“It’s always been my perspective that eventually going public made the most sense in terms of keeping true to the mission of the company, and today that path seems clearer,” Tetrick told FoodNavigator-USA on Wednesday.
“Once we get to operating profitability, which we’re looking to do before the end of next year, I’ll start a serious conversation with my team, the board, and a few of our largest shareholders about timing [for an IPO].”
‘More human beings today are consuming egg protein than any other animal protein’
To those wondering whether investors will see a return on the hefty sums ($300m+) the San Francisco-based firm has raised to date, the market opportunity is huge, claimed Tetrick. “Our addressable market is the $238bn global chicken egg market [spanning retail eggs ($122bn), frozen breakfast products ($8.9bn), foodservice ($48.8bn), and ingredients ($73.2bn)].”
“More human beings today are consuming egg protein than any other animal protein.”
While the current formulation of flagship product JUST Egg doesn’t provide the aerating qualities needed for, say, bakery applications – a big chunk of the egg market, Eat Just has products in the pipeline that will address that gap likely to come out in 2022, he claimed.
“Folded JUST Egg is now the #1 frozen breakfast item at top five US retailer. To our knowledge, this is the first time ever that a plant-based protein has achieved #1 in category status in a major grocery store.”
Source: Eat Just
The pathway to profitability
So what is the key to achieving operational profitability?
While production costs for the firm’s flagship product JUST Egg – which is made from mung bean protein isolate and canola oil – remain higher than they are for conventional eggs, margins will steadily improve through more efficient sourcing of mung beans, higher yields from processing, monetizing byproducts (starch and fiber), and increased scale, claimed Tetrick.
“We need to expand the number of regions we source mung beans from and move to contracts rather than sourcing primarily on the spot market; and there are additional elements of the [protein extraction] process we’re installing before the end of the year that will allow us to increase our yields. We’ve also signed an agreement with Emsland to monetize the starch and fiber.
“If you look at the cost today of egg globally it’s around 8.2 cents for [a regular] egg, whereas we are at about 18 cents, so we need to bring that down.”
‘When we have a dollar, we want to invest it in technology’
Right now, mung beans are processed at Eat Just’s facility in Minnesota and a contract facility (Emsland will also become a processing partner). It then sells the protein powder to partners such as European egg giants Eurovo and PHW and US partner Michael Foods, which add other ingredients such as oil, gums and seasonings, before distributing JUST Egg to foodservice and retail partners, said Tetrick.
“Another critical milestone for us before the end of the year will be sign a major food company in China to do what Michael Foods is doing for us in the US.”
He added: “We’re a food tech company and our focus is identifying functional proteins, converting them into finished products, and building aspirational brands. But the heavy lifting on the manufacturing, mixing, the pasteurizing, warehousing, distribution, the slotting, the door-to-door knocking on Sysco and US Foods. We want to identify best-in-class partners to do that, using Michael Foods as an example.
“When we have a dollar, we want to invest it in technology, we don’t want to focus on things that other companies are better at than we are.”
Beyond mung beans? Nine plant-based proteins under investigation
While the company is laser focused on JUST Egg right now – which is now sold in thousands of stores from Walmart and Kroger to Whole Foods - it has also identified nine plant-based proteins that are not commonly used in the food industry today, that could be used in everything from ice cream to pasta, claimed Tetrick.
“Some will likely be used for future JUST Egg products, so we’ll be adding bakery functionality in future, and some we’ll likely license out.”
A high-profile player in the ‘alternative protein’ space launching in December 2011 (as Hampton Creek) with a mission to disrupt the food system, Eat Just emerged victorious from PR spats with Unilever and the FDA, raised bucketloads of cash ($300m to date) from Silicon Valley’s biggest investors, and developed a range of consumer products from Just Mayo to Just cookie dough using yellow pea protein.
Five years later, Tetrick – described by one industry source as “a phenomenal pitch man… one of the best capital raisers in the business” - was fielding questions about product buybacks and boardroom squabbling, with some commentators speculating that he was running a ‘food company masquerading as a tech company’ and others wondering if forays into the nascent cell-cultured meat industry reflected a lack of focus rather than a move into a logical adjacency.
Fast forward to 2018, however, and the narrative changed again with the launch of JUST Egg, a plant-based egg alternative made with mung bean protein that quickly demonstrated the potential to transform the company’s fortunes.
By August 2019, Tetrick was telling reporters that, “The company is JUST Egg, and JUST Egg is the company,” while by early August 2020, he had sold the equivalent of 50 million eggs [JUST Egg is now available as a liquid ‘ready to scramble’ product and in frozen pre-folded versions ready to toast, microwave, skillet or oven cook].
‘We could be in a world in the next 10-15 years where more people are consuming an egg from a plant than from a chicken’
JUST Egg folded is now the #1 selling frozen breakfast item in the natural channel and the #1 frozen breakfast item at a top-five retailer ahead of waffles, sausages, pancakes and other established products.
12oz pourable JUST Egg is also in the top-five of all fresh egg SKUs sold at a top five retailer, according to Nielsen data, said Tetrick, who will launch JUST Egg products in Whole Foods and Walmart in Canada next month. It is also making significant inroads into the Chinese market.
“Plant-based eggs as a category is by far and away the fastest-growing segment in plant-based protein [albeit off a smaller base] in the US and we own 99.2% of the category.
“We could be in a world in the next 10-15 years where more people are consuming an egg from a plant than from a chicken.”
Cell-cultured meat: ‘A much longer-term endeavor’
While the yellow pea-protein-based JUST Mayo business is still going, it’s not a key area of focus, while cell-cultured is a “a much longer-term endeavor,” opportunity vs plant-based eggs, said Tetrick.
“We’re running at the 1,000-liter scale today and we can run at a relatively large scale, and we have a bunch of chicken prototypes in our freezer, so the limiting step to a launch is really regulatory. The first wave of products in this market will probably be hybrid products, with at least 50% made from animal protein.”