The round was co-led by Greenlight Capital and Green Circle Foodtech Ventures; while Johnsonville Holdings (parent company of Johnsonville Sausage), and Lever VC also participated, said The Better Meat Co co-founder and CEO Paul Shapiro, who reckons hybrid products could capture a significant chunk of the protein market in the coming years.
“Some companies are blending things like kale or vegetables into pork, or you’ve got the mushroom blended trend, and those are both great, but these products taste different from conventional products and they have less protein. With our proposition, we enable meat makers to have something that looks and tastes the same… with the same amount of protein.”
The hybrid trend
The hybrid trend appeals for health reasons (blended meats have less saturated fat and cholesterol and fewer calories); sustainability reasons (they have a lower environmental footprint); to tap into new trends (plant-based is hot right now); culinary reasons (consumers often prefer the mouthfeel of hybrid products in taste tests); and yield enhancement; he said.
“People also like the fact that they can lock in with us a six or 12 month contract guaranteeing a certain price [whereas meat pricing is becoming increasingly volatile, a trend COVID-19 has exacerbated, he said].
“I’m all in favor of plant-based and cultivated [a.k.a. cell-based/cell-cultured] meat [Shapiro is the author of the best seller, ‘Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World]; what we’re doing is supplemental to that. But plant-based meat is still less than 1% of the meat market and cultivated meat is not even on the market yet.
“For our products, you’re getting better nutritionals: less saturated fat, less cholesterol, more fiber, and fewer calories, plus you can talk about plant-protein, which is very popular right now.
“It depends on the application, but some use about a third [plant materials], some applications work best at around 50:50, and some customers of ours use us for 100% of the product, so there are no meat ingredients at all.”
Room for the middleman?
While the fact that a company as big as Perdue has chosen to work with The Better Meat Co on its first ‘hybrid’ products rather than going directly to plant-based protein suppliers suggests that The Better Meat Co has some value to add, how can the startup ensure it won’t be cut out of the loop in future if the blended trend takes off?
“We’re offering formulations that are combinations of plant-based proteins [primarily pea], fibers, fats and flavors - not single ingredients,” said Shapiro, who said The Better Meat Co has done the R&D work to create tailored solutions for a variety of products (beef, pork, chicken, turkey, crab, and fish) so that meat companies of all sizes and capabilities can find drop-in solutions.
“The key is to figure out how to seamlessly marry plant and animal proteins such that the consumer will not detect [the difference with regular meat products], and it’s not as easy as you might think,” added Shapiro, who is building out a new 13,000sq ft facility in Sacramento.
By adding plant-based proteins, fats, fibers and flavors to conventional meat burgers, sausages and other processed meat products, The Better Meat Co claims brands can:
- Improve yield & moisture retention
- Maintain high protein levels
- Reduce calories, saturated fat, and cholesterol
- Increase fiber
- Keep ingredients lists clean and short
- Keep products allergen-free
- Improve sustainability
“Many investors were not interested in deploying any new investments during the pandemic, but demand was still high enough that we were over-subscribed and we increased the size of our round.”
‘We’ve satisfied every single Perdue order on time and in full’
While on the face of it, a plant-meat combo might seem like the worst of both worlds, alienating meat-enthusiasts and vegans/vegetarians alike; CPG companies, foodservice companies and consumers are increasingly open to blended products, claimed Shapiro, who noted that Perdue’s Chicken Plus nuggets, tenders and patties – which use a 50:50 blend of chicken and plant-material from The Better Meat Co – are now available in 7,100 stores.
The partnership with Perdue proves that major meat companies see the value in what The Better Meat Co is doing, but also demonstrates to the market that it can scale up and work with the biggest players in the meat industry, claimed Shapiro, who has also struck deals with firms in burgers, seafood and shelf-stable meat snacks.
“We’re a two-year old startup and we’ve satisfied every single Perdue order on time and in full.”