The State of Israel has a successful history with the meat substitutes industry. Tivall began operations at Kibbutz Lohamei HaGeta’ot in the 1980s, when vegetarianism was still out of the mainstream (albeit bolstered by the kosher food market). Later, it became one of kibbutz industry's star exits with its sale to Osem, at a valuation of around NIS 1 billion.
Can the country that was a leader in the first wave of alternatives to meat also play a significant role in the second wave? And what does this mean for Tel Aviv Stock Exchange investors?
Investors in the local stock market currently have two investment options in the area of advanced meat substitutes; both are still in the development phase. Meat Tech 3D (TLV: MEAT) was a local pioneer in the field. The company is developing cultured meat patties (some prefer the term "cloned meat"), produced using in-vitro cell cultures - a product that is still in development.
Since its modest entry to the stock market via shell company Ophectra Real Estate & Investments at the beginning of the year, Meat Tech 3D’s share price has risen 180%. It currently has a NIS 282 million market cap, despite the early stage of its technology. In addition to its public offering, the company has raised capital from personages like Rami Levy, who controls Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) and the Adom meat importing and manufacturing group.
Customized veggie burgers
Joining Meat Tech 3D the other week was Millennium Food-Tech Limited Partnership (TASE: MIFT), (until recently called the Next Food Partnership), which plans to invest in a wide range of foodtech products - novel food ingredients, food-related artificial intelligence, supply chain handling and waste management, and more. Its first investment is in SavorEat, which has developed a vegetarian burger that can be produced at the point of sale, and customized to the consumer’s requirements.
Millennium Food-Tech is managed by Guy Rosen, former deputy chairman of Israeli food giant Tnuva and director of various industrial companies, and the Infinity Israel-China Fund, together with venture capitalist Chanan Schneider, the former CEO of Beta-O2 Technologies, partner in Agate Venture Capital, and CEO of the Fresh-Start Foodtech Incubator in Kiryat Shmona.
Millennium Food-Tech went public about two weeks ago, raising NIS 26 million. The share price is now 27% higher than the issue price, and the partnership’s market cap now stands at NIS 33 million.
Although Millennium Food-Tech intends to invest in a variety of companies, it’s clear that alternative proteins is the sector investors find most attractive. Meitav Dash Investments (TASE: MTDS) and MORE Investment House took advantage of the exposure that the company received to make a $1 million direct investment in SavorEat at a $13 million valuation, before money, and took an option to invest an additional $2 million at a valuation of $35 million, before money.
Millennium FoodTech invested in SavorEat just a few weeks ago, participating to the tune of $1.75 million in an investment of $4.75 million, at a valuation of $7 million, before money.
Meat Tech 3D plans NASDAQ listing
The alternative meat sector on the Tel Aviv Stock Exchange is benefiting from the success of US company Beyond Meat, which is traded on the Nasdaq Stock Exchange. Beyond Meat - which markets vegetarian meat-like patties that are essentially similar to Tivall soy-based patties but are reportedly close to the taste and texture of real meat, is traded at a market cap of almost $8 billion.
Surprisingly, a huge wave of competing alternative meat companies did not flood US stock markets in the wake of Beyond Meat’s success. Apparently, the development of such products is more complex than it would seem. In addition, some leading companies operating in the field, such as Impossible Foods, preferred to remain private. Israel’s Meat Tech 3D did announce its intention to take advantage of this situation and list on the NASDAQ.
Although both companies operate in the field of meat alternatives, Meat Tech 3D’s and SavorEat’s offerings are fundamentally different. Meat Tech 3D goes for the field’s technological "Holy Grail": taking a real meat cell sample, and growing it the lab to create cells from different types of meat tissue. The company's 3D printer then prints, one alongside the other, a fat cell, a blood cell, and a muscle cell, the aim being that at the end of the process there will be as little difference as possible between this printed slice and a real steak, apart from the fact that it doesn’t harm animals, does preserve the environment, and is less exposed to the health problems of industrial meat production.
Meat Tech 3D has yet to pilot sample patties for taste tests, but hopes it can do so within a year.
SavorEat's activity also involves 3D printing, but the product is different. It is based on plant-derived ingredients developed by Prof. Oded Shoseyov, (who is also the inventor of Collplant's tobacco plant-based human recombinant collagen technology). The company loads these components into a 3D printer, and prints patties in different compositions according to the customer’s preferences and nutritional needs, cooking the patty as it prints.
This product is unique in the world of meat alternatives. SavorEat states that its plant-origin raw materials are based on cellulose to which various flavors and aromas are added, imparting a range of meat flavors.
There are other Israeli alternative protein companies that for the time being have not taken steps towards going public. In Meat Tech 3D’s field of cloned meat, there are also Aleph Farms and Future Meat.
Another company that has managed to grab the sector’s attention is Flying Spark, which stretches the definition of alternative meat because it produces animal protein from black fly larvae. Meanwhile, the product developed by Hargol Foodtech (formerly called Steak Tzratzar, a play on the Hebrew for "tartar steak" and "cricket"), is based on - well, you can guess the main ingredient for yourselves. The Tel Aviv Stock Exchange seems to be inviting for such companies right now.
Published by Globes, Israel business news - en.globes.co.il - on August 4, 2020
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