Alternative protein startups have attracted a lot of investor attention over the past couple of years, and the trend looks set to continue. The latest plant-based startup with funding news is Next Gen Foods, the creator of the chicken alternative TiNDLE. According to data from PitchBook, this $100 million is the largest Series A ever raised by a plant-based meat company, and will be used to expand quickly in the United States and on its Singapore research and development center, which is currently under construction. From what I understand, Singapore is quickly turning into a hub for food-tech startups, partly because of government initiatives supporting the development of meat alternatives.
Like other alternative protein brands, including Impossible Foods and Beyond Meat, Next Gen Foods is building brand recognition through partnerships with chefs who create and serve dishes in their restaurants, before moving to other distribution channels like grocery stores. I’m told it’s currently available at restaurants in San Francisco, Los Angeles, Napa, New York and Philadelphia, with more planned, including Miami and Austin. Co-founder and CEO Andre Menezes says TiNDLE, made with a proprietary blend of plant-based ingredients, like sunflower oil, has already proven its ability to work in diverse cuisines and that its rapid international expansion was enabled by its asset-light model. By sticking to just developing components, ingredients and recipes then entering into manufacturing contracts with partners, they have avoided the costly and slow-moving process of building their own factories and hiring talent to create their first expansion.
In a recent interview, Menezes says he and co-founder Timo Recker chose chicken because other players in plant-based protein are mostly American, i.e. Impossible and Beyond. And being American, it is only natural that one of their first movements would be to tackle the burger. But Next Gen is not coming from the US and wanted to make a global business from the beginning in order to be successful wherever people eat meat. And from a market perspective, chicken makes a lot of sense to start with as it’s the fastest-growing in consumption, and it is the most universal protein.
It’s worth mentioning that Menezes has years of experience in the food industry which started in Brazil at one of the world’s largest poultry exporters. I’m told he began working with plant-based meat after serving as general manager of Country Foods, a Singaporean importer and distributor that focuses on innovative, sustainable products, and he says it was clear to him after he was inside the meat industry for a while that it was not going to be a sustainable business in the long run.
Over the past few years, more consumers have started to feel the same way and began looking for alternatives to animal products. Now, UBS expects the global plant-based protein market to increase at a compounded annual growth rate of more than 30%, reaching about $50 billion by 2025, as more people, even those who aren’t vegans or vegetarians, seek healthier, humane sources of protein. It’s hard to argue against the numbers as more Baby Boomers pass away and the Millennial and Gen Z consumers continue to lead the charge with their food dollars. In particular, they are now willing to reduce their consumption of meat, eggs and dairy products as they become more aware of the environmental impact of industrial livestock production, and that seems to be the leading narrative of the day, and the money follows.
Interestingly when Menezes is asked about the competitive landscape, he’s quick to remark that they are really glad this sector is gaining traction and that they do not see other plant-based companies as competition. His biggest concern is that companies will dive into the space because it’s hot and bring unsatisfactory products to consumers and compromise the customer’s impression of the space. Sounds a lot like what ag is dealing with in the biological sector right now. (Source: TechCrunch, Tindle.com)