Paul Shapiro: [00:00:00] Josh, welcome back to the business for good podcast.

Josh Tetrick: Good to see you, Paul.

Paul Shapiro: Yes. Great to see you too. Okay. Let me not beat around the bush. So. People are writing the obituaries for cultivated meat, right? You know, you've got the upside announcement recently. They're putting their factory on hold. Eat just as putting his factory on hold.

believer meats does appear to be still building a factory in North Carolina, but they haven't even received approval from regulators yet to start, you know, serving, even if they do finish this and are able to commercially produce. So what's going on, what's happening in this field right now that is leading to these outcomes?

Josh Tetrick: well, I think it's important to remember the industry is not 50 years old. It pretty much just started like, I don't know, seven years ago or so. Right. I think

Paul Shapiro: it started with the publication of queen meat. I'm told that's what I, that's what I've heard. At least

Josh Tetrick: that's usually the marker. So how many years ago was

that?

Paul Shapiro: That was six years ago, but there is a new edition. There's a new edition coming out in April of 2024.

Josh Tetrick: About, [00:01:00] about, about, yeah, six, seven years ago, the entire industry started, I think it's important to just for folks to say that out loud, meditate on it and maybe relax a bit. So since the entire new industry of making meat in a different way, different than it's been made for, Tens of thousands of years started, multiple companies have been approved to sell.

We have sold thousands of pounds of real meat without the need to slaughter an animal. Thousands of consumers have experienced for the first time the federal, drug administration and the U. S. Department of Agriculture have both said That eating real meat, cultivated meat, clean meat, is safe to consume.

I'm in a facility right now that has been granted the USDA grant of inspection. There's been enormous progress and there's a lot more to come and that's what's going on and a lot more to come is really about how do you not make thousands of pounds, which we can do [00:02:00] today. But how do you make millions and tens of millions of pounds at a cost that's anywhere close to the cost of chicken, beef and pork and other conventional products.

And that is inherently challenging. There's a lot of technology necessary to do it. They're going to be, there's going to be a lot more capital required to do it. but two things can be true, my friend, at the same time, one is you can have enormous progress starting from literally nothing. And then the other thing can be true is you need to do a lot more.

And that's the case with this industry today.

Paul Shapiro: Yeah. So has anything happened, Josh, that leads you to believe that it isn't technologically possible? Not that it's, I'm not saying it's going to be hard or it's going to require huge amounts of money, but is there anything that has led you to believe there's some physical or technological hurdle that just can't be surpassed?

Josh Tetrick: No. Okay. I think, no, I think, I think the technology is here around cell line development, around design engineering of, vessels, around, cell density now just because the [00:03:00] building blocks are here. It doesn't mean that good meat and other companies are necessarily going to solve it. It doesn't mean that it's not extremely challenging.

It doesn't mean that it's guaranteed. But the framework of the technologies plural are here for us to be able to do this. We just have to execute over the long term and do it.

Paul Shapiro: So would you say that the technology already exists to commercially produce at scale or would you say things still have to be invented, like there still need to be new inventions or at least new breakthroughs?

They're going to allow for either cheaper media or cheaper bioreactors or something else. Like, is it just, if you, if somebody offered you a billion dollars right now, would you already have accomplished all of the science that needs to be done in order to commercially scale? Or would you still be building the airplane while in the air?

Josh Tetrick: Well, let me, let me define what. I believe commercial scale is because I think sometimes people have different definitions of this. So 50 yards from me, we have a facility that cost tens of millions of dollars to [00:04:00] build, build around a 3000 liter vessel, and you could walk in it and think it's a big facility, right?

and it's the biggest or one of the biggest cultivated meat facilities in the world. But we look at that as a pilot plant or a demonstration facility or a very small scale facility to use just plain spoken language about it really scale commercially. we think a facility needs to produce tens of millions of pounds, which is sufficient volume necessary to supply the United States from a national retail or food service distribution perspective at a cost that's close.

To chicken beef in pork today, right? That's, that's what's necessary. we think the, the ability to make it at that poundage is available today. we think there are a lot of challenges in making it at that cost today. We think there need to be advances in cell density. We think there need to be advances in media.

We think there need to be [00:05:00] advances. I think really importantly in how these facilities are designed. I think the technologies exist. It's a question of how smart we and other companies are at integrating them. at, effectively raising money for them and doing the fundamental research to bring them to life.

Paul Shapiro: Got it. So there, there's still our breakthroughs that need to be made, but none that you think are impossible to make as you are, as you continue to seek to get the capital to do this, right? Correct. That's right. All right. So, you know, Joe Fassler, the guy who used to write for the counter and a few years ago, he wrote this story, basically writing the obituary for, cultivated meat in the counter.

and then, you know, oddly, then the counter itself went out of business. then again, like a year or so later, he wrote another piece again, writing the obituary for cultivated meat. And then recently he wrote an obituary for cultivated meat in the New York times that got a lot of buzz. And in it, in the New York Times column, he mentions that in the book, Queen Meat, which again came out in 2018, that you said that you wanted to be [00:06:00] selling By 2025, which obviously you've already accomplished before then, but that you want to be the world's biggest meat company by 2030.

Now, of course, often aspirations take time to achieve and business plans really survive the first contact with reality. But what do you think now? You know, we're now in 2024. Presumably, you're not going to be the biggest meat company in 2030. Or do you still think that when do you think that you can be even if not the biggest meat company akin to a large meat company that's selling not just tens of millions of pounds, but that's selling billions of pounds of meat.

Josh Tetrick: So it's a question of, to answer that question, it's unpacking what is the timeline ultimately to build what I would define as a large scale facility in a large scale facility, tens of millions of pounds. It's not going to happen in 24, we're not going to get a large scale facility again in the way that I defined it for the end of 25.

So now you're looking at 26 plus, and that'll depend on whether we can execute on the, the different elements around process development that we're currently [00:07:00] executing on, whether we can design a facility, not for a billion dollars, but in my mind, under 200 million, which I think is actually the most significant challenge here, even if we had, you know, 5 billion and we could build multiple large scale facilities, but.

The industry needs to figure out a way to build these facilities under 200 million. I think to do them at a billion is not viable. so, to predict the timeline is just predicting these different elements across the timeline. so not three years, somewhere north of three years. but, but I do think just, just broadly, Paul, it has never been the case that just because there was a headline that said, cultivated meat is here.

The cultivated meat has been here for 300 million Americans and 8. 2 billion people. That is a headline that someone in a newsroom decides to write to a company, an article in order to get clicks in order [00:08:00] for that outlet to make money that is different than the actual reality of the thing. and I think sometimes, These articles that come out are addressing headlines that say cultivated meat is here again defined as literally everywhere.

But of course it's not literally everywhere. It's in a single stinking restaurant, right? Now I'm super proud, right? of it, but that, but that's quite different. I will say also, if we want a good assessment of the potential to make clean meat, to make cultivated meat, right? You might want to look at what the meat industry is actually doing about it, because if I was a meat industry and I thought this technology had no potential, if I thought it was irrelevant, if I thought it was only going to be relevant 80 years, you know what I would do, ignore it, not pay attention to it.

Instead, we have quite the different, quite the opposite reaction. We have an active effort to [00:09:00] actually ban consumers from purchasing it. Active across multiple states, and more than one country. So it begs the question, who knows more about the potential of making meat in this way? You know, a handful of critics on the side.

Or a multi multi tens of billions of dollar meat industry. Who's been doing this for decades and decades. I think they probably know what they're talking about. And I agree with them.

Paul Shapiro: Okay. Yeah. And you know, look, you have numerous States now trying to ban the sale of cultivated meat, not just labeling, but to actually ban the sale, right.

It was even a bill in Congress right now that would ban cultivated meat from being served in the school lunch program. there's this, you know, really serious effort to try to crack down. On this, which means that the companies in this space are going to have to, you know, use some of their capital to fight these bills when it's very difficult to raise capital at all.

So I think that you're raising, you know, a good point in terms of.[00:10:00] what the meat industry sees as a threat, whether they're informed or not, I maybe they are, maybe they aren't. It's hard. It's hard to know how many of them because some of them are actively involved in this space also. So I have a feeling that some of them are not in agreement with each other about this technology and whether they should be embracing it or not.

I don't know. But I want to ask you about the economics of this, because you're mentioning, let's say, building a plant that can make tens of millions of pounds, and the plant will cost, let's say, 200 million, as you alluded to a moment ago. So if it's a 200 million capex, and let's just say it's going to produce 30 million pounds of cultivated meat a year, and, you know, you're going to sell that at five bucks a pound, let's say, which is, you know, around beef prices, but more expensive than chicken.

So, you know, it's 150 million of revenue a year in that case. and, you know, I don't know what the margin is, but, you know, it's gonna take quite some time to pay off that initial, plant, right? Pay off that initial 150 million, or excuse me, 250 million, 200 million dollars if you're making, you know, only, [00:11:00] you know, 10 or 20 million dollars in profit a year.

So how do you make the math work there? Is it that you're gonna hybridize those 30 million pounds of animal cells and, and with plant based materials, so you're selling more than 30 million pounds of product? Is it that it will be higher than 5 a pound? Like how do you pay off the plant? So you don't rate of return is actually attractive.

Josh Tetrick: Well, what is it? I guess we don't look at rate of return in the way you just described. So you could just do what you describe. You could have a company that's worth 2345 billion dollars on the market and then investors can sell their shares for that. And it's disconnected from the exact amount of capital that one invested in it.

Right? So as an investor in a company like this, you know, this is not a real estate investment, right? Right. I'm assuming, right, the highest probability of my return is going to be coming from some significant acquisition or some public market. That's one. Two is just to be clear. We have not figured out yet how to build that kind of facility for 200 [00:12:00] million.

it is, I think it is a, the most fundamental, task of the cultivated meat industry to figure out how to do that. I don't think the, I can say unequivocally. I do not think the cultivated meat industry will eventually be the meat industry. If it costs a billion dollars to build these large scale facilities, we all need to figure out how to make them, for significantly less money.

And that will be challenging to do. but, Making hybrid products certainly will be a part of it. We make a product today that's 60 percent cultivated meat. I will say that we don't call it a hybrid. It's on the menu as cultivated meat consumers enjoy it. Just like if my friend is going to Walmart and buying a pack of Tyson chicken nuggets that has plenty of plant material in it.

The Tyson nugget doesn't say a hybrid nugget. It just says a Tyson chicken nugget. But we do think initially bringing down the [00:13:00] amount of cultivated meat in it will help improve the economics until we continue to progress this forward.

Paul Shapiro: Got it. So what's the pathway? I mean, if investors right now, at least are not so interested in this space as they were a few years ago, is the pathway government funding?

Is it going to be some other type of grant or low interest loans from USDA? But what do you see as the pathway to realistically scaling up to the point where there's tens of millions of pounds? And of course, there's 100 billion pounds of meat produced in the US alone each year. So to even get to 1 percent of that, you know, a hundred million pounds, it's going to, you know, it's going to take a long time and a lot of money.

So what do you think is the path to, to actually getting to 1 percent of the meat industry, which plant based meat is not even at yet?

Josh Tetrick: Yeah, I guess Paul, I will say when, when one says, you know, investors are into something or not into something I've been, I've been doing this job, you know, for now, close to 13 years, I've had many occasions where [00:14:00] investors have been into something and then not into something and then into something and then not into something.

And then five more times. So when I hear someone is not into something, it's like hearing there's a thunderstorm outside and knowing eventually the thunderstorm will be a sunny day. And when I see a sunny day, my assumption is not that I always need to put sunblock on. My assumption is it will eventually rain.

So I don't like gyrate back and forth between whether someone's into something or not into something. I just try to stay focused on like what is, which is the conventional meat industry is ripping the roots out of the planet on a daily basis. We need a way to replace it. Cultivated meat has enormous potential to do so.

Therefore I put my head down and, do work to try and increase the probability of doing it. But to get to the, even the 1%, which you say, It's going to require companies like ours figure out a way to increase our cell densities in a sterile [00:15:00] environment in facilities that I think are south of 200 million dollars.

And I do think investors will be interested in that proposition. I do think governments will be interested in that proposition. And, you know, I will say to, Cultivated meat is not the first industry where, folks, look at the beginning of it, turn their nose up to it in some part. and then, it becomes ubiquitous.

literary digest back in the day wrote, this was an expert. The ordinary hortless carriage is at present a luxury for the wealthy. And although it's price will probably fall in the future, it will never, of course, come into common use. Is a bicycle on laptop computers, the New York Times in 1985 said, for the most part, the portable computer is a dream machine for the few, the real future of the laptop computer will remain in specialized niche markets.

The point is, folks say stuff, the right, the wrong, I've got shit to do, [00:16:00] I could just got to put my head down. And do work because the alternative

Paul Shapiro: is a lot worse. So do you think it will take government funding like an inflation reduction act type bill where huge incentives are offered to companies to make shifts like this?

Or do you think it can still rely on the private sector for this?

Josh Tetrick: I think, I think just like with renewable energy, I think, I think the cost of solar, wind, geothermal, other renewable technologies will continue to drop without government support. But government support accelerates that drop. So I think cultivating it can do it without the government, but it certainly will accelerate its transition if the government is involved.

Paul Shapiro: And do you think there are any countries in particular, whether in Asia or the Middle East or anywhere else that are doing a better job than the U. S. in terms of providing public support for this industry?

Josh Tetrick: I think it's too early to tell right now. I think governments have made pronouncements about things, but a pronouncement is a lot [00:17:00] different than like substantive funding.

China has called cultivated me one of the key technologies in their few in their food security plan, but I think it's to be determined how things like that are actually translated into real policy, not just, you know, on a, on a piece of paper and funding.

Paul Shapiro: Right. I mean, if you think about it, like I just put, solar panels on my roof and these are panels that of course were produced in China, right?

Because the Chinese government actually had policies to incentivize, solar photovoltaic technology there, whereas the U. S. until the IRA really didn't, right? And so now we import most of our clean energy tech from Asia, whether it's solar panels or wind turbines and so on. Do you think that the U S is at risk if we don't prioritize cultivated meat and other animal free protein technologies of having to import clean protein technology in the future?

Josh Tetrick: I don't, I don't think yes. And I don't think that's any different than any technology that we, [00:18:00] intentionally get behind on, right? If you were behind on a technology that turns out to be vital. You're necessarily going to be importing that technology and cultivate a meat is, is no different. Yeah.

Paul Shapiro: Okay.

Well, let me shift for a second. Cause you have recently put out again, just Mayo, which was discontinued about three or four years ago and is now back on the market. Much to my mother's delight. She's like one of the biggest just Mayo fans out there. In fact, many years ago, you gave her a, Oh, there you go.

All right. Yeah. For those listening, Josh has put a, a just mayo jar in the video here, but, my mom still has her just Jolene, just Jolene mayo jar that she keeps as like a flower vase on her counter, but she's very happy that it's back on the market, but it reminds me of many years ago, you showed me this chart.

And it was a chart of all the SKUs of products that you wanted what was then Hampton Creek to, have, right? And it was ice cream and cookies and mayos. And then a couple years later, you told me that you wanted to burn that chart. [00:19:00] You said that having that chart was one of the worst things that you had done, that you said that you thought that it was something that took, too much focus off of the core things that you wanted to do, which were basically eggs and meat.

so let me ask you now you're going to have, you know, just egg and however many skews of just egg there are, whether it's folded or the liquid, you're going to have just Mayo other other launches that you're gonna be putting is like just, you know, just cookie dough coming back, just birthday cake or there's coming back.

Also,

Josh Tetrick: no, we don't, we're not planning on bringing the, the cookie stuff back, but we are thinking about. some new categories in the, in the plant based space. I think there are, I think there are a couple of categories out there, where the products just are not good enough. and I think folks in this space need to be okay.

Just saying it's just not good enough yet. that we're, we're doing some early research on,both in eggs and dairy, and also the, also the meat side. And, you know, when I step back and look at this year, Paul, the single [00:20:00] most important objective for us this year is doing a set of things and increase the likelihood we get to break even, right?

That's what I want to make sure that we're able to do this year. and it'll be challenging to do it. We gotta continue to grow. We've got to continue to improve our margins. We've got to continue to watch our expenses. We got to do lots of things like negotiating better rates with warehouses, right?

It's not very sexy to talk about on a podcast, but it, It is the granular, gritty, boring work necessary to run a food company, even if that food company is enabled by a lot of technology, and launching some of these new products are key to making sure we get those margin dollars to be able to fund everything in this damn building, including my own salary.

Paul Shapiro: so probably new SKUs coming out, who knows what they'll be, but other things that you're not working on that you hope that somebody else will do, like if there's somebody listening here and you're thinking, you know, that person is thinking, well, you know, this category doesn't have the best [00:21:00] products that I think I could have.

Is there something that you hope that some listener will start themselves?

Josh Tetrick: Yeah. two things. one is I think. A barrier for a lot of people in considering moving to a plant based diet is, is cheese, even though cheese is. Not as impactful as chicken is an example to the planet or to animals. I think it can be the psychological barrier.

And I think if someone can actually figure out a way to make a cheese, it is actually not just compelling for vegans, but compelling for people who really love particularly stretchable meltable cheese. I think that's, that's high potential probably even more so than that though.

You

Josh Tetrick: know, I always think about the work that we do and other folks like you and alternative protein do and how.

On one hand, it's necessary. And on the other hand, it's completely unnecessary because human beings right now could just decide to eat a nice diet of [00:22:00] kale and sweet potatoes and beans. And we could retire right now or decide to do something else. I would love to hang out with Ellie, my dog, a lot more than doing this job, to be honest with you.

And they can make the decision right now. And I think thinking about ways that you can make those everyday foods that don't require a bit of technology, much more appealing to people, brand them better, package them. In a more compelling way. I think there's, there's something there that I wish people would do a better job of.

Paul Shapiro: Yeah. So let me say two things in response to that. The first on, on cheese, I agree. There's obviously far fewer dairy cows than chickens. of course cows have a much bigger impact on the planet per animal than chickens do. but while fluid milk consumption has been going down for decades, cheese consumption is going up.

And because, because it takes literally 10 times more milk to make a pound of cheese than a pound of milk. dairy cow numbers have not really gone down because fluid milk consumption is going down, but dairy cow numbers have remained the [00:23:00] same because cheese consumption keeps rising. And so, and so actually, it's actually, you know, a cheat.

So anyway, that means like a cheese replacer, a successful cheese replacer would do 10 times more good than a successful milk replacer as an example. and, and then on the other point about making, you know, just conventional plant based, more attractive. I agree. I don't know what somebody would do.

It's kind of like saying, like going to the EV market and saying, Hey, why don't you just make walking and biking more attractive, like, wouldn't it be easier just to make walking and biking more attractive than trying to figure out how we're going to get all these rare earth minerals and, and everything else you need to make all these EVs, you know, people like to drive, so we need to make cars that don't rely on fossil fuels.

And people seem to really like to eat meat like everywhere on earth. When people get a dollar in their pocket, they seem to increase their meat consumption. Whether it's China, India, Brazil, people escape. Poverty enter the middle class, the first thing they do is start eating meat. or start eating more meat, I should say.

And so, I would love it if somebody would take the Tetrick principle here and, and make black beans sexier. but, I, [00:24:00] I don't see, you know, why, why hasn't Goya done this yet, right? Why hasn't Bush's beans done this yet? They've got a lot of money and smart people, so I, I don't know why they're not doing it.

But, I hope that somebody figures out how to do it.

Josh Tetrick: Yeah, but on that Paul, I mean, think about, I always, I always keep coming back to this idea. How do you make beans sexier? It's this gnawing problem in me that I just don't, I don't have the actual energy to address because I'm dealing with making vegan eggs and, cultivated meat every day.

I, I feel like there's some unlock there. You know, Red Bull created the entire energy drink category, even though Coca Cola was quote set up and had lots of smart people to do it. And for whatever reason, they didn't figure out how to do it. You know, Tesla created the GM were quote set up and had all the money available to do it.

But for some reason, Tesla that Unlocked it in a way. I don't know what the [00:25:00] unlock is. I don't know if it's just a branding thing, or something else, but I would love someone out there to make that sexy bean idea come to life. and hopefully put me out of business because. All people want to do is eat a whole lot of beans.

I don't need to mess around with anything that I'm making anymore.

Paul Shapiro: Whenever somebody is like into, like, you know, who's like an anti food type person tells me about why what we're doing is bad. I always say I would love not to do it. It would be so much easier if people would eat tofu and tempeh and seitan.

I mean, it would be just amazing. I'd much rather do that than have to harness biotechnology. but sadly, I think human nature is not the way that it is that some of those critics may imagine it to be, but I wish it were different.

Josh Tetrick: Yeah, I was, I went to, the climate change summit in Sharm el Sheikh, Egypt, not this past one, but the, the previous one.

And there were these, protesters, at the entrance to the, to the summit. and there was this young woman who was holding up,a sign that said, that said stop fossil fuels [00:26:00] today. And she had, red tears, like tears of blood coming down her eyes and she was so passionate. And I went up to her and I said, You know, thanks for like standing for something.

and I'm wondering what you think about the whole food thing because, you know, so we, yeah, we got to stop fossil fuels, but you got this, like the whole meat thing. And she said, well, I don't know about that. That seems awfully sensitive to wait into,

Paul Shapiro: and I just

Josh Tetrick: thought it was so, so interesting that this person had such guts, right.

To stand and just yell, stop fossil fuels. But to dare wade into the meat topic was to. Offend someone. and I think we need to get over that.

Paul Shapiro: Yeah. And it's funny you say that there are some topics that people just don't want to address. And, certainly, meat is one of them, but on that final note, Josh, let me ask you if there are any resources that you would recommend to folks that you've been running, eat just now for 13 years, as you mentioned, [00:27:00] have there been any resources that are useful for you that you'd recommend to somebody else who's thinking about starting their own company, or maybe they want to do something important in the world that you would recommend.

Josh Tetrick: I'm looking at my bookshelf here. I think I'll give you, I'll give you a couple book recommendations. I think this is, this is one of, one of the best, thinking fast and slow. You probably have read it, Paul, but it's a, it's not a book about technology or entrepreneurship. It's just a book about how to think better.

and I think when you're doing this kind of work, it's hard to step back and just think about thinking. And this book really, digs into an evidence based approach of just thinking with more clarity. it reduces the probability of you getting fooled. it just increases the likelihood that you'll make, smart decisions in life and at work.

So that's one, And then, the second resource I would say is I think when you're in this [00:28:00] world, it's easy to just listen. It's easy to listen to critics, but it's also listen easy to just listen to people who think everything that you're doing is great. I think if you can try to surround yourself with, with people who will give you extremely blunt, direct feedback when something is not great, it's, it's oxygen.

and it's hard sometimes to get that because people don't want to offend. They just, we're social animals. We're not true seeking animals. And I think if you try to surround yourself with the truth seeking kind, as opposed to just the social kind. You probably can improve, improve how you're getting shit done.

Paul Shapiro: yeah, I feel you on that. So, our mutual friend, Josh Balk, whenever he listens to an interview or a speech of mine, he knows that the only thing I want to know is what could have been done better. I don't want him to say, Oh, great job. I really liked it. Just say, what are the things that you think could have been done better?

Anything from a, you know, a three minute TV interview to a 30 minute speech, anything. And. there's very few people who actually tell you the truth. I think my [00:29:00] wife, Tony, is one of them. She has no problem telling the truth, honestly. but, but also Josh Balk is somebody who I always ask, you know, what, what could be done better?

And he, he of course is the same. He always wants to know what could be done better as well. And so, next time I see you screw up or do something suboptimal, I'll make sure to let you know how, how it could have been better. Okay.

Josh Tetrick: So that, that means I'll be hearing from you about five times a day. So that'll be, that'll be good.

That'll be good for me.

Paul Shapiro: All right. Well, thanks so much, Josh. it's great to talk with you about the future of the cultivated meat space. And if you want to learn more about the origins of the eat just cultivated meat program, you can check out the new edition of clean meat now coming out on April 9th, 2024, everywhere books are sold.