Vegan green burger

Picture your favourite burger. Most likely, it will comprise a juicy patty of smoked meat topped with a slice of comforting cheese and a slightly spicy sauce, enclosed in an artisanal brioche bun. If you’re a bit more open-minded, the burger might be plant-based but the rest of the formula broadly unchanged. Wind the clock forward a few years, however, and our burgers might be very different. That was the conclusion we derived from catching up recently with a leading venture capital expert in the foodtech space.

Our contact, who comes from an academic background and has a PhD, highlighted that the food industry was not yet at the tipping point for alternative proteins but that “we have been laying the foundations.” The problem was characterised as being one less about demand and more about supply. Put another way, if alternative meat’s share of the metaphorical protein pie is ~1% currently, then just to get to 2% implies a massive scaling of production resources, not to mention the guaranteed availability of necessary input materials.

Mass-market adoption, therefore, could be many years away. If scaling plant-based production sounds complicated, then imagine the challenges attached to developing precision fermentation or cultivated meat solutions. For our venture capital firm, they see its mandate as being about “solving industry pain points and developing enabling technologies.” This approach emphasises both lower costs and better products, leading eventually to a self-sustaining virtuous circle effect. When this happens, both consumers and governments will increasingly buy in to the proposition. Our contact pointed to the way in which both the DNA sequencing and solar industries have developed as a possible roadmap for alternative proteins.

So how about the burger of the future? The most likely path forward, we were told, was towards more market fragmentation. Sure, there will always be a place for premium Wagyu beef burgers. Some consumers, equally, will only want to eat certain products, whether for ethical or economic reasons. At the same time, the vision shared with us was of the hybrid burger as the dining choice of the future. Most likely, tomorrow’s burger could contain a blend of cultivated meat, plant-protein and fermented products. Sounds tasty? Well if not, imagine a cultivated fish product for the Japanese market or bug-based burgers in Mexico. Regardless, we expect innovation in the space only to accelerate.

10 May 2023

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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Alex Gunz, Fund Manager

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The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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