Plant-Based Competition Heats Up as Future Farm Expands in US and Europe
The plant-based protein market is getting as hot as a grill on the Fourth of July, as competition for consumers looking to buy meat alternatives is growing. The latest player to challenge the heavy hitters, Impossible and Beyond Meat, is a Brazilian upstart that just raised $58 million to take America by storm called Future Farm. The food tech company is making burger patties, sausage substitutes, and meatballs with a proprietary formula that uses a blend of chickpeas, peas, soy, beetroot, and other plant-based ingredients. It also plans to expand into plant-based dairy, putting existing players on notice that there's a new act in town.
Beyond struggles as competition for plant-based meat heats up
When Impossible and Beyond Meat entered the market, both in 2016, demand for plant-based protein was relatively small and consumers greeted these new meat alternatives as novelty items to be tried but not eaten regularly. In the past five years, during a global pandemic, meat shortages, and consumers embracing and adopting the plant-based food trend in record numbers, the sales of plant-based meat have topped $1 billion.
With more than 25 percent of all US consumers embracing plant-based foods and growing, it's no wonder that other players have nudged their way into the market, while companies that had been making vegetarian options like Amy's Kitchen and Dr. Praegers, and Gardien all introduced more meat-like alternatives that are made from plant-based proteins that are kinder on the environment and healthier for humans.
While Impossible is still privately held, Beyond's stock value shot up in the last year, reaching a 52-week high of $221, which would make anyone who bought into the 2021 IPO at $25 feel like a genius. But that was a short-lived surge. The stock hit a 52-week low this month (at press time Beyond's stock was trading at $104), with Beyond telling investors that the sales decline was due to a combination of issues including supply chain disruptions, employment troubles, and later-day pandemic sales falling flat. Another key issue is that the company’s growth is being eclipsed by competition as a significant number of companies rush into the market to capture consumer attention.
Lab-grown "cultured" meat is coming soon
Along with the traditional plant-based offerings, food tech is on the brink of a new era as lab-grown meat is just entering the public consciousness. The future of lab-grown meat is expected to reach $2.7 billion by 2030 and big companies are betting on this as a way to feed the world inexpensively so Nestle, Kellogg's and others are building plants to grow it.
Last week the USDA announced that it was investing in a cultured meat lab at Tufts, funding research into growing proteins from animal cells in the lab as opposed to making meat alternatives from plant-based ingredients.
Meanwhile cultured or lab-grown meat is still not available in the US and so far only countries like Singapore have allowed it to be sold to consumers in restaurants.
Celebrity investors are gaining attention for meat alternatives
Leonardo DiCaprio invested in two lab-grown meat companies, Aleph Farms and Mosa Meat, and announced he will be an advisor as well. As an environmental activist, DiCaprio is bringing attention to the benefits of choosing meat alternatives when it comes to the impact on climate change.
Then Ashton Kutcher and Guy Oseary, the talent manager, announced they would also enter the fray, investing in yet another cultured meat company called MeaTech 3D, to bring "clean meat to the masses."
And as if that weren't enough to interest the consumers, celebrity investors like Owen Wilson and Woody Harrelson just invested in Abbot's Butcher, makers of plant-based meat, while Leonardo DiCaprio and Ashton Kutcher have both gotten into the investment game by backing different cultured meat companies in recent months. Celebrity investors Oprah, Natalie Portman, and Jay-Z, among others, have also invested in plant-based products – pouring a reported $200 million into Oatly, the dairy-free company out of Sweden that went public earlier this year.
The plant-based meat gold rush is happening
The latest player to enter the competition is Future Farm, out of Brazil. The plant-based protein start-up just secured a $58 million Series C funding in order to make its way into the US market and propel the rising star to the forefront of the competition. The company intends to use the investment to sell throughout the US and Europe and expand its product selection, including a line of plant-based dairy.
"We’re incredibly proud of this investment and those behind it, not only to validate the immense opportunity that exists within the category but also to mark a new chapter for Future Farm, as we work towards furthering our plant-based offerings and creating a portfolio inclusive of meat, seafood, poultry and dairy,” Founder of Future Farm Marcos Leta said.
The recent funding round brings Future Farm’s total investment raised $89 million – valuing the company at $400 million, still a fraction of the valuation of Beyond, which is around $6.2 billion. Currently, Future Food offers a Future Burger, Future Sausage, Future Beef, and Future Meatballs. The product selection is available at select retail outlets worldwide and available online.
Future Farm’s plant-based protein selection boasts a 100 percent natural ingredient list that is GMO-, gluten-, and heme-free. It's made of a proprietary blend of chickpea, pea, and soy proteins. The plant-based meat products also contain beetroot, coconut, and several non-artificial ingredients sourced from plants that enhance the flavor and texture.
Future Farm aims to provide consumers with a product that entices not only plant-based consumers, but all consumers to cut down on meat consumption worldwide. The company reports that it has experienced substantial growth since its products hit US and UK shelves earlier this year. The annual growth rate is recorded at 960 percent, according to the company.
“In order to change the way the world eats, by making slaughterhouses and animal-protein products obsolete, we will continue bringing consumers into the category by delivering on quality, variety, and flavor with our products, and bringing joy and deliciousness to the experience of plant-based eating,” Leta said.
Future Farm’s explosive entrance into the plant-based market is part of the broader alternative protein expansion. A report from Bloomberg Intelligence [BI] recently projected that the plant-based protein market will hit $162 billion by 2030, rapidly rising from its 2020 valuation at $29.4 billion. While competition continues to rise, plant-based demand is also experiencing growth, meaning that companies like Future Farm will carve a place in the market.
“Food-related consumer habits often come and go as fads, but plant-based alternatives are here to stay — and grow,” Senior Consumer Staples Analyst at BI Jennifer Bartashus said. . “The expanding set of product options in the plant-based industry is contributing to plant alternatives becoming a long-term option for consumers around the world. If sales and penetration for meat and dairy alternatives continue to grow, our scenario analysis suggests that the plant-based food industry has the potential to become ingrained as a viable option in supermarkets and restaurants alike.