Seven years working in the meat industry turned Andre Menezes off from eating animals — most of the time.
During his time working for a poultry exporter in Singapore, Menezes remembers standing in a supermarket, looking at a chicken imported from Brazil and a block of ice cut from a river in Malaysia, just 20 or 30 miles away. They cost the same. Menezes remembers thinking that kind of mass production of meat was environmentally unsustainable.
“If you extend your view to decades instead of quarters, that industry doesn’t make sense,” he said.
Menezes is now the CEO of Next Gen Foods, a plant-based food-tech startup founded in Singapore in 2020 with bold American ambitions. The company announced Wednesday it has selected Chicago, where Menezes now lives, as its U.S. headquarters, becoming the latest entrant in a growing field of alternative protein producers.
For now, Next Gen Foods produces one alt-meat product, a plant-based chicken it calls Tindle, after John Tyndall, the 19th century Irish physicist who proved the connection between atmospheric carbon dioxide and the greenhouse effect. The alt-chicken is on the menu at about 1,000 restaurants worldwide, 15 of which are in the Chicago area, including the local vegan fast-casual chain Can’t Believe It’s Not Meat and the decidedly not-vegan Parson’s Chicken and Fish.
For Menezes, meat is now reserved for “fundamentally special occasions.” He doesn’t crave it anymore because of the way it’s produced, but he still enjoys its taste and texture. Next Gen Foods is betting on the interest, and dollars, of people like him.
Tindle is made from nine ingredients, including soy, wheat, coconut and sunflower oil and water. Menezes says the alt-chicken is nutritionally similar to the real deal, with about the same amount of protein, calories and fat as skinless chicken. Tindle, however, has no cholesterol.
On a September day in their new research and development facility at the 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 breaded tender and a fried not-chicken sandwich topped with pickles, a tomato slice and lettuce. Tindle doesn’t quite pass as real chicken, but it tastes good.
Menezes said he chose Chicago for Next Gen’s U.S. headquarters because of its central geographic location and the city’s proximity to multinational food companies, suppliers and distributors. Its talent pool was also a draw. Ip, for one, is McKinley Park-raised and worked previously for the Alsip-based Griffith Foods. The company has about 70 employees, with about eight based in Chicago. Tindle production takes place in the Netherlands.
Retail sales of plant-based meat proteins soared over the last several years, more than doubling from 2017 to 2021 and reaching a total of $1.48 billion dollars in 2021, according to market research firm Mintel. But sales are expected to decrease slightly in 2022, said Caleb Bryant, the firm’s associate director of food and drink reports. Mintel projects a 2% decline in sales this year.
“I really think it was a case of too much too fast,” Bryant said. Too many products flooded the market, he said, and they didn’t always live up to consumer expectations.
Taste is the most important factor when it comes to meat alternatives, with 55% of people surveyed by food market research firm Datassential saying they would be motivated to try alt-meat if it tasted better than the real thing. A similar proportion said health and affordability were important factors. Only 29% said 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 from increased interest in environmentally-friendly eating and the development of better products that cost less. But in the short-term, especially as consumers deal with skyrocketing prices at the supermarket — plant-based proteins tend to carry a premium compared with their real-meat counterparts — the outlook is less rosy.
“Right now, for a lot of smaller companies it is a very challenging period, and so different product differentiation is key,” Bryant said. Lots of companies are producing meatless chicken nuggets; the question for any one company, Bryant said, is how to make their product stand out.
Next Gen Foods joins a short list of alt-protein companies in Chicago, including the alt-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 of plant-based protein products, and all three say they’re not marketing their products only or even primarily toward vegans and vegetarians.
From a business perspective, that makes sense, said Mark Brandau, a group manager at Datassential.
“The market of purely strict vegetarian or vegan eaters is incredibly small,” he said. “You are not going to make a giant business on that.” Only a fifth of consumers follow any kind of reduced-meat diet, according to Mintel.
Anne Palermo, CEO of River North-Based Aqua Cultured Foods, eats animal proteins on occasion herself and said the company’s focus is on luring in traditional seafood eaters.
“Vegans are awesome,” Palermo said. “They’re very willing to try new and exciting alternatives. But they haven’t tried and tasted seafood in a long time. And so the one-to-one comparison isn’t as challenging as when you have a consumer that is still eating seafood.”
From its River North research and development facility, Aqua Cultured Foods has developed fishless seafood using a process called microbial fermentation. The company has the ability to create a wide range of seafood, from calamari to whitefish, shrimp, ahi tuna and salmon, said Palermo. It plans to soft launch products this fall or winter at restaurants and universities; its first fishless fish on plates will be sushi roll tuna.
The company is also in the process of signing a lease for a pilot production facility in the Back of the Yards, Palermo said.
River North-based Nature’s Fynd operates a 36,000-square-foot production facility near the Union Stockyards, Chicago’s former meatpacking district that prompted Carl Sandburg to dub the city the “Hog Butcher of the World.” It’s a connection chief marketing officer Karuna Rawal acknowledges as “poetic.” The company is bringing “new protein to the home of old protein,” she said.
Nature’s Fynd sells its products in about 250 grocery stores across the country, including in Chicago-area Mariano’s and in Whole Foods on the coasts. It plans to expand into another national retailer soon, which Rawal says will push the products into close to a total of 600 stores within the next month or so. The company has about 200 employees, most of whom are based 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 an much larger 200,00-square-foot facility in the Back of the Yards. The company had initially planned to open that facility by the second quarter of this year, but supply chain and construction delays now point to an opening by the end of the year, said CEO Thomas Jonas.
Legacy food brands still have the biggest share of the plant-based protein market, Bryant said. Kellogg’s MorningStar Farms brand, which makes plant-based chicken in the form of nuggets, tenders and patties, is an industry leader; the company announced plans in June to spin itself off into three companies, one of which will focus on plant-based foods.
MorningStar sales were down just over 10% throughout the first half of the year because of 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 through it,” CEO Steve Cahillane told investors at an August earnings call.
In May, Chicago-based Conagra’s Gardein announced a handful of new plant-based options, including chicken wings and sausage links. And in February, Chicago-based Kraft Heinz announced a partnership with the food tech startup TheNotCompany that will focus on the development of 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. It said it would also open an innovation facility there in summer 2023.
Beyond Meat, which unlike competitor Impossible Foods is publicly traded, posted a 1.6% decrease in net revenues in the second quarter as consumers traded their proteins for lower-cost options amid high inflation.
At an August earnings call, Beyond Meat CEO Ethan Brown said the company recognizes that “progress for us and for the sector is taking longer than expected.” He said the company was taking steps to reduce its cash consumption — including by laying off 4% of its workforce.
Chicago-based McDonald’s recently ended its U.S. trial of the McPlant, a burger it developed with Beyond Meat. “We put on the menu what sells,” McDonald’s CEO Chris Kempczinski said while addressing the change at an event for the Economic Club of Chicago last week.
As for Tindle, Menezes is optimistic. Next Gen raised $100 million in Series A funding, and Menezes says the company is in conversations with larger restaurant chains about using the alternative chicken in their stores. Next Gen Foods plans to place products in grocery store sometime in the first half of 2023. And the moldable texture of raw Tindle means chefs can literally shape it to their needs.
“Anything that’s popular with chicken could effectively be done,” Menezes said. “I mean, except bone.”