Just 12 months back, Singapore was the most-commonly named market when cultivated meat firms were asked regarding expansion or development plans in the Asia Pacific region, not least due to the success of Eat Just in securing world-first regulatory approval from the Singapore Food Agency (SFA) in December 2020 to launch cultivated chicken nuggets under its GOOD MEAT brand.
But despite the huge amount of fanfare and publicity the launch received, in recent months the industry was rocked by revelations that Eat Just had not only paused its ongoing cultivated chicken production in Singapore in both its own and partner facilities, but also halted plans for the building of a separate plant protein production establishment.
This has come amidst a legal standoff that Eat Just/GOOD MEAT is facing in its home base in the United States with bioreactor firm ABEC over alleged US$100mn of unpaid bills to the latter.
Looking at the sector as a whole, experts are urging caution around investment and expectation on returns.
“In the context of a global ‘cooling’ of venture investments, this sector is clearly being impacted by unrealistic promises made by entrepreneurs to their investors,” venture capital consultancy firm ID Capital Founder and CEO Isabelle Decitre told FoodNavigator-Asia.
“However, I would not cry over spilled milk – Early on, a deeper examination of the science already revealed that replicating the complex matrix of meat and emulating its nutritional properties was a highly challenging endeavour – and this was even before we delved into consumer acceptance.
“What venture investors now realize is that it may not conform to the typical model of venture investment, which promises oversized returns within a (relatively short) lifespan of a fund.”
That said, it is unlikely that Singapore will be giving up on the cultivated meat pursuit just yet – The authorities still see it as a viable alternative protein solution, even if future regulatory approvals will be issued with greater caution.
“Even though the closure of GOOD MEAT in Singapore is undoubtedly a setback, the approximate US$3bn invested in this sector globally, while substantial, is not extraordinary in the bigger scheme of things,” she said.
“My understanding of the situation is that Singapore has committed resources to research and development in cultivated meat, viewing it as a potential solution and identifying it as a ‘white space’ within food technology.
“[Its move in clinching a leadership position to become] the first country to establish a regulatory framework for and approve the commercialisation of these products [has] had a positive impact, making Singapore an attractive hub for innovators, extending beyond just cultivated meat startups.
“However, it’s worth noting that despite numerous cultivated meat startups filing applications with the Singapore Food Agency (SFA), no new commercialisation approvals have been granted in the past 12 months [after GOOD Meat’s last approval for serum-free media in January 2023].”
Is Singapore still ‘the place to be’ for cultivated food firms?
Another recent big revelation in the Singapore cultivated food industry was the news of local pioneers Umami and Shiok Foods merging under the Umami Bioworks umbrella, to be led by Umami CEO Mihir Pershad with Shiok CEO Sandhya Sriram stepping down.
Speaking with FoodNavigator-Asia, Pershad opined that this merger was a sign of market maturation and consolidation, sharing plans for the Umami’s fish and Shiok’s crustacean portfolios to eventually be integrated as one.
“We aren’t looking at this as taking two separate pipelines of seafood to market, the goal is for these two to become a properly integrated pipeline where Umami has things such as unagi and Shiok has the shrimp and other crustaceans,” he told us.
“The idea is to have a large enough portfolio of seafood such that we can present any food company or investor with a large enough opportunity to justify the risk they are taking in being an early adopter.
“And there is no way around that as for several years at least cultivated is going to be an early adopter business and so we have to really help people to see what it could look like 10 years from now if they join us on the journey and that it can be a big stable part of their business – we need to sell them on that vision.
“In any industry globally, consolidation is just a necessary part of industries maturing because you need to bring together resources – But this is particularly so in APAC as each market is so different, so consolidation helps to bring the resources that are needed together under one roof, under one strategy to be able to reach multiple markets, otherwise it’s incredibly difficult for early stage companies to build that kind of capacity.”
On the other hand, consolidation can also have a much more financial explanation behind it – one that is particularly salient in light of the current reduction of venture funding globally.
“We need to give credit to the first movers for their pioneering efforts [such as] Umami Bioworks merging with Shiok Meats, Piece of Meat acquired by MeaTech 3D in Israel, and Shiok Meats acquiring Gaia Foods,” she said,
“[That said], for me, in theory consolidation is indicative of contracting venture funding, affecting segments of the foodtech industry, particularly startups requiring more substantial funding (Series B and beyond) for still relatively unproven product concepts.
“So in theory, consolidation can serve as a lifeline or signal to investors that the market is maturing, with companies strategically positioning themselves for long-term success – and I would argue that the sector is redefining its expectations. This is a highly divisive topic, so much so that we have dedicated three years of debates to it at our own Future Food Asia Conference.
“Scientifically fascinating though it may be, at this point the unanswered question remains whether cell ag will extend beyond a niche premium market, and whether there is room for premium cultivated products given their modest impact on the planet if they remain niche – and quite logically, valuations will have to adjust to this new situation.”
Data from investment firm AgFunder has revealed that globally, funding for cultivated meat firms dropped a hefty 78% from US$807mn in 2022 to US$177mn in 2023, one of the largest seen amidst the ongoing ‘funding winter’ that start-ups everywhere are seeing due to the global economic downturn.
Notably, many of the successful top 10 funding rounds went to entirely different start-ups in 2023 than year before, with only China’s CellX having secured top 10 positioning in both lists, indicating the increased spreading out of funding versus key stable players that investors are choosing to focus on.
What’s to come for cultivated protein in Singapore?
Despite all of this, so far Singapore still holds the advantage of being the only market in the world with its Novel Food Regulations that have allowed for the successful commercialisation of cultivated meat – but this could soon change.
“Singapore created a first-mover’s advantage by pioneering ‘innovation through regulation’ – However, several other countries have also established regulatory frameworks, and more are on the verge of doing the same,” Decitre said.
“Some start-ups we speak to consider entering the Singapore market as one more feather in their cap, and play it opportunistically whereas others truly want to test their product in Singapore as a potential market.
“Nevertheless, I am not certain that the responsibility lies solely with start-ups to determine their initial market entry – Regulatory agencies from around the world are often overwhelmed by novel food applications (not just cultivated protein ones), and the way they prioritise their tasks will influence in which countries these start-ups launch first.”
Umami Bioworks also recently handed in its own applications to SFA for the approval of cultivated seafood, and when asked whether Singapore can still be considered the so-called ‘haven’ for cultivated start-ups, Pershad highlighted that the answer is no longer as cut and dried as it was before.
“I think it has pros and cons – for seafood, Singapore has a has a major advantage compared to being in a country like the US where seafood consumption is much less prevalent, so the growth in seafood is going to happen here in this region; plus Singapore is a pretty easy place to do business,” he said.
“But it has challenges as well because it’s undoubtedly a small market – So if you’re building in Singapore, and you get that approval in Singapore, you’re not going to be able to sell to 300 million people whereas if you’re in the US, you can do that.
“The other thing to think about now is also access to capital, especially with the industry [not being in] the sweet spot for a lot of investors because they haven’t seen it really deliver returns – Singapore doesn’t have that much in terms of investors willing to make an ‘early bet’, but other places such as Silicon Valley might be a better starting point if that’s important.
“So it really depends – if you know the market and just need access to customers, then Singapore is great for that [but] if you need to raise money and that’s going to be the hardest part, it may be worth building a business from California and reaching back to Asia.”
In addition to all of the funding challenges and other potential hurdles, cultivated protein start-ups may also need to take a good hard look at current business models and future strategies.
“Beyond the fad, I believe firms should prioritise the establishment of a relevant and viable business model during the initial three to five years, recognising that it may evolve thereafter – To determine its viability, I would caution against adopting a business model that assumes the maturity of the entire cellular agriculture supply chain, which is currently far from reality,” Decitre added.
“For a nascent business in a nascent food product segment, depending on equally nascent suppliers is highly unsustainable.”