At an upscale sushi bar in New York last week, a smattering of media and policy types chowed down on a menu of sushi rolls, peking duck tapas, and mushroom salad. But what made this menu unusual was the one ingredient that ran through the dishes—foie gras made from quail cells brewed in a bioreactor. The event, catered by the sushi chef Masa Takayama, was a launch party for Australian cultivated meat firm Vow, which will sell its foie gras at a handful of restaurants in Singapore and Hong Kong.

The meal was decadent—one course featured a mountain of black truffle—but that was mostly the point. Vow and its CEO George Peppou are angling cultivated meat as a luxury product—an unusual positioning for an industry where many founders are motivated by animal welfare and going toe-to-toe with mass-produced meat. But while growing meat in the lab still remains eye-wateringly expensive, Peppou is trying to turn the industry’s Achilles’ heel into his advantage.

“I feel like the obituary has already been written for our industry,” he says. “But just because Californians can’t do something, it doesn’t mean something can’t be done.”

That something is making cultivated meat while turning a profit. The big challenge facing the industry—along with the bans and the lack of venture capital cash—is that it costs a lot to grow animal cells in bioreactors. Reliable figures are hard to come by, but one research paper with data provided by companies in 2021 put the cost of cultivated meat between $10,000 and $68 per pound, depending on production methods. A lot of startups say they have drastically cut production costs since their early experiments, but prices are still way higher than factory farmed chicken at around $2.67 per pound.

The two best-funded startups in the space—Eat Just and Upside Foods—have both brought out cultivated chicken products. But Peppou, who leans into his reputation in the industry as something of a provocateur, says that approach doesn’t make sense. “Making chicken was always a terrible idea,” he says.

The fundamentals of cultivated meat are pricey. The business of growing animal cells outside of their bodies is usually the domain of medical researchers and pharmaceutical companies. Animal cells grown in culture are used to make vaccines and medicines, which are sold in tiny volumes for sky-high prices.The cultivated meat industry needs some of the same ingredients to grow the cells it wants to sell as meat, but unlike the pharma industry, it needs to grow huge volumes of cells and sell them at grocery store prices.

The major cost right now is what’s called cell media—the broth of liquid, nutrients, amino acids, and growth factors fed to cells while they’re growing. The off-the-shelf standard cell media for growing stem cells is called Essential 8, and it costs upwards of $400 per liter. That’s fine if you’re a scientist growing a few cells in a petri dish, but growing a single kilogram of cultivated meat might require tens of liters of media, quickly sending costs sky-rocketing. Cultivated meat companies need to find cheaper sources for their ingredients and buy them in bulk in order to drive their costs down.

“Ultimately the industry needs to prove that it can scale,” says Elliot Swartz, principal scientist for cultivated meat at the Good Food Institute, a nonprofit focused on advancing alternative proteins. Just a few crucial ingredients in cell media are a major factor pushing up costs for cultivated meat companies, most of which are still operating at a tiny scale, producing kilograms of meat per production cycle rather than the tons they are aiming for.

“My biggest concern is always the scalability and the ability to industrialize something,” says Ido Savir, CEO of Israeli cultivated meat company SuperMeat. His company has just released a report estimating that—if produced at scale—it could grow chicken meat at $11.8 per pound, close to the price for pasture-raised chicken in the US. But this assumes production in bioreactors up to 25,000 liters—several orders of magnitude higher than the 10-liter scale the company is currently working at. “We’re improving every month,” he says.

Savir is aiming at a much lower price point than Peppou, and hopes to partner with food manufacturers who might license his technology to add cultivated meat into their mix of options. “We’re more interested in the mass market,” he says. Dutch company Meatable has indicated it wants to follow a similar approach—licensing its technology to the handful of firms that already produce much of the US’s meat. Other cultivated meat companies want to sell to consumers under their own brands, but are still targeting the mass meat industry.

Peppou is skewing decidedly in the opposite direction. He declines to name a price, but says his foie gras is at the “higher end” of the market—somewhere in the region of hundreds of dollars per pound. The foie gras is 70 percent Japanese quail cells—which also make up the parfait that Vow has sold in Singapore since April—plus a plant-based fat mix and corn husk flavorings. “It’s either for a venue that wants to use ingredients to distinguish themselves,” says Peppou, or it’s for “large hotels or cateries that have removed foie gras from their menus due to cruelty.”

Conventional foie gras is made by force-feeding ducks or geese until their livers swell with fatty deposits. Production is banned in the United Kingdom, Germany, Italy, and California among other places. Another cultivated meat company, France-based Gourmey, also makes foie gras, although its product is not currently on sale anywhere.

Vow’s quail parfait is on the menu at around six restaurants in Singapore, including being sold as a $20 SGD ($15) bar snack and as part of a $250 SGD tasting menu. In Peppou’s telling, going high-end is a way to turn cultivated meat’s Achilles’ heel—high costs and low production volumes—into a luxury positioning. “I believe the biggest challenge we have is how to shape consumer sentiment around this category. And the most efficient way to do that in my mind is to be in the most influential places with the relatively limited volume we have available.”

SuperMeat’s Savir says that luxury cultivated meat products “have a place” but that he is more interested in the mass market where he can complement the current production of meat. That will mean continuing to drive production costs down. One option is to mix cultivated meat with much cheaper plant-based ingredients. Savir says that they’re aiming at products that are around 30 percent cultivated meat cells and 70 percent plant-based ingredients. Several other firms are taking a similar strategy. In Singapore, Eat Just sells cultivated chicken strips that are just 3 percent chicken cells.

The industry is also hoping that customers will pay premium prices because of the potential environmental benefits of making meat outside of animal bodies. Savir says he has spoken with a “very big” pizza company that says replacing just 5–10 percent of its chicken toppings with cultivated chicken would make a substantial dent in its carbon footprint.

Even replacing a fraction of a percent of the $50 billion broiler chicken industry in the US would require a monumental scaling-up of cultivated meat production. “If you’re competing against chicken, which is the lowest cost meat product, then you either have to go to very large scales or create hybrid products that have lower inclusion rates,” says Swartz of the Good Food Institute. But with investor dollars in short supply, companies are having to get creative about how they plan to get products into the world and achieve many founders’ ultimate goal of displacing at least some conventional meat production.

Even though he’s targeting the luxury market, Peppou says he still isn’t turning a profit on his cultured quail parfait or foie gras, although his margin is much better than it would be if he was competing with factory-farmed chicken. “If you look at a lot of deep technology companies, it’s kind of a game of just not dying,” he says. “And it’s figuring out ways to not die long enough to get good enough to win in a market which probably doesn’t exist yet.”

That means that the route ahead for Vow might not look totally different from other cultivated meat companies. “The volumes are going to be low, it’s mostly going to be in restaurants. They’re going to be iterating on these products over time before they get any sort of mass market entry point,” says Swartz. “In the short term, what I’m looking forward to is getting more people that are trying this for the first time, not trying it because they’re excited about cultivated meat, but generally because they’re interested.”