Bezos, Gates Support Fake Mushroom Meat As Next Big Protein Alternative

As consumers become more comfortable eating fake meat burgers that look, cook and taste real, a food tech startup backed by Jeff Bezos and Bill Gates is using mushrooms. as the main ingredient to create alternative meat foods.

Chicago-based Nature’s Fynd has raised $ 158 million from investors including Bezos, Gates and Al Gore. The company’s meatless breakfast patties and burgers, dairy-free cream cheese and yogurt, and chicken-free nuggets are expected to hit grocery store shelves later this year.

The alternative food industry skyrocketed in 2020, increasing US retail sales by 27% and bringing the total market value to $ 7 billion, according to the Plant-Based Foods Association (PBFA), a group commercial comprising more than 200 member companies. Meanwhile, shipments of alternative protein products from foodservice distributors to commercial restaurants increased 60% year-on-year in April, according to research firm NPD Group.

The ascendant industry is dominated by Beyond Meat and Impossible Foods, whose alternative meat burgers, chicken and sausages have disrupted the $ 733 billion US agri-food industry. This prompted Tyson Foods, Purdue, Hormel, Cargill and other traditional meat producers to launch their own products in the category.

Some growth in alternative meat sales has slowed amid the pandemic and restaurant closings. A recent report from JP Morgan claims that Dunkin ‘ditched their breakfast sandwich using a Beyond sausage patty from most restaurants, although this has not been confirmed by either company (Dunkin’ and Beyond Meat responded to calls at press time..) Still, plant-based and cultured foods are expected to account for 60% of global meat sales by 2040, according to consultancy firm AT Kearney.

Having lost 1% of its overall market so far probably doesn’t disrupt meat producers much, but the falling costs of alternative meat should raise eyebrows. As of mid-June, Beyond Meat was selling for $ 6.40 a pound, bringing it closer to the price of traditional beef, making some progress towards Beyond Meat CEO Ethan Brown’s long-term goal of reaching the cost parity with traditional meat. The beef patties were selling for $ 5.26 a pound at the time, according to the US Department of Agriculture. Impossible Foods has cut prices at its restaurants twice in the past year, and in February the company slashed retail prices by 20%, lowering the price of two quarter-pound patties to $ 5. $ 49.

Nature’s Fynd was co-founded in 2012 – initially under the name of Sustainable Bioproducts – by Thomas Jonas and Mark Kozubal, respectively CEO and Scientific Director. A few years earlier, Kozubal had unearthed a microbe, Fusarium strain flavolapis, volcanic hot springs in Yellowstone National Park. He led an R&D team that formulated the microbe into what the company calls Fy, the fermented, versatile, and protein-rich source for Nature’s Fynd’s products.

Fermentation has been used in the making of bread, beer, wine, cheese, and other products for millennia, and is now emerging as a key alternative protein platform with major potential to align science with l entrepreneurship, politics and investment, according to the Good Food Institute. Still, Nature’s Fynd has some catching up to do. British company Quorn, founded in 1985, has offered its meatless mushroom products in the United States since 2002. It was acquired by Philippine maker World Nissin for around $ 830 million in 2015, according to Reuters. And the field of other potential competitors is widening.

Just as cows, chickens and pigs were domesticated centuries ago as sources of protein, “the time has come for this second domestication,” Jonas said in a recent interview. “Breeding this microbe is an efficient way to produce equally good protein.”

To close the loop of evolution, Nature’s Fynd is building a 35,000 square foot factory on the site of Chicago’s former Union Stockyards, the epicenter of the 20th century meat packaging industry.

Beyond mushrooms, Nature’s Fynd is also representative of the food sustainability movement, whose mission is to reduce the carbon footprint of global food systems, which generate 34% of greenhouse gas emissions linked to climate change.

“The challenge for this generation and future generations is to learn to do more with less,” said Jonas. “Because with eight billion inhabitants, the Earth is not expanding, its resources are dwindling and climate change makes it even more difficult to find land to grow crops to feed animals. The math just doesn’t work. The goal of our new protein system is to increase the efficiency of the complete protein chain. “

Consumer acceptance, of course, is paramount to Nature’s Fynd’s business model. In February, the company launched a limited, direct-to-consumer sampling of its patties and cream cheese exclusively online. Marketing director Karuna Rawal said the official rollout of the product will focus on retailers first, with foodservice partnerships to follow. “It’s important that we start with retail and that we can tell our story to the consumer in a way that we can control the narrative,” she said.

In this vein, Nature’s Fynd’s packaging features an “Fy” badge, a la “Intel Inside”, to create brand recognition and loyalty.

Unsurprisingly, the biggest draw for alternative meat products is among younger consumers.

“Generation Z and Generation Y are the biggest buyers in the plant space,” said Sabina Vyas, director of strategic initiatives and communications at PBFA. “As their purchasing power increases, [food] businesses are going to have to adapt accordingly. “

Sixty-three percent of American consumers aged 24 to 39 believe their nutritional needs can be fully met by a plant-based diet, according to a One Poll study.

“I don’t know anyone over 40 who says, ‘I should eat more meat,’” Jonas said.

Chris Rivest, a senior climate technology investor at Breakthrough Energy Ventures, created in 2016 by Gates and a coalition of private investors concerned about the impacts of climate change, said food is a commodity, with purchases based on taste. , nutrition and cost.

He is a fan of the mushroom, saying he is “blown away” by the products he has tested (Gates was also impressed during a “60 minute” segment) and its nutritional value.

The company claims that the vegan protein includes all 20 amino acids, including all 9 essential amino acids, and good levels of fiber, vitamins and minerals, without cholesterol and trans fat. He says that Fy has one-tenth the fat of ground beef and 50% more protein than tofu; twice as much protein as raw peas.

Rivest also believes the company can compete on costs. “We believe that Nature’s Fynd model can reduce the costs of traditional protein sources,” he said. “That’s what really sold us on this opportunity.”

Like many start-ups, scale will be critical to Nature’s Fynd’s success.

“We expect to have a lot of demand for our [manufacturing] capacity, so we have to move fast and raise additional capital to move forward, ”Jonas said. “We are competing with the meat industry, which has been working their supply chain for 300 years, so we have a big catching up to do. . “