Can Expensive Lab-Grown Burgers Compete With McDonald’s?

On a sunny Tuesday afternoon in May, Gastropod co-hosts Cynthia Graber and Nicola Twilley sat down at a countertop in a test kitchen for a very unusual hamburger: taste test #97 at Bay Area-based company SCiFi Foods. The little slider looked straightforward, even old-school — a thin, crispy patty, smashburger style, with the standard fixings — yet the meat had come from a decidedly nontraditional source. Rather than growing inside a cow, these beef cells were grown in a lab and blended with plant-based ingredients, giving the burger a meaty flavor with practically none of the ethical implications of eating meat from industrially raised cattle.

The catch? According to Kasia Gora, co-founder of SCiFi Foods, that little burger cost in the “low hundreds of dollars.”

Cultivated meat is booming right now, with dozens of new companies promising to provide our increasingly meat-hungry planet with everything from cultivated burgers and bacon to lab-grown sushi and sashimi. One of the biggest companies in the field, Good Meat, made headlines this week when it debuted its lab-grown chicken at chef José Andrés’s restaurant China Chilcano in Washington, D.C. The dish, called anticuchos de pollo, features small chunks of skewered chicken as part of a $70 tasting menu. But Good Meat CEO Joshua Tetrick told Gastropod that his company, which also sells its chicken at a butcher shop in Singapore, is not exactly raking in the cash.

“With every sale it’s historic, and with every sale we lose a bit of money,” Tetrick says. Basically, these early sales are a proof of concept — a loss leader that the industry hopes will build enthusiasm and keep investors on board while they figure out how to deal with their biggest headache: cost.

Lots of coverage of cultivated meat has focused on the scientific challenges, the regulatory approval hurdles, and even the potential ick factor among consumers. But, in reporting its latest episode, “Where’s the Beef?,” Gastropod found that the real story is money. If a burger costs north of $100, it doesn’t really matter whether it tastes good (it did) or is more ethical (it is) or could help save the planet (TBD), because no one is going to choose to regularly buy it over its conventional competitor. The industry will fail — it won’t achieve its own goals of making a dent in industrial animal agriculture and fishing, and, once it burns through its venture capital funding, it won’t have enough revenue to keep going.

So, is cultivated meat doomed? In its latest episode, Gastropod co-hosts Cynthia and Nicky ate a lot of cultivated meat, but also spoke to scientists, CEOs, and analysts to find out.

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So, why is that burger so expensive?

For most companies working on cultivated meat, the biggest cost doesn’t necessarily come from their fancy labs or the cutting-edge technology they’re working with — it’s simply the costs of keeping the cells alive.

First of all, there’s what you feed them. Unlike other cells grown at scale in factories, like baker’s yeast, you can’t keep animal cells alive on sugar; they need amino acids, which are currently really expensive to produce.

The other big issue is the scale at which these cells can be grown. They’re currently grown in 3,000-liter stainless steel tanks called bioreactors. That sounds pretty big compared to a test tube in a lab, but it’s actually artisanal at the food factory scale. The other place these size bioreactors are used is in the pharmaceutical industry. In other words, they’re perfect for growing small amounts of super high-value products and not so great for making cheap meat.

What needs to happen to make it cheaper?

Easy, right? Reduce the feed costs and build bigger bioreactors. But it turns out neither of those things is actually a snap — in fact, scientists don’t yet know if they’re even possible.

Every company told Gastropod they’ve already brought down their cell food costs a lot. When the very first lab-grown burgers were produced, they were fed something called fetal bovine serum: a blend of amino acids, fats, and hormones extracted from the blood of a cow fetus. “We’ve found a way to make an enriched media that completely eliminates the use of serum, which is very expensive,” explains Sophia Bou-Ghannam, a scientist in Good Meat’s cellular agriculture department. “That alone has tremendously reduced our media costs.”

But getting them down further? “We’re working with companies to ensure that the production of the upstream raw materials is going to be optimized and they’re going to be cheaper,” says Bianca Lê, a lead scientist at Mission Barns. Exactly how that might happen is proprietary, of course, but it probably involves changing how the amino acids that the growing cells need are produced. Right now, they’re excreted by bacteria in yet more pharma-scale bioreactors, which is why they’re so expensive. There is some research showing amino acids can be made directly by breaking down plant sugars, no need for bacteria. That would, in theory, be cheaper — but it also seems that no one’s doing that commercially yet.

Scale also comes into play here. To grow a commodity like meat, the industry needs to scale up to 100,000-liter tanks, and that’s never been done. No one knows whether cells can grow at that density — companies still need to figure out how to make sure they’ll get enough oxygen and how to get rid of their waste products in that big of a tank. But Bou-Ghannam says she’s confident that they’d figure it out. “I think we can get there,” she tells Gastropod. “There’s just been no need to innovate in this space before.”

That all sounds hard. Is there a work-around?

There is, and it’s one that a few companies are trying. No cultivated meat product is 100 percent cultivated meat cells — even the chicken that José Andrés is serving is only about two-thirds cultivated meat, with the rest made up of plant-based ingredients. But some companies are trying to keep costs down by using cultivated meat cells as more of a flavoring than a main ingredient.

For example, Mission Barns figured that focusing on fat would give it the biggest flavor bang for its technology buck. The company is growing pork fat cells and blending them into plant-based meatballs, chorizo, and bacon. “Pork fat brings a juiciness, a deliciousness, but also it’s actually much easier to scale and cheaper to grow fat compared to muscle,” says Lê. “With this strategy, it allows us to produce more product, and to reach more consumers.”

How about just charging more?

It’s the path of least resistance: Don’t try to make the product cheap in the first place. That’s the tack being taken by two cultivated fish companies, Wildtype and Finless Foods, which are producing lab-grown salmon and tuna, respectively, for the sushi market.

“What’s compelling about seafood is that you can go into the sushi space, where we routinely see really premium products that sell for $50-plus a pound,” says Ben Friedman, the chief growth officer at Wildtype.

“Bluefin is a much higher price point than chicken, for example,” agrees Finless Foods’ Shannon Cosentino-Roush. “So it’s an easier journey for us to get to a place where we could actually bring products to market at price parity.”

The downside, of course, is that the people paying big bucks for high-end sushi are also looking for high-end texture and flavor. Can cultivated tuna and sushi match the best wild-caught fish? Not quite yet, according to Gastropod’s co-hosts — but it’s good, and it’s getting better. “It’s the early days of cellular agriculture, and you’re trying our very first product, which is imperfect in so many ways,” agreed Friedman. “But there’s a real sense that there’s something beyond plant-based here — that there’s something beyond expectations — and I think that’s a really exciting place to start.”

The wild card: government subsidies and true costs

One thing that cultivated meat companies can’t necessarily do a lot about, but that makes a big difference to their business model, is the fact that they’re not competing on a level playing field. Industrial livestock is fed corn and soy, and those are both heavily subsidized by the U.S. taxpayer, which is a big part of why conventional meat is so cheap.

The other reason is that meat companies aren’t accountable for their environmental impact. “No one’s paying for the biodiversity that’s lost. No one’s paying for those carbon sinks that don’t exist anymore when they’re buying a pound of ground beef,” says Good Meat’s Tetrick. “Thinking about ways to incorporate that real cost into the price of conventional meat is something that we want to happen. It’s hard politically to do, but I hope it happens.”

If industrially produced meat wasn’t artificially cheap and cultivated meat received government subsidies… well, that $100 burger might seem like a much better deal, much sooner.