TIDMANIC
Agronomics Limited
22 October 2019
2.00pm 22 October 2019
Agronomics Limited
("Agronomics" or the "Company")
Company Newsletter
Set out below is a Company Newsletter available on the Company's
website: https://agronomics.im/
This newsletter is the first monthly update Agronomics since the
adoption of its new investing policy on 16(th) April 2019. Current
and prospective shareholders alike are welcome to read our monthly
newsletter, so they are up to date on the portfolio as well as any
additional insights into and news about this immensely interesting
space.
Agronomics' goal is to become a leader in the nascent industry
of cellular agriculture, which includes environmentally friendly
alternatives to the traditional production of animal-derived
products. Agronomics is focused on companies with defensible
intellectual property that provide scalable and commercially viable
opportunities to improve the sustainability of traditional supply
chains. This encapsulates technology within the food sector, such
as the alternative protein space.
MARKET EVOLUTION
The team at Agronomics believes that disruption of the nearly
US$ 7 trillion global meat, seafood and poultry market, primarily
through the application of biotechnology, is one of the major
secular opportunities of our generation. With the global population
projected to reach 10 billion by 2050, and demand for animal
protein growing at an even faster rate, the necessity to produce
animal protein through more efficient means is clear. The scale of
the challenge to feed the next 3 billion people, while also
preventing potentially irreversible damage to the environment leads
us to conclude that traditional farming/meat, cultivated meat and
plant-based alternatives will co-exist in the future.
While these three methods are likely to co-exist Agronomics is
focused predominantly on investments in cellular agriculture, which
although earlier in the stage of development than plant-based
alternatives, have considerably higher barriers to entry In the
next five years, we predict a continued increase in popularity of
meat alternatives, as they improve in taste, texture and price. We
believe consumers are becoming more conscious of their food
choices. Consumers are recognising the effect their plate has on
the planet and health; traceability of food, animal welfare and
carbon footprint size are important. The alleviation of animals
from supply chains will extend out to the dairy and fashion
industry, as the costs of animal suffering in industrial dairy
farming and for leather goods become more apparent.
When cultivated meat launches commercially, we believe this will
act to ease the pressures on both the land and our oceans. To date,
the investments made in the entire cellular agriculture universe
are below US$ 100 million with only six companies having closed
Series A funding rounds. Wild Type and Future Meat Technologies
both recently announced the close of their Series As. The sector is
still relatively nascent and there are approximately 30 companies
in the space looking to develop cultivated meat or seafood
products. Companies in the space are adopting different approaches
for their go-to-market strategy. Some companies intend to produce
100% muscle and fat steak like products that are identical in
appearance, taste and texture to conventional meat, whereas others
intend to combine their cultivated meat with plant-based protein to
create blended products. It is of paramount importance that the
first products launched are a success. We recognise the need for
consumer acceptance in the space and the importance of governments
supporting the development. It is likely that the USA, Singapore or
China will be the first markets to have access to these products,
as government regulation supports the introduction of the novel
foods.
The plant-based sector is undergoing rapid expansion, with
large, multinational corporations in the consumer goods industry
shifting their product focus to incorporate plant-based
alternatives. We have witnessed the release of plant-based products
from Nestlé, Tyson Foods, Smithfield, Perdue Farms and Hormel.
These are just some of the big meat companies diversifying their
portfolios. The hype surrounding Beyond Meat and Impossible Foods
as the 'pioneers' in the plant-based sector has helped fuel this
sector, however the lack of price parity remains apparent. With
scale and manufacturing expertise, we believe plant-based products
will become as cheap as industry raised meat products in the
future.
SUSTAINABLE DEVELOPMENT GOALS
Cultivated meat can support and accelerate meeting the
Sustainable Development Goals - the United Nations blueprint to
achieve a more sustainable future for all.
The effects of climate change are becoming more prevalent and
recent reports support the true facts that the world is warming at
an unprecedented rate:
-- Goldman released a report on the effects of Climate Change summarised here.
-- IPCC, the Intergovernmental Panel on Climate Change, released
a Special Report on Climate Change and Land.
-- UN released a landmark report in May: Diet must change to halt nature loss.
The Teamexpanded in May, with David Giampaolo and Richard Reed
joining the board as Independent Non-Executive Directors on the
31(st) . Richard was also appointed Non-Executive Chairman of
Agronomics.
Richard Reed
Richard Reed CBE is the co-founder of Innocent Drinks, an
international company producing fresh fruit smoothies and juices
sold in various outlets globally, the majority of which was sold to
Coca-Cola for more than US$ 500 million. Richard is also a
co-founder and partner of JamJar Investments, a venture capital
investment fund based in London, UK, specialising in early stage,
high growth consumer technology and offline companies.
David Giampaolo
David Giampaolo is a major shareholder and chief executive of Pi
Capital, a London-based investor club. He is also a noted
entrepreneur in the global health and fitness sector. He has been
involved as an investor, advisor and board member of some of the
largest and most successful health and fitness companies in the
world including Fitness First, 24 Hour Fitness, Zumba Fitness and
SARVA, India's largest chain of yoga and mindfulness studios. David
is also Chairman of SCA Investments Limited, the parent company of
Gousto, a recipe box company, using technology to provide extensive
choice and personalisation in an eco-friendly way.
Portfolio Updates
NEW AGE MEATS
Agronomics participated in New Age Meats Seed fundraising round
for a 7% equity stake. New Age Meats is a cultivated meat company
focusing on pork, based in San Francisco. This was an immensely
positive and exciting investment for Agronomics to make as the team
are highly supportive of Brian Spears, the founder of New Age
Meats. Brian has a background as a chemical engineer, who moved
into the cultivated meat space when he saw an opportunity to make
meat that is 'healthier, tastier and more sustainable.' New Age
Meats had a taste testing back in September 2018 and since then the
team have been very R&D driven. They welcomed a new
Bioengineer, Jonathan Parrish in early September.
BLUENALU
Agronomics has participated in both BlueNalu's seed and Series A
financings, with the most recent investment made in August 2019.
BlueNalu is a cellular aquaculture company based in San Diego,
aiming to produce great tasting, healthy, safe and trusted seafood
products that support the sustainability and diversity of the
oceans. BlueNalu has an immensely strong founder team; Lou
Cooperhouse, President and CEO, has 35 years' experience working in
food service and retail operations and Chris Dammann, CTO, who is a
scientific expert in the field. The significant experience and
industry expertise of the team at BlueNalu is immensely valued by
Agronomics.
BlueNalu's product focus is on finfish and crustaceans, they
have developed stable fish muscle cell lines of multiple fish
species, without the use of genetic engineering. Since August,
BlueNalu have demonstrated rapid progress; they announced their
strong commercialisation strategy and facility designs for
large-scale production which will enable them to move towards their
goal of becoming the global leader in cellular agriculture.
BOND PET FOODS
Bond Pet Foods is a pet food and cultivated meat company based
in Colorado, founded by Rich Kellemann and Pernilla Audibert in
2018. The company is hugely promising to Agronomics, as Bond Pets
is developing acellular fermentation techniques to produce chicken
proteins with the appropriate amino acid profiles, to match current
animal pet foods that will provide a slaughter-free alternative to
conventional products. Bond Pet Foods is as far as Agronomics are
aware, the only pet company that are focused on developing chicken
proteins. Their products will eventually allow dogs and cats to
receive the same or even enhanced nutritional content to maintain
animal welfare and health. It is often underestimated or at least
not known; the amount of animal slaughter required to produce meat
that can be used in pet foods.
Bond Pet Foods was mentioned in Cleantech groups '50 to watch'
report - companies offering high-impact solutions.
REBELLYOUS FOODS
Rebellyous Foods is a plant-based meat production company, based
in Seattle. The company was founded by Christie Lagally, a highly
experienced engineer, in 2017. Rebellyous intends to be a leader in
plant-based meat production innovation, creates delicious,
cost-competitive plant-based meat for the foodservice industry.
Rebellyous team incorporates engineers, food scientists, and chefs,
using quality plant protein, high-throughput manufacturing
automation, innovative low-energy manufacturing tools, and uniquely
designed modular production facilities to craft better tasting,
more affordable plant-based meat. Rebellyous Foods is Agronomics
first sole plant-based investment, which complements the
outstanding cultivated meat portfolio.
VITROLABS
VitroLabs Inc is a clean cellular agriculture company creating
slaughter-free, environmentally friendly leather in the world's
first fully scalable tissue-engineering platform. Their technology
works at the intersection of biology, material science, design and
engineering to bring transformational change to the leather
industry in a sustainable manner. VitroLabs was founded in 2016 by
Ingvar Helgason and Dr Dusko Illic in 2016. Dr Illic is a highly
experienced stem cell biologist who offers the technical expertise
necessary for VitroLabs platform. The Agronomics team is hugely
excited about the addition of VitroLabs to the portfolio and look
forward to VitroLabs commercial launch in the future.
COMPANY NEWS
NEW HARVEST
The Agronomics team attended the New Harvest Conference in MIT
on 19th & 20(th) of July. New Harvest is a non-profit
organisation based in Boston. New Harvest (NH) is passionate about
revolutionising the supply chain of animal-based products, for
instance NH provided the laboratory of Mark Post, the scientific
leader in the cultivated meat sector who created the first
lab-grown burger in 2016. This was New Harvest's 4th conference on
the cultivated meat space. Discussions regarding scale-up and
bioreactor design were included. A highlight of the event was a
talk from Scott Allen, a New Harvest fellow at the University of
Bath, who discussed the various designs for cultivating meat. Other
interesting observations included a mention on regulation in
America for cultivated meat - it is jointly overseen by the FDA and
USDA for cultivated meat, and solely the FDA for cultivated
seafood.
GOOD FOOD INSTITUTE
Jim Mellon and the Agronomics team attended the Good Food
Institute's (GFI) Conference in San Francisco on the 4-6(th)
September. GFI is a U.S. based non-profit organisation founded by
Bruce Friedrich in 2016, promoting plant-based and cultivated meat
alternatives to products of conventional animal agriculture. The
team had the opportunity to speak with Bruce and GFI's head of
Europe, Richard Parr. GFI has recently launched in a division in
Europe, and Agronomics looks forward to collaborating to raise the
profile of GFI's work in Europe.
Chairman of Agronomics, Richard Reed, spoke on Vox Markets
podcast on 11(th) September. He discusses the reasoning behind the
latest portfolio additions including BlueNalu and Bond Pets, and
why he personally no longer eats pork due to the cruelty that
exists in traditional farming practices!
Agronomics was also represented at the 5th International
Conference on Cultivated Meat held in Maastricht, Netherlands, on
6th-8th October. This conference was held by Mark Post, founder of
Mosa Meat and the scientist responsible for the world's first
lab-grown burger in 2013. Richard Parr, head of GFI-Europe gave a
talk on how governments need to support cultivated meat in line of
addressing antimicrobial resistance, climate change and the
Sustainable Development Goals.
EXTERNAL RESOURCES
We have adopted new terminology to express the lab-grown/clean
meat/cell-based meat space: cultivated meat. Labelling and consumer
acceptance are vital for cultivated meat to have success in future
markets. The sector is working very hard to ensure that cultivated
meat has the appropriate language for it to be universally
supported. This is a consequence of GFI's on-going consumer
research to determine the best language to help people understand
how the process works and its potential for food systems. Read more
here.
Plant-based progress has been tremendous over the past few
months offering alternative protein solutions:
-- Impossible Foods have launched B2C in Wegmans, a U.S. grocery store.
-- McDonald's have agreed to test a Beyond Meat burger called
the 'PLT' (Plant, Lettuce, Tomato) in Canada.
-- VBites launched a vegan Omega-3 supplement, V-mega 3, made from algae.
-- Sunfed, a New Zealand-based brand launched in over 250 stores in New Zealand and Australia.
-- KFC Beyond Meat Fried Chicken launched in Atlanta.
-- The Meatless Farm Co. secured an equity deal with Channel Four.
-- Lewis Hamilton's Neat Burger Restaurant opened serving Beyond Meat.
Cellular agriculture, and the terminology surrounding it, can
appear unfamiliar to many. There are some useful resources
available online should the reader wish to delve further:
-- Elliot Swartz, Academic Research Advisor at GFI has a
comprehensive report on the science behind cultivated meat, read
here.
-- GFI: An analysis of culture medium costs and production volumes for cell-based meat 2019
-- Rethinkx report on 'Rethinking Food and Agriculture 2020-2030'
-- GFI's plant-based and clean meat MOOC
SOCIAL MEDIA COVERAGE
Agronomics was briefly mentioned in The Telegraph's technology
section on Sunday 29(th) September.
Agronomics were pleased to announce the launch of their new
website in August.
A monthly blog post on Master Investor on the clean and
cultivated meat sector provides a brief discussion of the topical
matters within the space:
-- August update: Clean Meat - the future of our food?
-- September update: Clean Meat: regulatory approval may rule this race
-- October update: Cultivated Meat: Climate Change, the presence of Plant-Based Food & Science
Follow Agronomics on twitter: @AgronomicsLtd
Visit Agronomics website at: https://agronomics.im/
For further information, please contact:
Agronomics Limited Beaumont Cornish Optiva Securities Peterhouse Capital Britton Financial PR
Limited Limited Limited
The Company Nomad Joint Broker Joint Broker Investor Relations
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Denham Eke Roland Cornish/James Jeremy King Lucy Williams Tim Blackstone
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