Where can Singapore take the lead in alternative proteins?

Singapore is investing heavily in alternative proteins in a bid to become a world leader – but its status as a global hub, especially for manufacturing, may be threatened as other countries catch up.

Alternative proteins do not involve the slaughter of animals; they may be plant-based, fermented using microbes, or cultivated from animal cells.

In Singapore, investments in such proteins multiplied to US$169.8 million by 2022, from just US$5.9 million in 2019, according to think tank Good Food Institute (GFI). This was part of the US$562 million Asia-Pacific total in 2022, up from US$42 million in 2019.

On the regulation front, Singapore planted its flag in 2020 by being the first – and so far, only – country to allow the commercial sale of cultivated meat.

As a result, startups have flocked to Singapore to pilot production and test their products. According to the Economic Development Board (EDB), there are more than 60 alternative protein companies here, employing 790 people.
 

Andre Menezes, Chief Executive of plant-based manufacturer Next Gen Foods, says: “It’s remarkable to see how Singapore – in this really short period of time of five years at most – has truly become a hub globally and is perceived as a leading country in this space in the world, which I would say only Singapore, Israel and the Netherlands occupy today.”

Globally, alternative protein investments rose from US$1.1 billion in 2019 to a peak of US$5.1 billion in 2021, then fell to US$2.2 billion in 2022. Industry watchers expect further growth; a Boston Consulting Group report from 2021 estimates the market could reach at least US$290 billion by 2035.

In Singapore, too, investors expect the market to grow. But as the global industry matures and other countries catch up, it is less clear what role the Republic will eventually play.
 

A hub for what?

The government’s vision is for Singapore to be a “globally leading hub for the agri-food sector” in general, EDB’s Executive Vice-President Damian Chan tells The Business Times.

It aims to attract investments across the value chain that are “aligned with Singapore’s strengths”, such as research and development (R&D), manufacturing and commercialisation, says Chan. A diverse range of companies – from global industry leaders to startups – have set up here, he adds.
 

But industry players and observers are divided on Singapore’s role in alternative proteins. The Republic may lead in developing technologies and products, but may not stay ahead in manufacturing – especially for mass production.

For plant-based and fermented proteins, R&D here can improve taste and quality, as well as “overcome cost and quality challenges at the pilot and demonstration scale”, says GFI Apac Managing Director Mirte Gosker.

But once proven technologies are ready to be scaled up, he believes mass commercial production will shift to regional countries with more land and comparatively affordable labour and inputs.

This is likely to happen for cultivated meats as well, says Gosker: “As cultivated meat scales up and becomes a global business with bigger manufacturing needs, those operations will also inevitably need to shift to neighbouring countries in Southeast Asia, while Singapore leans into its role as an R&D hub and launch pad for global climate and food security solutions.”

An existing reputation

Singapore could quickly establish itself as an “experienced wayfinder and knowledge partner” in alternative proteins as it plays a similar role for conventional food, notes Gosker. This is thanks to its food culture, multiethnic population, and world-class research facilities – factors that also apply in “developing compelling cultivated foods destined for newly opening markets”.

In foodtech more generally, Singapore is “globally recognised as a leading hub”, says Alex Brittain, Senior Vice-President of fermented dairy company Perfect Day.

The government is “very vocal” about prioritising food security and sustainability, establishing a friendly environment for startups to go to market, he notes. “We strongly believe in Singapore’s potential in playing a significant role in the alt protein industry and growing big enough to compete on the global stage in the next five to 10 years.”

Beyond general advantages such as access to talent and robust intellectual property laws, what makes Singapore a hotspot for alternative proteins is its ecosystem: from facilities, to funding, to regulatory support.

“There is no other place that has so many pilot facilities in such a short proximity. Lab facilities, pilot facilities, scale-up facilities – it’s all available,” says Dominique Kull, Chief Executive of plant-based meat contract manufacturer SGProtein.

There is substantial support as the sector dovetails with Singapore’s goal of producing 30 per cent of its food locally by 2030, notes Ang Lip Kian, a partner at Morrison Foerster. The law firm has advised on alternative protein fund-raising and acquisitions in the region.

Government funding is easy to access via the Singapore Food Story R&D Programme and the National Research Foundation, he adds.
 

Jackfruit-based protein startup Karana has tapped food accelerator Innovate 360 and received funding from Seeds Capital, the investment arm of Enterprise Singapore.

“The support and environment that Singapore has built around the food and agri-tech ecosystem has definitely helped us hire talent and build connections with food manufacturers,” says Dan Riegler, Karana’s Co-Founder. The company processes jackfruit into “product formats” that can be used to make meat-free versions of items such as gyoza, chorizo meatballs, and pastrami.

On the regulatory front, Singapore has an established advanced novel food regulatory framework and a platform, the Future Ready Food Safety Hub (Fresh), that helps companies meet requirements.

Singapore-based startup Karana processes jackfruit into “product formats” that can be used to make meat-free versions of items such as gyoza, chorizo meatballs, and pastrami.
 

Regulatory support is especially important for cultivated meats. Singapore’s regulators are willing to work with businesses in a “collaborative and transparent manner” to ensure such proteins are safe to eat, says FoodTech investor Yip Hon Mun.

Also helpful for cultivated meat is Singapore’s talent pool and training programmes in stem cell biology and genetic engineering, says Mihir Pershad, Chief Executive Officer of cultivated seafood R&D company Umami Meats: “We view Singapore as an upstream technology hub, where we can develop the inputs, develop new fish cell lines, and we can do some small scale process development.”
 

High costs and an eroding edge

In manufacturing, however, the picture is mixed. Singapore’s advantages are its efficient supply chain networks and proximity to the growing Southeast Asia market. But high land, labour and energy costs make it challenging to scale up production.

Plant-based manufacturer Shandi Global chose to set up a manufacturing facility in Singapore because of the ease of importing raw materials, says Chief Adviser Gaurav Sharma.

Being based in Singapore gives Next Gen Foods access to Asia, where it sees long-term growth potential, while staying “extremely well connected to the west”, says Menezes.
 

Where Singapore falters is the high cost of production. This may be a reasonable trade-off in pilot stages, but not when firms ramp up production and need to become cost competitive, says Pershad. Umami Meats’ customers – manufacturers using its technology – plan to build facilities in other countries.

For cultivated meats, which face the most regulatory hurdles, another question is whether Singapore will lose its edge once other countries catch up in approvals.

The United States may be inching closer to this, with two producers having received pre-market approval for their cultivated chicken products: Upside Foods last November and Good Meat on Mar 21. In Asia, China has included regulations for cultivated meat in its latest five-year agricultural plan.

“When the US has its first product sold, is that going to convince Israeli companies – all the companies we see building factories here – to just build in the US instead?” asks Pershad.

Similarly, “a lot of the Asia focus will move to China” if it passes cultivated meat regulations by 2027. “So the question is, where are the strategic advantages that Singapore can continue to be globally competitive on?”

Whether Singapore can secure its position as a manufacturing hub depends on what support the government offers to lower costs, says Menezes. “If that can be alleviated, then Singapore could play a bigger role (in manufacturing).”

Still feasible

One cost-effective way to scale up production here is to use contract manufacturers, suggested some observers.

Entrepreneurs could tap Singapore’s Contract Development and Manufacturing Organisation to “drive volume, reduce cost and move towards price parity with conventional protein”, says investor Yip.

Thomas Chou, Co-Head of Morrison Foerster’s Asia Private Equity practice, expects increased regional use of contract manufacturers for all three alternative protein categories. High-quality contract manufacturers with a reputation for safety and consumer insights can help companies commercialise successfully, he adds.

Some startups are already doing this. Last year, Dutch company Meatable announced a partnership with contract manufacturer Esco Aster to produce its cultivated pork products in Singapore.

As a contract manufacturer, SGProtein has seen growing interest from Asia-Pacific companies – including established brands – to collaborate on products, says Kull.

Even without taking the contract manufacturing route, some companies are not fazed by Singapore’s costs, believing that automation and technology can bring these down. For them, the city-state’s strengths outweigh these concerns.

“We think the combination of land, energy and skilled labour makes Singapore a solid place to build manufacturing-centric operations,” says Josh Tetrick, Co-Founder and CEO of Eat Just and Good Meat. He sees Singapore as a hub for both R&D and manufacturing, and plans to keep investing in both areas.
 

Meatable is “very much committed” to Singapore, says Chief Operating Officer Hans Huistra. While it is still early days for the company, which came here late last year, he is confident of lowering costs to be on par with conventional meat here.

The main costs of cultivated meat are the initial capital spend – for equipment like bioreactors – and growth media, which are both comparable across geographies, notes Huistra. “In our plans, we do believe it works out.”

Source: The Business Times © SPH Media Limited. Permission required for reproduction.