Is the Future of Cultivated Meat in Thailand? Aleph Farms is Betting on It

by Paul Shapiro | April 12, 2024

When you think about cultivated meat, Thailand isn’t exactly the first country that comes to mind. Sure, you may think about the US, Netherlands, Israel, and Singapore. But the Southeast Asian kingdom is where Israeli cultivated meat juggernaut Aleph Farms recently announced its first commercial factory will be. 

Having just received Israel’s first regulatory approval to sell cultivated meat—and the world’s first regulatory approval for cultivated beef in particular—Aleph Farms CEO Didier Toubia discusses his company’s rollout strategy with me in this conversation. As you’ll hear, Aleph wants to start by selling limited quantities in Israel within 2024, but the company intends to operate its first plant in Thailand with what Didier calls an “asset light” pilot facility capable of producing 1,000 tons a year. For those of you who aren’t mathletes, that’s about two million pounds of finished cultivated meat product—”finished” meaning finished goods that are a hybrid of animal cells and plant-based ingredients as well.

Of course, two million pounds is a vast quantity compared to the volume of cultivated meat that’s been produced thus far, but it’s not even a rounding error in Asia’s meat demand, let alone global meat demand. So how long will it be before Didier thinks the cultivated meat sector will make a real dent in animal meat demand? You can hear his answer in this episode!

Despite negative headlines surrounding the space lately, Didier claims he’s more optimistic than ever before about his prospects for success, and that he’s still fighting to have $1 billion in revenue within the next 10 years. You can hear him explain why he thinks that’s realistic in this conversation. 

Discussed in this episode

More about Didier Toubia

Didier Toubia is the Co-Founder and CEO of Aleph Farms. He’s a Food Engineer and Biologist who led two medical device companies and co-invented over 40 patent families; Co-Founder and CEO of IceCure – went public in 2010, and CEO of NLT Spine – acquired by SeaSpine in 2016. He was trained at AgroSup in Dijon, France, and was awarded with a specialized masters degree from ESCP Business School. Didier holds a joint Executive MBA degree from the Kellogg and Recanati business schools, USA and Israel.

Business for Good Podcast Episode 137 - Didier Toubia, CEO of Aleph Farms

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

Didier Toubia: Hey, thanks for having me.

Paul Shapiro: Hey, it's a pleasure to be talking with you. I was so honored to have you, last year, visit the Better Meat Co. with some other folks and get to try some of the mycoprotein products that we're making, when we did our night under the fermenters event, but sadly, I have not been able to visit you in Israel and get to try some of the olive farm steaks yet, which I'm very eager to do.

I was thinking maybe at, Foodtech IL, which I was scheduled to speak at, obviously the Hamas massacre prevented that from occurring. but I hope that there will be a time when I can get back over there. Will that be possible? Do you think when I'm over there to try some of the steak?

Didier Toubia: Of course, welcome.

Anytime we love to share our product with the sophisticated people like you, who are able to provide a very focused feedback and always happy to hear them to hear good things. [00:01:00] You can. You can help us.

Paul Shapiro: That's very kind of you. I, I, I certainly don't perceive myself as sophisticated, but I might be able to provide some useful feedback.

So we'll see. we'll see what happens. Thank you so much. Hey, listen, we had Jonathan Berger from the kitchen on, who I know is a board member of yours and we had him on just a couple of months ago. And before we get started, I just want to comment on something he had said, he, he mentioned that, it was something like 15 percent of all of our farm staff is serving in the military right now.

And so I'm sure this has taken a very serious toll, obviously, on the company. And I first want to express my thoughts and say, I'm sorry for the hardship that, that you guys are, are facing. from the, from the massacre of October 7th, and also wanted to just ask, how is the company doing with so many of the staff not being able to show up for work right now?

Didier Toubia: Yeah, thanks a lot. Some of the stuff which has been [00:02:00] drafted to the military came back and overall, you know, we believe that the current security situation in the Middle East is just strengthening our motivation and adding more people in. More energy to to our vision for making the world a better place.

We really hope that the situation will will improve and that, similar agriculture as a whole and cultivated meat in particular will play a role in building back a better a Middle East and helping, you know, tackling joint issues with, food sovereignty and, and access to nutrition in the region and, better integrating the economies and, And promoting, promoting,more stability in the region. so we're, we're sorry for what happens currently. and all the pain and suffering happening in the regions. And we, we believe that we will have a role in building, building it back better. [00:03:00]

Paul Shapiro: Let's hope so. Let's certainly hope so. I hope to be able to celebrate you with you at a food tech IL whenever it is rescheduled, apparently for this upcoming November, but we'll, we'll find out as time goes on here.

But let's talk about some happier things here. Did you because you guys have done a lot of impressive things, right? Like, first, you've raised hundreds of millions of dollars. You have you're the only company to have received regulatory approval for cultivated meat in Israel. You're the only company to have received regulatory approval for beef for cultivated beef anywhere in the world.

You've partnered with SpaceX to do actual meat growing in space on the International Space Station. There's so many cool things that you have done. But to my knowledge, you have not started selling stakes. So when is that going to happen? you have the regulatory approval. You can make stakes. I've seen them.

They look beautiful. When will somebody be buying an olive farm state?

Didier Toubia: Yeah, it's a good question. And thanks for, for asking it. It's an opportunity to clarify a little bit where we stand. as of, now, meaning [00:04:00] mid-March, we, we got our,product approval. I mean,which is equivalent to a no question letter by the FDA in the US on the intrinsic safety of the product.

This lecture has been, delivered to us in December last year, and we published it in January, a few weeks later, and we're still working on, hand in hand with the Minister of Health to finalize the guidance for, for the labeling of the product. And in parallel, same as in the U. S., the USDA also needed to, inspect and approve the facility for, cultivated meat production.

We're also in the process of, getting our GMP certification, and,Finalize all the prerequisites for being able to operate or plant, fully, as a fully commercial facility. So we still need to fulfill some requirements before we can start and market our products, which are more, let's say, let's say, technical requirements, not related to the safety of the product.

And we expect to launch our, our,cultivated [00:05:00] beef steak under the Aleph Cuts brand in the next, few months, I mean, during the course of, 2024.

Paul Shapiro: Wow, that's really exciting. And and this will be in Israel?

Didier Toubia: Yes, it'll be in Israel. as you know, we also filed, regulatory applications in, in Singapore and, in the US and the UK in Switzerland.

We're opening additional geographies. Then there are good chances we could get another approval during the course of 24 and in that case, we'll probably, launch, you know, in, at least a small scale in the second country as well to gather additional data points and more customer feedbacks. So we launched primarily in Israel, but potentially in a second country as well in 24 at small scale.

Paul Shapiro: Very exciting. And so when you say small scale, like if you look at upside foods and eat just, you know, what they have done is essentially, put their cultivated chicken on one or [00:06:00] two restaurants menus, not every day. you know, sometimes it was even just once a week in some cases. and for a limited number, is that the type of small scale you're thinking, or are you thinking something bigger than that?

Didier Toubia: It's a good question. We, we learn. Actually, learning and, you know, the, the, we really want to make sure that when we launch our product, we have the, the resources and the, the capabilities to increase the quantities and,support, you know, in,the, and, and initial traction in the market. and then, to expand our reach, to additional restaurants and, into the wider food service space.

We prefer not rushing and launching early while we're not yet 100 percent certain we can deliver on the mid and long term. We'd like to avoid launching the product and putting it from the market and then relaunching it. I think it's not doing good for the [00:07:00] company. so in parallel to a to a regular approval, so so working on our scale up plans on all the agreements, with partners.

You know, which will ensure the, that the quantities and the demand, will, Will actually justify the launch and will drive, quantitative increase in the in revenues on the, on the short term. And so to your point, we, we, we prefer dealing a bit or launch and make sure that the launch will be successful and,Ensuring we can, we can, deliver, not only with the launch event itself, but also in the next, six, months, one, two, three years and show an increase,a steady increase in revenues.

Paul Shapiro: Nice. So let me ask you then, you recently announced that you're going to be building a facility in, in Thailand. And I was pretty intrigued by this because, Southeast Asia actually has a relatively booming market for alternative meats right [00:08:00] now. I was in Thailand not that long ago and I was surprised that there were 16 different local brands of alternative meat.

Not like Impossible Foods and Beyond Meat, but in terms of plant based meats, there were 16 Thai brands of plant based meat. And so it seems like there is a real appetite there. So did that have to do with your decision? So let me just ask you point blank, why Thailand and what are you building? It's a pilot plant or it's a commercial facility?

Like what is it that's actually going to be in Thailand and why are you doing it there?

Didier Toubia: We, we decided to focus, first on, smaller countries, which require less initial investment, to launch and,where we can learn, and, implement,iterations and, make sure that we improve our product before we move to the U S.

So we decided to focus on Israel and Singapore first. Singapore is for us a hub into Southeast Asia. So we do implement a strategy to expand in the [00:09:00] region around Singapore, including in Thailand, potentially in other countries in Southeast Asia afterwards. and Southeast Asia in general, Thailand in particular, are interesting geographies for a couple of reasons.

First, the expected acceptance of cultivated meat is very high. We performed in a market survey with our partners, Thai Union, in Thailand. it was a couple of years ago, we showed, 97% willingness to try cultivating it. It sounds too high. We need to redo it. . Wow.

Paul Shapiro: Anyway, yeah, yeah. I was gonna say, I wonder, was there a translational problem?

Like 97% agreement on anything is, is pretty unlikely, but still, still good directional direction. But that, that's one I

Didier Toubia: think, I think it's, it's, similar in, Singapore, in China and in many other countries, but we're not in the intending to go to China right now, but. You know, the openness for Nobel food is very high in, in Asia.

the selling price of, of beef is high because most of it is [00:10:00] imported. Thailand is not a beef producer. Singapore imports all of, all of its foods and, overall, we prefer focusing on markets and channels where the selling price is initially high just because we want to Maximize the, all gross margins and get quicker to,a break even on top of that, there is no lobbies there, like we've seen in the US or in the south of Europe, no politicization, everyone is in favor.

We have kind of edge to edge support from all the governmental agencies with a strong focus on food security and, food sovereignty. there's a vibrant culinary scene, with a lot of innovation. We also see, we also see, a lot of,improvements in the talents, availability, very good universities and,high, availability of, of talents.

The production cost is low, and the cost of utilities in Thailand is very low, [00:11:00] and at the end of the day, the APAC, Asian Pacific market is much larger than the U. S. 40 percent of the world population will be living there soon, so all of that together makes this geography interesting. It's also very open.

You know, in the U. S., there are 100 companies, and a lot of the larger companies are in the U. S. and Southeast Asia country with the APAC. You know, for the most advanced company, there is no one else, especially not with food, a little bit of a seafood companies, but not with the meat. I mean, sorry, not with not with meat and surely not with beef.

So the market is very open. No competition overall. Yeah, I think it's a good good place to be. And we will will move into the US and extend into the US in the next few years. We do see the US as a strategic market for us, and it remains. The midterm, goal to be successful in the U S as well.[00:12:00]

Paul Shapiro: Great. Well, I look forward to, trying your product in the U S also. I, I hope to be able to try it first in Israel, but we'll find out, what, what the fates will hold here. With regard to the Thailand pilot plant, is the idea that you will produce commercially from a pilot plant or that this is a proof of concept that you are then going to build a larger factory in Thailand or Southeast Asia?

Didier Toubia: The plant in Thailand is not a pilot plant. It's intended to be up to 1000 tons per year. Which is, I believe, a two million pounds. Oh, okay. It's not huge, but to increase our production capacities in a stagged manner. And

Paul Shapiro: the Yeah, great. Thank you for the correction. I didn't realize it was planning to produce a thousand tons a year.

That's of all cultivated meat or that's of finished product that is hybridized with [00:13:00] some plant based material as well?

Didier Toubia: It's of finished products at this stage. very much. And it fits into a roadmap we, we have,communicated about in the last couple of years. At Aleph Arms, we were quite, let's say, prudent company in terms of the way we deploy our, our cache and our,resources.

We, we decided, End of 22 when, the financial crisis started with increased, interest rates and, and increased cost of cost of capital to postpone some of our massive CapEx investments. And on one hand to take our asset light strategy one step further, Aleph Arms has always, always been focused on an asset light, capital efficient, scale up, roadmap.

That's why we have today six corporate partners. Five are investors at Alif Arms, including Cargill and the, for the ones on the longer term, we do intend to license the production of our sales on our products to our, network of, partners. [00:14:00] And, what we decided to incorporate an intermediate stage between our pilot initial and is larger and scale.

instead with the contract manufacturing organizations or CMOs in Asia, where we actually outsource the production to, to those, co manufacturers, if you'd like, which enables us to,scale up in a more, prudent manner, de risk the scale of the roadmap in terms of financial risk and, operational risk.

While making sure that we optimize the process as we scale up and make sure that we were not investing in a massive production facilities before the process is fully developed and and optimized. So we're really going step by step, slowly, slowly, slowly, but, I think that's, the way to, to really, build a company for the long term.

Paul Shapiro: Great. So I'm glad you emphasize slowly there because there have been, as you are well aware, a [00:15:00] number of obituaries that have been written recently for the cultivated meat movement, including one in the New York times. So it's an opinion piece, essentially saying this is going so slowly compared to what projections may have been five or 10 years ago that some people just don't think it's going to happen.

Right. The eat just factory that they were planning to build in the Midwest of the United States is now on hold. Same thing for upside foods. Currently, there's no cultivated meat being served anywhere in the world by either by any of the companies who have regulatory approval. And so you have these folks who are saying, look, I just don't think that this is actually ever going to happen.

So let me ask you a very direct question. Didier. Right. Have you learned anything in your time of running this company that made that makes you think that maybe it's just not possible? Has there been anything that you've come across? You say, actually, there is this one hurdle that I just don't think that we're going to be able to surmount or are you as optimistic today as you were when you started the company?[00:16:00]

Didier Toubia: I'm much more optimistic today than when we started the company. I'm going to say when we started, it was really, really high risk. We started working on other farms in 2016. We formally registered the company in 2017. And at the time, you know, there were, you know, four or five other, teams, working on the, on the topic in the world, including, Dr.

Professor Post and, and, Umar, and, we had here at the time, Supermeet, which was, I mean, it was really the beginning and think that the, the question marks were huge. It was. Almost impossible to really predict, you know, whether the direction at all, made sense on whether what would be the chance of chances of success.

I think that after, you know, seven, seven years, six, seven years of hard work and huge,investment in efforts and,creativity,designing around the hurdles and the barriers for scaling up,this industry. [00:17:00] I, I feel comfortable now that, we have a clear roadmap for,building a new category in animal proteins.

I think that we, we, we, we have, we might have,underestimated, the timelines, especially for the scale. And I think this is something which we, you know, we're smarter now than we were, three, four years ago, even two years ago, I think that, you know, the fact that a lot of companies, including elephants, but also maybe, you know, a dozen of other companies moved toward the pilot scale and production facilities in the last two, three years.

has been instrumental for us all as an industry to better understand the challenges of scaling up the process and what would be required to really make it work on large scale. At Aleph Arms, again, I can talk just for us. I think that we, we have implemented a lot of improvements in the last couple of years when we've been [00:18:00] working in this pilot.

We developed a, an optimized process, which you call,Generation 1. 2, which is actually basically relying on the same core technology and building blocks, but much more scalable and, with a much lower cost. I think other companies are doing the same. So we have to do a much clearer view. and the fact that, you know, okay, regarding the New York Times article, you know, UMA and Upside have been Very open since the one that the first product which has been cleared by the FDA and USDA are not necessarily the, is not necessarily the product they intended to, to launch at scale.

And I think once this first product has been cleared, there were huge expectations for cultivated meat to become, you know, commodity product the day after overnight and to be available everywhere in large quantities and low price. I think that it was not in still in line [00:19:00] with the, with Umar's plans.

but again, I don't want to talk for the companies back on, back to elephants. We believe that, that,cultivated me today is at the same point in time where electric vehicles were 15 years ago. And, you know, when Tesla, for instance, started, and again, electric vehicles is today, you know, facing some other challenges.

And I'm not saying that, you know, we should compare one to one, but I do believe that there are a lot of analogies. in, in the mid,years, 2000. The electric vehicles were facing upstream supply chain issues with batteries and there were regulatory issues, for instance, it was not allowed to charge electric vehicles in the underground parking, for instance, or they had some issues and they had the high cost structures.

The technologies were not yet fully optimized, and they were not able to replicate exactly [00:20:00] the same as the same experience or set of attributes as conventional vehicles. And actually what electric vehicles did as a category is to differentiate the product, focus on higher end product to start with.

build coalitions and consortiums better structure the upstream supply chain and share technologies and collaborate. You know, Tesla has actually made their patents public and available to everyone. I think in 2013, don't get me wrong, but I think, you know, or one or two years around that. To foster the development of the industry and to accelerate the build up of the infrastructure for the industry.

I think we need to go through a similar path with the cultivated meat and we're working currently on structuring the upstream supply chain, building coalitions, aggregating some of our capabilities, [00:21:00] differentiating our products to our more high end premium products, high quality. I think that the, the fact that I found focuses on beef is, an integral part of this strategy.

and you know, it's same as, same as electric vehicles. I don't think cultivated meat will be equivalent one to one to the meat we know today. it will be a different product. most of the first products will be hybrid as you mentioned. So they're inherently not,equal one to one to, the whole muscle.

And they will have some benefits on the unique value proposition for specific subset of the market. And we're working at Alphonse on a very strict marketing strategy and product positioning, both for direct customers, which are the restaurants and food service players. And for the end users, if you, if you like, which are the diners and so we're going through all that and it will take time to get to 10, 20 or 40 percent market share of the global animal protein sector [00:22:00] because we need to improve the processes, reduce the cost with economies of scale, we need to build production capacities, but it doesn't mean that there is no opportunity today.

I think that same as with the X3 vehicles, there will be it. inflection points in the industry and in the company's variations as well. before we reach a 40 percent market share,

Paul Shapiro: let me ask you, did you, you're, you're saying it'll be some time before you reach 40 percent market share, but what about something more modest?

you think about, let's say 1 percent market share, the plant based meat industry has received drastically more funding and has been around for much longer, and it still is not at 1 percent market share. Is it your belief that cultivated meat is just going to be so much better from a sensory perspective that it'll happen faster?

Or like, let me just ask you, how long before you think cultivated meat may reach 1 percent market share? Do you think it's 5 years away, 10 years away, 20 years away? What do you think?

Didier Toubia: That's a good question. I [00:23:00] think that the, one of the issues that we compare many times cultivated meat to plant based meats, and of course there are a lot of, there's a common ground maybe between those two industries.

But the thing it's, it's really different because, CultivatedMeat is a deep tech, platform, you know, at Elephance, we have 16 PhDs and 15 families of patents, and we have six labs working 24 7 and, and, you know, it's, we're really building a new, category. animal based products. it's like building from scratch, the dairy industry, if you'd like.

you know, milk actually is, is one source of, of, of animal products from cattle or country building a whole new industry on sales as a new source for, for, animal products from cattle. So it's a huge endeavor. A lot of the, plant based products, again, there were, I think, nine hundred eighty something,companies making plant based burgers [00:24:00] in the world, two years ago.

99 percent of those companies were actually primarily developing new receipts or formulation of the same ingredients with the same processes. again, there were a few more innovative companies, but it was really the exception. So it was very, very low tech and has been actually introduced to the market as a high tech, as a high tech sector and plan based is not high tech in 99 percent of the cases.

It is in 1%. Okay. But in 99%, it is not. And I don't think that there's a room for that level of funding in so many startups doing more or less the same thing and with no differentiation. It's a, it's a CPG play. You know, plant based is a play by the large food corporations. I don't think startups really have a, you know, it was important, impossible and beyond were there to kind of, ignite the transition.

But on the long term, I think it's a, the play of a large,food corporations. I think it's a, it's a play of a [00:25:00] large,food corporations. I think it's a, it's a play of a large, food corporations. low tech, low margins,cultivated meat is, is, is cell based. It's completely different. so again, the comparison has some limitations.

And to your point, we're talking here, like with any transformative technologies, cultivated meat will go through an S curve. Meaning that there will be kind of a, you know, it will take usually it takes the same time to get to from zero to 5 percent market share than from getting from 5 to 50 percent market share.

So I think that it will, it will probably take time to get to the first 1 percent market share. And it might take, I don't know, 1 percent market share in the animal protein sector is how much? 15, 18 billion dollars in revenues.

Paul Shapiro: I think it's more than that. I think it's more than that, but, probably, globally hundreds of billions of dollars for sure.

Maybe even closer to a trillion

Didier Toubia: times. [00:26:00]

Paul Shapiro: Right. But yeah. So let me then just finally ask Didier if you were looking at what are the hurdles to doing that, to getting to one or two or 5%. Is the is it that new technology still needs to be invented like you need a better media or much, you know, new types of bioreactors or is the technology now actually ready and it just needs capital to scale or is it both?

So do you have to make new technological inventions in order to actually get to commercial scale or is the tech already sufficient? And you just need capital.

Didier Toubia: Yeah. What, what was a really, great is that in 20, 21, there had been a lot of money invested in, many enabling technologies actually for cultivating meat, you know, among the hundred, something, I don't know, on the 20, 130 companies in the space, most of those companies are enabling technologies and making, you know, cheaper,growth [00:27:00] factors or, new technologies for them.

For bioreactors for larger scale, low cost bioreactors or developing new salines for something else than chicken, you know, there were just chicken salines available. So that we've seen actually, a lot of research and development, funded in the last two, three years. In the enabling technology space, and we do see today a lot of a lot of technologies available, which were not available before 2021.

Of course, today it's more challenging to get funding, but those technologies have been developed already, and I think it's a great asset for the industry. I would say that today I'm confident the technologies exist. I don't see any technology limitation, or let's say any, Technological barrier, barrier, or gap, which we need to fulfill.

It's, it's really a matter of executing and the funding, [00:28:00] but also implementing the right strategy in terms of a product strategy, like scale up strategy, financial strategy, it's more than just developing products.

Paul Shapiro: Okay. I also, I just looked up the value of the global meat market and a quick Google search shows it to be about 1. 5 trillion in terms of global revenue for me. So it's a long way to go to get to 1 percent there for sure. Exactly. That's

Didier Toubia: the issue that the market is so large, it takes time to get a market share.

Elephants has a goal to get 1 billion in revenue in 10 years. 1 0. 0 percent market share. It's an issue, you know,

Paul Shapiro: yes, indeed. Yeah, that is an issue. Well, hopefully there'll be many companies in the space that will be billion dollar revenue companies by that time will tell. Didi, I appreciate all that you're [00:29:00] doing.

I'm rooting for your success. I hope very much that we get to see each other sometime in person, preferably in Israel at food tech IL, but maybe before. So thanks for all you're doing good luck in Thailand. And I will look forward to getting to try a olive cut steak sometime.

Didier Toubia: You're welcome. Paul, thanks for having me and looking forward to, to have you, testing of products soon.

Looking forward to it.