Plant-based meat sounds like an oxymoron. Unsurprisingly, there’s considerable debate on the labeling laws circling plant-based consumables being called “meat”, as in Oklahoma’s attempt at prohibiting the term on plant-based replicas in 2020. But we’re not talking about the semantics of “what’s in a name?” today. Whether or not you find it puzzling, the reality is a plant, by any other name, can smell as “meat”.  The plant-based meat industry is a fast-growing disruptor, which has been creating some heated activity in the meat market, and we’ve been tracking its movements.

For instance, just last month, Amazon Fresh has launched “Fresh Plant-Based,” in-house plant-based meat and dairy line featuring 15 products; Kroger, the largest supermarket chain in the US, announced a co-branding partnership with plant-based meat producer Impossible Foods to develop meat alternatives for Kroger’s private label business.

Let’s carve in…

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Why is plant-based meat a hot topic?

There’s a revival driven by growing demand for healthier food choices that are less harmful to the environment. Unlike the distinctly un-meat-like quality of the original veggie burger, today’s plant-based meat products are produced by advanced processes swiftly closing the taste gap between real and alternative meat.

Before we discuss two notable players featured in the EDGE100 report, let’s have a look at the industry.

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What is plant-based meat?

Let’s define plant-based meat by what it is not; it is not animal-sourced meat. Instead, plant-based meat uses a combination of vegetable byproducts, seeds, and grains to mimic the flavor, color, and—likely the most significant achievement in the industry—the mouthfeel of meat. 

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What's happening in the plant-based meat industry?

The plant-based meat industry is seeing an increase in startups, and more than half of the total startups in our coverage are still in the pre-seed or seed stage. The majority of the startups are exploring the production of meat substitutes, followed by alternative fish and poultry. 

Although closing in at the end of 2021, the industry saw a disappointing end to its meaty year, overall, the market was bustling. We tracked more than 230 new product and market initiatives in 2021. According to our findings, there were 141 instances of companies either entering new markets or expanding within their existing markets during the year, with North America and Europe being the most active markets accounting for over 70% of recorded instances on average.

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For sales, in March 2020, plant-based meat products saw the biggest increase with 231% YoY growth in grocery store sales, compared to a 40% YoY increase for actual meat. By July 2020, however, plant-based meat grocery sales gradually normalized as consumer piling slowed down.

In the second quarter, there was a gradual increase possibly triggered by the recovery in the US restaurant industry, which saw a 32% YoY increase in customer transactions in March (still down 6% compared to March 2019), driven because of restrictions being lifted and vaccination rollouts expanded. 

However, towards the latter part of the year, the activity slowed down, possibly owing to a slower recovery in dine-in activity, which was 34% lower in August 2021, compared to the pre-pandemic August 2019.

Though the industry has seen some volatility, largely because of the pandemic, we’re placing our bets on players in this space. Our recent EDGE100 report ranked two plant-based meat disruptors within the top five positions. We feel the players have high-growth potential and will show progress in the next 12 to 24 months.

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Let’s look at Motif FoodWorks and Nature’s Fynd 

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Motif FoodWorks

Starting as a spin-off of bio-engineering company Ginkgo Bioworks, Motif Foodworks uses biotechnology to produce ingredients for plant-based meat and has developed a range of technologies to achieve similar taste and texture to animal meat. In August 2021, Coolgreens tested two “Feel Good” sandwiches by offering them to customers. The sandwiches made by Motif’s offered plant-based products, and 93% of consumers in the test indicated that they would eat plant-based meat featuring Motif's ingredients regularly. 

The startup has entered into several partnerships with universities to develop plant-based food-related technologies such as with the University of Queensland, Australia, the University of Massachusetts Amherst, the University of Illinois, and the University of Illinois at Chicago, and more recently, in 2020, with the University of Guelph in Ontario, Canada to develop plant-based fats that have similar attributes to animal fat.

Its most recent funding was in June 2021 when it secured USD 226 million in a Series B round.

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Nature’s Fynd

Based on a unique microbe found in the geothermal springs of Yellowstone National Park, Nature’s Fynd is already selling dairy-free cream cheese and meatless breakfast patties to consumers in the US. 

In June 2021, the startup received a letter from the Food and Drug Administration (FDA) citing that the agency has no questions about the Generally Recognized As Safe (GRAS) status of its “Fy” (Fusarium strain flavolapis) fungi ingredient for the use in plant-based food and beverage products; an indication of the FDA’s approval for Fy protein in food products. Nature’s Fynd debuted its first two products, back in February 2021; dairy-free cream cheese and meatless breakfast patties.

In its latest funding round in July 2021, Nature’s Fynd secured USD 350 million in a Series C funding round led by SoftBank’s Vision Fund 2. The company is expanding production capacity across America in preparation for national and global expansion, to penetrate the Asian market to capitalize on consumer demand for sustainably-sourced protein.

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Can we expect plant-based meat on a mainstream menu?

The partnerships proliferate in this space between incumbents like McDonald’s, Unilever, and Nestle—to name a few—and plant-based meat players. Plans to introduce a McPlant burger indicate where the mainstream palates are headed. If the consumable replicates taste and nutritional value, as they seem to be fast approaching, it’s probable that we’ll be making space for plant-based meat at our tables!

Understanding the plant-based space that’s challenging traditional meat industries requires more than a dinner-table discussion. To learn more about the plant-based meat story, book a demo with our team, or write to us at info@sp-edge.com.