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The Spoon Food Tech Weekly: About That Bloomberg Article

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Someday, We’ll Look Back and Laugh

If you’re in the alternative protein industry, you’ve probably seen an article from Bloomberg titled, “Beyond Meat and Impossible Foods wanted to upend the world’s $1 trillion meat industry. But plant-based meat is turning out to be a flop.”

And if you haven’t read it, you’ve almost certainly read about it. That’s because, over the past week, there’s been no shortage of blog posts, newsletters, Linkedin think pieces, and full-page ads in the New York Times declaring why – depending on where you fall on the matter – Bloomberg had it right or wrong. 

Much of the reaction from those in the alt-protein industry centered on the article’s focus on two companies, Beyond Meat and Impossible Foods. Many argued (rightly) that the plant-based meat industry is much bigger than just these two companies, and any analysis of the space and its prospects that doesn’t include a fuller look of the new products on the horizon (like those based on fungi/mycelium) misses why so many are still so excited about the industry’s prospects. 

But as Rachel Konrad, former head of comms for Impossible Foods, said on this week’s Spoon podcast, the industry “doth protest too much.” 

After all, it’s just one article, right? Why was there so much pushback?

The strong reaction can be partly attributed to Bloomberg’s place in the media ecosystem. Not only is its journalism viewed on par with the Wall Street Journal from a business reporting perspective (though they don’t have as many journalists covering as many beats at the Journal), but unlike the Journal, it’s a weekly news magazine with cover stories. 

I mean, just look at that cover: 

Despite print media’s long and slow death spiral, a story like this still has an outsize impact, especially in publications like Bloomberg. They can become, in a sense, self-fulfilling prophecies.

Don’t believe it? Just ask Juicero’s founders. Those familiar with Juicero’s demise will remember the final nail in the coffin for the connected juicer startup was a Bloomberg piece. Within days after publication, the company and its high-priced juicer became a symbol of Silicon Valley excess and over-engineered solutions. It wasn’t long before the company’s venture backers backed out, and soon after, the company was toast.

But the plant-based meat industry is not Juicero. It’s an industry made up of literally hundreds of companies, backed by billions of dollars of venture funding, and it has achieved some measure of success in that many of these new products have become established on quick service menus and occupy space on grocery store and warehouse store meat aisles. 

I suspect the real reason, though, the article touched a nerve was it pointed out a truth that not enough executives in the plant-based industry and food retail are ready to admit: some of the earliest and loudest voices in the plant-based industry over-promised early on about how quickly consumers would embrace their products. 

Take these quotes from Pat Brown, founder of Impossible, made on stage in 2015 at a TED talk and later in an interview with the New Yorker: 

“I know it sounds insane to replace a deeply entrenched, trillion-dollar-a-year global industry,” he said, “but it has to be done.” Four years later, when the New Yorker profiled Impossible, Pat predicted his company would “take a double-digit portion of the beef market” by 2024 before sending it into a “death spiral.” Next he would target “the pork industry and the chicken industry and say, ‘You’re next!’ and they’ll go bankrupt even faster.”

Ethan Brown has spoken in similar terms about how he felt his company would transform people’s diets around the world. From the Bloomberg piece:

Just like technology had rendered the horse-drawn carriage obsolete, he told the crowd at the New York Times’ climate conference this past fall, so, too, would his system of breaking down plants transform the protein at the center of the plate. “This,” he said, “is something that I feel is inevitable.”

I don’t blame either founder for articulating what they see as the ultimate goal of plant-based meat. Both are visionary founders and are driven to change what they see as a cruel industry that is, according to them, steering the planet toward a calamity caused by the climate impact of industrial agriculture. The goal of the plant-based meat industry – to replace industrially-produced meat from animals with a more sustainable alternative – makes sense and should be the goal.

But the reality is that these visionaries overpromised early market acceptance because, in part, they underestimated how difficult it would be to convince consumers to change their diets. Part of this has to do with the product themselves; neither Beyond nor Impossible are what you could describe as healthy when compared to a pure, simple ingredient plant-based diet. Even more importantly, the products’ taste profiles aren’t nearly close enough to what they are replacing, residing still in what chef Ali Bouzari describes as the ‘Uncanny Valley of Food.’

As a result, the consumer dietary profile that Pat Brown has said many times he most wanted to target – the carnivore – doesn’t believe these products are suitable replacements for something they’ve been eating their whole lives. Arguments about animal welfare don’t resonate with the vast majority of consumers, and the health arguments – which have the potential to resonate with a wide swath of consumers – haven’t convinced the vast majority of people who have been told – rightly or wrongly – that these products are going to be better for them. 

The hard truth is consumers are creatures of habit. They eat what they know, and convincing them to change their behavior is difficult. When consumers do change their diets, it’s often due to exposure to a mix of influencer-fed trends and ideas passed on to them by friends or family. Plant-based meats just haven’t caught on, and in fact, you could point to an opposite trend, where a contingent of consumers argue (again rightly or wrongly) against these foods because they’ve come to believe they are too “processed” and this is somehow unhealthy. 

The purchase price also factors in. While consumers with plant-forward diets may be ok paying a premium for an alternative product that satiates a desire for meat, most consumers are not. They wonder why not just buy the real thing at a lower price? And sure, the price premium for plant-based meat has gotten smaller, but the products are still, on the whole, more expensive than those spit out by the fine-tuned, highly-scaled machinery of industrial animal agriculture. 

Now, the plant-based meat industry finds itself in a tricky spot in 2023. A majority of consumers not only don’t believe these products are any healthier than the real thing but they also aren’t convinced plant-based alternatives taste as good as meat yet. In other words, the average consumer sees plant-based meat – as represented by Beyond and Impossible – as expensive processed food, and no amount of New York Times full-page ads will change that.

But all hope is not lost. The plant-based meat industry is still in the early innings, with much of its promise ahead of it in a pipeline of new products that are either on the market or slated to arrive soon. Tasty meat analogs that use mycelium, jackfruit, or other ingredients are already here, and most consumers have yet to try them. Products using novel ingredients derived using new approaches that use some combination of artificial intelligence, precision fermentation, and genetic engineering are on their way. New formats, like plant-based whole-cut meat and fish, have yet to make their way onto the vast majority of consumer plates. And let’s not forget to mention those products made with real animal cells in the form of cultivated meat, which are now on the fast track toward consumer plates in 2023.

The alternative meat industry has a lot of work ahead of it, but the best way to move forward is to examine its challenges in the cold light of day. That’s what we’re doing now, and we’ll look back at the Bloomberg article in 5 or 10 years and laugh and wonder what we were all worried about. 

How will new tools like ChatGPT impact the world of food? We’ll be discussing just that during the Spoon’s mini-summit on February 15th. The event is free, so register here today before the session fills up. 

Bruce Friedrich, Isha Data, and Mark Post in a panel discussion at Tufts University’s Cellular Agriculture Innovation Day. (Paul Rutherford for Tufts University)

The Cell Ag Infrastructure Buildout

A little over a week ago, the leaders of the nascent cellular agriculture industry got together at Tufts and held a day-long state of the industry conference. The Tufts team did an excellent job getting the right people together, and the sessions spanned several topics that have been top of mind for me, including scaling and funding, two things that are integrally intertwined.

One of the points made during the day was the need for more government funding. Bruce Friedrich of GFI said he’s seeing progress on this front, as we’ve seen governments go from “almost zero to hundreds of millions of dollars” in funding in the span of a few years.

Friedrich pointed to how the government helped get the EV industry off the ground by allocating tens of billions of dollars over the past decade and thinks governments could be convinced to eventually do the same for cellular agriculture. 

So the question becomes what this type of funding would look like and how it would be spent. Are tax breaks for large-scale biomanufacturing similar to what we saw for the chip industry with the CHIPS act the right approch? Or what about direct investment in infrastructure, like we’re seeing with the EV charging network buildout spending allocated from the infrastructure bill? The devil is definitely in the details, but one that is sure is that private capital alone won’t get us there alone. 

Who knows, maybe someday we’ll see a biomanufacturing infrastructure plan akin to the CHIP act. For that to take place, the Biden administration or one that follows will need to be convinced that cellular agriculture is not only a growth industry that will provide millions of new jobs (which I think it could), but it’s also strategically important for the US to become a leader in biomanufacturing, something other countries – China and Singapore to name a couple – already have recognized. 

Food robots are popping up everywhere, from fast food to stadiums to even some homes. So what’s the food robot industry look like in 2023? Join us for the Food Robotics Outlook 2023 on March 1st to find out! 

You can register for this free event here. Better hurry before the tickets are gone!  

Sigh. I Guess The Gas Stove is Now Part of the Culture War

Over the past couple of years, food-related matters have become an ever-bigger part of the political culture wars, and the latest one to enter the fray is gas stoves. The recent fuss resulted from some poorly worded remarks from Consumer Product Safety Commission Commissioner Richard Trumka Jr, who told Bloomberg that “any option” was on the table regarding gas stoves: “Products that can’t be made safe can be banned,” he said. 

Some on the right, ever eager for a new political cudgel with which to hit the Biden administration over the head, seized on the words. Trumka later clarified his remarks and said no ban was being considered, but by then, it didn’t matter; gas stoves were fodder in a new culture war.

While there is little chance we’ll ever see an outright ban on gas stoves at the federal level, we are already seeing some restrictions being put in place at the state and city level. Berkeley started it all in 2019, followed by San Francisco and LA, and the state of California is looking to ban gas hookups to new builds by 2030. More recently, states like Washington have passed legislation banning gas in commercial buildings set to kick in this year.

Somewhat lost in the frenzied debate is the momentum we’ve seen for induction cooking over the past couple of years. The technology, which a number of chefs have started to see as superior to that of gas, has become more mainstream in the US in the past couple of years, and forecasts have it continuing to outpace the growth of gas or coiled-electric cooktops. 

The biggest hurdle for induction cooking today is price. On average, a new induction stove still costs more than a gas or coiled electric stove and costs even more if a consumer has to swap out their cookware for induction-compatible pots and pans. The good news is many pans sold today come induction compatible, so many consumers may already be equipped to start cooking with induction. 

For now, organizations like the Decarbonization Coalition are busy making the rounds, doing the hard work of trying to convince more of the benefits of electrification. We wish them luck and hope they don’t get caught in the crossfire!

That’s it for this week. Have a great weekend and we’ll talk to you next week.

Michael Wolf

P.S. The CES food tech report will be out on Monday. There was so much to cover we wanted to make sure to get all of it!

New Alt Protein and Bioinnovation Hubs Are Popping Up From NYC to Israel

This week was a big one when it came to incubating the next generation of future food.

Not only did GFI Israel and Technion announce a new Sustainable Protein Research Center (SPRC), but the city of New York also announced it would build a “bioinnovation hub” with $20 million in new funding earmarked from NYC Mayor Eric Adams’ administration.

The SPRC, which Technion and GFI Israel claim is the first of its kind in the world, “will coordinate the collaborative activities of dozens of researchers from more than ten different academic departments at the Technion and with additional universities and companies to address the world’s most pressing challenges of sustainability and human health.”

The new facility will have a 5-year budget of $20 million and will facilitate the recruitment of new faculty members in the field and support “the construction of a building for the Carasso FoodTech Innovation Center.” The new center will purchase and maintain capital equipment and recruit professional technicians and ” fund collaborative seed research and train graduate students and post-docs in related fields.”

You can read the full story here on The Spoon.

Meati Opens Up ‘Mega Ranch’ Production Facility, Plans to Produce “Tens of Millions of Pounds” of Fungi-Based Meat

Meati Foods, a producer of plant-based whole-food protein made from mycelium, announced the opening of its largest-yet production facility in Thornton, Colorado. The 100 thousand foot facility, dubbed the “Mega Ranch,” is expected to hit a production rate that could produce tens of millions of pounds of the startup’s fungi-derived meat product by late 2023.

The funding for the new facility comes in the form of a $150 million Series C raised last year and a recent $22 million extension round. The company’s total funding to date is more than $250 million.

Meati claims the Mega Ranch will be able to match and even exceed the scale of the United States’ largest individual animal-based ranches. The company says the Ranch is vertically integrated, which means it will allow for the growing, harvesting, processing, and packaging of Meati products under one roof.

Read the full story at The Spoon.

Food Retail

GreenSwapp Wants to Make Figuring Out the Climate Impact of a Bag of Chips as Easy as Snapping a Pic

While the climate impact of our food has finally made the main stage as a topic at the world’s most high-profile summit, the average joe has no idea how good or bad that bag of chips or can of soda is for the environment.

A Dutch startup called GreenSwapp wants to change that by making information about the climate impact of practically any CPG product instantly available to anyone using its technology.

The Amsterdam-based company started as an online grocery app for climate-friendly products, but more recently has focused on building a climate impact data platform for both consumers and companies. To that end, the company debuted a new scanning tool at CES which gives instant scoring (low, medium, or high impact) of practically any packaged food product when the product’s barcode is scanned with a smartphone.

You can read the full story at The Spoon. 

Food Robotics

SJW Robotics Raises $2M as It Eyes Launch of Autonomous Robotic Restaurants This Spring

SJW Robotics, a maker of autonomous robotic restaurants, has raised a $2 million seed funding round, according to an announcement sent to The Spoon. The Canadian startup’s newest round includes investments from Alley Robotic Ventures and celebrity chef Tom Colicchio.

Company CEO and cofounder Nipun Sharma told The Spoon the new investment would be used to fund the rollout of the company’s robotic kitchen system with partner Compass Canada. The two announced their partnership last summer, with Compass disclosing that they had plans to pilot three RJW robotic restaurant kitchens in select markets. According to Sharma, the first Compass autonomous kitchen pilot will launch at a hospital in the Toronto market under Compass’s Bok Choy brand this spring.

To read the full story, click here!

Beyond Meat Enters Japan Through Exclusive Agreement With USMH

Beyond Meat is entering Japan through a new partnership with one of the country’s largest grocery store holding companies in United Super Market Holdings (USMH).

The new agreement, announced on Friday in Tokyo at the SKS Japan conference, is a distribution and product development deal through which USMH will have exclusive distribution rights of Beyond Meat branded products in Japan as well as the ability to use Beyond’s meat in new products developed for the Japanese market.

Products co-developed under the partnership will be sold under USMH’s Green Growers brand, a brand initially launched by the grocery chain to sell lettuce grown via the company’s vertical farm “plant factory” called TERRABASE. These products, the first of which will include Beyond’s minced plant-based ground beef, will also include Beyond’s branding on the products in something akin to a “powered by Beyond” style branding approach. Products developed under the Green Grower brand will be tailored to specific formats and tastes of the Japanese consumer.

The co-development partnership between USMH and Beyond will be done through a new open innovation initiative from USMH called “AKIBA-Runway”. USMH launched AKIBA-Runway in March of this year as a way to work with other companies to utilize their technologies to create new products for their customers.

For Beyond, the deal with USMH is the company’s second attempt to enter the Japanese market. The company’s first attempt was going to be through a partnership with investor Mitsui, which had invested in Beyond back in 2016. However, the two companies announced in 2018 that the plan to enter Japan had been shelved.

But now with USMH, the plant-based meat company will enter the market in partnership with a powerful grocery chain with deep knowledge of Japanese consumer preferences and tastes. USMH, which has over 500 retail outlets in Japan through its MaxValu, Maruetsu and Kasumi chains of stores, has a wide reach across Japan.

For USMH President and CEO Motohiro Fujita, the new deal delivers in part on a vision he discussed the last time he spoke at Smart Kitchen Summit Japan in 2019. At that event (SKS Japan is put on in partnership with The Spoon and SigmaXYZ), Fujita talked about how he wanted to disrupt the Japanese grocery store market through innovation. Fujita told The Spoon that this deal and innovations delivered through AKIBA-Runway are the results of that vision he outlined on stage in the summer of 2019.

Rise of the Plant-Based QSR

This is the web version of our restaurant tech newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

Those of us of a certain age will remember a time when eating “vegan” at a QSR meant the Wendy’s salad bar. 

Fast forward to 2021, and advances in both food technology and the restaurant biz have made the concept of eating vegan (which we now call “plant based”) much more palatable to the mainstream. The names “Beyond” and “Impossible” are on most major QSR’s menus today. Eat Just’s plant-based egg products are in a growing number of fast-food breakfast items. And recently, two more announcements from major QSRs dropped that indicate we’re at fast approaching a major turning point for menus in the QSR realm.

On its most recent earnings call, Starbucks said it had turned one of its Seattle, Washington locations into a test area for a “100% plant-based food menu.” Starbucks CEO Kevin Johnson suggested that this test site is in response to what he sees as “the most dominant shift in consumer behavior,” which is the move to plant-based foods. The shift, said Johnson, is evident in both food and beverages. 

The move to offer plant-based meals to customers isn’t entirely new for Starbucks. The chain debuted Beyond Meat products in China last year and carries Impossible sausage sandwiches at its stores in the U.S. It also offers a number of plant-based milk alternatives. 

But this new test store in Seattle is the first time the chain has gone full-tilt on a plant-based menus. All food items on the Starbucks menu will be vegan, with animal-based proteins being replaced by plant-based counterparts. 

Also recently, McDonald’s announced it’s finally testing its McPlant burger, a vegan offering the mega-QSR developed with Beyond Meat. While this is less of a monumental change than overhauling an entire menu, McDonald’s has up to now has made few moves when it comes to introducing plant-based foods to its menus. (A brief trial in Canada is the exception.) Though this McPlant pilot is pretty limited right now — Denmark and two cities in Sweden — it is also likely also in response to a growing consumer demand for plant-based proteins.

All that said, demand shows up differently in different parts of the world. Sweden and Seattle are obvious choices to test plant-based wares, given the demographics that reside in those areas. In the U.S., at least, seven in 10 people classify themselves as “meat eaters,” according to recent data, and there are undoubtedly parts of the country where a plant-based Starbucks would fail harder than the Wendy’s salad bar expansion did in the ‘90s. 

For now, that is. As more tests like that of Starbucks are conducted, and major chains like McDonald’s introduce more plant-based items, the concept of a full-vegan fast-food meal will grow less foreign to more customers. I doubt it’s long before we see plant-based QSR locations popping up in certain markets like, NYC, San Francisco, and even newly popular cities like Austin and Denver. How the plant-based QSR fares in these markets will tell us a lot about when it will head to other parts of the country.

The Restaurant Robots Are Coming

Of course we’ll know we’ve really hit a turning point when vegan Starbucks locations start delivering our plant-based breakfast sandwiches via robot.

I just made that up, but as The Spoon’s Editor in Chief Chris Albrecht points out in his new Spoon Plus report, we will soon see these delivery bots rolling about our sidewalks, college campuses, and city streets.

Chris’ report breaks down the different companies currently leading the space, including Starship, Kiwi, Nuro, and Refraction, and where these players’ opportunities lie in making robot delivery more common for the average consumer.

In the restaurant realm, there are a few advantages to robot delivery. It’s first and foremost a more contactless delivery method, which is an obvious plus at a time when COVID-19 vaccines aren’t widespread. Robots can also work continuously without the need for a break and could potentially be cheaper for restaurants. The flip, of course, is that widespread robot deployments would take jobs away, a point that cannot be ignored in any discussion about restaurant robots.

Chris delves into all of this and much more in his report, which you can access by becoming a Spoon Plus member. Spoon Plus members get access to all of our market reports, maps and deep dives that give you an advanced understanding of where the food tech industry is headed. Get the goods right here.

Restaurant Tech From Around The Web

Luckin Coffee, one of China’s largest coffee chains and Starbucks’ main competitor in that market, is filing for bankruptcy. The company is still dealing with the fallout from a fraud scandal from 2020. Luckin said that stores would remain open for business.

The California Supreme Court has declined to hear a lawsuit filed this week seeking to overturn Proposition 22, the controversial ballot measure that passed in November and exempts companies like DoorDash and Uber from classifying workers as employees. the Court suggested plaintiffs refile the case in a lower court. 

If it feels a little off to you that third-party delivery services like DoorDash and Uber Eats are spending millions on themed Super Bowl ads (Cookie Monster and Wayne’s World, respectively) while restaurants and restaurant workers continue to struggle, check this quick read from the folks at Eater Chicago. In the words of Eater writer Ashok Selvam, “can you imagine Wayne and Garth using a third-party service to order from Stan Mikita’s Donuts? Game off.”

Impossible Is Prototyping a Plant-Based Milk Product

At a press conference today, Impossible Foods revealed a prototype for a plant-based milk alternative as part of its ambitious plans to eliminate animal protein from the food supply chain. The product will be called Impossible Milk and will look and function just like cow’s milk. 

To illustrate the differences, Impossible showed its prototype off alongside other alternative milks at the press conference, even mixing it with a cup of coffee to demonstrate how it does not curdle as other plant-based milks do.

Though the milk won’t be available to customers at any point in the near future, It is part of Impossible’s plan to diversify its products to include a range of plant-based alternative proteins. The company is also working on alternatives to chicken and steak, and CEO Pat Brown told MIT Technology Review that Impossible is on a mission to “completely replace the world’s most destructive technology by far, which is the use of animals, by 2035.”

“We will succeed or fail based on whether we build a complete technology platform that creates all the foods we get today from animals,” he added.

To help realize that lofty goal, Impossible also said at the press conference that it intends to double the size of its R&D team over the next year and launched the “Impossible Investigator” project to entice scientists to join the team.

Today’s news follows Impossible’s just-announced expansion onto retail store shelves in Hong Kong and Singapore. And overall, 2020 has been a busy year for the company. It raised another $200 million in August, expanded distribution of its products to Walmart, Trader Joe’s, and other food retailers, and launched a direct-to-consumer e-commerce store. 

The company’s ambitions to branch out from faux beef into dairy, fish, poultry, and other areas of alt protein comes as the entire sector is seeing enormous growth and investment. Impossible’s chief rival Beyond hasn’t exactly rested on its laurels this year, either, having also expanded its product line, launched its own D2C store, and launched products at retail stores in China.

One area we won’t see Impossible branch into, at least for now: cell-based meat. Pat Brown didn’t waffle about at SKS last week when he said the idea of commercially produced meat from a lab was never going to happen. Of course, the company could always change its stance. For now, though, expect Impossible ton continue its focus on plant-based proteins for the foreseeable future.

OmniPork Parent Green Monday Raises $70M to Expand Its Plant-Based Food Enterprise

Plant-based food company Green Monday Holdings has raised $70 million in new funding led by TPG’s The Rise Fund and Swire Pacific, according to a press release sent to The Spoon. The round also includes participation from CPT Capital, Jefferies Group, Sino Group’s NG Family Trust, artist Wang Leehom, and Room to Read founder John Wood. Existing investors, including Lee Kum Kee Health Products Group’s Happiness Capital and individual investorsJames Cameron, Mary McCartney, and Susan Rockefeller, also participated.

The Hong Kong-based Green Monday enterprise has multiple branches. It operates OmniFoods, which makes plant-based meat alternative OmniPork, as well as Green Common, a retailer and restaurant for plant-based foods. The Green Monday Foundation, meanwhile, is a charitable organization that aims to raise awareness about the importance of living more sustainable lifestyles. The enterprise as a whole reaches multiple countries, including Japan, China, the U.S., the U.K., and Thailand. 

OmniFoods debuted OmniPork on mainland China a little less than one year ago. Since then, the company has expanded across that market, landing in both retailers and QSR chains like Taco Bell and Starbucks. 

This new funding round comes at a time when both investment and interest in plant-based meat is up worldwide. In a recent report, investor network FAIRR said that while the U.S. is still the largest market for alternative proteins, China, along with the rest of the Asia-Pacific region, is catching up. 

Not surprisingly, that means Green Monday is not the only company expanding its alt-protein business in that region. Beyond Meat just announced it will build production facilities in China. Starfield, which recently raised $10 million and launched in 20 restaurant chains across China, is another established player to contend with.

Green Monday said this funding round is the largest of its kind to date in Asia. It will use this new capital to expand research and development as well as its retail networks, and boost its production, distribution, and supply chain capabilities. It plans to increase global operations to over 20 markets across Asia, EMEA and North America, as well as open Green Common flagship stores in China and Singapore.

Good Food Institute: Plant-Based Food Consumers Spend 61% More in Food Retail

We’ve known for a while now that the current spikes and surges in demand for plant-based protein are in large part because of the COVID-19 pandemic’s impact on our food system. Now there are some new numbers that back those claims up and give insights into just how big plant-based products have gotten in the food retail sector, thanks to the Good Food Institute (GFI). 

GFI’s new report, “Plant-Based Strategies for Retail: An overview of leading plant-based assortment, merchandising, and marketing tactics at top U.S. retailers,” lays out some of the growth statistics of the plant-based meat sector, and examines the forces driving such a rapid adoption in the retail space. 

For context, the report notes that U.S. retail sales of plant-based food were worth $5 billion in 2019. While we don’t yet have the full sales numbers for 2020, GFI notes in its report that “plant-based sales are growing 14 times faster than total food sales” and that consumers who buy plant-based food products tend to spend more: 61 percent of plant-based food shoppers are considered “valuable,” and spend 61 percent more than the average shopper. 

All of those numbers are pre-pandemic, which means this time next year, figures will likely be even higher. It’s an understatement to say the pandemic has had a major impact on plant-based meats. According to GFI’s report, nearly one quarter of consumers surveyed report eating more plant-based meals because of COVID-19, with Millennials and Gen Z being the largest age group in this percentage. Both groups (41 percent for Gen Z and 37 percent for Millennials) reported they “will be less likely to buy [traditional] meat” because of COVID-19 fears, compared to 25 percent for all age groups. The report cites health concerns (physical and mental), an intent to buy more health-related items, and general fears around the spread of COVID-19 as plausible reasons for this uptick.

Meat alternatives, in particular, saw positive increases. GFI’s report outlines some figures from some of the major plant-based meat companies: 

  • Beyond’s retail sales increased 194.4 percent over the second quarter of 2020; the company currently has products in roughly 25,000 retail stores across the U.S.
  • Impossible saw a 500 percent increase in grocery stores selling the Impossible Burger during the pandemic months, and the company’s products are available in 9,200 stores nationwide.
  • Morning Star farms saw a 66 percent increase in March sales.
  • Gardein sales increased by 65 percent from March 13 to April 19, 2020.
  • Tofurky sales increased 40 percent from February through April of 2020. 

It’s likely the plant-based foods sector would have seen these high numbers even without the pandemic — only over a much longer timeframe. For example, Impossible would probably have reached that 500 percent increase in grocery retailers eventually, but it likely would not have happened in a matter of a few short months had there been no pandemic.

Exactly how long it would have taken sans pandemic we’ll never know, but regardless, sales of plant-based foods aren’t going to subside once COVID-19 does. As GFI’s report notes, this demand for plant-based foods “is a consumer shift, not a fad.”

That in turn means we’ll see more food retailers (and restaurants) selling these products, more alt-protein companies setting up direct-to-consumer e-commerce stores like those of Beyond and Impossible, more food tech accelerators dedicated to alt-protein, and, of course, far more investment in the coming months.

Chile’s NotCo Raises $85M to Bring Its Plant-based Proteins to the U.S.

NotCo, a Chilean food tech company known for its alternative protein products, announced today it has closed an $85 million Series C round. The round was led by Future Positive, L Catterton Partners, and General Catalyst. Existing investors include Kaszek Ventures, The Craftory, Bezos Expedition, Endeavor Catalyst, Indie Bio, Humbolt Capital and Maya Capital.

The new funds come as NotCo plans to scale its operations and expand internationally, starting with a move into the U.S. The company said in today’s press release that it is evaluating both retail and restaurant partnerships in the States.

Rather than focus on a single food category, NotCo is developing meat, dairy, and egg alternatives at the same time. The company currently has its NotMilk, NotBurger, NotIceCream, and NotMay in stores around Chile, Brazil, Argentina. It also has deals with Burger King and Papa John’s in Chile. 

To make its plant-based protein products, NotCo uses artificial intelligence to match animal proteins with their ideal plant replacement, pulling from a library of thousands of plant profiles the company has stored up. The idea is to make combinations of plants that will most closely mimc not just the taste of meat or dairy but also the texture, smell, and mouthfeel, among other factors.

This approach has made NotCo one of the biggest players in plant-based protein in Latin America. However, an expansion to the U.S. means NotCo will have to compete with some serious competition in an already crowded alternative protein space that includes some of the industry’s biggest names: Beyond and Impossible in the plant-based meat sector, Eat JUST for eggs, and Perfect Day for dairy. 

International expansion, whether to the U.S. or from it, is a major development in the alternative protein space of late. Beyond, Impossible, and Eat JUST have all announced plans to move into other markets, including Canada and China. Those expansions make sense, given the amount of cash flowing into the sector. The entire alternative protein category has seen an enormous amount of investment in 2020: over $1.1 billion so far, with more than $907 million of that going to plant-based protein.

For its own expansion, NotCo co-founders, Matias Muchnick (CEO) and Karim Pichara (CTO), will be based in the U.S. The company said in a recent interview that it wants to be a $300 million company by 2024, with 70 percent of that business in the U.S.

Plant-Based Meat Company THIS Has Surpassed Its £2M Crowdfunding Goal — With Time to Spare

Plant-based meat company THIS has more than surpassed its £2 million (~$2.6 million USD) target goal on crowdfunding platform Seedrs. So far, the London, U.K.-based company has raised over £3 million — and has 40 days left to go on its campaign (h/t Plant Based News). 

THIS, which raised £4.7 in March of this year, calls itself a plant-based meat company for meat lovers. It only launched in 2019, but already has its plant-based chicken nugget and bacon products in stores at 2,000 retailers across the U.K., including those of Tesco, Waitros, and Ocado. The company has some presence in restaurants, too. Its products are made from soy bean protein, water, and pea protein. The inclusion of other ingredients, such as vegetable extracts, food additive Maltodextrin, and potato starch, varies from one product to the next. 

With the money it’s raising via its Seedr campaign, THIS hopes to expand further into supermarkets and across more restaurant chains, though the campaign does not list specific names. The company noted that it is also “building a formidable innovation engine within the company” to develop more plant-based meat products. 

THIS says it’s on a mission to make “hyper-realistic plant-based food that mimics meat in taste, texture, and appearance.” But while the company may have picked a good time to launch their campaign, it’s also a highly competitive year for plant-based protein. Thanks in no small part to the pandemic, investment in plant-based proteins is up: $1.1 billion up, according to investor network FAIRR’s recent report. Over $907 million of that figure has been invested in plant-based protein alternatives so far in 2020.

And where the alt-protein space was once the territory of mostly burgers, more and more companies have lately come to market with other meat substitute products. Simulate, which raised $4.1 million in July, also makes chicken nuggets. In the bacon realm, THIS will compete with Hooray Foods and Prime Roots, and possibly Beyond, if rumors are to be believed. 

THIS’s fundraising campaign on Seedr is still in private phase and will go public in the coming days.

Noops Closes $2M Pre-Seed Round, Launches Oatmilk Pudding in U.S.

Noops, a new company that makes plant-based pudding snacks from oat milk, today announced its U.S. launch online and in some retail locations. The company also announced it has closed a $2 million pre-seed round led by 25madison, with participation from Unovis/New Crop Capital and Siddhi Capital. 

Noops said in today’s press release it will use the funds to further develop its product, expand into more retail and foodservice outlets, and expand marketing efforts.

On its website, Noops lists oat milk, date paste, and sunflower seed protein as the main ingredients of its pudding snacks. All ingredients are organic, and the puddings contain zero added sugars. Noops says each serving contains five to seven grams of protein, five to seven grams of fiber, and half the carbs find in regular pudding snacks at the grocery store. 

Starting today, the snacks are available to pre-order online, and the company will launch at certain retailers (specifics weren’t named) and via Instacart later this month. Right now, the products are only available in the U.S.

Like many products derived from plants and alternative ingredients, Noops’ snacks ring up high in terms of price point right now. An eight-pack of 135g cups costs$39, while a 24-pack costs $84. That’s considerably higher than, say, a three-pack of 115g Swiss Miss puddings that will run you about $3.50 bones. It’s less astronomical, though, than something like Magic Spoon’s $40 for a four-pack of 7-oz. alt-sugar cereal.

On the whole, demand for plant-based products products continues to rise. And Noops is wise to sell its wares directly to consumers via its website. Since the pandemic hit, many companies have taken this route to reach customers who prefer e-commerce to mingling with strangers at the grocery store. Noops joins the likes of Impossible, Planterra, Beyond, and other plant-based brands in offering or planning to offer their products via e-commerce shops.

Report: Plant-based Meat Sales Increased 23 Percent When Sold Next to Real Meat

Sales of plant-based meat products increased 23 percent when those products were sold in the same department as traditional meat, according to a newly released study from the Plant Based Foods Association (PBFA) and Kroger.

The study ran from December 2019 to February 2020 in 60 Kroger test stores across three states: Colorado, Illinois, and Indiana. Plant-based meat products were placed “in a three-foot set within the meat department,” according to the study. 

Results varied by region. In the Midwest stores, where widespread adoption of plant-based meat is only just beginning to catch, sales were up 32 percent. Stores in the Denver, CO area, which the study says “already had a high concentration of plant-based consumers,” saw a 13 percent increase.

Other notable stats from the study include:

  • Shoppers purchasing a wider variety of plant-based meats increased by 33%
  • Shoppers increased their number of purchase occasions by 34%.

This rise in purchases of plant-based meat products isn’t too surprising, given the recent overall spike in demand. But retailers are still determining which section of the grocery store plant-based meat products belong in, and depending on where you go, they could be int he vegan section, with the organic meat products, or with regular ol’ Big Meat. 

Despite demand, plant-based companies have gotten pushback over the last year or so from Big Meat over labeling their products as “meat.” In 2019, the PBFA actually sued Mississippi over the state’s restrictive labeling rules, which originally prevented plant-based meat companies from using terms like “burger” or “hot dog.” Those laws were overturned in Mississippi, but Arkansas, Missouri, and other states have passed similar legislation. What labeling laws are in any given state will inevitably affect where plant-based products wind up in the grocery store.

Of course the debate of where to put plant-based meats may be rendered less important if current trends in grocery shopping continue. Online shopping is still popular, and the uptick in coronavirus cases may ensure it stays high for some time longer. At the same time, leading plant-based meat companies like Impossible and Beyond have launched or are planning to launch direct-to-consumer sites. Though to be honest, you’d have to be a pretty dedicated fan of those products to take the time to buy in bulk directly. For plant-based meat companies looking to reach newer flexitarians and casually curious consumers, the grocery store aisle — and specifically the meat aisle — remains their best bet.

Planterra’s Plant-based Meat Brand Ozo Hits Retail Store Shelves, E-Commerce

JBS-owned Planterra Foods announced this week it will launch its first Ozo product on grocery stores shelves in June, and will also make them available direct to consumers via its e-commerce site. To start, the brand will launch its burgers (two-4 oz patties), its Ground product (12 oz), and Mexican-Seasoned Ground (12 oz).

Colorado-based Planterra first announced Ozo in March of this year, saying the new line of plant-based products would include burgers, grounds, and meatballs. All Ozo products are a mix of pea protein and rice protein fermented with shiitake mycelia (root). 

According this week’s press release, Ozo products will hit store shelves in several different states:

Albertsons and Safeway locations in Colorado, Nebraska, New Mexico, South Dakota and Wyoming; Kroger* stores in 12 states (Alabama, Arkansas, California, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio and Tennessee) and, as well as military bases across the country.

Customers will also be able to order Ozo’s meatless meat through the brand’s website and through Wild Fork Foods for customers in Florida.

And for those looking to try before they buy, Planterra is also sending out its own fleet of vans to offer curbside-pickup samples of its products during the rest of June. Those vans will make stops in Denver, Boulder, Detroit, Los Angeles, and Chicago. Additional cities are planned for the next 12 months, including Seattle, San Francisco, and Nashville, among others. Finally, “special deliveries will be made to fire stations, hospitals and other locations to serve frontline workers this summer,” according to the company press release.

Selling meatless meat directly to consumers is fast becoming a standard trend for companies, particularly with the restaurant industry — formerly a key channel for plant-based products — still in the throes of its pandemic-induced upheaval. Earlier this month, Impossible launched a direct-to-consumer channel for its “bleeding” meat products that’s available to anyone in the lower 48 states. Its chief competitor Beyond followed with an announcement of its own forthcoming D2C store, which is slated to launch at some point this summer. 

Meanwhile, demand for plant-based meat keeps rising, thanks in no small part to panic buying sprees and meat shortage scares, and online grocery shopping has hit record numbers in the last couple months. That makes now an ideal time to launch direct-to-consumer stores, and also to get new meat alternatives onto store shelves across the country.

It’s unclear if the demand for online grocery shopping will keep now that economies are reopening, so Planterra’s Ozo shop, not to mention those of other plant-based retailers, may or may not be a hit. That said, Ozo’s website says products can be stored frozen for up to 60 days, so flexitarians wanting to stock up may find a D2C e-commerce site a convenient addition to their online shopping.

DAIZ Raised $6M to Become ‘The Fourth Meat’

Japanese plant-based meat startup DAIZ raised a $6 million Series A round in the second half of May. According to a DAIZ press release, the round included participation from the Fisheries Growth Industrialization Support Organization fund and Mitsubishi UFJ Capital. The $6 million figure marks DAIZ’s total funding to date.

While the actual funding was announced a couple weeks ago, it’s worth noting because of DAIZ’s ambitions and how the company plans to take on big-name players in the plant-based space with its so-called “miracle chips,” which are raw plant-based meat components created using DAIZ’s patented Ochiai High Pressure Method technology.

According to the press release, this germination method brings out the umami flavor of soybeans and lessens the unpleasant aftertaste that are found in a lot of vegan meat offerings right now. The soybeans are then put in an extruder, where molding technologies recreate the texture of actual meat.

With the new funds, DAIZ says it will build out one of the largest factories for plant-based meat in Japan in 2021. They also plan to raise Series B funds at some point in 2020. Initially, the company will focus on selling to major food manufacturers as well as distribution companies, and eventually wants to expand globally. 

Notably, DAIZ is aiming to become what it calls “the fourth meat” alongside chicken, beef, and pork. In other words, they have no plans to replace the real thing. Rather it aims to have plant-based meat co-exist on the table with animal-based meat. Many plant-based meat companies have similar goals that target the “flexitarian,” which means when DAIZ finally does expand internationally, it will be competing with the likes of Impossible, Beyond, Néstle, and a growing number of others in the space.