Beware Vegan ‘Meat’ Peddled by Venture Capitalists

(Bloomberg Opinion) -- The potential of plant-based meat alternatives to lead to more ethical, more environmental sources of protein for the world is something to cheer. But the potential of venture capitalists and Silicon Valley controlling that market is not. With what we've seen in the behavior of leading tech companies over the past decade, we should be careful before their ethos takes over yet another critical industry.

The time to start thinking about these issues is now, with Beyond Meat holding its initial public offering this week, and the popularity of Impossible Burgers leading to shortages in New York. As with most emergent industries built on a benevolent premise, it's easy to think about the utopian world these companies could usher in, where livestock are no longer raised to be slaughtered, and meat production no longer contributes to climate change or takes up so much land that could be used for housing or any number of other purposes. Maybe the cost of plant-based “meat” could eventually fall below the natural stuff, providing plentiful protein to the world at prices lower than we currently have.

But it's a bit strange to only focus on the upside of this “new technology” given all the bad behavior we've seen from tech companies in recent years. Given that the financing and management of these companies is likely to share a lot of overlap with existing large tech companies, they very well might bring similar values and management philosophies with them.

It's still early days for the industry, and early adopters for vegan meat tend to be health-conscious and wealthy given the cost of the products. So it's no surprise that the products created so far have been marketed to that demographic.

But at some point, if vegan meat is going to be a meaningful part of the food industry and consumers' grocery budgets, it's going to need to scale in a meaningful way — and quickly if it's going to show the kind of potential needed for venture capitalists to invest billions of dollars in the industry. That means expanding beyond wealthy, urban, progressive palates and finding a way to win over McDonald's eaters and Walmart shoppers.

That probably means vegan meat will need to morph into something more akin to Doritos Locos Tacos. Why eat a “clean” veggie burger when you can eat one that tastes like a Big Mac?

If there's one thing we've learned from venture capital values, it's that there's a relentless focus on product tweaking to maximize engagement and consumer addiction as a way of juicing revenue and profit. Should vegan meat begin to penetrate the mass market, it's likely we'd see a similar dynamic here. The investors' priority will be to maximize consumption. The profits will go to the food companies, and the costs will be borne by the health-care system.

Is that so different from the current food industry? Maybe not, but vegan meat should be a chance to do better. It can be, if the public demands more accountability and if regulators are more proactive than they have been against tech cowboys like Uber and Airbnb.

If regulators are lax, we could end up getting a “Theranos of food.” As Theranos investor Tim Draper explained, venture capitalists make most of their money on a handful of investments that become huge winners. If some number of startups take liberties with ethics and the law in the pursuit of greatness, well, that's just the cost of doing business.

That sort of logic could lead to meat alternatives that change menus without changing the world. Food recalls would continue. Super-sized fast food would continue to make us sick. Healthy, fresh foods would remain expensive compared to the cheap calories from a drive-through window.

Today's evangelists for vegan meats want to solve all this, along with ending animal cruelty and unsustainable agriculture. Their vision is achievable, but it will come true only if the public demands it.

Probably a similar wealthy, white, liberal demographic that has flocked to Pete Buttigieg in the Democratic presidential primary.

To contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.