HUMAN PRACTICES
Entrepreneurship
We want our cultured meat products to be available to people around the world who need protein. Cultured meat from chicken eggs is not restricted by religion and can provide higher nutritional content. It could give more people on the planet access to the protein they need to survive and make those who eat it healthier.
At present, Chinese consumers' understanding of cultured meat is still in its infancy. From the Internet, such as news, articles, or videos related to cultured meat, we could tell that people's attitudes are still hesitant. Some people express their willingness to taste it, but most of them are neutral or opposed. After all, a "new species" for this world would be treated with caution, and education plays a key role. There is no doubt that the cost of market education is huge for startups to bear, but chain catering giants have been dealing with consumers for a long time. Brands are a trust relationship, and cultured meat products are promoted and sold through the channels of the restaurant chain, which is undoubtedly easier for consumers to accept than the products of an unknown company. Therefore, we choose 2B's business model, which is easier to land in the Chinese market, and it is also the most important business mode of cultured meat brands now. When the company cooperates with large catering brands, the "raw materials" part is the crucial part that offers an opportunity to achieve success more effectively.
At the same time, we accurately positioned the users. The customers are roughly divided into three categories: meat product processing plants, leisure food, and catering enterprises. For example, Tai Er pickled fish needs cultured fish slices, Chao Shan beef hotpot requires cultured beef slices, and braised chicken rice needs cultured chicken pieces. The cooperation between cultured meat companies and mature chain catering enterprises can accelerate the polishing of products, the development of cultured meat, and the production of industrial lines.
According to “the list of Chinese meat processing industry development and poultry intensive processing enterprises”, the annual income of chicken deep processing products of Shengnong, Dacheng, Fengxiang, and Chunxue is more than 1 billion yuan. In 2020, the total income of poultry deep-processing products of these eight enterprises was 10.633 billion yuan which is an increase of about 200 million yuan over 2019 (10.429 billion yuan). Thus, the food processing industry can be considered as having great market potential.
Figure: Poultry food intensive processing enterprises
“The 14th five-year plan for bio-economy development” issued by the national development and Reform Commission proposes to develop synthetic biology technology, explore the development of new foods such as "cultured protein", realize the iterative upgrading of the food industry, and reduce the pressure on environmental resources caused by traditional aquaculture. Experts said that China's "cultured meat" market is in an early stage but has great potential, thanks to the demographic dividend brought by the huge domestic population base. In recent years, there have been dozens of listed companies involved in the field of "cultured meat", and many of them have begun to lay out. As a candidate, cultured meat has become one of the top ten breakthrough technologies in 2019, and plant protein meat is a research hotspot in the field of "cultured meat". According to Euromonitor information consulting, the value of China's meat substitute industry will reach 11.9 billion US dollars by 2023.
Nowadays, with the continuous development of the economy and the improvement of living standards, the transformation and upgrading of residents' food consumption structure speed up. Scientific research and judgment on the changing trends and peaks of meat consumption are of great significance to enhance the regulatory ability of China's agricultural product market. The traditional aquaculture industry is vulnerable due to the epidemic, so meat consumption has fluctuated. Cultured meat can solve this problem. This characteristic of the cultured meat industry provides a large number of potential customers. From 2016 to 2018, the total revenue of 17 Listed meat products enterprises was 116.094 billion yuan, 122.528 billion yuan, and 127.09 billion yuan respectively; The total profit was 5.19 billion yuan, 5.319 billion yuan, and 1.519 billion yuan, which decreased by 71% in 2018. According to the analysis of Dongxing securities, under the influence of African swine fever, Shuanghui development slaughtered 16.3056 million pigs last year, with a growth rate of 14.27%, a decline compared with 2017. The decrease in the growth rate of slaughtering combined with the decline in pig prices led to a 4.9% year-on-year reduction in its business income. According to the data released by the National Bureau of Statistics, in the first quarter of 2019, China's pork production was 14.63 million tons, down 5.2%. The Ministry of agriculture and rural areas monitored 400 counties at fixed points. In March, the number of live pigs decreased by 1.2% month on month and 18.8% year on year.
The proportion of "cultured meat" in China is increasing year by year
Data100, “an insight into China's Vegetarian meat market”, released that the global meat market will reach $1.4 trillion in 10 years, and the market share of "alternative meat" will increase from less than 1% at present to 10%, exceeding RMB 1 trillion.
While meat production has dropped significantly, the substitution effect of plant meat is not obvious.
Animal husbandry is influenced by epidemics, resulting in fluctuations in output affecting supply and prices. In 2019, affected by African swine fever, environmental protection policies, and other factors, China's pork output declined. Although the output of beef, mutton, and poultry maintained an increasing trend, because of their low ratio, China's total meat output still declined significantly. In 2019, China's meat production decreased significantly, but the size of the vegetarian meat market still maintained the original growth trend and did not show an obvious replacement effect, which may be mainly caused by the low penetration rate of the vegetarian meat market, inferior taste, high price, and other factors.
Economic development and dietary pattern are the main factors affecting meat consumption.
The international analysis of meat consumption provides a reference for China. Taking Japan, South Korea, Taiwan, China, the European Union, the United States, and other countries or regions as examples. Through comparison of the characteristics, analysis of meat consumption changing rules in the past 60 years, and the study of the relationship between meat consumption and economic development level, the consumption peak in the Chinese Mainland has been forecasted. The results show that, with the improvement of economic development, the consumption in Japan, Taiwan, China, the European Union, and the United States follows a law of "growth first, then stabilization". After reaching the stabilization stage, the change in structure converged, consuming livestock meat was almost saturated, and the consumption of poultry meat increased rapidly. It is predicted that the per capita meat consumption in the Chinese Mainland will reach the peak (70 kg) in 2028, of which the annual per capita consumption of pork, beef, mutton, and poultry will be 40 kg, 10 kg, and 19 kg respectively. The total meat consumption in the Chinese Mainland will reach its peak (103 million tons) in 2031. As a result, the number of potential customers is large and as the development of cultured meat is still at the initial stage, it can predict that competition and coexistence between cultured meat and traditional aquaculture will occur in recent years.
It is expected that the market scale of meat substitutes will increase steadily in the next few years driven by the demand for health and environmental protection. According to the research data from Markets and Markets, by 2023, the global meat substitute market is estimated that will achieve 6.43 billion US dollars, with a CAGR of 6.8% from 2018 to 2023; Among them, the market scale in the Asia Pacific region has the fastest growth, and CAGR can reach more than 8%.
In 2018, the per capita apparent meat consumption of Chinese residents was 61.7 kg (the per capita apparent consumption refers to the sum of domestic production and net imports divided by the total number of people, and the meat consumption refers to the apparent meat consumption), an increase of 12.8% over 2008, and China's total meat consumption accounted for nearly one-third of the world. Since the development of meat-related industries has been greatly affected, in 2020, the general office of the State Council issued opinions on “promoting the high-quality development of animal husbandry” to promote the recovery of meat-related industries.
The model of China's cultured meat industry is directly oriented to the business end, and China's cultured meat is mainly sold to temples, the catering industry, industrial raw materials, and other demanders. For example, cooperating with catering to develop customized R & D and producing cultured meat according to the requirement of individuals. In 2019, Pizza Hut China announced that they collaborate with a vegetarian meat company to launch the first “cultured meat” hamburger set meal in history. At the end of the same year, Burger King also tested the vegetarian meat market and started selling the plant-based imperial Fort. Haidilao hot pot launched a vegetarian "taste companion" made of vegetarian meat in some stores and will continue to launch more than ten relative products, including snacks and instant dishes. The data also shows that the global cultured meat market will reach 206 million US dollars this year and 572 million US dollars in 2026 at a compound annual growth rate of 15%. There is a rapid growth of new companies and investors entering this field, and the trend of "cultured meat" has become increasingly fierce in China.
Expensive to produce and difficult to promote: for every $1 increase in the price of cultured meat from a benchmark level of $4.00/lb), conventional beef increased its market share by 6%. A selection experiment in China also found that the willingness to pay for cultured meat was only about 2.2% higher than the price of conventional meat.
The essence of developing biotechnology is because the sustainability and reproducibility of biology itself
Reverse the shortage of natural resources.
Compared to meat produced by traditional animal agriculture, cellular meat can reduce greenhouse gas emissions by 80% in the same production process. By eliminating the need for space and diet for poultry farming, the production of the same weight of cellular meat can reduce land and freshwater by 99% and 96%, respectively.
Broad market prospect
As of June 2021, more than 70 companies worldwide have invested in the development and production of cultured meat, with cumulative funding of more than $610 million. Che Connon, a tissue engineer at Newcastle University in the UK, estimates that to feed the world's population with lab-grown meat would require the construction of a system that grows 1 billion cells per year, and with global production capacity currently meeting only about one billionth of this demand, the cultured meat market has tremendous scope for growth and profitability. A recent report by McKinsey & Company shows that if consumers accept these products, the market could reach $25 billion by 2030. But to compete with traditional meats, further cost cuts will be needed.
Self-advantages
Plant-based Meat commercialization: Following the successful listing of Beyond Meat, the first plant-based Meat company in the United States, plant-based Meat producers began to partner with fast-food chains and the market for plant-based Meat products expanded rapidly around the world.
Cultured meat is in the early stage of development. At present, the listed enterprises have not formed a certain scale of revenue in the cultured meat field, and the product output and sales are also small, by launching their brands, joining forces with start-ups, and other ways to open up the market.
The degree of market entry of cultured meat products is relatively shallow, which affects the acceptance of consumers and its market potential. Compared with meat, cultured meat still has some room for self-regulation. We can use different means to improve the public acceptance of cultured meat, such as continuous improvement of technology to customize meat products for different consumer groups. Research has also shown that different names for cultured meat trigger different attitudes among consumers. "Cultured meat" leads to more positive associations and attitudes among consumers, so descriptions of cultured meat without technical terms increase acceptance. Meanwhile, for countries with fast economic development, people's acceptance will be relatively high, so it will be easier to popularize. But to gain more popularity, cultured meat still needs to undergo multiple safety certifications. Although there is currently no policy or regulatory movement in the field of cell-grown meat in China, we have reason to believe that there is a potential for encouraging cell-grown meat in China, and this possibility is not low.
Additionally, through the analysis of customers' needs and the current situation of cultured meat in society, we can draw the following conclusions:
According to customer demands, relevant costs, and stakeholders, our team will solve the problem in the following ways.
Production and supply (Sales) revenue model:ToB product and service business (customers meat food processing plants)
Enterprise positioning: provide bio-safe, stable qualified, standardized, and customizable cell-cultured meat as raw material for meat processing
How to carry out: introduction stage - growth stage - maturity stage
The iGEM community's official non-profit entrepreneurship support group, EPIC, is committed to assisting startup businesses. In an effort to promote entrepreneurship and the growth of businesses based on synthetic biology which hastens the transition of the globe towards a more sustainable bio-economy, EPIC China fosters entrepreneurship based on China's local environment. The BUCT-China team pursues a new entrepreneurial path, breaks the conventional competitive cycle, and advances the synthetic biology industry in China through EPIC China.
Project planning is done all year round by EPIC_ China using the iGEM timetable. There is an incubation cycle that takes place every year and is broken down into the following four phases: the venture development lab in April, the mentorship program in June, the roadshow in August, and the jamboree presentation in October.
Our team conducted online lectures, exchanged ideas, and wrote market research reports during the early stages of the venture creation lab and mentoring program to assess the entrepreneurs' basic entrepreneurial knowledge and literacy, comprehend the Chinese synthetic biology entrepreneurial market and confirm their direction. At the same time, we met entrepreneurs to learn about their entrepreneurial experience and comprehend the cutting-edge information of the trade. In addition, entrepreneurial projects were polished through the evaluation of entrepreneurial mentors with one-on-one counseling. As a result, we successfully made our debut during the roadshow and presented the novel idea of cultured meat. The experts in this field gave us some advice.
Miracleplus Zhang Huangqi
He asked us to think about the difference between us and the listed cultured meat company in application. Meanwhile, technology itself is one of the sources of barriers, but he suggests that we could focus on the market section and find the place where our advanced technology is used. The end users are the most important part. Following his suggestions, we have a more thorough study on our potential customers to figure out their demands that have not been well met. This means that studying market needs is one of the priorities to help us find our product positioning and team focus.
Starthub Li Huaiyu
He used to be the CEO of WHALEY which is invested by the chief investment officer of CMC,General manager and CEO of SMG
“How to impress the Angel users when starting?” and “how to find a method that can make the efficiency cost competitive after industrialization in the long term?” are the questions he asked us. Through the taste and high-end, cultured meat could win its place. He took Tesla as an example, which designs high-end sports cars and reduces battery costs to gain business opportunities. Therefore, the cheaper way to provide protein with a differentiation strategy is a better choice for us which allows our cultured meat has its advantages. As a result, we start with the customers who are more acceptable by going viral, just like “influencers” on the internet. It enables the cultured meat to enter from the young people so that we can get feedback from the user's demand side to promote the project further.
Bluepha Liu Xinyu
Head of open innovation and CEO Assistant of Bluepha
She suggested we do more research on domestic cultured meat food and market research. Because China has different diet habits from western countries, and when it comes to the cooking materials, we need to consider the target audience. We take her advice and focus our end users on the business end. In addition, there are many market surveys have done to find out whether our project is feasible in China and whether it can be differentiated in this respect to win the opportunity.
Pisces Venture Capital Lucas He
Our performance in the CCiC road show attracted Lucas' interest. After the meeting, he took the initiative to contact us, wanting to further discuss with us and full of investment hope for our project. He suggested that we should consider from the laboratory to industrial production, and evaluated the commercial value of the whole project from the perspective of the investor. He gave us valuable suggestions on business model and building brand effects.
There is still a big gap between China's large-scale production of animal products and the per capita consumption level of animal products. The growing demand for protein by consumers and the insufficient effective supply of animal husbandry are still the main contradictions that China's animal husbandry development is facing. With advanced food science and technology and Bioscience, the processing of the food industry is directed to the moving of new types, intelligence, and accurate nutrition. As the novel food’s representative, cultured meat will be manufactured in combination with food, biology, big data, computer science, and other disciplines, as well as artificial intelligence technology, synthetic biology technology, modern fermentation technology, and new processing technology.
The production of nutritious, healthy, safe, and environmentally friendly cultured meat products can fill the gap in the demand for meat products promoting the efficient and multi-functional development of the cultured meat industry and global new concept foods. Nowadays, China's animal husbandry production is characterized by the coexistence of large-scale and intensive production with small-scale and family-scattered breeding, and the proportion of the former is lower than that of the latter. Therefore, improving it has become a realistic strategy to solve the problem of insufficient effective supply of animal husbandry in China. However, cultured meat also faces challenges in food safety, epidemic prevention and control, fecal sewage treatment, animal welfare, and so on.
In terms of cost, ORZECHOWS-KI believes that the cost of producing cultured meat is too high at the current technical level unless a new low-cost alternative technology is found, which means it is difficult to achieve commercial production of cultured meat. SPECHT and others summarized the current technologies which demonstrate that there are no fundamental technical defects in the large-scale commercial production of cultured meat, but the costs of these technologies are high. Thus, it was necessary to constantly strengthen the cooperation between scientific research institutions and food enterprises to reduce production costs.
Still, our project is a valuable production to overcome the barriers in the competition via the multiple advantages and differences. With the analysis of end users’ requirements, broad market prospects, and innovative marketing model, we prove that it is worked. In addition, the construction of the project conforms to the national industrial policy, and the technical content of the project has its promise which is necessary. At the same time, the external equipment of the project is completely meeting the production demands. According to the financial analysis at the preliminary stage and the profound market prospect, the project has certain profitability meanwhile. In a nutshell, the project has construction conditions and economic benefits which demonstrate that it is feasible for further development.