Next Gen Foods, a plant-based chicken startup founded by former BRF executive Andre Menezes and Timo Recker, has just written a new chapter in the global foodtech industry. Just over six months after celebrating the biggest seed of a plant-based startup, when it raised $30 million, the owner of the Tindle brand broke barriers again.
The Singapore-based foodtech has raised $100 million in the biggest series A round ever by a company of its kind. The round included the participation of Alpha JWC, a venture capital manager in Southeast Asia, EDBI and UK-based MPL Venturesa. Temasek, GGV Capital, K3 Ventures and Bits x Bites, which were already investing, followed suit. The valuation was not disclosed, but the startup claims that the amount exceeds “well” the $180 million valuation of the seed.
The round also marks the debut of Tindle in the United States, significantly expanding the footprint of Next Gen Foods. “Adding up the population of all countries, we could serve less than 50 million inhabitants. But the U.S. has more than 300 million. You can already have a sense of expansion,” Mr. Menezes, CEO of the startup, told Pipeline, Valor’s business website.
With a strategy initially focused on restaurants, a way to convince those attracted by famous chefs about the potential of cooking with plant-based chicken, Tindle was already in restaurants in Singapore, Malaysia, Macau, Hong Kong, Dubai and Amsterdam. The idea is to reach retail only in 2023.
Upon landing in the U.S., Next Gen Foods surprised skeptics who doubted the company’s expansion speed. “I came here at the end of September, after the launch in Dubai. Our crazy ambition was to make the launching in the first quarter, which we did, but a lot of people said it wasn’t realistic,” recalls Mr. Menezes.
Living in Chicago to prepare for the arrival of the startup, Mr. Menezes worked on the various fronts necessary to bring the product to the United States, which includes the import process — the outsourced factory is in the Netherlands —, definition of the storage and distribution structure and prospecting of restaurants that already have dishes with Tindle on their menu. “We already have dozens of restaurants we’ve talked to, and we’re in talks with hundreds,” he said.
Starting this Tuesday, Tindle will be in select restaurants in California, New York, Miami, Philadelphia, a process that included long conversations with chefs to develop recipes. Unlike the traditional plant-based industry, Tindle does not come in a defined format — a hamburger, for example — but as a kind of modeling clay that allows for several uses, from breaded and fried product to a chicken breast dish.
The ambition of Next Gen Foods is to become the benchmark in plant-based chicken meat for restaurants and consumers, just as U.S.-based startups Impossible Foods and Beyond Meat were to the plant-based hamburger, virtually inventing a category. To date, no plant-based chicken meat has achieved the consistency needed to establish itself in the market, a gap that Tindle wants to fill.
The United States are expected to become the biggest market for the startup in a short time. “The receptivity of the product tests was incredible,” Mr. Menezes said. The expectation is that Americans will represent 60% to 80% of the revenues of the startup – of undisclosed value – in 2022.
Next Gen Foods has an asset to gain broad bases in the U.S. The startup cut a deal with Dot Foods, the largest food redistributor in the U.S., which in theory allows it to take Tindle to any restaurant in the country. “A contract usually takes years because they only take companies that operate with an already reasonable income, which is not our case yet. They reach 3,000, 4,000 restaurants,” Mr. Menezes said.
The debut of Next Gen Foods in the United States will test the doubts of part of the market with the growth of the plant-based segment. After a jump in the first year of the pandemic, the category stagnated last year and sales even dropped in a few months, which put some companies in the hot seat. Beyond, once a reference, became the target of short sellers.
Mr. Menezes does not ignore the scenario, but considers that both the euphoria of 2020 and the disappointment of some with the slow growth of last year reflect hasty assessments. “Any analysis done with such a short lens is inherently wrong,” he said. The game is long term, measured in decades. In this trajectory, the company bets that products like Tindle will fill a more significant space in the $350 billion global chicken market.
For now, plant-based alternatives like Next Gen Foods still account for a tiny share of the market — in the case of chicken, less than 1% — and are more expensive. In restaurants, dishes with Tindle are up to 15% more expensive than the traditional chicken options on the menu. “The scale discrepancy is very bizarre. A very large plant-based factory produces in a year what an average chicken factory does in a month”, compares Mr. Menezes.
With the gains of scale that will come with time, however, the prices of the plant-based industry also tend to fall, becoming more competitive in the competition for consumers. In a world that will need more food using fewer natural resources, the expansion of plant-based meat seems inevitable. “Livestock cannot be the only tool to feed 10 billion people in 2050 because there is no natural resource available,” summarizes the CEO of Next Gen Foods.
Source: Valor International