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Daily news and analysis about the food tech revolution

plant-based

Down Under, Australia’s Burger King is Developing a Vegan Whopper to Fool Carnivores

Hungry Jack’s, the Australian franchise of Burger King, is stepping into the meaty plant-based burger game with a whopper investment of… a million bucks?

The Australian Financial Review reported today that the founder Hungry Jack’s, Jack Cowin, has invested $1 million to develop a vegan burger made from legumes that looks, tastes, and even bleeds like real meat. It will be sold in their new vegan Whopper, which Hungry Jack’s will sell at all 400 locations across Australia by this summer. The forthcoming burger is being developed by v2food, a company founded by Cowin, in tandem with Australia’s national science agency, with the goal of developing better tasting meat alternatives.

That’s a noble mission, but I’m not sure how realistic it is with only $1 million behind it. For context, Impossible Foods has raised over $687 million and Beyond Foods had amassed $122 million before its IPO last month. Put next to those figures, $1 million looks like a drop in the bucket. There’s probably some knowledge that v2food can glean from forerunners like Beyond and Impossible, but R&D for food products is extremely expensive.

v2food is also working on a very tight timeline. Hungry Jack’s has announced it will have the plant-based Whopper out by sometime mid-year, which basically gives them three months tops to develop a new burger and start producing it at scale. The fast-food chain already can leverage its own established production facilities, but if they need any new equipment to make the plant-based burger, scaling could actually present a challenge.

It would have been easier for the company to just roll out a new Whopper made with “beef” from Beyond Meat or Impossible Foods, as Burger King is doing in the U.S. Impossible isn’t in Australia yet (possibly due to tighter restrictions on genetically modified food), though Beyond is. Maybe Hungry Jack’s is hoping it will be cheaper — at least in the long run — to develop their own patty. Though by taking that path, they won’t be able to leverage Beyond or Impossible’s brand recognition as a tool to entice new customers.

Concerns aside, Hungry Jack’s is smart to cash in on the growing demand for plant-based burgers. They just might need to invest a lot more cash in order to make it happen.

Future Food: The Confusion around Cultured and Plant-Based Meat

This is the web version of our weekly Future Food newsletter. In it we cover the alternative protein landscape, from plant-based meat to cellular agriculture to insects. Subscribe here!

Plant-based meat companies are leveraging technology to create a product so good it makes eating meat from an animal unnecessary. Impossible Foods and Beyond Meat are both doing an excellent job of it so far, and will continue creating new iterations that taste even closer and closer to the real thing.

But where does cell-based meat — still likely a few years from our plates — fit into the equation? If plant-based meat tastes so good people will willingly choose it over the real thing, do we even need to bother making meat in a lab?

This week I tackled that question and zoomed out to take a broad picture of the alternative meat ecosystem, now and in 10 years. Spoiler: Yes, I think that cultured meat has a place in our future diets and is worth pursuing. See if I can convince you.

Photo: New Harvest.

*Is* plant-based meat actually healthy?

My boss Michael Wolf posted that piece on Linkedin got some interesting responses including one from Sean Butler, the Managing Director of LIDD Supply Chain Intelligence and former SVP of Retail at the meal kit startup Chef’d. He said:

I think that consumers may come to see the current crop of plant-based [meat] as “chemical-based” in the future, creating a strong opening for cellular meat, which can be billed as a (relatively) natural and sustainable alternative. Time will tell!

I’d always assumed consumers actually felt the opposite way. After all, plant-based meat is chiefly made up of recognizable ingredients, like soy and pea protein, whereas cell-based meat is more of a mystery — at least for those of us without a cell biology degree.

But just because we know the basic ingredients in plant-based meat doesn’t mean it’s necessarily more healthy. Many meat alternatives are quite high in fat (in order to mimic the juiciness of real meat), and are heavily processed to nail the texture. Despite this, plant-based meat companies like Beyond and Impossible typically market their products as healthy alternatives — which is one of the reasons why flexitarians are flocking to them in droves.

In the rapidly evolving world of alternative protein, it can be confusing for consumers to delineate healthy and non-healthy, natural and non-natural, meat and non-meat.

Mission (actually) Impossible

I got in a bit of a news kerfuffle this week. Spurred by a piece in the Washington Post, I wrote a story about how Burger King will start selling the Impossible Whopper in Sweden.

As it turns out… that’s not the case. A food tech-connected source in Sweden reached out to let us know that the new plant-based burger to be sold in BK is not, in fact, from Impossible and has nothing to do with the famous “bleeding” burger. A rep at Impossible later confirmed.

There’s one good reason that Impossible isn’t available in Europe yet, even while their competitor Beyond Meat is: heme. Impossible produces heme through genetic engineering. While we’re cool with that in the States, the EU is very hesitant about what sort of genetically engineered foods it allows to be sold. That’s one reason why I was surprised to hear that Impossible was moving into Sweden so quickly.

So which plant-based burger can Swedes expect to order from their local BK? According to an email from Iwo Zakowski, the General Manager of Burger King Sweden and Denmark, the new Unbelievable Whopper will be made with a plant-based burger composed of soy and wheat protein. He didn’t give the name of the producer but clarified that it wouldn’t be Nestlé’s Incredible Burger, which is on menus in McDonald’s Germany.

If you happen to be in Sweden and are able to take a taste, let us know what you think, wouldja?

Sausage party

It may not be in Sweden, but Impossible made some other expansion moves in the U.S. this week. They’re now at Little Caesar’s, whose new Impossible Supreme pie is topped with sausage made of Impossible’s “bleeding” plant-based meat.

Interestingly, this marks the first time the company has developed a unique, non-beef product for a restaurant partnership. Which makes me think that we’ll soon see a wave of new plant-based sausage products coming to market. Beyond’s already there, as are some veterans in the alterna-meat space like Field Roast and Lightlife. Now Impossible has followed suit. Maybe next they’ll roll out some plant-based breakfast sausage patties, or bratwursts for the grill?

Ocean Hugger Foods’ new plant-based eel sushi.

Protein new ’round the web

  • Ocean Hugger Foods, who make a vegan raw fish substitute from tomatoes, unveiled a new plant-based “eel” sushi at this weekend’s National Restaurant Association Show.
  • Livekindly: In the U.K., supermarket chain Aldi is expanding its line of private label plant-based products with “sausage” rolls and “chicken” burgers.
  • Nation’s Restaurant News: Pret A Manger is buying British competitor Eat and turning all of its locations into Veggie Prets, which only serve (you guessed it) vegan and vegetarian food.
  • malaymail: In Singapore, food delivery giant Deliveroo will offer dishes from eight restaurant brands made from Impossible Foods’ plant-based meat.

Eat well,
Catherine

New Age: Perennial Makes Plant-Based Protein Drinks for the 50+ Generation

When it comes to protein drink options, there are a lot to choose from. There are ones for bulking up, for slimming down, for nutrition management and for keeping hunger at bay. Now there’s a new one for older people.

Based in El Seguno, Calif., startup Perennial’s plant-based protein beverages are geared towards consumers 50 years and older. Perennial’s single-serve beverages contain a mixture of pea protein, soy protein, almonds, and rice protein. It also has dietary fiber to maintain a healthy gut, and shiitake mushroom powder and algal oil for brain health.

For now, Perennial only has one product: a single-serve beverage with a vanilla flavor. You can buy a twelve-pack of the drinks on Perennial’s website for $34.99, which comes out to almost $3 each. The drinks are quite small — more Yoo-Hoo, less Gatorade — and each one contains 140 calories and 8 grams of protein. They’re intended to be a snack, not a meal replacement.

Interestingly, co-founders Sara Bonham and Brent Taylor (who previously co-founded Beyond Meat) are only in their mid-30’s. “We’re creating a world we want to age into,” Bonham explained to me over the phone recently.

Their choice to target the 50+ demographic isn’t only altruistic — it’s also a savvy business play. “There’s a lot of noise going after millennials,” Bonham said. But older demographics — specifically those over 50 — have been ignored.

That means there’s a huge, relatively untapped market. Ten thousand people per day are turning 65 in America; yet according to Bonham, only 1 percent of global innovation addresses them. I’m not sure where she gets that number, but anyone paying attention to food innovation trends can see that the vast majority of new products are targeted at Millennials and Gen Z, capitalizing off their demand for plant-based food, personalization, convenience, etc.

Products for older people, on the other hand, tend to lean towards convalescent care. But as the population ages and people stay fit for longer, older consumers are searching for foods that will help them stay healthy and active.

Photo: Perennial.

That’s where Bonham thinks that Perennial can gain traction. However, Perennial’s greatest strength may turn out to be its greatest weakness. The company is clearly targeting an older demographic, but I’m not sure if Baby Boomers will be into it. They care less than younger generations about whether or not their food is plant-based, and relatively few purchase groceries online.

To me, Perennial seems like a drink that will actually end up attracting Millennials. After all, it has everything they like: it’s plant-based, full of trendy ingredients like algae and mushrooms, and is available for online delivery. Maybe Millennials will introduce Perennial to their parents and get them hooked?

The real test will be when Perennial starts rolling out to different retail channels, which Bonham told me they’re hoping to do soon. Will their plant-based drinks jump out to older generations who are passing by a grocery shelf filled with other protein drinks like Ensure or Muscle Milk? A lot will come down to branding. To that end, the startup does have a little bit of funding to play around with: it raised a $2.5 million round in August of 2017 with participation from SOSV amongst others.

I sampled one of Perennial’s drinks and found it to be pretty tasty. There was still a bit of chalkiness and a bitter aftertaste that I’ve come to associate with plant-based dairy — especially ones that contain pea protein —  but overall it was good: sweet, creamy, and filling enough to sustain me over the long stretch between breakfast and lunch.

Would I buy it on the reg? Probably not. There are other, more readily available protein drinks and snacks I can grab at the corner store, and Perennial’s added benefits of bone, brain, and gut health aren’t quite enough to entice me. However, maybe by the time I’m 50 I’ll feel differently.

Pizza! Pizza! Impossible Partners with Little Caesars for New Plant-Based Sausage Pie

It seems Little Caesars is the lastest fast-food restaurant to jump on the plant-based meat bandwagon. CNN Business reported this morning that the pizza chain is testing out a new pizza topped with sausage made with Impossible Foods’ plant-based meat.

Called the Impossible Supreme pizza, the pie also comes topped with mushrooms, caramelized onions, and green peppers. Impossible developed a new sausage product especially for the pizza chain, making it the first time the startup has sold anything beyond its signature “beef,” be it served in a burger or a taco bowl.

The new ‘za has cheese on it, so it’s not vegan. But like most plant-based meat products these days, it’s not meant for a vegan audience. “The Impossible Supreme pizza is designed to appeal to meat eaters,” Ed Gleich, Little Caesars Chief Innovation Officer, told CNN Business.

So far Impossible seems to be doing quite well appealing to meat eaters in the fast food realm. They’re already on the menu at White Castle and Qdoba, and are preparing to roll out the successful Impossible Whopper in all 7,300 Burger King locations around the States.

The Impossible Supreme pizza is currently available at 58 locations in Florida, New Mexico and Washington State, and Little Caesars plans to expand it to all its menus if this first run goes well.  The new pizza costs $12, which is slightly pricier than most of Little Caesars offerings (the 5 Meat Feast is only $9).

Despite the higher cost, I’m betting that test won’t take long. Just look at how quickly Burger King opted to roll out its successful Impossible Whopper nationwide. If it does happen, that will mean over 4,300 more restaurant partners for the Redwood City, Calif.-based startup.

Impossible’s rapid expansion is great news for flexitarians — especially those on a budget — but it also presents a challenge. Recently the startup has been struggling to fulfill skyrocketing demand for its plant-based meat, leading to shortages across the country. However, just last week Impossible raised $300 million which will hopefully help them ramp up production to supply their growing bastion of fast-food restaurant partners.

I’m not surprised to see Little Caesars embracing the plant-based trend. The Detroit-based chain has actually been innovating quite a bit lately. In addition to embracing plant-based meat, they also have the Pizza Portal, a self-service pickup station for customers placing mobile orders. And let’s not forget that the company has a patent for a pizza-making robot.

Maybe down the road that robot will be slinging some plant-based sausage pies.

If Plant-Based Meat Tastes This Good, Do We Even Need to Make Meat in a Lab?

There’s never been a better time to be a vegetarian. Or a flexitarian, for that matter.

Gone are the days when the only veggie option at a barbecue was a dry disc of a bean burger. Companies like Beyond Meat and Impossible Foods have harnessed food science and culinary technology to essentially reverse engineer meat; taking the textures and flavors we crave and figuring out how to make them out of plants (and some genetically engineered yeast), skipping the animal entirely.

So far, they’ve done a pretty good job. When we tried Impossible’s new Recipe 2.0 at CES this January — where it won the Best of the Best award — we were blown away by how closely it replicated beef. It was almost uncanny. In the months leading up to its wildly successful IPO Beyond Meat also unveiled a tasty new recipe which has been roping in flexitarians at Carl’s Jr. and Del Taco.

We’re not the only ones impressed by these companies’ meat-like vegan offerings. Consumers have been flocking to plant-based meat as of late. Spurred by increased demand, meat alternatives have become more widely accessible (geographically and price-wise) as it heads onto menus of nationwide fast-food chains like Burger King.

Plant-based meat may be doing a good job at imitating the real thing, but some companies are trying to actually make the real thing by growing animal cells in a lab.

No cell-based meat product has hit the market yet, though companies are already doing taste tests of everything from cell-based sausages to shrimp. Food tech company JUST is claiming it’ll make the first public sale of cell-based meat by the end of this year, but most other companies are estimating 2020/2021 as the launch date.

It sounds great on the surface: real meat, minus the environmental and ethical costs! But cultured meat is actually quite polarizing. First of all, it’s expensive — as of now, it costs around $50 to make a single burger. There are also questions around whether or not it’s actually better for the environment than traditional animal agriculture, especially considering many companies rely on controversial (and non-vegan) fetal bovine serum. And the FDA and USDA haven’t exactly nailed down how they’re going to regulate this new foodstuff.

Lately I’ve been wondering: If plant-based meat tastes so good people can’t even tell it’s vegan, do we even need cell-based meat? After all — it’s expensive, polarizing, and it’s unclear when (or where) we’ll be able to taste it. So why bother?

JUST’s nuggets made with cell-based chicken meat.

I actually think there are a couple reasons that cell-based meat is still a relevant endeavor. First: taste. Sure, companies may make pretty good imitations of chicken nuggets or beef burgers out of plant proteins. But it’ll be a much bigger lift to make a vegan version of a white meat chicken breast, a T-bone steak, or fatty bacon that will fool the average carnivore.

There, cell-based meat has more of a chance. As of now it certainly has textural and taste hurdles of its own. However, at least it’s working with the same raw material that goes into an animal product (muscle cells, fat cells, etc). I’m optimistic that scientists will eventually crack the code — finding an affordable animal-free media, figuring out the right scaffolding to create texture — and be able to make cell-based meats that are pretty darn indistinguishable from the real thing.

The second reason that cell-based might have the upper hand over plant-based meat is psychological. Some people are just very stubborn carnivores (hi there, my entire Southern family!). Even if they couldn’t tell the difference between a plant-based and a cell-based burger in a blind taste test, I’m guessing that, given the choice, the majority of them would go for the latter — because at least it’s real meat.

In fact, a recent consumer study from Frontiers in Sustainable Food Systems found that 24 percent of consumers were not at all likely to purchase cultured meat, while 26 percent said the same for plant-based meat. Going forward, cell-based meat companies will have to figure out effective branding strategies to win over those that are hesitant and convince them that meat grown in a lab is the same — if not better — than what comes from a pasture.

In the end, it’s not an either-or. Our protein future will likely feature both plant-based and cell-based meat. Heck, there might even be some insects thrown in there. Consumers will choose different options based off of dietary preferences, budgets, marketing, etc.

So while plant-based meat does indeed rule for now, the alternative protein landscape will likely change in the next decade or so when cultured meat enters the scene. Until then, dig into your Impossible Whopper and let its (lab-made) blood run down your chin with abandon.

Want to keep tabs on the movers-and-shakers in the alternative protein space? Make sure to subscribe to our weekly Future Food newsletter!

Ocean Hugger Foods to Unveil Plant-Based “Eel” Sushi at National Restaurant Association Show

There will be aisles and aisles of new technology to see and taste at this weekend’s National Restaurant Association Show in Chicago. But I’m willing to bet my bottom dollar that there will only be one plant-based eel sushi.

Ocean Hugger Foods is debuting its new vegan eel, called unami at the show this weekend. It’s made from eggplant, which the company processes to imitate the texture of eel, as well as soy sauce, mirin, and algae oil for flavor.

This will be the second product from the New York-based startup, which already makes ahimi, a plant-based alternative to raw tuna made from tomatoes. (Next up they’re launching a vegan “salmon” made from carrots to be called sakimi.)

The company hasn’t announced when or where its unami will be sold. I’m guessing it’ll join sushi lineups alongside their ahimi, which is available in around 90 restaurants and grocery stores, including Whole Foods.

A few months ago I predicted that vegan sushi — that is, sushi that uses realistic plant-based raw fish, not just California rolls — would become a growing market. Ocean Hugger Foods isn’t the only one in the space: across the pond in the U.K., plant-based food company Ima is selling sushi made with a vegan salmon substitute.

Eel isn’t quite as popular a sushi selection as tuna or salmon, but it’s rapidly disappearing due to climate change and overfishing. In fact, the Monterey Bay Aquarium’s Seafood Watch List lists eel as “one of the worst seafood choices from an environmental perspective.”

It may not be America’s #1 sushi choice, but the New York-based company is smart to diversify its product range before other companies jump in and stake their claim with plant-based sashimi. Plus, since eel is chiefly consumed in Japan and China, maybe this product will help Ocean Hugger Food expand into the plant-based protein-hungry Asian market.

If you’re in Chicago this weekend and have a chance to sample Ocean Hugger Foods’ unami, leave us a comment and tell us what you thought.

Future Food: Beyond Impossible, Investment is Heating Up Throughout the Alt-Protein Space

This is the web version of our weekly Future Food newsletter. In it we cover the alternative protein landscape, from plant-based meat to cellular agriculture to insects. Subscribe here!

Who’s investing in alternative protein?

Last week the interweb was all abuzz with Beyond Meat’s wildly successful IPO. This week, Impossible Foods raised $300 million and began selling the hotly anticipated Impossible Whopper in three more cities (besides the OG: St. Louis).

But a girl cannot live on plant-based meat alone, no matter how good it may taste. Plus, any news from Beyond/Impossible this week is really just a continuation of the trajectory we’ve been seeing:

  • Consumers are demanding more plant-based protein options at a variety of price points
  • Alternative meats are heading into more and more retail channels, including prepared meal delivery
  • Investors are hustling to get more involved in the white-hot plant-based meat space

Let’s take a closer look at that last one. We don’t often spend much time peeking behind the curtain at the companies doling out funding to these startup darlings making bleeding burgers or cultured steak. But they’re the ones dictating the pace of innovation in the space.

One company of particular interest is the newly-minted Big Idea Ventures (BIV). The hybrid venture/accelerator firm is backed by Tyson and Temasek, a holding firm owned by the Singaporean government. BIV’s goal is to be the largest accelerator dedicated entirely to the alternative protein space. It made its first investment a few weeks ago, in Singaporean cultured shrimp startup Shiok Meats.

BIV may be unique in its laser focus on animal-free proteins, but there are quite a few other VC firms investing in the space, like Stray Dog Capital and New Crop Capital. Big Food corporations like Cargill and Tyson are also reading the cards and investing in plant- and cell-based startups, expanding their portfolios and gradually reframing themselves as generalized protein companies.

If you’re interested, you can read my piece on BIV’s new protein fund and upcoming accelerator programs here.

Media holds the key

One of the costliest parts of making cultured meat is the media — essentially, the food that scientists feed animal cells to help them multiply enough that we can eat them. As of now a lot of cell-based companies rely on Fetal Bovine Serum. Since this is extracted from the necks of baby cows in slaughterhouses, it’s a) super controversial, b) not vegan, and c) expensive.

This week we also wrote about Canadian startup Future Fields, which is developing a media completely free of any animal products. Their solution could help cultured meat companies bring their product to market sooner, and with a more appealing price tag.

Impossible gets into dairy?

Okay okay, I know we said no more Impossible Food news. But one more tiny thing: this week FoodNavigator reported that Impossible is currently developing a suite of “dairy” products. This isn’t exactly surprising. When we spoke to Impossible CEO Pat Brown at CES this year he made it clear that Impossible wasn’t stopping just at burgers.

We asked Impossible if they had any updates in the dairy department, and they responded that it’s their mission to “make all meat, fish and dairy products that consumers love directly from plants as soon as possible.” No word on when, though I’m guessing Impossible will focus on meat for a while longer. What we do know is their next product: steak.

For now, flexitarians thirsty for plant-based dairy alternatives can opt for a creamy glass of Oatly — that is, if they can find it.

Photo: JUST.

Protein news ’round the web

  • This week JUST, maker of plant-based and (soon) cell-based animal products, officially launched its JUST Egg in China. Their product uses mung bean to replicate scrambled eggs’ signature texture.
  • Iconic Canadian fast-food joint Tim Horton’s is testing out breakfast sandwiches featuring Beyond Meat’s vegan sausage patties in 60 restaurants across Toronto.
  • Chick-fil-A is exploring adding plant-based meat options to their notoriously small menu.

Eat well,
Catherine

Hybrid VC Firm Big Idea Ventures Wants to Scale the Alternative Protein Revolution

We hear a lot about plant-based startups raking in big funding dollars — cough, Impossible Foods, cough — but not a lot about the companies investing in them.

One such company working to fund the alternative protein revolution is Big Idea Ventures (BIV). Helmed by Andrew Ive, formerly of food innovation accelerator Food-X, Big Idea Ventures is a hybrid venture firm with a VC arm and accelerator program.

It tore onto the scene a few weeks ago when it closed its first fund: the New Protein Fund, which now stands at roughly $50 million. “It’s the first and largest plant-based accelerator fund,” Ive told me over the phone last week.

The fund is backed by giants like Tyson Foods and Temasek, the Singaporean government’s VC arm. It will focusing heavily on plant-based protein startups, Ive said they’re are allocating 5 to 10 percent of their money for cell-based endeavors.

That makes it all the more interesting that they chose to make their first investment cultured shrimp company Shiok Meats. Ive told me that they were drawn in by the Singaporean startup’s product focus: crustaceans. He believes that the flavor and texture of cultured shrimp will be easier to commercialize than, say, beef or chicken. I’m not sure if that’s true, but it is impressive that Shiok Meats, which is less than a year old, has already done an (apparently successful) taste test of its minced “shrimp” in dumpling form.

BIV is also launching physical accelerator programs in two locations: New York City (to launch in Q3) and Singapore (to launch in Q4). Mike Lightman, Managing Partner of BIV, told me that they plan to accept 8 to 10 companies per cohort and do two cohorts per year. All accepted startups will receive $250,000 in funding, a space to work, and mentorship from their entrepreneurs in residence in exchange for a convertible note. Once the program is over, BIV will allocate $1 to $3 million among the top-performing companies. Over the next four years, Ive said that BIV is hoping to back around 100 companies.

In a lot of ways, this accelerator follows the typical script: young startups get funding and advice in exchange for a portion of their company. But BIV’s program diverges in a few ways. Firstly, it’s five months long as opposed to the more traditional three-month programs like Y Combinator and Food-X, which Ive found was too short to really help a company grow. BIV also has a full kitchen in their accelerator space, so startups can actually work on developing/scaling their products in-house. Finally, with their dual presence in Asia and the U.S. (with plans to expand into Europe sometime in the future), Lightman also noted that they can help reduce opportunity costs for entrepreneurs by giving them ready access to multiple markets.

BIV is entering the scene at a time when every major company and their mother seems to be launching a new accelerator. For mega CPG companies, like General Mills, Danone, and Kraft-Heinz, they’re a relatively easy way to discover new companies for acquisition and keep a finger on the pulse of what’s new and “hip.”

With this in mind, it’s not hard to see why Tyson and Temasek want to get in on an alternative protein accelerator.

Tyson has set out to become the number one provider of protein, no matter the source. It has invested widely in both plant-based and cell-based meat companies, including Memphis Meats, FutureMeat, and, up until recently, Beyond Meat. They’re also developing their own line of plant-based proteins set to launch this summer. Through their involvement in the BIV accelerator, Tyson will have access to a wide range of innovative new alternative protein companies, which they can try to acquire or just use to gain inspiration.

For Temasek’s part, Singapore has been quite progressive in pushing for innovation the alt-protein space. Through its new RIE2020 plan, the city-state will invest over $100 million in foodtech endeavors like cultured meat and microbial protein production. Temasek can use BIV’s cohorts to attract promising new alt-protein startups to Asia; which we’ve already predicted will be a hotbed for cell-based meat.

TL;DR: If you’re curious about what new companies are shaking up the alternative protein space, keep an eye on what Big Idea Ventures is up to. Another good way to stay up to date is to subscribe to our Future Food newsletter! You’ll get a weekly dose of in-depth analysis on the plant-based and cultured protein landscape.

If you’ve got a plant- or cell-based startup of your own, you can apply for BIV’s inaugural accelerator program here.

Oatly Brought the Oat Milk Craze to America. Now They’re Hustling Not to Lose Their Grip

Chances are if you’re going to a fancy coffee shop, you’ll have the option to swap the cow’s milk in your latte for almond, soy, or oat milk.

If you haven’t heard of the last option, you’re kind of behind the times (don’t worry, that was me until recently). Oat milk is on a path to soon usurp almond milk as the top alterna-milk in coffee shops around the U.S. According to Nielsen, oat milk sales grew by 50 percent from 2017 to 2018, while almond milk sales grew only 11 percent.

Oat milk lovers can thank one company in particular for kickstarting the oat milk craze to the U.S. Ironically, they’re from Sweden.

Founded in 1994 in Malmo, Oatly was developed by brothers Bjorn and Rickard Oste, who were looking for a sustainable alternative to dairy milk. They began experimenting with oats and later patented their oat milk production process. In 2001 they launched a consumer-facing brand.

Oatly may have been around quite a while, but recently it has been experiencing meteoric growth. When I spoke to Bjorn Oste on the phone (who’s now on the board of Oatly’s parent company), he told me it took the company 18 years to reach a billion kronor (~$104 million) in sales. In the past year, they’ve doubled that number.

Oatly’s sales really started to climb when they made their way into the U.S. in 2016. They originally started out in coffee shops, but now their business is split 50/50 between cafés and retail. Oatly products are now in over U.S. 1,500 grocery stores including Whole Foods and Target. It’s also in over 2,500 coffee shops.

Unsurprisingly, Oatly’s explosive uptick in sales has brought its fair share of problems. The company is currently struggling with product shortages. To address this demand, Oatly — which is so secretive about its technology it doesn’t like to outsource production to copackers — recently cut the ribbon on a plant in New Jersey: its first in the U.S. They’re already building another plant in Utah set to open early next year.

“When we launched [in the U.S.] it was very hard to predict growth,” said Oste. “It’s been a shocking reception.” In fact, Oste told me that the non-dairy market is actually bigger here than in Oatly’s native Europe.

Photo: Oatly.

Oatly’s entrance into the U.S. was also strategically timed to take advantage of the growing alternative protein market. “We’re seeing a paradigm shift towards plant-based consumption,” Mike Messersmith, General Manager of Oatly, told me over the phone. He explained that Oatly waited to enter the U.S. until they thought that the market was strong enough to support their product.

And strong it is. Nielsen data indicates that sales of plant-based milk beverages rose 9 percent in 2017-18 and took in $1.6 billion. This growth is driven by flexitarians who are eschewing dairy milk for health or environmental reasons. Oatly is lactose-free and also friendly for those with nut allergies. It’s also markedly more sustainable than dairy from a cow and also takes much less water than almond milk, which attracts ethically-motivated Gen Z and millennial consumers.

As always in the alternative protein space, taste is king. A product can be sustainable as all get out, but if it doesn’t taste delicious in your coffee or poured over your cereal, it’s not going to make it. “Customers want to choose plant-based options without feeling like they’re compromising,” Messersmith said. With its creamy, latté art-friendly milk, Oatly seems to have nailed the taste and texture aspects.

Other companies are quickly trying to cash in on oat milk’s popularity. PepsiCo launched its own line of the beverage through Quaker Oats, and major brands like Califia Farms are also selling the oaty drink.

I haven’t taste tested every oat milk out there, but judging purely from what I’ve seen Oatly truly does seem to have at least the coffee shop market cornered (when it’s in stock). According to Oste, they have an advantage because unlike other companies, they have complete control of the entire production system. They even have founded a company which creates new non-GMO oat varieties that have higher protein and fat contents.

Oatly doesn’t seem to have any interest in making an “Almondly” or “Soyly,” either. Oste told me that over the years retailers had asked them to expand their repertoire and branch out into other milk alternatives, but he wasn’t tempted. “Pretty much anyone can make soy or almond milk,” he said. But when it comes to oat milk, “[we] own the space.”

For now, that might be true. Now Oatly has to ramp up production to maintain customer loyalty. With their first U.S. factory newly up and running and their second underway, it seems like they’ll be able to.

Next up, Oste hinted that the company might bring some of their other oat-filled products — like ice cream, savory spreads, and heavy cream — to the U.S. With the dairy-free ice cream market alone projected to hit $1 billion by 2024, I’d say that’s a pretty smart move.

Eat Mor (Fake) Chikin: Chick-Fil-A Might Add Plant-Based Meat to Its Menus

Growing up in Atlanta, there was no treat better than a crispy Chick-Fil-A chicken sandwich. These days, when I go home to visit, things are a little trickier: I’m a vegetarian now and Chick-Fil-A’s doesn’t have a single meat-free entrée.

But soon that might change. Business Insider reported today that the fried chicken chain is exploring adding vegan options to their offerings, including plant-based meat.

Amanda Norris, executive director of Chick-fil-A’s menu, didn’t tell BI exactly what type of vegan options they were looking into, but did mention that “it might be some kind of alternative protein on a sandwich.”

This news is far from surprising. Restaurant chains large and small are taking note of the rising consumer demand for plant-based proteins and adding vegan products to their menus. Del Taco, Carl’s Jr., TGIFridays and A&W have Beyond Meat options, while White Castle, Qdoba, and Burger King have embraced the Impossible Burger. In fact, at this point any QSR that isn’t exploring more alternative meat products is being foolish.

Chick-fil-A is an interesting case since it likely won’t be using plant-based ground beef or burgers. The chain’s whole shtick is that it eschews beef in favor of chicken, so adding a product from, say, Impossible Foods wouldn’t make a lot of sense from a menu cohesion standpoint. Beyond Meat does make plant-based chicken strips, so we could see something like that, or like the vegan crispy nuggets from Seattle Food Tech.

The chain is clearly open to experimentation: they’re the first fast food restaurant to experiment with meal kits and also have two off-premises units focused 100 percent on catering, delivery, and carryout, and offer delivery via Doordash from 1,000+ locations. And yet they’re only now experimenting with something as simple as a vegetarian entrée.

I chalk this up to the fact that the chain has a very small, simple, and curated menu. But even though people come to Chick-fil-A for one thing, it’s getting harder and harder for nationwide chains to ignore consumer demand for realistic plant-based meat — and the increased revenues and new customers it brings restaurants. It seems that Chick-fil-A is finally waking up to the fact that it’s losing customers (like me) who are bypassing it in favor of other QSR’s that offer filling meat-free options.

Future Food: How Big a Deal is Beyond Meat’s IPO, Really?

This is the web version of our weekly Future Food newsletter. In it we cover the alternative protein landscape, from plant-based meat to cellular agriculture to insects. Subscribe here!

Unless you’ve been living under a rock (no shame), you’ve heard about how Beyond Meat’s IPO is crushing it. At the time of this post, the company’s shares have more than tripled in price — from $25 to $78 — making it the biggest IPO pop since the 2008 financial crisis. Beyond Meat is now valued at almost $4 billion.

You can almost hear the investors drooling.

Beyond’s IPO success has proven that the plant-based protein craze isn’t just a fad; it’s a radical turning point in consumer preferences. Younger generations are demanding more from their foods — Gen Z especially is seeking out dining options that are ethical and environmentally sustainable. And companies like Beyond, who have a mission to halt climate change by reducing meat production, are reaping the profits.

So how big a deal is Beyond Meat’s IPO? Pretty darn big. In fact, I’m betting it will have significant ripple effects on the protein landscape over the next few months.

  • Beyond’s competitors — notably Impossible Foods — will likely follow suit with an IPO of their own (that is, if Impossible can overcome its recent supply issues).
  • Get ready to see lots of new alt-protein startups bring their animal-free eggs/milk/sushi rolls to market. This is where companies like Motif Ingredients, which provides protein R&D services, will soon be in high demand.
  • Mega food corporations like Nestlé and Unilever will invest more heavily in alternative meat products than they already have, possibly even following in Tyson’s footsteps to develop their own line of plant-based proteins.
  • More fast food and fast casual chains — big and small — will add high quality plant-based alternatives to their menus. Burger King went all-in on the Impossible Whopper last week, and I’m betting McDonald’s isn’t far behind.

A chicken patty that’s two-thirds meat, one-third Better Meat Co.’s protein blend.

Stuff is happening in the cell-based meat space, too. Last week Shiok Meats, the Singapore-based cellular aquaculture startup growing shrimp in bioreactors, raised a $4.6 million seed round. That makes them the third best-funded cell-based meat company in the world, after Mosa Meats and Memphis Meats.

Not too shabby for a company that’s only been on the scene for a year.

Instead of making totally new meat products, others are trying to improve the ones we already have. This week the New York Post wrote a story about food scientists in Australia who are incorporating insects into sausages and the like.

It may be a smart strategy to reduce the environmental footprint of meat while keeping a high protein content, but will consumers be okay with eating hot dogs filled with maggots? Probably not. (Though celebrities and celebrity chefs are working on it.)

This brings up an interesting point, though. People might balk at eating bugs, but the concept of replacing some meat with non-meat protein is sound. For example, startup Better Meat Co. makes a wheat protein that can be blended into processed meats, like hot dogs or bologna. It’s a clever way to reduce meat consumption without asking consumers to compromise or adjust their dining habits, at least until cell-based meat gets to market.

Lightlife’s new plant-based burgers.

Plant-based news ’round the web:

  • Lightlife, a plant-based meat company owned by the Canadian meat giant Maple Leaf Foods, brought its new, more realistic line of vegan burgers and ground “beef” to retail shelves this week.
  • Taco Bell U.K. is experimenting with a new plant-based taco filling made from pulled oats (h/t Livekindly).
  • Future Tense (via Slate) posits that cell-based meat is nothing more than “a cotton-candy bedtime story about making a different world through food.” It’s an interesting read asking if cultured meat will actually create a better protein source, or if it’ll continue to promote harmful industrialized agriculture practices.
  • NPR interviews Lou Cooperhouse of cellular aquaculture BluNalu on whether consumers will take to cultured seafood. FYI, they say it’s about 5-10 years from your plate.

Finally, last week Eater staffers brainstormed a list of hilarious (and hilariously bizarre) names for the next unicorn alt-burger company. My personal favorite: Meat Cute.

Eat well,
Catherine

GFI: Investment in Plant-Based Meat, Eggs, and Dairy Hits $16 Billion, No Sign of Slowing

Today the Good Food Institute (GFI), a nonprofit promoting alternatives to conventional animal agriculture products, released a report on the state of investment in plant- and cell-based meat and dairy companies. You can download the report and read it in full, but here’s the main takeaway: the alternative protein space is on a massive upward trend, with record amounts of capital invested and high rates of new companies and acquisitions.

While it’s important to be aware of the author here — GFI has a clear agenda to promote alternative protein products — the numbers (below) are convincing. And also, not all that surprising. In fact, it’s in line with what we’ve been reporting all year.

Data from the report shows that alternative protein investment began experiencing a real boom in the past 2.5 years. Of the $16 billion invested in plant-based meat, egg, and dairy companies over the past 10 years, GFI reports that $13 billion of that occurred in 2017 and 2018 alone. We can attribute that to a corresponding increase in consumer demand for plant-based food options, specifically dairy and meat, spurred by trendy startups making tasty-in-their-own-right products like Impossible Foods, Beyond Meat, and Oatly oat milk.

There has also been an uptick in acquisitions of plant-based companies: of the 19 acquisitions in the space since 2009, 10 happened in 2017-18. That number could certainly increase as Big Food companies decide to invest more heavily in alternative protein sources (Unilever purchasing The Vegetarian Butcher; Maple Leaf Foods buying Lightlife and Field Roast). Beyond’s over-performing IPO could also entice these big corporations to spend big bucks.

However, acquisition isn’t the only way to get a bigger piece of the plant-based pie, especially going forward. For example, Tyson decided to end its investment in Beyond Meat to focus on developing its own line of plant-based products. And with its aforementioned successful IPO, Beyond has proven that acquisition isn’t the only end game for alternative protein companies.

The reports also covered investment and growth in the cell-based meat space, though products in that space have yet to come to market so there’s less going on overall. GFI notes that a whopping 11 new cultured meat companies were founded in 2018, bringing the total number of companies to 27. Of course, none of those companies have actually made a public sale. But 2019 might be the year that JUST finally makes good on its promise and brings cell-based meat to market — keep your eyes on Asia.

The plant-based/cell-based investment space isn’t about to cool anytime soon. So far in 2019 Shiok Meats, the Singaporean startup developing cultured shrimp, has raised $4.6 million, Singapore is investing over $100 million in cell-based meat (and other food innovations), and plant-based dairy company Eclipse Foods also closed a seed round. Add in Beyond Meat’s wildly successful IPO and it’s no wonder investors are scrambling to throw money at the alternative protein space. And it’s only May.

You can download the full report here.

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