Yo Egg, a Los Angeles-based startup with patent-pending tech to create sunny-side-up and poached eggs from plants, is making its retail debut on the west coast.
Founded in September 2021 by entrepreneur Eran Groner (CEO) and chef Yosefa Ben Cohen and backed by investors including NFX, Stray Dog Capital, Secret Chord Ventures, and Surround Ventures, Yo Egg launched into foodservice last spring and is now entering the retail market.
The zero-cholesterol, low-saturated fat eggs—made from a base of soy and chickpea protein plus sunflower oil, with ‘runny’ yolks sealed from the whites by an alginate film—are distributed by Whitestone Natural Foods.
They will be sold in four-packs in the freezer section in select supermarkets across Los Angeles, including Besties Vegan Paradise, Rainbow Acres Natural Foods, Hanks Organic, Follow Your Heart Market and PlantX-XMarket Venice, with plans for expansion throughout California, New York, and nationwide next year.
“We’re starting small with individual operators in the better-for-you natural foods category,” CEO Eran Groner told AgFunderNews. “Then we’re targeting regional players such as Bristol Farms, before going after accounts such as Sprouts and Whole Foods. We’re launching at $6.99 but fairly soon we hope to get that down to $5.99.”
The technology
While some players have made refrigerated plant-based boiled eggs (notably WunderEggs from Crafty Counter), Yo Egg is the first to create sunny-side-up and poached options that are shipped frozen and designed to be fried or boiled, claimed Groner, who was previously head of business development at cultivated meat startup Believer Meats.
Typically, plant-based eggs are sold as powdered egg replacements, liquid products or in some cases frozen ready-to-cook patties, he said. “We’re bringing a ‘whole egg’ experience, complete with a perfect egg white and runny yolk, using two distinct technologies.
“One is our specialized egg white system, which allows us to deliver the right texture for each format. It can be fried, poached or boiled. It’s all about the phasing, timing and temperatures, not just the recipe, so it would be very hard to reverse engineer it.
“The other part is the system to scale up yolk manufacturing. With one piece of equipment, we can manufacture 50,000 yolks per day. In a room that’s 200 square feet, we can have four such machines, so that’s 200,000 yolks per day, which if you do the math is already a scaled egg farm in the United States if you have 200,000 birds laying eggs.”
The manufacturing process
According to Groner, “We have a mixer, and then we have the yolk machine, and then the rest of the process has to do with baking equipment or frying equipment, plus freezers and packing machines. Our entire line of manufacturing at our facility in North Hollywood cost us less than half a million dollars.”
At scale, he said, a co-manufacturer could handle the latter part of the process: “We would make the egg whites and the yolks and the co-manufacturer would form the egg, and we provide the plug and play equipment for that process. They form the egg and then they cook it, freeze it and package it. We’ve just done some line testing with a fairly big manufacturer and it came out somewhat better than we can deliver on our own equipment.
“This way, we maintain the IP, the recipe and the protocol of mixing, and the yolk manufacturing using our specialized equipment.”
He added: “But even with our pilot facility, we can compete head-to-head on price with Just Egg [the US plant-based egg market leader, which uses mung bean protein as its base ingredient], and we’re not even close to the scale they are.”
Go-to-market strategy
Yo Egg had a soft launch in foodservice with a handful of partners in the US in February 2023 and broader launch in April 2023 through distributors including Gordon Food Service, Sysco, US Foods, Earthly Gourmet, Sunbelt Foods and WebstaurantStore.com, said Groner, who says he’s following Impossible Foods’ playbook [beginning in foodservice before launching into retail].
“There are definitely advantages in launching a brand in foodservice before you go into retail,” he claimed. “It’s easier to iterate quickly in foodservice, get rapid feedback, and iterate again. It doesn’t work like that in retail. What people like is that we’re going after every format of eggs. We’re starting with fried and poached eggs and we’re planning to launch a patty next quarter, where we already have major accounts signed up. This will be followed by hardboiled eggs later this year, and a liquid yolk product next year.”
The appeal of plant-based eggs
But how big is the addressable market for Yo Egg’s products, and what’s the draw for consumers that don’t spend much time thinking about animal welfare or the environment?
According to Groner, a surprising number of dishes now include a fried or poached whole egg on the menu from hamburgers, tacos and pizza to avocado toast, bibimbap, ramen, fried rice and breakfast sandwiches, and current liquid or powdered plant-based egg alternatives can’t deliver this experience.
While vegans are obvious early adopters for his products, Groner is not pushing an environmental or animal welfare message, but instead homing in on the ‘deliciously plant-based, cholesterol-free’ tagline, he said.
“Consumers like the fact that animals are not involved and it’s better for the environment, but what really drives consumption is you have a third of the saturated fat ( 0.5g vs 1.6g in a chicken egg), zero cholesterol, and less sodium [50mg vs 70mg in a chicken egg],” said Groner. “And foodservice operators love the fact that finally, they have a plant-based option on their menu that they can be proud of. It’s a surprising, innovative, versatile product.”
Funding
Yo Egg was initially funded by its founders but raised $5 million in a seed round in 2022 led by Stray Dog Capital and NFX. It has since raised an additional sum from existing investors to help support its retail launch, said Groner.
“Many investors stopped looking at alternative protein because of the negative sentiment. But the smart ones understand that there are specific companies that do things differently. Beyond Meat isn’t doing great because they didn’t meet the market’s expectations and they’re losing money, but they’re still doing $343 million in annual sales, so there is clearly a market there for plant-based alternatives.
“We have a very lean CapEx structure, our equipment is affordable, and what we’re doing is very scalable.”
Egg alternatives
Plant-based eggs are still a fairly niche product. However, the addressable market is potentially significant, spanning industrial applications as well as foodservice and retail, with some firms keen to tap into the plant-based trend, while others are looking to avoid allergens and pathogens (salmonella) and secure more consistent pricing and supplies as egg prices YoYo up and down with every avian flu outbreak.
That said, there is still only a relatively small number of players making egg alternatives for US retail, from runaway market leader JUST Egg (which has sold the equivalent of 500 million+ chicken eggs since 2019) to Hodo (soy-based scramble), Bob’s Red Mill (powdered substitute from potato starch, tapioca flour and psyllium husk fiber), Follow Your Heart (soy-based powder), Neat Egg (chickpeas and chia seeds) and some private label offerings from brands such as Kroger’s Simple Truth.
Crafty Counter has launched plant-based boiled eggs for snacking under the WunderEggs brand, Spero is developing a liquid egg alternative made with pumpkin seeds at Sprouts; pea protein giant PURIS has an egg alternative line called Acremade made from pea protein and lupin flour, and Zero Egg is combining soy, pea, chickpea and potato protein for egg alternatives with an initial focus on CPG and foodservice.
Separately, ‘animal-free’ egg protein startups such as The EVERY Co are developing real egg proteins in fermentation tanks using genetically engineered microbes as mini production factories. The firm has an egg white replacer that delivers functional properties including aeration, whipping, gelling, binding, and foam stability; and a new liquid whole egg replacement.
*Yo Egg will be showcasing its new retail line at booth N609 at the Natural Products Expo West show in Anaheim, California, next week.
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