Lab-grown meat: make an investment in the future of food

The next big thing in the food industry may be lab-grown meat

This is how you invest.

Plant-based diets were popular only five years ago. Following its successful initial public offering (IPO), Beyond Meat, a US-based manufacturer of plant-based vegetarian burgers and sausages, began manufacturing the McPlant for McDonald's. Impossible Foods, a rival company, introduced a meatless version of the Whopper for Burger King; Greggs, a bakery chain, introduced a highly acclaimed vegan sausage roll made from Quorn; and Nestl, a massive consumer goods company, developed a line of burgers made without meat.

Plant-based meat substitutes use high-protein plant sources like soy and peas or wheat gluten to mimic the flavor and texture of meat. Pure-play vegetarian and vegan restaurants appeared on high streets as these became more accessible and were added to menus. In addition to adopting healthier lifestyles and looking for sustainable, eco-friendly meat substitutes, consumers' concern for animal welfare had grown. The majority of plant-based meat substitutes use less water and emit fewer greenhouse gases than the meat industry. In comparison to their meat counterparts, they typically contain more fiber, fewer calories, and less saturated fat.

Plant-based diets fluctuate in popularity.

Sustainability-focused investment funds showed interest. "Sustainable food systems were increasingly incorporated as a core theme within broader ESG environmental, social, and governance and climate strategies," says Tara Irwin, senior ESG analyst at investment platform Hargreaves Lansdown. "A number of thematic strategies, including dedicated funds and exchange-traded funds ETFs, were launched to capture the opportunity."

According to data-analysis firm Research and Markets, the market for plant-based protein was projected to be worth £14 billion in 2024 and was projected to grow by more than 7 percent per year to reach £20 billion by 2029. However, there has recently been less talk about plant-based diets. Plant-based options have been reduced by restaurant chains. Aside from the McPlant, Pret has closed its vegetarian-only locations, McDonald's has eliminated its vegan options, and Impossible Food's purported initial public offering has not materialized.

In the meantime, Beyond Meat, which raised £240 million and was valued at £1.5 billion in 2019 after becoming the first company to list with a plant-based meat substitute, has not yet made a profit. Since 2022, sales have declined, and debt levels are high. In October, it initiated a debt-for-equity swap to prevent a credit default. Its problems are similar to declining sales of plant-based foods and changing consumer attitudes. According to the Good Food Institute Europe, sales in Britain decreased by 4.5 percent to 898 million in the fiscal year ending in January 2025. According to Circana data, sales of plant-based meat in the US fell for three years in a row to £1.1 billion in 2024.

Customers are now more skeptical of highly processed foods and are more interested in other sources of protein, like chicken, beans, and pulses. Ultraprocessed foods "share more characteristics with cigarettes than with minimally processed fruits or vegetables and therefore warrant regulation commensurate with the significant public health risks they pose," according to a US study.

By suppressing appetite, the growing popularity of GLP-1 weight-loss medications like Ozempic and Mounjaro has also accelerated the decline in demand, as not all consumers want to eat food that has been artificially made to taste like real meat. Lumina Intelligence, a food and drink research firm, reports that restaurants expanded their menus with mostly meat options in the first quarter of 2025 compared to the same period the previous year, while pubs and bars doubled down on higher-margin meat dishes while cutting back on vegetarian and plant-based dishes.

Despite the fact that sales are dropping, some analysts have explained this by pointing to the normalization of demand following an initial surge due to shifting consumer preferences and inflation for food producers, hospitality companies, and customers. Veganism is now widely accepted and no longer regarded as a niche practice. The manager of Pret A claimed that the company only closed its independent Veggie Pret locations because customers were purchasing vegan options at every location. It has declared, "Every Pret is a Veggie Pret shop." Seyi Oduwole, head of food and drink at strategic consultancy The Future Laboratory, states that "plant-based foods are far from a passing trend, but the landscape is evolving."

Some consumers are choosing "more flexible, balanced diets rather than committing exclusively to plant-based or animal-based extremes" amid a growing "counter movement" of renewed interest in a carnivorous diet and animal-based foods. A record-breaking 30 million people worldwide participated in Veganuary this year, which encourages people to adopt a vegan diet for the month of January, up from 25.8 million last year. Plant-based foods are still very popular.

Lab-grown meat: what is it?

Meanwhile, the more cutting-edge field of cultured foodmeat that is grown in a lab and could eventually replace vegetable beef burgersis gaining popularity and may represent a new frontier in the food industry. Younger customers who care about ethics might find it appealing. According to Oduwole, "the key to wider adoption will be marketing these products not just as alternatives, but as the next stage in sustainable, high-quality foods that are accessible, ethical, and even indulgent."

In the face of overfishing, resource depletion, and climate change, lab-grown meat may help alleviate global food insecurity. Half of Britain's food is imported, and energy and food supply chains may be disrupted by geopolitical conflicts and climate change.

According to the UN Food and Agriculture Organization, a growing world population will require the production of about 50% more food, feed, and fiber by 2050 compared to 2012, further taxing land and water systems. In comparison to the average level between 2018 and 2020, global meat consumption is predicted to rise by 14% by 2030.

Because lab-grown meat uses less water and land than traditional livestock, it has a smaller environmental impact. According to environmental consultancy CE Delft, it lowers carbon emissions by up to 92% when compared to the production of beef and 44% when compared to the production of pork. According to Oduwole, this is a major selling point for businesses, "especially as sustainability becomes an even more urgent priority for consumers and investors." However, businesses like Steakholder Foods, which is creating technologies like 3D-printed seafood, find it challenging to grow due to the high startup costs.

Meat produced in a lab and plated.

According to reports, the Food Standards Agency is accelerating the approval process so that lab-grown meat, dairy, and sugar can be sold in the UK in 2027. In the US, Australia, and Singapore, they are already accessible. Although there is doubt that Britons will grow to love lab-grown food, Oduwole believes that if it is presented as a "premium, ethical indulgence," they might be open to it. This is because fine dining was the first to support cultivated meat.

In 2023, diners at San Francisco's Michelin-starred restaurant Bar Crenn were served laboratory-grown chicken, and Australian food technology start-up Vow plans to supply cultured quail dishes to upscale restaurants. For the UK market, cultivated wagyu beef burgers will be produced by Oxford-based biotech company Ivy Farm Technologies and Northern-Irish food manufacturer Finnebrogue. A pound of real wagyu beef can cost up to 165. This implies that before going mainstream, food produced in labs will most likely be embraced in upscale markets.

Additionally, the industry is unlikely to become profitable for investors for some time. According to Jeneiv Shah, global equities portfolio manager at London-based asset manager Sarasin and Partners, "both sectors face structural challenges that limit their near-term investment appeal, even though plant-based and laboratory-grown foods can offer long-term potential."

Where to find fat profits right now.

Investors have few publicly traded plant-based and lab-grown meat companies to choose from, and those that are, like Beyond Meat, are having difficulties. In terms of taste, texture, and a sense of authenticity, laboratory-grown foods might be able to overcome some of the shortcomings of plant-based foods, but they might have trouble getting off the ground, according to Shah.

High expenses and "regulatory constraints, labelling challenges, uncertain consumer adoption" are potential roadblocks. However, since plant-based, vegan cuisine is becoming less popular, food produced in laboratories may become the next big thing. However, no obvious front-runner has surfaced to capitalize on the change in the potential for food production.

What does that mean for investors? According to Tara Irwin of Hargreaves Lansdown, investors view plant-based and lab-grown meat as crucial for decarbonizing food systems, but they are being cautious because of the companies' erratic results and the unexpectedly sluggish uptake of the products in some markets. Investors are focusing more "on scalability, cost competitiveness, and commercial viability, rather than sustainability credentials alone."

Irwin cites the Pictet Nutrition Fund, which aims to increase the resilience and sustainability of food systems by making investments throughout the food value chain. "Emphasises food-system resilience beyond alternative proteins" is the statement of the Schroders Global Sustainable Food & Water Fund. A "wider shift away from concentrated exposure to alternative proteins towards more balanced, system-level opportunities" is reflected in Impax's Sustainable Food Strategy fund, which makes investments across supply chains with a focus on nutrition and resource efficiency.

A more concentrated option.

Jim Mellon, a veteran investor and BFIA favorite, co-founded Agronomics (Aim: ANIC), which leans more toward alternative proteins. In an effort to increase the sustainability of the food industry, the company has invested in over 20 cellular-agriculture companies. Among the investments are Bond Pet Foods, which uses fermentation to produce animal proteins, and Good Startup, an early-stage investment fund supporting businesses creating sustainable protein and food technologies for fermentation and alternative proteins.

Additionally, Mellon established the private investment firm New Agrarian, which primarily targets investors from the Middle East and concentrates on cellular agriculture firms. Among New Agrarian's investments are Onego Bio, a producer of fermented egg-protein powder, and Meatly, a company that creates cultivated pet food. Mellon told the publication New Private Markets that New Agrarian is concentrating more on dairy and egg protein markets where "the consumer probably doesn't have a significant resistance to alternative protein" in the face of declining demand and capital flows to the alternative protein market.