As demand for plant-based food like fake burgers heats up, biotech start-up Ginkgo Bioworks is launching a venture to bring scale to the rapidly growing industry.
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U.S. retail sales of plant-based foods that replace animal products grew by 17 percent to $3.7 billion in 2018, according to data from Nielsen and the Good Food Institute.
Impossible Foods took the top prize at the Consumer Electronics Show in January for the latest version of its burger known for its realistic bleeding. Beyond Meat, which sells products like Beyond Sausage and Beyond Burger on the shelves of Kroger, Target and Amazon‘s Whole Foods, has filed for an initial public offering.
It’s the success of Impossible Foods that drove Ginkgo to begin planning Motif Ingredients in mid-2017, according to Ginkgo co-founder and CEO Jason Kelly.
Silicon Valley-based Impossible Foods genetically engineers heme, a protein that makes the vegetarian-friendly burger taste like meat. The company, started by a Stanford University scientist, received a key FDA approval last July for its protein, but its plan to sell uncooked Impossible Burgers in retail grocery stores requires a separate FDA color additive review, which is still pending ahead of a planned retail launch this year. Kelly said it is difficult for other companies to follow in Impossible Foods’ footsteps, because few people have both the experience to build a successful food brand and a Ph.D. in biotechnology.
That’s where Motif thinks it can play a role as the plant-based protein market matures. The Boston-based start-up will help food companies — both large and small — find the next big thing in laboratory-based food by developing the key ingredients and leaving the rest of the work to the food companies, Kelly told CNBC. The company plans to use biotechnology and fermentation — rather than animal agriculture — to engineer proteins derived from dairy, egg and meat.
Motif Ingredients attracted some high-profile investors to a $90 million Series A funding round announced Tuesday. The Bill Gates-led investing entity Breakthrough Energy Ventures — which includes among its roster of billionaire backers Jeff Bezos, Michael Bloomberg, Richard Branson, hedge fund titan Ray Dalio, LinkedIn co-founder Reid Hoffman, Alibaba’s Jack Ma and Softbank founder Masayoshi Son — was in on the venture round. Investors also included hedge fund Viking Global Investors, Louis Dreyfus Companies and New Zealand-based dairy cooperative Fonterra.
Gates is an investor in several lab-based food companies, including Impossible Foods, Beyond Meat and Memphis Meats. Earlier this month, Breakthrough Energy Ventures led a funding round for Chicago-based Sustainable Bioproducts, which is working with a fermentation process to grow edible protein as a replacement for animal-based meats. Cascade Investment, Bill Gates’ personal investment firm, already is an investor in Ginkgo, which builds made-to-order microbes for customers in sectors such as agriculture, pharmaceuticals and food.
Scientists estimate the world population will reach 9.6 billion by the year 2050, and according to the Food and Agricultural Organization of the United Nations, world food production will need to increase 70 percent.
“Raising meat takes a great deal of land and water and has a substantial environmental impact,” Gates wrote on his personal blog, Gatesnotes.com, a few years ago. “Put simply, there’s no way to produce enough meat for 9 billion people. Yet we can’t ask everyone to become vegetarians. That’s why we need more options for producing meat without depleting our resources.”
Between 2016 and late 2018, Beyond Meat had sold more than 25 million of its Beyond Burgers. Restaurants, including TGI Friday’s, sell it on its menu. White Castle sells the Impossible Burger.
The rise of lab-based foods has resulted in legal challenges and regulatory scrutiny. In recent weeks, beef and farming trade groups successfully lobbied a dozen states to introduce laws that would make it illegal to use the word meat to describe burgers and sausages created from plant-based ingredients or grown in labs.
Ginkgo, which has made the CNBC Disruptor 50 list three times, has tapped Jonathan McIntyre — whose experience includes a stint as the head of research and development for PepsiCo’s snack division and head of R&D at another CNBC Disruptor 50 start-up, Indigo Agriculture — as CEO for the new company.
“Sustainability and accessible nutrition are among the biggest challenges facing the food industry today,” McIntyre said in a release on Tuesday.
CNBC.com
