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Nowadays - >>> The plant-based meat startup that raised $10 million for its alternative chicken nuggets


Fortune

Rachel King

May 1, 2022


https://finance.yahoo.com/news/plant-based-meat-startup-raised-120000267.html


Over the last few years, plant-based meat alternatives seemingly went from obscure to arguably mainstream with the Impossible Burger and Beyond Meat now being incorporated in fast food chain staples at the likes of Burger King and Dunkin.

While much of the motivation for both producing and eating meat alternatives is rooted in sustainability, the end results aren't always healthy (maybe just healthier).

Plant-based meat company Nowadays is putting health at the forefront of its creative process, touting to have the most nutritious offering on the market. The brand's first product—faux crispy chicken nuggets—does have that classic fried chicken taste. And they are made with only seven ingredients, including non-GMO yellow pea protein, and boast 13 grams of protein, no saturated fat, and 250 milligrams sodium per serving.

Founded in 2020, the San Francisco-based company recently closed a seed round at $7 million, raising just shy of $10 million to-date. The round was led by Stray Dog Capital, with additional support from Standard Meat Company, a privately-owned meat processing and packaging company suppling major national restaurant and supermarket chains.

Nowadays cofounder and CEO Max Elder recently shared more with Fortune about what it's like fundraising right now and the rapid expansion of the plant-based meat market.

Nowadays cofounder and CEO Max Elder.

The following interview has been condensed and lightly edited for clarity.

Fortune: Can you share a bit about your professional backgrounds prior to launching Nowadays?

Dominik and I came from very different professional backgrounds, though share a similar passion for good food.

I have been on the periphery of the emerging alternative protein sector for almost a decade now. When I was 21, I became the youngest fellow at a think tank in Oxford, where I was researching the nexus of animal agriculture, food ethics, and sustainability. I then became a long-term strategy and innovation consultant across the global food value chain at the Institute for the Future, the world’s leading strategic foresight organization and a spinoff of the RAND Corporation in the late 1960s. I’ve consulted for ingredient companies, [consumer packaged goods] companies, foundations with a nutrition or [agriculture] focus, industry groups, and more. While working around the world with large companies across the value chain was edifying and rewarding, I knew I needed to spend 100% of my time working on scaling alternative meats.

Then I met Dominik Grabinski. Dominik is an agricultural engineer and father of two. He has three decades of experience working in senior positions at some of the largest agricultural food ingredient companies, including Cargill and DSM. Dominik has expertise in product development, ingredient innovation, and go-to-market strategy for food & beverages. He has been granted six patents related to food manufacturing and has managed product launches all over the world. Dominik and I have complementary backgrounds and share a passion for good food, so starting Nowadays together was a natural fit.

What inspired you to launch Nowadays?

We’re convinced that plant-based meat has a massive potential to positively impact human and planetary health, however alternative meats account for less than 2% of the meat market in the U.S. today. There are many opinions on why plant-based meats haven’t captured more market share, but we believe it comes down to three main barriers: taste, nutrition, and cost.

Taste is table stakes for a food company; you need to deliver a joyous eating experience. Taste is a barrier for the plant-based meat category as it’s incredibly complicated to take plant ingredients and create an eating experience that mimics animals. While there have been some fantastic innovations over the past five years, eating experiences need to continue to improve.

The number of vegans and vegetarians in the U.S. hasn’t changed much over the past fifty years. We’ve instead witnessed a meteoric rise in flexitarianism, or those who eat meat and also occasionally eat a meat alternative. One survey from 2021 commissioned by Sprouts Farmers Market found that 47% of Americans, and over half of young Americans (aged 24-39), identify as flexitarians. Study after study demonstrates that the primary motivator for flexitarians to occasionally choose an alternative to animal-based products is health, or at least a "perceived health halo" that the plant-based category provides. However, few plant-based brands or products are focused on creating categorically more nutritious alternatives.

Finally, these products are too expensive to be able to reach mass market adoption. Novel ingredients, complex manufacturing processes, and challenges with cold chain distribution channels all drive costs up. A vast majority of the animal-based meat industry has done a fantastic job externalizing costs over the past half a century or more, resulting in consumer expectations for very cheap meat. Chicken is the most consumed protein in the U.S. (and in the world). The commodity price for a pound of chicken today is about $1.80 [as of April 28]. To compete in these markets, plant-based meat companies need to lower costs by utilizing scalable manufacturing technologies and existing finishing assets across the value chain.

Dominik and I started Nowadays to make delicious, nutritious, and affordable plant-based meats for the mainstream so that we might help the category realize its full potential. We’ve developed a proprietary process for creating whole cuts of plant-based meats that we finish into delicious products with unparalleled ingredient labels and nutritional profiles. Our process, at a relatively small scale, can undercut commodity prices of poultry (our first focus is chicken products) so that we can become cost-competitive quickly.

What was the recipe testing process like for achieving the taste and texture of your plant-based chicken nuggets?

The recipe testing process never ends at a food company. The Nowadays recipe testing process began in a small kitchen in San Francisco. Dominik was working on a plant-based nugget in his kitchen using his island countertop and stove top. Our early taste testers were friends, family, industry peers, and anyone who was willing. Once we got enough feedback from personal connections, Dominik and I felt confident our version one nuggets could help us raise enough money to start the company. (And get out of Dominik’s kitchen!)

The first capital we raised enabled us to transition from tinkering in a kitchen to having true R&D and innovation capabilities, both internally (in a much fancier kitchen) and externally (with strategic partners). We’ve since conducted tastings with much larger groups; executed blind sensory panels with trained professionals; shared new product iterations with select groups of loyal customers; and collaborated with major food companies to test, learn, optimize, and further develop that V1 nugget as well as work on additional plant-based chicken products. Much of our "secret sauce" is in how we achieve taste (a blend of yeast and mushroom extracts) and texture (a similar process to how some pasta shapes are made).

Nowadays plant based vegan chicken nuggets

The market seemingly exploded with new plant-based meat alternatives over the last few years. Why do you think that this space is now resonating with consumers?

I know that consumers are always looking for delicious and nutritious foods, and that plant-based meats are a relatively new and fun category to explore in the search for a delightful eating experience. Nowadays first and foremost is focused on deliciousness.

I hope that consumers are increasingly concerned about the link between their plates and our planet. Americans farm 9 billion broiler chickens a year; nine out of 10 farmed animals are broiler chickens; the biomass of all chickens on the planet right now is three times the biomass of all other birds on earth combined; and some geologists and archeologists are arguing that broiler chickens are a marker species of the anthropocene.

I worry that the plant-based meat alternative market isn’t exploding because of consumer demand, but instead because of the increased supply of venture capital. Global venture capital doubled between 2020 and 2021, and over half of all food tech investing last year went to alternative proteins.

We started Nowadays to create a differentiated solution to meet the real consumer demand for healthier meats so that this space truly can resonate with mainstream consumers from coast to coast.

Nowadays recently raised $7 million in its seed round; what has your experience been like in fundraising? What were some obstacles you didn't expect? What advice would you offer for other entrepreneurs?

I think fundraising is always hard, and anyone who says otherwise is lying. (I haven’t been able to validate this theory; some tell me it’s easy!)

It should be hard. These are long-term partnerships you’re establishing with strangers who become owners of your company, a company that will inevitably need to weather challenging storms at some point on the horizon. Here are three obstacles and pieces of advice for others on this journey:

Meeting matters: Nowadays is a pandemic baby. We were born as a public benefit corporation on August 25, 2020. One major challenge was not being able to meet investors in person or host tastings, which has recently changed. Meeting—and eating together—goes a long way in building relationships with strangers. If you can ever get in-person time with someone you want to work with, take it!
Find believers: There’s a lot of capital, but not all of it is aligned with your mission, vision, or business. Instead of spending a little time with lots of funds, try to only target those who really align and then minimize your funnel quickly so that you can go deep with a few. The thesis-driven funds, in my experience, tend to be the most high-conviction and supportive investors.

Always improve: After you close a round, do a short post-mortem with your internal team and your lead investor to discuss what worked well and what needs improvement for next time. Velocity of learning is one of the most important variables to focus on at an early-stage.

One more piece of advice: don’t listen to trite advice like this from founders. There’s no one way of doing any of this, and you’re probably not thinking creatively enough if you’re doing things the way we’ve done them in the past. Do what you think you should do, and figure that out however best you think you should figure that out. You’re building something.

Looking forward, how do you want to grow Nowadays as a company? Do you plan to expand your product offerings to other meat alternatives? Go beyond direct-to-consumer and partner with restaurants?

By the end of this year, Nowadays will be sold in retail stores, restaurants from coast to coast, online marketplaces, and our own direct-to-consumer channel. Starting this July, Nowadays original nuggets will be available in Whole Foods Markets across Arizona, Hawaii, Southern California, and southern Nevada. We’re getting on restaurant menus across the country in cities like New York, Los Angeles, and San Francisco. We’re soon to release a gluten-free nugget direct-to-consumer. We also have other plant-based chicken products in R&D that we can’t wait to share soon.


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