Beyond Meat’s nosedive, lukewarm growth, mediocre products? We unpack the plant-based meat industry with the CEO of global alt meat startup TiNDLE.
Just a little over two years old, vegan chicken maker TiNDLE is often held up as one of the poster children for plant-based meat and it’s small wonder why. The company is available in just under ten countries, including nationally across the United States, has raised over $130 million in funding, and has attracted heavyweight talents from Rachel Konrad to Andrew Zimmern. Last week, it announced new U.S. headquarters & R&D center in Chicago. But where does TiNDLE fit in when it comes to the plant-based meat sector as a whole?
As the industry faces looming headwinds including supply chain disruptions, skyrocketing inflation, lukewarm interest from US consumers, and overcrowded shelves, Green Queen’s Sonalie Figueiras talks to TiNDLE co-founder and CEO Andre Menezes about the future of plant-based meat.
Q: Let’s dive right in with what I call the industry’s avatar: Beyond Meat. The stock is down 70-80% over 12 months. How much of an industry bellwether is this? How much should we be extrapolating from this?
Andre Menezes: As a whole, it’s important to emphasize how the Nasdaq, SP500, and many other companies’ shares have seen a significant drop in 2022, not only for a plant-based food company like Beyond. We can’t discount that in the market, we’re seeing overall macro shifts like rising inflation, increasing interest rates, and geopolitical tensions that naturally cause a movement towards more defensive assets, distressed business deals, or plain and simple lower capital deployment. The fundamentals driving today’s markets have changed.
For our category, we do have to thank Beyond for opening consumers’ eyes to the sector globally, and whatever micro-challenges they are facing will hopefully be addressed the soonest and they will hopefully continue to drive a meaningful transformation in our world.
Q: Recent data suggests that despite all efforts, so far plant-based as a category is firmly under 2% of the meat/protein retail market. Do you think this can change? What are brands doing wrong and what can they do better?
Andre Menezes: At Next Gen, we have always stressed how this is a paradigm shift that will not happen immediately – but adoption will take decades. Our job as a player within this industry of changing the way we produce food is to try to compress that adoption curve and accelerate the transition to the highest level possible.
There are countless parallels to other industries in how we are becoming less reliant on animal agriculture for the production of food. We have seen it in the way we mechanized manufacturing, on how we ditched horse-based transportation and other examples in the disruption of old technologies in energy and communications. None of those transitions were quick or frictionless, just as we’re seeing in the current transition between internal combustion engine cars and electric vehicles.
On that, history teaches us that it is always a combination of factors that drive the transitions and that the steeper portion of growth within the S curve of adoption comes with generational shifts. It is the same for plant-based meats and foods. We need, as an industry, to stop thinking that one isolated factor (be it a magic molecule, price, infrastructure, technology, or policies) will drive the change individually. It is the combination of important factors that will dictate both the speed of and viability of growth – which, not coincidentally – also explains why 70% of Norway’s car sales are EVs, why China is the biggest market for EVs with countless exciting local players, why the UK has led the industrial revolution, and why smartphones took off.
In the plant-based sector, a challenge we’re facing is when products are mediocre and don’t deliver on what consumers are looking for. These types of products that don’t match consumer needs end up making the category move backward.
Q: There is also data underlining that the category is not having much luck attracting repeat customers. What’s going wrong?
Andre Menezes: This is where I believe mediocre products are causing the most harm and can hinder subsequent trials, as consumers who have unpleasant experiences trying plant-based meats and foods will not come back for a second time so easily.
Another factor that affects everyone in the category (no matter if they taste great or not) – and that needs to be addressed – is that plant-based products are no longer just for the vegan/vegetarian niche. So even if a product is liked/loved by consumers, it will still go head-to-head against the habit and category of animal-based options, which is a much larger pool of options and an industry with a wider distribution of animal-based products. That may simply result in consumers picking meat instead of plant-based, as the pull factor from flexitarians may not necessarily be strong enough to sway them.
Q: A lot of the data we are discussing is US-centric. As a fairly global brand with a presence in the UK, the EU, and Asia as well in the US- how do things look outside of North America?
Andre Menezes: The U.S. is undeniably the biggest market in the world, but it is fascinating to see how the UK, Germany, and the Netherlands are relatively ahead of the curve in terms of awareness and pull factors. If you walk down the streets in London, I welcome you to see that even street food operators and vendors have always proudly and loudly communicated a vegan option.
From what I’ve seen in London, Berlin, and Amsterdam, there is simply no option not to have a wide and well-executed vegan section in any decent restaurant, and we see that reflected in how our business has been growing quickly across these markets as well (where the category is already breaking out of the niche).
Singapore (where our company was founded) is another great example of how the curve has accelerated, and how it is now ahead of the entire continent in Asia in terms of consumer acceptance, awareness, and even distribution. When we first started (and even through today), some of Singapore’s best chefs were quick to adopt and try out TiNDLE on their menus – treating it just as they would chicken on their menus and in their restaurants. Additionally, consumers are increasingly aware of the relevance of food security and not taking the current broken system for granted – especially with the border challenges during the pandemic and the more recent chicken export ban from Malaysia.
Q: Who is doing it right, according to you?
Andre Menezes: Everyone plays a very important role in this current landscape. The exception to this is those putting out products that don’t deliver on taste or experience – or those that are stifling category growth by trying to push competition out (instead of welcoming it).
Similar to the animal farming business, there is no single method, category or positioning that works to meet success. We need the combination of players and efforts to make change happen, and we welcome it all. With this, we’ve seen an attempt to use traditional tactics of killing competition in an effort to have a bigger piece of the pie – instead of focusing on how to drive the category altogether. Don’t get me wrong – competing for a customer or consumer naturally happens, but at the same time I see that as a healthy competition that forces everyone to be better across products, price, and distribution.
Q: What is TiNDLE looking to do over the next six months? What’s the focus- is it brand building? B2B sales? New country launches?
Andre Menezes: We have concluded the 3rd step of our growth, and we are now simultaneously focusing on improving our efficiency as well as preparing for the 4th growth wave. If you recall – and we were privileged to have been able to share the journey with you from the very beginning– the first step was to design our business model, followed by the second step of testing diverse markets and making sure we were able to have a global reach and then opening the 3 biggest markets in the world (US, UK, Germany). All of that within around two years, offering literally millions of occasions where consumers tried and loved TiNDLE. Now we are preparing for the next big movement, which will happen sometime in 2023 and will be where all the learnings, infrastructure, trials, and presence we built will come together to multiply our impact significantly.
Q: What are your customers telling you, both B2B and B2C?
Andre Menezes: We are very blessed that consumers and customers around the world have shared a positive response to TiNDLE – including the way it cooks and tastes, but also that it exceeds expectations from what people have previously thought of what they think of plant-based chicken. Whether it’s chefs or diners, the feedback is unanimous and that is translating into meaningful growth. Today we’re in over 1,000 restaurants around the world, up from only about a dozen or so in Singapore initially in March 2021.
Q: Are you currently fundraising? Has the environment changed?
Andre Menezes: Right now, we are 100% focused on driving the maximum impact and development for TiNDLE and the category in the most capital-efficient way. Our previous rounds, and our very cautious and strategic capital deployment, gives us the ability to focus on where the impact is – and not have to focus on raising funds in the near term. While it is undeniable that the capital markets are under pressure, we still seeing a lot of interest from mission-aligned and long-term investors, who keep in touch and enquire about our next raise.
Q: What would be your advice to a new plant-based meat startup?
Andre Menezes: I should probably start writing a book on that! The most important underlying advice I would have for any startup would be to avoid -at all costs- the trap of thinking that a magic silver bullet (whatever it might be) will give you an immense and magical success path. It is a business that you are building, and that business is a combination of your beloved product/technology, your value chain, your capital deployment strategy, your team, your brand (b2c or b2b, it doesn’t matter), and all other aspects.
Q: Companies like Maple Leaf Foods say they are retracting from the category. What do you think about this?
Andre Menezes: As with any new category, many players will throw in the towel. They have their strategic reasons and drive, and certain factors might require them to do so. Many companies will naturally fail, many will be acquired, and there will be consolidation… It is all a natural part of growth within a new disruptive category, and that is also true for any other industry. We believe it is all positive since the lower tide will force mediocre products and players, who are not driving this for impact, out of the field, and that will cause an overall improvement for the category.
Q: Consumers are facing huge uncertainty, a looming recession, and inflationary pressures. Does that pose an existential threat for a category where prices tend to be on the high side?
Andre Menezes: The macro fundamentals behind this will not change, but the economic pressure may certainly drive a move towards cheaper options when applicable. It is unfortunate that animal products are able to receive such large subsidies, which makes them so much cheaper than plant-based options – which in general do not have any government support despite the actionable sustainability solutions it provides.
I am a believer that the industry is highly capable and that a change is extremely needed. All of these current challenges will make the industry emerge stronger, better developed, more efficient, and smarter on the other side. This is in stark contrast to the animal farming industry and old technologies there, which has fundamental limitations linked to animal genetics, resource utilization, and food conversion, which they will not be able to materially improve.