VTT: Stronger investment and advanced novel food regulation key to Finland’s cellular agriculture ambitions

Cellular agriculture can help Finland transition to a sustainable and profitable food system while providing an opportunity to capture €500 million to €1 billion (US$568 million to US$1.1 billion), according to an analysis conducted by VTT Technical Research Centre (VTT), Natural Resources Institute Finland, and the University of Helsinki.

However, integrating the process into the country’s food system will require well-planned capital investments, collaborative business models, and an advanced regulatory landscape for novel foods.

Food Ingredients First speaks with Emilia Nordlund, research manager, Industrial Biotechnology and Food, at VTT, to understand the findings, how Finland and the EU policy landscape are aligned with the gains of cell-based agriculture promises, and the role of F&B manufacturers in the transition.

Gains for hybrid foods

The action plan, which was commissioned by the Finnish Ministry of Agriculture and Forestry and Business Finland, gauges the opportunities offered by cellular agriculture, which uses cultivated animal, plant, or microbial cells to make animal-based products.

The report mentions that cellular agriculture-derived ingredients often come in a powder form and can be used in many F&B applications in drinkable to spoonable formats.

Nordlund tells us that these could include dairy and meat alternatives as well as staple foods like bakery products.

“In the first wave, it is mostly the enrichment of plant-based products that cellular agriculture-ingredients will bring value to. This means various hybrid food concepts. With hybrid foods, the goal is to produce superior quality food products that meet the price parity and consumer expectations when producing alternatives to meat and dairy products.”

She notes that hybrid concepts present a “feasible” opportunity for getting novel food ingredients to market despite scalability challenges.

“One key area is to combine plant-based bulk or base raw materials with novel high-performing ingredients produced by cellular agriculture and fermentation to generate food products that stand out and end up in consumer’s shopping carts.”

“Instead of providing staple foods, these ingredients will first be integrated as high-value compounds, enabling business ecosystem development and building infrastructure. Through this stepwise approach, citizens and stakeholders can familiarize themselves with the novel ingredients and production concepts and start adapting and building the required societal structures.”

NFR and consumer acceptance

Nordlund highlights that the “most important” regulatory bottleneck slowing cellular agriculture innovation in the EU is the Novel Food Regulation (NFR) EU 2015/2283.

“That is a tedious and lengthy process for getting market approval of novel ingredients in the EU. Especially when compared to the US or Singapore approval process.”

A Wageningen University and Research paper indicates that while the overall speed of the process improved in the final years of the old NFR, there are no apparent substantial improvements under the new law, even though it looked to simplify authorization procedures. It notes that the approval rate has dropped by 20% compared to the previous NFR, which might impact investor attitudes and increase volatilities.

Meanwhile, studies have singled out consumer acceptance as the most crucial barrier in commercializing cultured meat. Therefore, increasing consumer awareness in multiple ways to build consumer trust in cell-based ingredients used in everyday foods is essential.

“Naturally, cellular agriculture should support the development of delicious but affordable products, but strong and inspiring stories about the future food system and cellular agriculture should also be created. Establishing showrooms is one way to deliver the stories and enable delivering science-based information on sustainable food systems and food choices,” says Nordlund.

For example, her report also encourages authorities to allow novel food tastings organized by experts before market approval.

“Public tastings of novel foods would also increase recognition of innovations and help remove prejudices. These have not been conducted in Finland. They have no approval process, and this should be changed.”

Corporate-start-up collaborations

According to the joint report, the UK and Germany are emerging as significant players in Europe’s cell culture. While Finnish start-ups in the space are gaining international recognition, complete value chains cannot be effectively established in Finland without adequate support. This is where big food industry players come in, says Nordlund.

“For example, Fazer is co-working with Solar Foods, and Valio is collaborating with Enifer. This is a good model to get cellular agriculture ingredients faster to the market as the food manufacturing companies already have functioning business models and partnerships.”

“The field is still mostly non-specialized, and many start-ups cover many parts of the value chains. We hope that in the future, start-ups and bigger companies can achieve a competitive edge by specializing in certain value chain parts. It will be interesting to see how the specialization will develop, what roles the existing start-ups and food industry will take, and how the collaboration models develop.”

According to Nordlund, the ecosystem also needs new players, especially the equipment manufacturing and feedstock development actors, to transition to new business fields/lines.

The investment gap

One of the weaknesses highlighted in the researchers’ SWOT analysis of the Finnish cellular agricultural landscape is a lack of capital, including ventures and loan instruments, which particularly hinders factory plans. Nordlund highlights addressing the investment gap by inviting food and tech-based investors.

“It is important for the government to participate in investments and take measures to increase the interest of international companies in investing in Finland. Cell-based technologies are new, and the banking sector is cautious about financing them. VCs support new technologies but do not finance the construction of factories.”

She notes that government or public sector support can be crucial for the growth of cellular agriculture, with the “order of support” outweighing the “amount of support.”

“The public sector can provide support that signals the realization of private financing. Thus, the government can make the first move with its support and get the wheels turning. Even loans with reasonable terms or guarantees could promote CapEx investments in the sector.”

Furthermore, Nordlund reveals that cross-sectoral cooperation between Finland’s renewable energy and IT sectors can result in synergy benefits for cellular agriculture, enabling a competitive edge.

“This is also important from the perspective of primary production so that the role of agricultural entrepreneurs and the economic viability of farms can be strengthened when underutilized raw materials from agriculture and forestry are converted into business in cooperation with cell factories.”

Nordlund believes the Finnish ministry recognizes the substantial investment needed in the field. 

“They have taken the message seriously and, based on my understanding, are considering possible actions they could contribute to. However, the support functions to investments would need government support and probably cross-ministries collaboration.”