Björn Witte is
Björn talks to vegconomist about the future of protein and how Blue Horizon is on track to reach the 1 billion dollar mark in funding this year.
Where does Blue Horizon currently stand, in terms of funding and number of investments etc?
We had an intensive start to the new year. Especially in our seed portfolio we have been very active and have made some extremely exciting new seed investments. One of them, for example, is Arkeon, an Austrian company that produces proteins from carbon dioxide. Arkeon’s technology makes it possible to convert CO2 directly into all 20 amino acids that are essential for human nutrition. At the same time, this opens up a whole new world of food.
Another exciting company is California Cultured, a company that is reinventing the future of chocolate. As we all know, the global chocolate industry relies on a fragile cacao supply chain that causes deforestation in biodiverse tropical areas and is often implicated in human rights issues.
California Cultured uses plant cell cultures to grow whole cells in bioreactors rather than fields, similar to cultured meat. This allows cellular agriculture to produce delicious chocolate that is completely GMO-free while avoiding all the negative impacts. Blue Horizon has now made investments in over 70 alternative protein and food tech companies.
How are you sourcing your investments?
We have a very strong deal pipeline. I believe this is based on two key factors. First, we have been active in this market since 2016, so we were one of the very first players in the alternative protein space. We were an early investor in several companies that have since become unicorns such as Beyond Meat, Impossible Foods or EAT Just.
“We were an early investor in several companies that have since become unicorns such as Beyond Meat, Impossible Foods or EAT Just”
This pioneering work is now paying off with Blue Horizon being perceived as one of the clear leaders in sustainable food investing. The unique ecosystem we have built gives us access to deals that many others are denied. The second factor is our team. We have, just over the last 24 months, been able to add high caliber professionals to the team and have now grown to over 30 employees.
This mix allows us not only to analyze the market but to truly understand it down to the last detail. This allows us to find the most attractive investments that generate a real positive impact on our environment while providing outstanding financial returns for our investors.
Will Blue Horizon reach a billion in funding this year?
We do not communicate detailed fundraising figures, but we are well on track to reach that mark. We are seeing increasing investor interest in impact strategies, although of course in the current environment many have become a little more cautious about where exactly they allocate their capital. But our area in particular, where we focus on sustainable food systems, has attracted increased attention in the wake of the pandemic and the war in Ukraine.
“Food is the biggest industry on our planet, and if we can leverage this and accelerate the shift to a more sustainable system, then we have a real chance of getting our future on track.”
Issues like global food security and sustainability across the value chain are finally on the front page of the newspapers. Tragically, it often takes extreme crises for people to really wake up, but this is now happening and this offers all of us the opportunity to really make a difference. Food is the biggest industry on our planet, and if we can leverage this and accelerate the shift to a more sustainable system, then we have a real chance of getting our future on track.
What are the other plans for 2022?
We have various interesting projects in the pipeline for 2022. On the one hand, we are planning new vehicles in our asset management business like the build-up of our Growth strategy with a stronger focus on institutional investors, and on the other hand, we are working on various options for additional roll-up strategies.
To this end, we are continuously expanding our Blue Horizon Seed portfolio, which allows us to remain close to the market’s pulse and be at the forefront of innovative products and technologies. The wave of innovation that will be rolling towards us in the coming years is huge.
“Through fermentation technologies we can reduce greenhouse gases and deforestation”
What is happening right now in the field of precision fermentation, for example, is particularly exciting. Through fermentation technologies we can reduce greenhouse gases and deforestation, stop the loss of biodiversity, reduce water consumption, and improve many aspects of human health.
How do you see the future? Is there a technology that we don’t have on our radar yet that will completely change the way we eat?
In addition to precision fermentation, cell-based meat (also called ‘cultured meat’) will be part of our future. It is identical to conventional meat in terms of taste, texture and nutritional value, but it is not the product of animal slaughter as the animal is taken out of the process. Instead, it is made from real animal cells that are provided with the nutrients and growth conditions necessary to grow into a piece of meat as we all know it.
Over the past year, there has been a lot of media interest in this technology, and many new startups are dabbling in this area, which has led to healthy competition and encouraged further innovation.
One of our portfolio companies, Mosa Meat, recently made international headlines because Leonardo DiCaprio invested in the company. The firm also announced a few months ago that it was able to reduce the cost of its growth medium, which is needed to grow cells in the bioreactor, by a factor of 66. As Mosa Meat continues to lower production costs, this will ultimately lead to the scalability of a new product on a global scale.
Another portfolio company of ours, Israel-based SuperMeat, last year introduced the world’s first commercial platform for farmed chicken called “The Chicken.” Already today, as a consumer, you have the opportunity to dine at “The Chicken” and at the same time take a look at SuperMeat’s factory, where you can see how your chicken burgers are made under the same roof.
Will food prices increase or decrease and why?
I am convinced that the prices for animal proteins will increase in the long term, while they will decrease for alternative proteins. Today, in many countries there are huge subsidies for traditional meat production and sometimes even advertising and marketing are financed by tax money. This has to change, and it will. The traditional meat industry has reached a natural limit in terms of the efficiency of its processes. Everything is super-efficient, and there’s not much room left to squeeze out additional margins. Alternative proteins, on the other hand, are still in the very early stages of development.
“The traditional meat industry has reached a natural limit”
This, coupled with efficiency gains, will lead to a positive explosion in supply. Together with BCG, we have calculated that alternative proteins will capture at least 11% – if not double – the global protein market in the next 10 years. Achieving price parity will be critical for widespread adoption, as consumers will be all the more willing to try new plant- or cell-based alternatives if they are cheaper than the animal-based originals.