, but now we’re shooting them with cameras rather than harpoons.”
How did this industry fall from one of the essential players in the U.S. economy to becoming not only irrelevant but morally repugnant? It wasn’t some moral awakening, Shapiro pointed out.
“In 1853, about the same time that Abraham Lincoln was getting ready to try to save the Union, Abraham Gesner was about to save the whales,” he said. “But Gesner wasn’t a pioneering environmentalist. He wasn’t somebody who cared about whales at all.”
Gesner was a Canadian geologist who invented kerosene, which would quickly displace whale oil as the lighting agent of choice in American homes. Within 30 years of his patent, the whaling industry had fallen 95%.
The parallel Shapiro drew to our modern animal agriculture industry is hard to ignore. Emerging technologies threaten the traditional way of raising chickens, cows, and pigs for slaughter, making it an industry ripe for a technological revolution.
One such advancement is clean or cultivated meat, created by taking microscopic cells from an animal and growing those cells outside of the body into real meat.
“We’re not talking about an alternative to meat or a substitute to meat but rather an actual animal meat that was simply grown without the animal,” Shapiro said. “It’s not science fiction; it’s science fact. I’ve eaten this kind of meat many times. I’ve eaten lab-grown beef, duck, fish, liver, even foie gras, and about 20 startups are racing to commercialize the world’s first slaughter-free real meats.”
An Early Obstacle
One hurdle that’s emerging to widespread consumer adoption has been what many refer to as the “yuck factor,” primarily when a product is “lab-grown.” It doesn’t sound like something the average consumer would want for dinner.
However, as Shapiro pointed out, the way we produce meat today isn’t exactly what most people consider appetizing. Yet, we still eat it.
“Take chicken, for example,” Shapiro said. “Most chickens raised for food in the United States are genetically selected to grow so big so fast that many of them have difficulty taking more than a few steps before they collapse. They’re raised wing to wing in barns of tens of thousands of other birds living in their feces and pumped full of antibiotics. The air chokes with ammonia, and when it’s finally time to slaughter them, most people probably would prefer not to hear about it. So, when you consider how inhumane, unsustainable, and unnatural our methods of meat production are, it’s a wonder people still eat it.”
But human nature is hard to change. A lot of consumers like to eat meat. As soon as people start earning more money, one of the first things they do is eat more meat. Additionally, the vast majority of people who become vegetarian eventually return to meat. From Shapiro’s perspective, it’s much easier to change meat than to change human nature.
“The fact is that the percentage of vegetarians in America hasn’t changed over the past few decades,” Shapiro argues. “It’s a tiny fraction of the total population. And it’s even lower in many other parts of the world. Now in some countries like India or Israel, which have religious-based vegetarianism, you have higher percentages. Still, in most of the world, you have increasing rates of meat-eating, not increasing rates of vegetarianism.”
The other problem with what we call “meat alternatives” is that many in the meat industry view the term “clean meat” as a disparagement of conventional meat. It’s similar to how oil companies probably don’t like hearing solar referred to as “clean energy.”
Nevertheless, Shapiro was quick to point out that, frequently, the meat we eat today contains E. coli, salmonella, or campylobacter.
“That’s why we have to treat raw meat almost like toxic waste,” he added. “You can’t put it in the same grocery bag. If it touches your kitchen counter, you have to disinfect it. If it touches your hands, you have to wash them. That’s because there are fecal pathogens in there. These are intestinal pathogens that can sicken us if we don’t cook the crap out of our meat—literally. That’s all we’re doing.”
With clean meat, consumers don’t have to worry about intestinal pathogens. As Shapiro said, you’re more likely to infect the meat with your own hands than the meat is to infect you.
“Clean meat works from that perspective,” he says. “It’s cleaner for you and cleaner for the planet. However, if people don’t want to use that, it’s fine. I think cultivated meat is a good option. That term seems to me — at least on an intuitive level — to be more appealing. But then you’ve still got to overcome other barriers.”
Overcoming cultural bias is one of those barriers. Americans regularly consume a lot of things now that, in the past, might have seemed abnormal. Sushi’s a great example. A few decades ago, the idea of eating raw fish didn’t sound that appealing. Add seaweed to that, and some might find it disgusting.
“There’s a tale that’s told quite often about some innovative chef in California who had this idea to name it the California roll,” Shapiro recalls. “It made it seem like something native vs. a foreign fish. He also turned it inside out to put the rice on the outside, so the seaweed wasn’t the most obvious thing. That helped people ease into the idea of eating this type of food they hadn’t seen before.”
Price is another barrier to mainstream acceptance of meat alternatives. The economies of scale aren’t there yet to mass-produce clean meat. The first cultured meat hamburger, produced in 2013, cost $330,000. Three years later, the industry provides a meatball that “only” costs $1,200.
“It’s pretty amazing how fast the price falls,” Shapiro says. “Now they’re making chicken nuggets with chicken cells that cost about $100 a nugget. It’s not ready for KFC yet, but closer. So, you start thinking about how technology accelerates and how much prices fall. If you think about the smartphones most of us have in our pockets, today, the very first one probably cost more than $1 billion to produce. Now it’s affordable enough that hundreds of millions of people have them.”
Technology can accelerate price cuts for specific products with enough R&D. Shapiro points out that roughly, alternative meat has $50 million in R&D so far, but hundreds of millions more are needed.
Ready for Prime Time?
Shapiro is confident the market is there for meat alternatives, just not next year — or the year after.
“There might be some sales of clean meat in the next year, but they’ll be minuscule,” he suggested. “It’ll be one restaurant, one place, one time. You’re not going to see it on Walmart shelves. But five years? It’s possible. You could see it depending on how much investment comes.”
As there’s a competition between wind and solar to replace fossil fuels, there’s growing competition between plant-based and clean meat to replace factory farms. Plant-based meat is winning right now, Shapiro admitted, but he insists clean meat will have some advantages once they can scale up production and get prices down.
Shapiro pointed to the dairy industry as a source of optimism for the alternative meat industry. Consider that plant-based milk is now 13% of the fluid milk market in the United States, thanks to options such as soy milk, almond milk, or coconut milk.
“I don’t know how quickly it will happen, but it will,” he argues. “Today less than 1% of meat consumed is plant-based, in the future that will rise and with the ascent of companies such as Beyond and Impossible, you’ll see more meat aisles become protein aisles, and people will eat a greater diversity of protein. Maybe it will come from animals. Maybe it will come from plants. Maybe it will come from cultured animal cells. Maybe it will come from microorganisms. There are a lot of companies now making proteins from yeast, for example. The future is one of a greater diversity of protein.”
Making a Difference
Shapiro disputed the conventional wisdom that this new market is targeting vegetarians and vegans. That market is just too small.
“You have that segment of the market of vegetarians and vegans who are happy to eat these products, but then you have the flexitarians, which is a much larger universe,” he explained. “These are meat-eaters who would like to eat less meat. These are the people driving demand for these products.”
It’s all about the math. To improve sustainability, Shapiro said that if you could get 50% of people to eat 20% less meat per person, the total meat reduction would be much more significant than if you get 5% of people to be vegetarian all the time.
“All of us are doing things, that when we examine them, we probably could be doing better,” he argued. “It’s the same with our food choices, especially with meat. We can do better. It’s an easy thing to start with food because of the impact it has and because we do it multiple times a day. I only buy shirts so often, but I’m eating multiple times a day. And that’s a good opportunity to try to make a difference.”
The food industry is part of the problem when it comes to sustainability, but it’s also the solution. The questions are apparent.
“We’re raising too many animals,” he says. “We don’t have enough room on the planet. The planet’s not getting any bigger, but humanity’s footprint is getting a lot bigger. Food scientists and others like them can save the world by helping the food industry do a better job of feeding the nearly 8 billion of us today and the coming billions in the future.”
Shapiro insists the solution, though, lies with food technology. Whether it will solve it in time is another question.
“With climate change occurring at the rapid pace it is, I get nervous because I’m not sure whether there will be enough time to solve this before it’s too late,” he admitted. “That’s one of the reasons I’m so bullish on blending because it’s something we can do today. The meat companies can blend their meats and, while something like clean meat is still years away from being a solution, we can make a dent in the numbers. It’s important to invest in it. We must continue to pursue it. But we need other more near-term solutions as well.”
The biggest mistake companies make is halting new product development, especially during a challenging economic environment. A wait-and-see approach leads to a static product portfolio that can’t hope to outperform a competitor’s proactive strategy. Because your competitors are moving ahead, pulling back on NPD isn’t a viable solution.
With the launch of Formula Management, the TraceGains Networked Product Development Suite is now complete. The combined solution allows teams to go from manual processes to automated results by digitizing and streamlining new product development for better, faster innovation. Networked means companies no longer have to chase down suppliers for documentation because it’s already available.
Join us for a webinar on March 25, where TraceGains CEO Gary Nowacki and Sales Engineer Ruben Galbraith share how Networked Product Development drives collaboration, innovation, and faster time to market. Register for this complimentary webinar here.