14 Nov 2016
‘Synthetic food’ is a product produced by biotechnological methods from particular nutritive substances, such as proteins or their component amino acids, carbohydrates, fats, vitamins, and trace elements.
" There will always be a marketplace for natural products that are produced in a sustainable manner."
Con Williams, Rural Economist, ANZ NZ
The end result is a product which imitates natural food products by recreating appearance, colour, flavour, aroma, texture, nutrition profile and palatability.
The good news for food and beverage companies, particularly in New Zealand where agribusiness is quite strong, is there will always be a marketplace for natural products produced in a sustainable manner.
To defend against new forms of competition though primary producers, particularly in New Zealand, will need to tell this story for every product sold. This requires emphasising the unique attributes of natural foods compared with synthetic products, as well as trademarked intellectual property.
There is also a need to continually strengthen the sector’s claims and credentials around animal welfare, environmental sustainability and food safety with appropriate policy and quality assurance programs.
Broadly, there are three main approaches being investigated to produce synthetic food. These are: cellular production; acellular production; and extraction from plant or animal-based materials. Both cellular and acellular production is about synthesising food substances.
The components, some of which are synthesised together, are then combined with other nutrients to imitate the desired product. This can include recombination with other naturally occurring substances.
Cellular production methods are about taking a number of cells and reproducing them in a nutrient-rich medium. Acellular production is slightly different in that it uses micro-organisms, such as bacteria or yeasts, to synthesise a range of different nutrients.
Essentially, different types of bacteria or yeast are grown on a food (often sugar) or non-food (petroleum hydrocarbons) medium and through excretion or fermentation different nutrients are created.
The third process used is the extracting and isolating of different nutrients from a variety of plants and animal foodstuffs.
Synthetic food is being marketed as ethical, environmentally sustainable, stable, safe, healthier and more diverse than the food it tries to imitate.
Producing a more environmentally friendly product seems to be a main motivator advocates cite.
The common pitch is livestock sectors use a vast amount of land, water and fertiliser as well as producing a large proportion of the world’s greenhouse gases.
Seafood developments are driven by declining wildlife stocks from overfishing and pollution. This is leading to a rise in aquaculture to fulfil demand, but this is perceived as resource intensive.
With demand for products from both sectors expected to increase over the coming decades ahead it’s assumed the world’s natural resources won’t be able to cope.
Getting beyond the sales pitch of synthetic food, there are some key barriers faced to widespread adoption, especially for products which use cellular or acellular production techniques.
• Commercial scalability
New technologies that use cellular or acellular production techniques to produce meat and dairy imitations are mostly still in the ‘proof-of-concept’ stage.
A few market leaders appear to have completed this stage but now need to prove they are commercially scalable and there is an actual market.
This means the commercial viability of such technologies is not yet clear. The headlines from various companies suggest rapid improvement is being made, but academic research suggests many barriers remain.
The truth is likely to lie somewhere in the middle with the academic research likely only just catching up with commercial reality.
It might very well be the decrease in costs of resources, labour, and land is offset by the extra costs of a stricter hygiene regime, stricter control and capital costs required. Ultimately its looks like we will have to wait and see.
Completely reproducing an existing product’s appearance, colour, flavour, aroma, texture, nutrition profile and palatability from synthetic components is challenging for a range of reasons.
Some specific ingredients and products have already reached the marketplace. But where the rubber really hits the road is the ability to fully replicate a product from synthetic components.
This remains some way off with a number of unknowns as to what might actually be feasible.
Regulatory regimes are often one of the most important influences in determining the course of technological innovation.
Synthetic foods face two major regulatory hurdles in the form of food safety standards and labelling requirements.
Both are complex with overlapping features and there is substantial variation between countries. For some of the emerging technologies, governing legalisation doesn’t even exist yet, or there are effectively blanket bans.
In some cases there is a gap between actual market practices and regulation too. All these dynamics suggesting regulators will need to play catch-up at some point.
• Consumer reaction
The consumer response is the ultimate test. Research and surveys on the topic seemed to vary substantially between finding there is limited appeal through to unlimited opportunity.
Until more products are in the marketplace it will be difficult to judge how consumers might actually respond.
Responsive to change
As Charles Darwin said, “it is not the strongest that survive, nor the most intelligent, but the ones most responsive to change”.
New Zealand food and beverage companies have many unique points of difference that can be leveraged to defend against synthetic substitutes.
There will always be a market for natural products, particularly in a world where the population is ageing and becoming more health conscious, but companies can’t solely rely on this to deliver sustainable returns.
Keeping ahead of the competition requires constant innovation and more investment into product development, marketing, production effi ciencies, food safety, animal welfare and environmental sustainability.
Con Williams is a Rural Economist at ANZ NZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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