Venture capitalists are investing in startups that are engineering new foods for a hungry planet–alternatives to chicken, beef, eggs and salt that deliver environmental or health benefits. The food industry, they say, desperately needs reinvention.
“The way we generate protein today is just not sustainable,” says Samir Kaul of Khosla Ventures, which has invested in a half-dozen food startups. “We’re running out of fertile land. There are water issues. Health issues.”
“Our population is growing, and agriculture just hasn’t kept pace,” says Amol Deshpande, a chemical engineer who worked in the seed business before joining Kleiner Perkins.
One company that’s getting lots of attention: Beyond Meat, a startup that has developed a vegan alternative to chicken. Kleiner invested. So has Bill Gates, and the founders of Twitter, Biz Stone and Evan Williams.
I’ve written a long story about Beyond Meat that was posted today at fortune.com. It was originally destined for the print edition of the magazine, but Wired has just run an excellent story about Beyond Meat, so my editors chose to post my story on the web. Here’s how it begins:
FORTUNE — Most people consume protein in what vegetarians call “the secondhand form,” that is, after it has been digested and converted into meat by chickens, cows, and pigs. This is inefficient, as Winston Churchill noted In “Fifty Years Hence,” an essay published in 1931. Churchill wrote: “We shall escape the absurdity of growing a whole chicken in order to eat the breast or wing, by growing these parts separately under a suitable medium. Synthetic food will … from the outset be practically indistinguishable from natural products, and any changes will be so gradual as to escape observation.”
Then again, predictions are hard — especially about the future. Food scientists and entrepreneurs have tried to reinvent meat for decades, with little to show for it. Last summer, Dr. Mark Post, a Dutch scientist and medical doctor, unveiled a five-ounce hamburger that was grown in a laboratory from cow muscle, at a cost of $325,000. (Google (GOOG) founder Sergey Brin picked up the tab.) Closer to home, mock meats from companies like Kellogg (K) and Kraft (KRFT) can be found in supermarket freezers, branded as “Chik’n Nuggets,” an “All-American Flame Grilled Meatless Burger,” and “Classic Meatless Meatballs.” Soy-based, mushy, and more expensive than the real thing, they remain niche products.
And yet, the need for alternatives to meat has never been greater. Global demand for meat has tripled in the last 40 years, driven by population growth and a doubling of per-capita meat consumption, according to the Worldwatch Insitute. That has intensified pressures on land, water, feed, fertilizer, and fuel. Meat is a climate change problem, too: Animal agriculture is said to be responsible for about 18% of human-induced greenhouse gas emissions, more than the transportation sector.
This presents a big opportunity for someone who can devise a tasty and affordable plant-based substitute for meat. That is exactly what Ethan Brown, the founder and chief executive of a California-based startup called Beyond Meat, aims to do, and he has persuaded some smart people to put their money behind him. Beyond Meat makes vegan “chicken-free” strips that it says are better for people’s health (low-fat, no cholesterol), better for the environment (requiring less land and water), and better for animals (obviously) than real chicken; most important, if all goes according to plan, they will cost less to produce than chicken. Fortune has learned that Bill Gates is an investor; he sampled the product and said he couldn’t tell the difference between Beyond Meat and real chicken. “The meat market is ripe for invention,” Gates wrote in a blog post about the future of food. Kleiner Perkins, the Silicon Valley venture capital firm, made Beyond Meat its first investment in a food startup. “KP is looking for big ideas, and this qualifies as a big idea,” says Amol Deshpande, a former Cargill executive and a partner at the venture firm. “The single biggest inefficiency in agriculture is how we get our protein.” Other investors include Evan Williams and Biz Stone, the founders of Twitter; Morgan Creek Capital Management; and the Humane Society of the United States, an animal-welfare group.
You can read the rest here. The story goes on to explain that one advantage that Beyond Meat should enjoy over “real” chicken is that its product will use less feed than chicken. As I write:
It takes four-tenths of a pound of feed, mostly soy and pea protein, to make a pound of Beyond Meat. (A chicken breast is more than 60% water.) By comparison, even after decades of selective breeding and production efficiencies, broilers require nearly three pounds of feed, mostly corn and soy, to yield a pound of ready-to-cook chicken. Feed accounts for about 35% of the costs of chicken, so when corn prices spiked last year, the prices for whole chickens rose by 21%. As the costs of feed increase over time — and they likely will, as the costs of energy and fertilizer rise — Beyond Meat’s competitive advantage should emerge. “A chicken is just a bioreactor raised for the purpose of delivering protein to humans,” says Kleiner’s Amol Deshpande. “If you can do that more efficiently another way, that’s good for everyone.”
I’ve tried Beyond Meat, and it’s good, especially when chopped into a “chicken” salad or used with a sauce. In his Wired story, Food Network celeb Alton Brown writes that Beyond Meat’s “Chicken-Free Strips could replace chicken in at least 30 percent of the existing chicken recipes floating around out there,” to no ill effect. Brown is also pursuing a b-to-b strategy for his product.
I don’t know if Beyond Meat will grow into a big company. But I’m pretty sure that the way we produce and consume meat today is unsustainable. One way or another, we need to figure how to produce meat more sustainably or, better, eat a lot less of it.