With big-name CVC investors like ADM Ventures and Danone Manifesto Ventures, Sustainable Bioproducts is preparing to unveil new plant-based product offerings targeting what it describes as the white space in the plant-based segment.
It was only a matter of time before companies started to emerge from Beyond Meat and Impossible Foods’ titanic shadows.
“In terms of why we are throwing our hat in the ring, there is so much opportunity and Beyond Meat and Impossible Foods have by no means taken over the market,” Karuna Rawal, chief marketing officer at Sustainable Bioproducts (SBP), told AFN. “We think we will have a differentiated offering that will make us a very viable competitor in the space.”
For now, the products that the Chicago-based biotech startup plans to launch are a complete secret. The company is busy building out its product portfolio and figuring out the best route to market for its volcanic microbe-based technology.
After a trip to Yellowstone, SBP observed how certain extremophile organisms can survive in the National Park’s volcanic streams sparking a quest to create edible proteins with nutritional value from these hearty microbes.
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Investors are shelling out big bucks for plant-based food products, with nearly $16 billion pouring into the space over the last 10 years. Despite all this investment, two companies have been hogging the plant-based protein spotlight lately. Impossible Foods alone has raised $750 million, including a recent $300 million round, while Beyond Meat’s IPO raised $240 million for the company in a blockbuster debut that saw the company’s valuation soar over $10 billion.
SBP has also snagged a share of that cash, raising a $33 million Series A lin February 2019 led by 1955 Capital with participation from Breakthrough Energy Ventures, Archer Daniels Midland’s investment arm ADM Ventures, Danone Manifesto Ventures, Lauder Partners, and the Liebelson family office. NASA, the National Science Foundation, the National Park Service, the EPA, and the USDA have also provided financial and in-kind support to the company.
Rawal may be mum about which products the company will launch, but with two corporate venture capital entities in the line-up, one can’t help but wonder whether SBP is eyeing a B2B route to market.
“We are looking at both consumer-facing and B2B channels, but what I am trying very hard to do is to make sure that we don’t rush to get a short-term win,” she explains. “We have to think through all of the implications in a longer-term strategy and how the different channels may impact that.”
Joining SBP only two weeks ago, Karuna boasts 25 years of marketing expertise in consumer brands, retail, and innovation, and was the Lead Strategist behind Proctor & Gamble’s #LikeAGirl campaign, making her a hot commodity in the marketing world.
Most startups seem to share a desire to be the first to market with a new, disruptive product, but in some instances being a challenger or “me too” isn’t always a bad thing.
“There are advantages to being first to market, but everyone is watching your missteps. We have the benefit of learning from the things that they maybe could have done differently while they were still learning,” Rawal says. “At the same time, Beyond Meat and Impossible Foods opened the door and did a lot of consumer education that we would have had to do.”
The broad range of routes-to-market may be a good sign for startups vying to get their real estate in the plant-based space. Beyond Meat has largely focused on getting packaged products into supermarkets, while Impossible Foods has targeted restaurant partners like Burger King.
That’s assuming that the plant-based industry maintains its momentum — which may not be as inevitable as some hope — and expands into other segments. So far, plant-based startups have mainly managed to replace ground beef, which may be the fodder of countless popular dishes but that leaves poultry, pork, and seafood largely in the lurch. Chipotle recently announced that it has no plans to add plant-based meat describing the offerings as too processed for its fresh-focused platform.
And there’s the fact that only 5% of the US population is vegetarian and only 3% is vegan. One of the main marketing platforms for plant-based meat alternatives is that livestock production is one of the primary contributors to climate change (we dug into the often mischaracterized stats here) and that consumers need to eat far less meat in order to save the planet.
When it comes to describing SBP’s target consumer, Rawal’s marketing chops shine.
“We aren’t necessarily trying to convince meat-eaters to go meatless. I’ve been in the food business a long time and I’ve learned over and over that you can take a position like Impossible Foods, but you can also sometimes have a broader impact if you focus on helping people to make small steps and changes.”
Startups hoping to venture into the plant-based protein Superbowl have a lot of big decisions to make when it comes to making their debut and their route to market.
For SBP, nothing is off the table at the moment.
“You may see it in more than one category. We are now looking at the road to commercialization and figuring out where the white spaces are,” Rawal says. “Do you go where the big guns have already gone, or do you carve out something unique?”