Mitsubishi partners with startup to sell lab-grown beef in Japan

[TEL AVIV] Mitsubishi Corp agreed to partner with Israel's Aleph Farms Ltd. to lay the groundwork for bringing lab-grown beef to Japan, where demand for meat is growing.

The two companies will work on tailoring Aleph's beef - grown in vats from muscle cells of living animals - to the tastes and nuances of Japanese consumers and regulatory bodies, Aleph's chief executive officer, Didier Toubia, said in an interview from his office in Rehovot, Israel. They would then use Mitsubishi's manufacturing capabilities to scale up production and distribution, he said.

Aleph, whose investors include American food giant Cargill Inc, plans to sell its initial batch of lab-grown meat to consumers in Asia next year, with Japan being "high on the list" of target countries, Mr Toubia said.

Mr Toubia declined to provide further details about the companies' arrangement or plans to obtain regulatory approval. Mitsubishi spokespeople declined to comment.

The partnership reflects the recent strides made by the so-called cultivated meat industry, which arose mainly in response to animal rights and environmental concerns. Aleph is among some 60 startups jockeying to sell meat or poultry that bypass the abattoir and modern, industrial-scale farming, and countries are starting to open pathways to consumers.

Tokyo-based Mitsubishi, which had US$15.6 billion in food sales in the 12 months through March, is tapping an industry that's expected to grow. The cell-based meat market is projected to reach US$140 billion in the next decade, according to forecasts compiled by Blue Horizon Corp, which invests in alternative proteins.

That's still nowhere near the size of the meat industry, which was US$1.3 trillion last year, according to Global Data. High production costs and consumer skepticism over taste and health implications are among the biggest barriers to accelerated growth.

Governments must also be convinced. Last month, Singapore became the first nation to approve the sale of cultured meat. Israeli Prime Minister Benjamin Netanyahu is supportive of the sector - he visited an Aleph factory last month and tried its cultivated steak as part of his initiative to promote the country's startups in the sector.

Still, Aleph isn't rushing its product to market, and is particularly mindful of the specific preferences of the Japanese market, famed for its Wagyu beef.

"We might be the third or fourth company to release a product, but that's because we're focused on consumer acceptance," Mr Toubia said. "They have high expectations for their meat, and we want to get it right."

BLOOMBERG