"This is the most recent, and far and away, the largest example of how we’re plugging in our plant-based technology to an extremely large and scalable infrastructure so we can get it out to more people," Josh Tetrick, co-founder and CEO of JUST, told FoodNavigator-USA.
Prior to the Michael Foods partnership, JUST was already active in the foodservice channel, supplying to QSR and fast-casual outlets such as Veggie Grill, Bareburger, and Gregory's Coffee. However, the new partnership with Michael Foods will give the JUST a massive boost to production and availability within foodservice, explained Tetrick.
"It allows us to, one, plug into their manufacturing, and their manufacturing is high volume, high scale, so we’re going to be able to make a whole lot more of the product. And the second reason it’s so important is we’re going to be able to sell a whole lot more of it."
Michael Foods produces and sells more than 1 billion lbs of liquid egg annually to the foodservice industry including K-12 school cafeterias, hospitals, hospitality operations, c-stores, and on-campus dining at colleges and universities.
"We like to tell people we're the largest food company most people have never heard of, because we're really big in untraditional channels, whereas a lot of food companies are focused on the retail grocery base. But we do a lot of business," said Josh Nissen,vice president, commercial marketing at Michael Foods.
The bulk of Michael Foods' business is in liquid eggs, but the company also manufacturers and sells pre-cooked egg patties into foodservice, noted Nissen.
Under the arrangement, Michael Foods will be the exclusive manufacturer, supplier, and distributor of JUST Egg to its foodservice and food ingredient customers.
"They’re focused on the finished product piece, and we’re focused on the upstream technology piece," said Tetrick.
JUST will supply Michael Foods and its 14 egg processing facilities across the US with its plant protein extracted from mung beans through a proprietary process at its Western Minnesota facility, opened late last year.
"We sell that JUST Egg protein to Michael Foods, and Michael Foods adds oil and water to it, mixes it, pasteurizes it, bottles it, makes it into a breakfast sandwich and then they push it out to their hundreds of points of distribution," said Tetrick.
Driving down cost
Achieving cost parity with farm eggs is part of JUST's fundamental mission, and partnering with Michael Foods will allow the company to lower the cost of its plant-based egg even more.
"Our objective is to get the cost per serving of protein down below $0.05, what we call 'egg equivalent' or a 1.5-ounce serving of protein. And today, we’re north of $0.15 per egg equivalent. That’s significantly lower than where we were last year, and is already lower than where we were in January," said Tetrick.
"For us to get that cost down means we have to more efficiently source the mung bean that we use, we need to more efficiently remove the protein from the mung bean, and that’s about getting our yields up."
Foodservice, on the mend?
In its first full year of distribution, JUST launched with leading US retailers and grocers such as Walmart, Kroger, Whole Foods, Safeway, Albertsons, Giant, Wegmans, Publix and online via Amazon and Fresh Direct among others. JUST Egg’s grocery sales velocity in the US has grown 51% since December with large gains at top national chains, reported the company.
When asked how JUST felt about expanding its foodservice footprint at a time when the industry is facing a major downturn compared to a pre-COVID-19 environment, Tetrick said: "I think we’re going to be in a place in the next handful of months where restaurants do reopen, not just for delivery but we can go back in a restaurant. People are going to go watch sporting events again, whether it’s two or five months, it’s going to happen.
"We’re trying to form partnerships that really make sense for us for the next ten years, not just the next 60 days," he added.
As states slowly reopen their economies including the reopening of restaurants for dine-in service, the industry has started to see early signs of recovery, according to data from The NPD Group.
Restaurant dine-in restrictions have been lifted for nearly 192,000 restaurant units or about 29% of all units since May 1, based on an analysis using NPD’s ReCount restaurant census. For the week ending May 10, an estimated 19 states allowed some level of on-premise dining.
For the week ending May 3, total restaurant transactions were down 26% from year ago compared to a 32% decline the prior week and a decline of 43% the week ending April 12, the low point of the COVID-19 disruption, according to CREST Performance Alerts.
Need for plant-based innovation
For Michael Foods, the addition of JUST Egg to its portfolio allows the company to expand its plant-based menu offerings.
"With JUST, it's all about bringing innovation and options to our customers. All of our customers are looking for ways to differentiate their menu," said Nissen.
"As dietary habits change, we're seeing the need for growth in plant-based. This allows us to reach consumers that we've never really been able to get at before... and ultimately be an incremental sale to our customers."
According to Tetrick, the two food companies have completed several pilot runs of manufacturing JUST Egg products at Michael Foods' production facilities, and will be targeting a first larger manufacturing run later this year.