Seven years working in the meat industry kept Andre Menezes away from eating animals, most of the time.
While working for a poultry exporter in Singapore, Menezes remembers being in a supermarket, looking at a chicken imported from Brazil and a block of ice cut from a river in Malaysia, just 20 to 30 miles away. They cost the same. Menezes remembers thinking that kind of mass meat production was environmentally unsustainable.
“If you expand your view to decades instead of quarters, that industry is meaningless,” he said.
Menezes is now the CEO of Next Gen Foods, a plant-based food technology startup founded in Singapore in 2020 with bold American ambitions. The company announced Wednesday that it has selected Chicago, where Menezes now lives, as its US headquarters, becoming the latest entrant in a growing field of alternative protein producers.
For now, Next Gen Foods makes an alternative meat product, a plant-based chicken it calls Tindle, after John Tyndall, the 19th-century Irish physicist who demonstrated the connection between atmospheric carbon dioxide and the greenhouse effect. Alternative chicken is on the menu of some 1,000 restaurants worldwide, 15 of which are in the Chicago area, including the local vegan fast-casual chain. I can’t believe it’s not meat and the decidedly non-vegan Parson’s Chicken and Fish.
For Menezes, meat is now reserved for “essentially special occasions.” He no longer craves it because of the way it’s produced, but still enjoys its taste and texture. Next Gen Foods Bets in the interest, and dollars, of people like him.
Tindle is made from nine ingredients, including soybean, wheat, coconut, and sunflower oil and water. Menezes says alternative chicken is nutritionally similar to real chicken, with about the same amount of protein, calories and fat as skinless chicken. Tindle, however, has no cholesterol.
One day in September at their new research and development facility in Hatchery, a food business incubator in East Garfield Park, Tindle’s vice president of product development, Julie Ip, served up two Tindle samples: a super crispy tender patty and a not fried -chicken sandwich covered with pickles, a slice of tomato and lettuce. Tindle doesn’t pass like real chicken, but it tastes good.
Menezes said he chose Chicago for Next Gen’s US headquarters because of its central geographic location and the city’s proximity to multinational food companies, suppliers and distributors. His talent pool was also an attraction. Ip, meanwhile, grew up in McKinley Park and previously worked for Alsip-based Griffith Foods. The company has about 70 employees, with about eight in Chicago. Tindle production takes place in the Netherlands.
Retail sales of plant-based meat proteins have soared in recent years, more than doubling between 2017 and 2021 and reaching a total of $1.48 billion in 2021, according to market research firm Mintel. But sales are expected to decline slightly in 2022, said Caleb Bryant, associate director of food and beverage reporting at the firm. Mintel projects a 2% drop in sales this year.
“I really think it was too fast,” Bryant said. Too many products flooded the market, he said, and they didn’t always meet consumer expectations.
Taste is the biggest factor when it comes to meat alternatives, with 55% of people surveyed by food market research company Datassential saying they would be motivated to try alternative meat if it tasted better than the real thing . A similar proportion said health and affordability were important factors. Only 29% said that reducing their impact on the environment would lead them to choose meat alternatives, although that proportion rose to nearly 40% among Gen Z respondents.
Mintel still projects a positive long-term outlook for the plant-based meat industry based on increased interest in environmentally friendly food and the development of better products that cost less. But in the short term, especially as consumers grapple with skyrocketing prices at the supermarket (plant-based proteins tend to command a premium compared to their real meat counterparts), the outlook is less rosy.
“Right now for a lot of smaller companies it’s a very challenging period, so differentiating different products is key,” Bryant said. Many companies are producing meatless chicken nuggets; the question for any business, Bryant said, is how to make your product stand out.
Next Gen Foods joins a short list of alternative protein companies in Chicago, including alternative seafood company Aqua Cultured Foods and Nature’s Fynd, which makes meatless breakfast patties and dairy-free cream cheese. All three focus on meatless foods other than meatless burgers, which are the most established plant-based protein products, and all three say they are not marketing their products solely or primarily to vegans and vegetarians.
From a business perspective, that makes sense, said Mark Brandau, a group manager at Datassential.
“The market for strictly vegetarian or vegan eaters is incredibly small,” he said. “You’re not going to make a big deal out of it.” Only one-fifth of consumers follow some kind of reduced-meat diet, according to Mintel.
Anne Palermo, CEO of River North-based Aqua Cultured Foods, eats animal proteins on occasion and said the company’s focus is on appealing to traditional seafood consumers.
“Vegans are amazing,” Palermo said. “They are very willing to try new and exciting alternatives. But it’s been a long time since they tasted or tasted shellfish. So the one-to-one comparison is not as challenging as when you have a consumer who still eats seafood.”
From its River North research and development facility, Aqua Cultured Foods has developed fish-free seafood using a process called microbial fermentation. The company has the ability to create a wide range of seafood, from squid to white fish, shrimp, ahi tuna and salmon, Palermo said. He plans to launch products this fall or winter at restaurants and universities; Your first fish without fish on plates will be the tuna sushi roll.
The company is also in the process of signing a lease for a pilot production facility in Back of the Yards, Palermo said.
River North-based Nature’s Fynd operates a 36,000-square-foot production facility near Union Stockyards, the former Chicago meatpacking district that led Carl Sandburg to call the city the “Swine Butcher of the World”. It’s a connection that Karuna Rawal, director of marketing, recognizes as “poetic.” The company is bringing “new protein into the home of old protein,” she said.
Nature’s Fynd sells its products in about 250 grocery stores across the country, including Mariano’s in the Chicago area and Whole Foods on the coast. It plans to expand to another national retailer soon, which Rawal says will push products to about 600 total stores in the next month or so. The company has about 200 employees, most of whom are in the Chicago area. It received a $134,000 Small Business Improvement Fund grant from the city for its Stockyards facility in 2021, Rawal said.
Nature’s Fynd plans to add a much larger 200,00 sf facility in Back of the Yards. The company had initially planned to open that facility by the second quarter of this year, but construction and supply chain delays now point to an opening by the end of the year, CEO Thomas Jonas said.
Legacy food brands still hold the lion’s share of the plant-based protein market, Bryant said. Kellogg’s MorningStar Farms brand, which makes plant-based chicken in the form of nuggets, steaks and patties, is an industry leader; the company announced plans in June to split into three companies, one of which will focus on plant-based foods.
MorningStar’s sales fell just over 10% during the first half of the year due to a supply chain disruption at a co-manufacturer, according to a second-quarter earnings presentation. “This is a short-term issue, and we’re working on it,” CEO Steve Cahillane told investors on an August earnings call.
In May, Chicago-based Gardein de Conagra announced a handful of new plant-based options, including chicken wings and hot dogs. And in February, Chicago-based Kraft Heinz announced a partnership with food-tech startup TheNotCompany that will focus on developing plant-based products across the company’s brands. Chicago-based agribusiness giant Archer Daniels Midland said in April it would invest $300 million in an expansion of its alternative protein production facility in Decatur. He said he would also open an innovation facility there in the summer of 2023.
Beyond Meat, which unlike its publicly traded competitor Impossible Foods, posted a 1.6% decline in net income in the second quarter as consumers swapped their protein for lower-cost options amid high inflation. .
In an August earnings call, Beyond Meat CEO Ethan Brown said the company recognizes that “progress for us and for the industry is taking longer than expected.” He said the company was taking steps to reduce its cash drain, including laying off 4% of its workforce.
Chicago-based McDonald’s recently completed its US trial of McPlant, a burger he developed with Beyond Meat. “We put what sells on the menu,” McDonald’s CEO Chris Kempczinski said while addressing the change at an Economic Club of Chicago event last week.
As for Tindle, Menezes is optimistic. Next Gen has raised $100 million in Series A funding, and Menezes says the company is in talks with larger restaurant chains about using alternative chicken in their stores. Next Gen Foods plans to put products in the grocery store sometime in the first half of 2023. And Raw Tindle’s moldable texture means chefs can literally shape it to their needs.
“Anything that is popular with chicken could be done effectively,” Menezes said. “I mean, except the bone.”