Clean Meat Disruption

Captain Obvious: People are cheap and lazy. Pay a little extra for an electric car? No thanks. Eat a little less red meat? Hell no!

Let’s face it: In today’s fast-paced, overstressed world, most people choose the easier, cheaper, and tastier option. I believe the only viable path to a green future is to make environmentally friendly alternatives more convenient, less expensive, and too fun to pass up.

Here’s a question to ponder: Would you eat meat that was grown in a lab? What if it tasted exactly the same as meat from a real animal and had the same molecular structure? Don’t answer just yet. Read on before deciding.

Memphis in Silicon Valley

Memphis Meats, a Silicon Valley venture-backed startup, has successfully produced lab-grown chicken, beef, and duck meat without harming a single animal. Uma Valeti, the CEO and a cardiologist by training, has dedicated his life to changing the way the masses consume meat.

This may sound crazy today, but I’m betting this will be the future of how we produce meat. Crazier prediction: In twenty years, it will seem barbaric to slaughter animals just for their meat and may even be illegal in some cities.

Our Appetite is Warming the Planet

Why is this important? Well, one of the biggest contributors to climate change is actually the meat we consume. Meat consumption is responsible for more than 15% of our greenhouse gas emissions.

Cows and other livestock on farms emit methane gas, which has a negative effect on the climate that is 23 times stronger than the same amount of carbon dioxide.

More than 65 billion animals are slaughtered each year to keep up with the human demand for meat. One pound of ground beef takes an estimated 460 gallons of water to produce.

And it takes 23 calories of grain fed to an animal to produce a single calorie of meat! Not exactly a good return on resources. The way we produce meat simply isn’t sustainable over the long run.

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Save the Rainforest

Remember the whole “save the rainforest” campaign in the 80s and 90s? Apparently, cattle that are raised for slaughter take up a lot of land.

In fact, the cattle sector has caused about 80% of all deforestation in the Amazon, the world’s biggest rainforest. Not only does this exacerbate climate change but it also contributes to the rapid extinction of much of our Earth’s biodiversity.

What if everyone just ate less meat? Unfortunately, the global trend is toward more meat consumption, not less. Our appetite for meat has only grown and is expected to double over the next 15 years as the world becomes more prosperous and Westernized.

It simply isn’t realistic to massively change the habits and tastes of seven billion people. In fact, I was shocked to learn that only 2% of Americans are vegetarian or vegan.

Meat with a side of antibiotics

Why is this important to our health? Ever wonder why fast food is so cheap? Meat production is designed to keep the costs as low as possible while still obtaining the government seal of approval.

If you eat meat, chances are you are also chowing down on some serious antibiotics and hormones because of the environment where that animal was raised and slaughtered. A whopping 70% of the antibiotics produced in the US are now fed to animals.

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The ick factor

Meat in factory farms is exposed to all sorts of harmful pathogens. According to Consumer Reports, a nonprofit watchdog group, over 90% of ground beef contains fecal bacteria. Still craving that Big Mac?

Antibiotics are designed to kill the bacteria, so it is “safe” to consume while growth hormones make the animals bigger. This has led to all sorts of unintended public health consequences, such as obesity, superbugs, and drug resistance.

Cognitive Dissonance

Most people aren’t aware or haven’t considered the cruel conditions these animals are raised in today. Livestock spend their entire lives in a tiny, confined space, waiting to get slaughtered.

You may think that lab-grown meat doesn’t sound natural, and you’re right, but I’d argue that the way meat is produced today is even less so.

The so-called Ag-Gag rule makes it illegal to film inside these factory farms. The conditions are so unspeakable that it would be catastrophic for business if people knew the truth.

Exponential Technology Meets Food

Memphis Meats produced a pound of chicken entirely grown in a lab, and it only costs $3,800. What a steal! Yes, maybe it’s not at a viable cost point yet, but the awesome thing is that the technology is scalable.

The CEO of Memphis Meats believes he will be able to drive down the cost curve exponentially over the next few years to the point where it will only cost $1 per pound of meat.

2021 is the magic year when Memphis Meats hopes to have a product available to the public. This is the point where the massive disruption to the agriculture industry will commence.

What would stop any restaurant or consumer from buying less expensive, cleaner, 100% humane meat, free from growth hormones and antibiotics? Restaurants and supermarkets embracing lab grown meat will have much fatter profit margins with less liability of customers getting sick from E. coli.

Beyond Meat

Plant-based alternatives are already growing in popularity today. I recently tried the Beyond Meat burgers, made entirely out of plants, and I was blown away by how much I enjoyed them.

The burgers tasted similar to the real thing and actually sizzled and flamed on the grill just like regular burger patties.

Beyond Meat is so good that TGI Fridays actually took the bold step of offering it on all of their menus as a substitution for red meat in their burgers. McDonald’s has also recently started offering a vegan burger in a few locations around the world.

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Take Action!

The most obvious way to help is to eat less meat. Less obvious, however, is that you may be supporting factory farms in your investment portfolio.

Consider divesting from the companies that are a major part of the problem. Take a hard look at the fast food chains and “Big Ag” companies in your portfolio that support unsustainable farming methods.

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My wealth management firm, Impact Fiduciary, offers comprehensive financial planning while investing at the intersection of sustainability and disruption. Our clients have no exposure to factory farms, fossil fuel companies, tobacco, firearm manufacturers or irresponsible pharma companies.

The goal is to be part of the solution, not the problem, without sacrificing investment performance.

Public Awareness and Capitalism to the rescue

I believe that capitalism has done more to improve the quality of life around the world over the past 100 years than any other force. However, it has caused a lot of the problems we face today, like climate change.

Today, a promising trend is combining public awareness with the profit motive to allow mission-driven companies like Memphis Meats to impact the world. In fact, Memphis Meats has already raised over $17 million in venture funds from the likes of Bill Gates and Richard Branson.

As we head into 2018, I love thinking about the potential world we may inhabit in the near future.

Demand for transportation, energy, and food have created some of the biggest challenges we face. However, they also represent some of the biggest opportunities for positive change and wealth creation.

It’s an exciting time to be alive! Happy New Year!

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Patrick Dinan, and all rights are reserved.