Are Investments in Livestock Passé?
It was hard to miss the news about the FDA approving lab-grown meat for human consumption. As a matter of fact, I found this exciting, too. Although so far, only a few countries already allow it to be sold in stores, I have a feeling cultured meat is going to be more and more dominant in our lives as the years roll by. If this truly happens, the world is set to go through some vast changes that will also have major after-effects on many aspects of our lives. Is the livestock market going to disappear, then? Should all investors in livestock shift their capital elsewhere as soon as possible?
I am Ofir Bar, an investor with over two decades of experience in worldwide markets. Hearing the recent news about cultivated meat, some questions arose in my mind: Are chicken coops and cowsheds set to become obsolete soon? Should investors direct their capital elsewhere as we speak? The answer, as it turns out, is a bit more complicated than ‘yes’ or ‘no’.
Eyes to the future
Even today, many are not convinced that the cultured meat industry is ever going to threaten the livestock industry. They say lab meat won’t ever be the same as real meat, and carnivore-based cuisines such as the Argentinian, American, and Chinese ones will be reluctant to replace the origin with a ‘fake’ and ‘dull’ product. Well, I believe that this shift is not going to be easy and quick, especially in countries like the three mentioned above. However, it’s probably going to happen there eventually — it’ll just take longer.
There’s just no way around it: It’s already widely accepted that we’re headed towards a future in which we won’t have to grow our food the old-fashioned way. Ridding ourselves of the wastefulness of the meat industry is definitely a substantial step towards this goal. As the world’s population grows, this advancement shall turn out to be essential.
One of the most substantial barriers that stand in the way of healthy, eco-friendly, “moral” food is its price. Truth be told, organic food and meat supplements are still rather too expensive for many. As a result, some people continue consuming “regular” food, even though they wish to change their diet. With that being said, I believe that as years roll by, the process of manufacturing cultured meat will become more affordable, and at some point even cheaper than real meat: Let’s not forget that in comparison to real meat, lab-grown meat barely requires any resources. As investors, companies, and corporations start to feel the deteriorating cost-benefit ratio of the livestock industry, they will probably start abandoning it in masses.
Even Rome wasn’t built in a day
Like any top to bottom change, the shift to cultivated meat will likely take longer than we think. This is because, in addition to the challenge of quality mass production, cultured meat has to withstand many significant obstacles before it’ll completely take over. Till then, investments in livestock may still hold financial potential for some investors.
Religion may be the most powerful force of resistance to cultivated meat. While secular countries are more likely to embrace it without hesitation, religious people will likely be less enthusiastic to accept it into their lives. I believe a great study case for the acceptance of cultured meat in a religion-oriented country will be Israel — a country in which a religious government-funded institute is responsible for deciding which food is religiously allowed or banned. I’m pretty sure that lab-grown meat will stir a great controversy there.
Even if we take religion out of the equation, many, including myself, fear artificially made food. So many things can go wrong in the process of making it. How can I be sure it’s actually good for me? Cultured meat is revolutionary, innovative, and intriguing — but it also raises some concerns. People need time to get used to the idea of consuming it, and this will take even more time in poor, third-world countries. Hey, even Rome wasn’t built in a day.
After cultivated meat becomes more popular, the livestock industry may even experience some sort of a last boost: Meat shall become food for the rich. Just like many wealthy people distinguish themselves from the crowd by driving fancy cars and wearing expensive clothes, they may try to differentiate themselves from the “common people” by eating the “real thing”, as opposed to others who will settle for “cheap replacements”. This will probably be the swan song of the livestock industry as we know it today.
The conclusion trap
The fast technological development forces investors to rethink their financial conduct more than ever before. That may cause some of them to be confused, or panic — and therefore act in a hasty manner. This is the most common trap for current investors. So, don’t rush it. As importantly, avoid making conclusions about entire markets: Think about each one separately, since similar forces may have a different effect on different markets. This is true in all fields of investing, but even more when speaking of groundbreaking industries like the market of cultivated food. On that note, bon appetit.
