‘There’s a Global Arms Race’: The Hottest Field in Israeli Tech Today

Meatless meat, cow-less milk and eggless eggs are just a small taste of what Israel’s alternative protein startups offer. ‘Countries across the world are investing to bring in Israeli food tech’ - but can Israel keep its edge?

Corin Degani
Corin Degani
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Meatless meat, cow-less milk and eggless eggs are just a small taste of what Israel’s alternative protein foot tech startups have to offer. But can Israel keep its advantage in the field?
Meatless meat, cow-less milk and eggless eggs are just a small taste of what Israel’s alternative protein foot tech startups have to offer. But can Israel keep its advantage in the field? Credit: AMIR COHEN/ REUTERS, Sanoop.cp / Shutterstock.com, Eric Isselee / Shutterstock
Corin Degani
Corin Degani

The Science Park in Rehovot, a walking distance from the Weizmann Institute of Science and the Hebrew University agronomy department, may deceive visitors. The sleepy atmosphere belies the fact that within the nondescript office buildings some of the most prominent food-tech startups are plotting their way to global status – by disrupting the traditional meat and dairy industries. Their goal: to render slaughterhouses across the world obsolete. 

Most of us have been exposed over the recent years to alternative protein companies, or “new protein.” The ones developing milk not milked from any mammal, meat that entails no animals being harmed, or plant-based products resembling meat more closely than ever before. But truth be told, as long as these products remained in labs rather than on shelves, most Israeli consumers saw them as a mere curiosity. 

All this may soon change. In fact, it has begun to change in recent months: Massive capital raised by some of the companies, at a very different scale than the alternative protein field has seen in the past, indicates the transition to the next phase – from development to production. 

Initial products have already begun reaching local consumers. Israeli protein startups raised a modest sum of $14 million dollars. Two years later, the sum had climbed to 114 million. The total for 2021 is still unknown, but a single haul – the 347 million dollars raised in December by Israeli firm Future Meat – is already triple the 2020 total, and it joins several other large fundraising rounds by other food tech firms this year. 

Israel is considered an alternative protein superpower. The number of local startups in the field with advanced technologies is among the highest in the world, second only to the U.S. They are not all located in the Rehovot science park – some are in Kiryat Shmona, in the north, or Ashdod, in the south - and some in Tel Aviv and other cities. Today there are 50 Israeli startups working in the alternative protein field, according to the Israeli branch of the Good Food Institute, a non-profit organization promoting alternative proteins, but the number keeps climbing. 

A food technician tests a cooked 3D printed plant-based steak produced by Israeli start-up Redefine Meatin Rehovot, last year.Credit: REUTERS/Amir Cohen

“There’s a global arms race over food tech here, and other countries are working very fast and investing a lot of money to draw Israeli startups. Israel has to react fast, or we’ll lose them,” says Nir Goldstein, Director of GFI Israel. 

Goldstein is not the only one speaking of the alternative protein industry in terms of a global race. There’s a new industry here, with great potential, that deals with a matter of national importance – food. The coming few years will likely decide the fate of the industry as well as where its leading firms will grow and flourish. Israel’s current advantage is overwhelming. The question is whether it will be able to overcome the barriers – of which there are more than a few – and maintain its superiority. 

Several factors have combined to give the global alternative protein field a huge push forward. One is the realization that the current resource exploitation of the food industry is not sustainable: The world’s population is growing and the demand for meat is skyrocketing – especially in emerging economies. 

Currently, for example, 33% of agricultural land around the world is used for raising food for animals. 

Another reason is the growing importance of producing food locally, due to the pandemic and global supply chain issues. The fact that the appropriate technologies are maturing is also providing a tailwind to this trend, along with changing consumer tastes. Many people prefer to significantly reduce their consumption of animal-based foods. As a result, traditional food manufacturers are showing great interest in the new industry and are investing money in it.

Personally printed steaks

The new world of protein stands on three legs: The first one is the most familiar, the extraction of proteins from plants such as peas and soybeans, using advanced technologies in order to produce products resembling meat, cheese, eggs and fish, as much as possible. The best-known example is the hamburger produced by Beyond Meat.

Much of the innovation in this area is focused on developing ingredients that will upgrade products in terms of texture, taste or functionality. For example, finding how to make a milk substitute froth like milk, or how to make a veggie burger “bleed” like a classic hamburger.

Redefine Meat - founded in 2018 by Eshchar Ben-Shitrit (L) and Adam Lahav (R) - is already selling its products in restaurants across Israel and EuropeCredit: Bloomberg

In tandem, there are companies in this category that go all the way. The products of Redefine Meat - founded in 2018 by Eshchar Ben-Shitrit and Adam Lahav, both of them with no background in the food industry or in biotech – can now be ordered in 150 restaurants across Israel, and starting in January, in 100 locations in Europe, under the company’s brand name. Some of the restaurants offering these products are actually ones that specialize in meat, such as MeatBar in Tel Aviv or Sinta-Bar in Haifa.

“We take plant ingredients and turn them into components that are very similar to what you have in an animal muscle,” explains Ben-Shitrit. “We produce the R-value, fat and blood separately and then combine them using a 3-D printer.” The company employs 140 people, with plans to double this number in the coming year. A pilot factory is already in operation. “We’ve built the most advanced food factory that’s been built over the last ten years inside an office building in Rehovot,” he adds.

The second leg in the new protein field is fermentation. This is a method that’s been in use for decades by the pharmaceutical industry, with isolated uses in the food industry. One of the main challenges with the transition to alternative proteins is how to scale up and manufacture a competitive product.

Fermentation enables the production of proteins while skipping over the plant-growing or animal-raising stage. Thus, for example, you can produce cow’s milk with yeast, using much less water and land. 

“In some way, our process is similar to traditional methods of producing wine or beer, using fermentation vats,” says Aviv Wolff, who founded a start-up called Remilk together with Dr. Ori Cochavi, an expert in producing proteins, together with a postdoctoral fellow at the Weizmann Institute. 

Aviv Wolff, co-founder of Remilk, that uses fermentation to create milk without as much as a 'single cell taken from a cow'Credit: Ilan Assayag

“We take yeast and have it digest sugar in a fermentation vat while making proteins found in cow milk. These are 100 percent identical to the proteins a cow produces, due to a process we put things through before the fermentation. In practice, there is not a single cell taken from a cow in our product,” says Wolff.

Wolff adds that “in contrast to dairy companies which receive their raw materials from cowsheds, we have the privilege of deciding what goes into our milk. Lactose is easily replaceable with other sugars that are easier to digest. Our milk is lactose-free and contains no cholesterol, hormones or antibiotics.” He estimates that ten companies around the world are now engaged in the fermentation of alternative milk proteins, most of them at an earlier stage than Remilk is at. Remilk will make the transition from development to mass production in the coming weeks, he says.

A plate of Remilk's products Credit: Remilk

The third leg on which the new protein industry stands is cultured meat, a technology allowing the production of food that is not meat, such as milk or honey. Currently, the meat industry uses only 30 percent of a cow; cultured meat allows one to grow in a lab only the tissues and cells people will actually eat.

The result is a reduced usage of water and land and, obviously, avoiding raising animals for the purpose of slaughtering them. The industry relates to cultured meat as the most complex technology of all, where regulation will dictate the most difficult approval process and where production infrastructure will be the most costly.

Prof. Yaakov Nahmias, founder of Future Meat, says that 'cultured meat is a not a complicated technology'Credit: Ilan Assayag

Prof. Yaakov Nahmias from the Hebrew University, who founded Future Meat in 2018 and is currently the company’s president, does not agree: “I don’t think that cultured meat is a complicated technology, but it is one that lets consumers have the taste and aroma of animal products, and that’s where the big difference is. Meat eaters want the entire experience,” he says.

Future Meat, whose products include chicken breast, nuggets and hamburgers, has managed to significantly lower the production costs of cultured meat. A slice of chicken breast weighing 100 grams (3.9 ounces) costs only $1.70. An Israeli buying veggie burgers or vegetarian meat will pay 60 shekels per kilogram. These prices only suit consumers who look for meat alternatives for ideological reasons. In order to compete with the meat industry among the wider population, you have to provide cheaper alternatives. 

According to Nahmias, the $347 million Future Meat reportedly raised earlier this month will be used “for building the biggest and most efficient production plant in the world.” The company is currently examining where in the U.S. to place its production plant.

No more tofu hamburgers?

The Israeli food tech industry didn’t just crop up out of nowhere - an incubator called The Kitchen, opened in 2015 by a big Israeli food producer and the state innovation authority, played a key role.

It helped launch over 20 startups, including Amai, which creates sweet proteins through fermentations; Imagindairy, which creates cow-less milk and recently raised $13 million; and Zero Egg, which creates plant-based egg alternatives. 

One of its biggest successes is Aleph Farms. Formed in 2017 it creates plant-based meat products and is now in the midst of setting up its first factory in Rehovot. Its pilot product is a “minute steak” and will launch in 2022. Though the factory in Israel hopes to grow “blue and white” meatless meat, regulatory issues may see them start mass production in the U.S., Singapore or even the UAE, which invested $105 million in the firm.

A meatless steak from Aleph FarmsCredit: Aleph Farms

While this field is overseen by the FDA in the U.S., in Israel it is regulated by the Health Ministry’s food risk management unit. In wake of the local boom, the unit launched a pilot program with four local firms with the intent of creating local expertise relevant regulation. 

“The goal is to make it so we can easily address and authorize these products - like it is with medicines, where the number of clinical trials, for example, is clearly defined,” says Anya Alden, deputy head of business development at the innovation authority. “We need regulation to promote innovation,” she says, explaining how creating such products, building factors and even selling them all require a green light from the authorities. “That way we can see these products reach the consumers in Israel as well as making sure these companies stay in Israel.”

Anya Alden, from the innovation authority, says they are working on streamlining regulation to allow Israel to remain a world leader in food tech Credit: Hannah Taybe

Redefine Meat’s Eshchar Ben-Shitrit is full of praise and says that while in other places food tech firms face obstacles, in Israel “it's the other way around, once we had a product the Health Ministry guided us through the process. It wasn’t easy - but that’s because it's a new technology.”

Future Meat already has a pilot factory up and running in Rehovot: “It's a space no larger than a living room,” Nahmias says. “This type of tech is unique because it allows large scale production in small facilities,” he notes, saying they are now creating a seaweed product to be submitted for approval both by Israel and the FDA.

According to Goldstien, of GFI, there is currently a paradox: “Why is Israel, which is a field leader in meat alternatives, importing products from abroad? Because they are not from here.”

Redefine's meatless meat, which is already being sold in restaurants, 'takes plant ingredients and turns them into components that are very similar to what you have in animals'

Though he is full of praise for the local industry and even the authorities, he also voices criticism: “As leaders in promoting the alternative protein market, we have to work with tens of different ministries and government offices. Everyone loves food tech but no one currently has the authority to provide comprehensive oversight of it. No one is looking at the really long term and leading us there.”

He recently presented a national plan to turn Israel into a world leader in alternative proteins. According to his plan and other experts, alongside regulation and infrastructure, there is also a lack of researchers and there is no clear educational path to creating new ones and attracting academic talent into this space through dedicated fundings. 

“This field requires a massive investment in research - this is not cyber or software. The problem is that the ‘deal flow’ is about to run out, and academic institutes dont have funding for these things. There is a lot of demand by investors and it has emptied out our academic institutions.”

Alden, from the authority, explains the issue from her perspective: “We have budgets to encourage research into alternative proteins, but there are not enough people applying for it - simply because there are not enough researchers. So we try to put these firms in touch with researchers in adjacent fields that may be able to help.”

Dr. Tami Miron, head of technology as Israeli food tech incubator Fresh StartCredit: Rami Zinger

Another Israeli incubator, located in the north, in Kiryat Shmona, is trying to help fill this gap. Set up by state and private investors, and even crowdfunding from OurCrowd, they give every new startup they take in 3-3.5 million shekel and currently have seven such companies. “They provide good returns for their investors from the day they start here," says Dr. Tami Meron, the head of technology at the incubator, called Fresh Start.

“Alternative protein is a relatively new industry. There was a first wave of firms that were successful, but now on the other hand, there are newer and younger initiatives coming from within the universities and our job is to help them mature into companies. The goal is to make food that is healthier and more sustainable - and we try to balance both sides of that equation.

Food tech’s future

When asked how the future of the local food tech industry will look, Meron of Fresh Start, says the goal is to create the regulation needed to support “local development centers.”

For Ben-Shitrti, in the long-term, the successful food tech company is a “global one. Israel actually has an advantage as it will require both talent and technology. So there is no reason to move production to Singapore or the U.S. - not to mention the fact that Israelis consumers like trying these products and are vocal in providing feedback - which is great!”

Others warn that though Israel will remain a leader in terms of knowledge and invitation in the field, it is unrealistic to expect it to produce “millions of tons every year,” Nahmias says. 

“We don't have enough water here to do that. When we talk about production of meat alternatives - we are talking about setting up factories across the globe. However, research and development will remain in Israel - we can be a type of Monsanto [which produces seeds] and I think that’s where things are heading. There will be factories in many places but the original cells will be sent there from here.”

“We want Israel to be the home for this,” says Remilk’s Wolff, “we will do research and development here - there is no better place for that than here. We want to produce here and sell here, but the burden of proof still lies with all the different parties involved in this industry.”

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