Israel’s food tech upstarts eye ASEAN’s Muslim countries

Dylan Loh, Nikkei

SINGAPORE — Israel’s food technology companies are looking for new opportunities in majority-Muslim markets like Indonesia and Malaysia, even as frosty relations between their homeland and those Southeast Asian countries raise doubts about their prospects.

The Jewish state’s food processors are planning halal-certified products for practicing Muslims as they try to expand in the 10-member Association of Southeast Asian Nations.

Among them are Steakholder Foods, acompany that makes cultured meat products. The company, headquartered in Rehovot, Israel, develops slaughter-free methods of producing beef and seafood, both as ingredients and as whole cuts, as an alternative to industrialized farming and fishing.

In Singapore, Steakholder Foods is developing 3D printed eel and grouper products with Umami Meats, a local cultivated fish and seafood company. Nasdaq-listed Steakholder has also turned its attention to making halal products for Muslim consumers.

Mor Glotter-Nov, vice president of marketing at Steakholder, told Nikkei Asia that in assessing the potential demand for Israeli food tech products in Muslim-majority countries like Indonesia and Malaysia, it was important to recognize similarities between Jewish kosher and Muslim halal dietary requirements.

“Both kosher and halal dietary laws emphasize similar principles of cleanliness, ethical sourcing and specific preparation methods,” she said. “While we cannot guarantee specific kosher or halal approvals at this stage, Steakholder Foods is committed to working towards meeting the relevant standards and requirements.”

Israeli food tech companies such as Steakholder are set on expanding abroad as the industry receives a rush of funding from backers. In the global alternative proteins market, Israel is the biggest recipient of investment after the U.S., topping Asian markets such as China and Singapore.

According to the Good Food Institute, a think tank, the U.S. drew $6.78 billion in alternative protein investment from 2020 to 2022, followed by Israel at $1.19 billion. During the same period, China received $210 million while Singapore pulled in $300 million.

Israel’s food tech players see ASEAN as a lucrative market for their innovations. Market research specialist GWI estimates there are 29.8 million potential consumers of cultured and artificial meat among Southeast Asians.

While the opportunities for business are sizable, there are also political risks Israeli food tech companies looking to secure a foothold in Muslim-majority countries such as Indonesia and Malaysia face. Israel has had a difficult history with countries where Islam is the dominant religion.

Despite its strides in normalizing relations with the United Arab Emirates and other neighboring countries that had rejected the Jewish state’s existence since its 1948 founding, Asia’s Muslim-majority nations have yet to come around.

In ASEAN, Israel has no formal diplomatic ties with Indonesia, Malaysia nor Brunei. As the closest mission, the Israeli Embassy in Singapore monitors developments in the three neighboring countries. But the ideological barriers are not stopping the country’s food tech upstarts, like Aleph Farms.

“It is time for us to remove the silos we have built over time and think about integrative solutions, which are addressing a range of challenges,” said Gary Brenner, director of market and corporate development at Aleph. “We position Singapore as our launch padto Southeast Asia and [the] Asia-Pacific, and asses the regulatory pathways necessary to enter the rest of the region.”

Like Steakholder, Aleph wants to establish a foothold in Muslim-majority ASEAN markets with a line of halal offerings. The Israeli food tech company grows cultivated steaks directly from non-modified beef cells and like its peer, is using Singapore as a springboard to the rest of the region.

In the city-state, Aleph Farms has an agreement with Esco Aster, a contract manufacturing organization, to produce cultivated meat. The two are planning to build the first Halal-certified facility in the world for cultured meat, helping Aleph’s beef steaks unit to obtain approval for products geared toward Muslims.

But that is just one step to tackling markets like Indonesia and Malaysia. The food tech companies are hoping that political differences between Israel and those countries will not dissuade consumers from buying their products.

“In Indonesia, I don’t know how people would think,” acknowledged Sagi Karni, Israel’s former ambassador to Singapore, who recently finished his term as envoy in July. “Some people might have political reservations.”

Karni, however, pointed out that despite the lack of diplomatic recognition for Israel, some Israeli companies do sell their products in majority-Muslim countries. “At the end of the day, you leave it to the people to choose what they want to buy,” he told Nikkei Asia.

Political hurdles aside, companies like Tiran Group are continuing to pour funds into research and development to drive food tech innovations for ASEAN. The Israeli company has an aquaculture unit where shellfish undergo a breeding program to increase yield.

“We are already active with farms in China, Vietnam and Singapore,” Haim Avioz, Tiran’s CEO, said. “We are already selling our products to Cambodia, Taiwan, Thailand, Malaysia, Bangladesh, Brunei and more, and are looking into the Indonesia, India and Philippines markets.”