Scalable production of alternative proteins remains a major challenge for companies in this sector Not a meat factory wants to help with that.
The Canada-based company, which produces alternative proteins for outside customers, raised $42 million in new Series B capital to build a larger manufacturing facility in the US. No Meat Factory has now raised $60 million.
New investor Tengelmann Growth Partners led the round and was joined by existing investor Emil Capital Partners, who initially invested in No Meat Factory when Dieter Thiem and Leon Bell co-founded the company in 2019.
Both Bell and Thiem have a background in plant-based food production and Thiem was even a master butcher in Germany.
Their goal is to expand their manufacturing footprint in North America. No Meat Factory’s current 30,000-square-foot manufacturing facility in British Columbia produces alternative meat products, such as nuggets, burgers and whole muscles, Bell told ukbusinessupdates.com. The new capital would allow a second facility to be built in the Pacific Northwest that, at 200,000 square feet, would make similar products and add the ability to make sausages, hot dogs and alternatives to processed meats. The new facility is expected to go online by the end of 2023, he added.
No Meat Factory started working with customers in September 2020 and is generating revenue; However, Thiem and Bell declined to provide details on year-over-year traction, other than to say there was “consistent growth.”
The world remains in a food crisis, but the jury is still out on whether meat alternatives will fill that gap and gain mainstream popularity. Many companies are working on it, and Project Eaden is one of the most recent companies to raise venture capital for its plant-based steak alternative. And as more consumers make healthier and more sustainable food choices, additional industrial-scale production capabilities are likely to help increase output as demand for plant-based products grows. Other companies are also working to add capacity to the industry. For example, both Planetary and Prolific Machines raised capital in 2022 to build production facilities.
The investors of No Meat Factory agree that extra capacity is needed for this industry.
“As more brands recognize the need to provide customers with delicious plant-based alternatives, companies like No Meat Factory are poised for rapid growth and increasing demand for their production capabilities,” added Daniel Bentrup, investment partner at Tengelmann Growth Partners in a statement.
More production capacity should also help to reduce the gap between the production costs of plant-based meat and animal meat. While traditional meat prices have risen significantly during the global pandemic, a report from the Good Food Institute looked at 2019 average selling prices and found that the cost of plant-based meat was double that of beef, with two or three times the cost of chicken and pork.
Meanwhile, with increasing demand for meat alternatives on the horizon, Bell said the company will work to expand its customer base and expand its 40-person workforce.
“Working with brand owners on the additional capacity coming up gives us an opportunity that we can pursue,” he added. “We will also focus more on a private label strategy, for example by offering our products and our ideas to a number of these private label manufacturers. With our phase one site, we were limited given the size of some private label opportunities in the market.
