Alternative proteins startups are set to be the new trend in 2017, according to Fortune’s Erin Griffith. In her daily newsletter for the private equity and venture capital industry Term Sheet, Griffith recently shared various 2016 takeaways and predictions for 2017 from her readers. Today, she quoted one prediction: “Alternative proteins will replace VR (virtual reality) as the current hype.”

Startups manufacturing alternatives to animal-based food products are a small but growing part of the food and agritech space. To-date they have mostly focused on producing alternatives to animal meat, milk, and eggs, but there are also startups manufacturing leather without animals, wine without vines, and coffee without beans. Other startups are growing algae and insects as a more sustainable source of protein for both human and animal consumption.

There are two main ways startups are manufacturing meat, milk and egg alternatives: using animal cells to culture a biological replica of the product without the animal in a process called cellular agriculture, and processing plant proteins to mimic the feeling and taste of the animal product.

Alternative proteins startups have already attracted investment from some high-profile names including Bill Gates, Khosla Ventures, Peter Thiel’s Founders Fund, Google Ventures, Kleiner Perkins Caufield & Byers, Horizons Ventures (the VC arm of Hong Kong billionaire Li Ka-shing), Tyson Foods, Singapore state fund Temasek, General Mills, Arielle Zuckerberg, rapper Nas, and Marc Benioff.

Also backing startups in the space are a couple of independent, non-profit organizations namely the Good Food Institute and New Harvest, which are dedicated ensuring alternative proteins startups get the support they need to succeed.

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I spoke with Bruce Friedrich, executive director of the Good Food Institute, to find out more about the organization and to ask some specific questions about how he sees the plant-based and cellular agriculture alternative proteins startups developing over the long term. (Also watch out for a guest commentary from GFI next week on what it will take for cellular agriculture to scale.)

LBT: When did GFI launch and why?

BF: The Good Food Institute launched February 1, 2016, after a few months of planning. We had three staff initially and received our 501(c)(3) nonprofit status in May. We ended up with eight staff members in June, and we have 10 staff members now. The Good Food Institute was formed to focus on creating the products that will compete with conventional animal products on the basis of the factors that actually go into people’s food purchasing decisions, which are taste, price, and convenience. Everything that GFI does is laser-focused on making alternatives to conventional animal products–both plant-based foods and the products of cellular agriculture–as delicious, price competitive, and convenient as possible.

LBT: How did you and your team get together?

BF: Two of the initial three of us worked together previously. Chris Kerr, who is currently GFI’s entrepreneur in residence, and I were the first two primary staff members. We worked on figuring out what GFI would look like, how the organization would focus its resources, and what our key program areas would be. GFI now has four program areas. The first one is fostering innovation; the second one is supporting innovation; the third is corporate engagement; the fourth is institutional engagement. Fostering innovation involves outreach to synthetic biologists, plant biologists, tissue engineers, entrepreneurs; people who have the skill sets that will make them particularly valuable to advance the fields of plant-based alternatives and cellular agriculture.

That outreach is key to focus efforts in these exciting new markets. Maybe they’re currently a tissue engineer that’s working in medicine, or a plant biologist who’s working in drought resistance, or an entrepreneur who’s thinking about starting a company. We reach out to educate people about both how well they can do and how much good they can do in the world if they use their skills to either join one of these incredibly innovative plant-based or clean meat companies or start a company themselves. At the Good Food Institute, we have ideas for about 15 whitespace companies that we would like to see started, and we’re working directly with entrepreneurs and scientists to turn those ideas into reality. GFI has launched two companies so far, and we have three or four more set to launch in the next year.

LBT: What about your second area: supporting innovation?

BF: Our team is designed to support the success of startups and established companies making clean meat or plant-based foods. Both our policy department and our science department focus on figuring out the pathway forward for both plant-based and clean meat products. For example, our policy director, who taught food law for five years at Valparaiso Law School, is working in the cellular agriculture space to map out the regulatory pathway for these novel products, both in the United States and internationally. In the plant-based category, she is focused on leveling the playing field and challenging some of the anti-competitive regulations that adversely affect plant-based alternatives to conventional animal products.

Additionally, we have three scientists, one of whom was a mechanical engineer and program manager at Boeing; two of whom have PhDs and expertise in working with recombinant proteins. Our scientists focus on conducting technological readiness assessments for both plant-based and cellular agriculture products. We need excellent products that taste fantastic, that are price competitive, and that are convenient; our team is there to help support companies and ensure that their products meet these standards and can compete on the market.

LBT: So, in some ways, you’re an incubator?

BF: We serve some of those roles, although we work with any and all companies in the space that want our help, and we are creating regulatory, scientific, and entrepreneurial roadmaps that will exist for everyone and in the public domain. These are all documents that will go up in the resources section of our website. We’re kind of an incubator for the entire plant-based alternative and cellular agriculture space, whereas a traditional incubator would serve specific companies and work to get those specific companies a competitive advantage in their market sectors. We work to give all plant-based and cellular agriculture companies a competitive advantage over conventional animal products.

LBT: What are some of the key challenges for this space? In the cellular ag space, everyone likes to quote that the first cultured burger cost $300,000, for example. But surely this is rapidly changing and will no longer be a challenge in the near future?

BF: The cost of producing clean meat fell by about 98% over the course of less than two years. It remains cost prohibitive, but it’s just silly that people continue to quote the cost of the very first burger as an indicator of current or future viability. The first iPhone cost $2.6 billion in R&D, but of course, we all now buy iPhones for a fraction of that.

It’s especially surprising to see people who understand, to see science journalists, talking about the first burger costing $300k without making the extraordinarily basic point that the first of anything costs exponentially more than what it will actually cost at commercialization. Cellular agriculture and clean meat production will be so much more efficient than conventional animal agriculture.

Economies of scale and various other technological hurdles that need to be cleared mean that it’s a lot more expensive to grow a clean meat hamburger now than a conventional hamburger. But, as we solve the engineering problems and as we scale up, clean meat is going to get to price points that are competitive with conventional animal agriculture. We need to put the resources into solving these problems, but they don’t require breakthroughs in the same way that getting to Mars might require a breakthrough. Much of the science is already available and well-developed, it simply needs to be adapted for this specific field.

The main obstacle is going to be raising the money that will be required to hire the right people and give those people the resources that they need to deal with these engineering questions. With the influx of new interest and the early successes of companies like Memphis Meats, I’m extremely optimistic that meat production as we know it today is on the path toward transformation.

This is a trillion dollar per year industry and we can shift the entire industry away from the use of animals and toward clean meat and plant-based alternatives that are more efficient, cause exponentially less climate change, don’t require antibiotics, have a zero percent chance of generating zoonotic diseases, don’t have bacterial contamination, and don’t cause animals to suffer. Right now people eat meat despite how it’s made rather than because of how it’s made. Some portion of people will shift to plant-based alternatives, but some portion of people won’t, and the clean meat technology can satisfy those people who simply won’t be satisfied with plant-based meat.

LBT: In your ideal world, is everyone eating plant-based or cellular meat? Is there no room for any animal agriculture even if it’s done with the highest sustainability standards and in environmentally beneficial ways? Some grass-raised operations have very noteworthy, regenerative ways of operating. Obviously, they’re still killing animals for food; I understand that. But I’m wondering if you have a place for some sustainable animal agriculture in the future?

BF: Our focus is on transforming the practices that represent 98-99% of animal agriculture: the lowest common denominator animal agriculture, which is almost all of it. There’s a very small percentage of animal agriculture that uses the regenerative process: the grass-fed, organic model. The people who are purchasing animal products from those farms are doing it with their eyes wide open and can afford to consciously make a choice to find products that aren’t the result of factory farming. We aren’t trying to reach those people, necessarily. We see plant-based and clean meat products replacing meat for the vast majority of consumers who are not thinking about the environment, or sustainability, or animal welfare. They just like the taste and are buying the least expensive stuff.

LBT: What do we know about the nutritional profile of alternative proteins, particularly the plant-based meats? I think everyone automatically assumes that because they’re plant-based, they’re going to be healthier, but there’s a lot of processing and production that’s going on. How do we know they’re definitely nutritionally superior to a normal burger? At AgFunder we wonder if some alternative products will be like margarine 2.0. The way that the ingredients interact with each other and how they then interact with our gut will be something new. It seems to me that startups aren’t really looking at that because I’ve asked a few of them about the research they’ve done into the nutritional profile of their products, and it’s not something that they’ve been able to answer really.

BF: That’s interesting. What we know to be true from the Harvard Medical School, the Johns Hopkins Bloomberg School of Public Health, the American Dietetic Association is that there is a nutritional consensus that excess animal protein consumption leads to a host of problems including the biggest killers in the developed world — heart disease and cancer — as well as other public health crises like diabetes and obesity. The studies indicate that where animal proteins and animal fats cause these chronic health problems, plant-based proteins, and plant-based fats are protective. You look at research which shows scientists actually unclogging people’s arteries by moving them off of animal products and onto a whole foods plant based diet; because the nutrients in the plant-based products are plant proteins and plant fats, which appear to be protective against disease.

The products that these companies use appear to be good for you. They have complex carbohydrates and fiber; they have low levels of saturated fat and no cholesterol, whereas animal products are the opposite of that. Animal-based meat is high in cholesterol, high in saturated fat, devoid of fiber entirely, devoid of complex carbohydrates entirely. At the very least you’re replacing one product that we know causes harm with another product the constituent components of which had never shown to be harm-inducing in the past.

LBT: What about the cellular ag companies that are hoping to recreate meat in a laboratory? I guess the nutritional profile of those should be the same as normal meat?

BF: There’s a discussion about that. There’s a little bit of a debate. What is definitely true is that the reason we’re calling it clean meat is twofold. The first is that it is so much better for the environment, akin to clean energy. The second is because its production doesn’t require antibiotics and because the process doesn’t involve all of the filth of factory farms and slaughterhouses. This means there is not the bacterial contamination; there isn’t the salmonella, the E. Coli, the listeria. Nutritionally, it’s most likely, at least initially, that clean meat will be the exact same thing. It will be the exact same meat as conventional meat. It will come with the same heart disease, cancer, diabetes, obesity impact of conventional meat, but with much less likelihood of food positioning.

In the United States, according to the Centers for Disease Control, contaminated meat leads to tens of millions of illnesses every year. It puts more than 100,000 people in the hospital every year and it kills thousands of people every year. With clean meat, those problems go away. But because it’s the exact same product, it does come with the chronic disease issues. Eventually, there is talk about adapting clean meat to have a lower fat or cholesterol content, but this is unlikely in the initial product.

The argument against that is that what we really want to do is create a product that is the exact same thing as what people would otherwise be buying except more sustainable, less expensive, less likely to be contaminated. The point at which you start tweaking the nutritional profile is the point at which people start seeing it as something different. We are convinced that once we’ve got the exact same thing but less expensive, a more transparent production process that causes less harm, people will buy it. If you tweak the nutritional profile, it becomes a different product, and it becomes less clear.

Ultimately, whole food, plant-based diets are the ideal, but we see plant-based meat as a little bit of a concession. We would be delighted if people shifted to a wholefoods plant-based diet, but so far that doesn’t seem like something that people are especially likely to do. We agree with people like Eric Schmidt and Bill Gates that as we make plant-based meats competitive with animal-based meat in terms of taste, cost, and availability, an awful lot of people who like animal meat will shift to plant-based meat who probably would not have shifted to beans and grains.

Clean meat is not quite as good from an environmental, sustainability, or health standpoint as plant-based meat but it’s a lot better than conventional animal-based meat in all of those categories. For example, where plant-based meat is nine times as efficient as chicken, which is the most efficient meat, clean meat is three times as efficient as chicken.

LBT: Going back to plant-based alternative proteins startups, how are you looking at sourcing the ingredients? At the moment it seems that pea protein is the big ingredient. Do you see there becoming more diversity in the type of ingredients? I’m thinking, at scale, will it lead to more mono-cropping of particular crops? Probably not corn and soy, but perhaps in replacing fields and fields of soybean for cattle feed, with fields and fields of pea protein for plant-based burgers, we could run into some of the biodiversity issues and unsustainable farming practices employed in conventional agriculture today. How much research is being done to find more diverse sources of plants for these products?

BF: That’s something that our scientists are looking at and is one of their top priorities. Bill Gates said in his food blog that 92% of plant proteins have not yet been explored for their capacity to be turned into plant-based meat. One of the things we’re working on is figuring out everything that’s been tried, looking at the costs, looking at the environmental impact, and looking at what the end product actually becomes in terms of taste and texture. Basically, we’re figuring out what the best avenues are for the commercialization of all of the various plant proteins in every way. Certainly, as more pea protein is turned into plant-based meat or plant-based dairy, there will be more pea protein crops. The same thing for canola, the same thing for quinoa, for chickpeas; for anything that’s turned into plant-based alternatives to conventional animal products. As demand increases, the supply will go up, but these products will be competing with animal-based meat and dairy products, which are undoubtedly the leading driver of biodiversity loss, rainforest deforestation, and environmental degradation.

Every time somebody chooses to consume veggie burgers or veggie nuggets instead of animal-based burgers and animal-based nuggets, that frees up a tremendous amount of land. To get a veggie burger, you put one unit of plant in to get one unit of plant-based burger out. Whereas to get an animal burger you put 25 units of soy, or wheat, or alfalfa, or whatever it is that animal is eating to get one unit back out in the form of meat. The most efficient meat is chicken, and it takes nine calories into a chicken in the form of animal feed to get one calorie back out in the form of chicken meat.

This was one of the key reasons that Eric Schmidt said plant-based meat is a technological innovation that will improve life for humanity by a factor of at least tenfold. The two things that he talked about were sustainability — the fact that we’re not going to feed 9.7 billion people by 2050 with a food source that is so extraordinarily inefficient — and the second was climate change. The least climate change-inducing meat is chicken and chicken produces 40 times as much CO2 as legumes, like beans and soy, per calorie of protein.

We definitely need to be thinking, as we shift away from animal-based meat and toward plant-based meat, about the environmental impacts and the production practices, but it’s absolutely the case that as this shift occurs there will be less mono-cropping, fewer pesticides used, and less environmental harm all around—because we’ll need a fraction of the total cropland if we’re not cycling crops through animals.

What do you think of alternative proteins startups? Who you eat a lab-grown meatball or cook a burger manufactured from processed plant proteins? Email Media@AgFunderNews.com.

More resources for alternative proteins startups:

13 Startups Pioneering the Future of Protein

Alternative proteins are changing how we think about everything

Food Replacement Market Map: 39 Startups Offering Alternatives To Meat, Dairy, Gluten, & More

Vegan Venture Funds: Enabling the Alternative Protein Craze