Meat from mycelium: Fungi fueled Meati Foods raises $150m to make Holy Grail of alt meat: whole cuts. 'We're creating a whole new category...'

21-Jul-2022 - Last updated on 21-Jul-2022 at 13:51 GMT

Meati says it has found white space in the crowded alt meat category with minimally-processed, fungi-based whole cuts. Image credit: Meati Foods

Boulder-based Meati Foods – which is seeking to differentiate itself in the increasingly crowded meat-alternative space with a fungi-based platform capable of producing ‘steaks’ and other whole cuts – has raised $150m in a Series C round led by Revolution Growth as it gears up to open a new production facility to support a “national omni-channel footprint by the end of 2023.”

The round – also backed by Chiptotle’s Cultivate Next venture fund and Grosvenor Food & AgTech – will help Meati complete its 100,000+ sqft ‘Mega Ranch’ fermentation facility in Thornton, CO capable of producing 10s of millions of pounds annually, which will begin to ship product in late 2022, and support the early stage of construction of a larger ‘Giga Ranch’ capable of producing hundreds of millions of pounds annually.

Unlike most players in the category, who use extruded soy, peas, or wheat protein, Meati Foods is seeking to stand out in a category dominated by processed products such as burgers and nuggets, by using a naturally occurring strain of mycelia, the filamentous-like root structures of mushrooms (although the strain Meati is using doesn’t have a mushroom ‘cap’), to create ‘whole cut’ products grown in fermentation tanks in liquid suspension.

At the Giga Ranch scale, Meati’s whole biomass fermentation process can produce the meat equivalent of 4,500 cows every 24 hours, and requires less than 1% of the water and land compared to conventional industrial meat production, claims the company, which debuted direct to consumer earlier this year and recently launched in a handful of Sprouts stores with products manufactured at its pilot plant in Boulder.

'It holds a lot of moisture so the meat is juicy, and it holds flavors really well'

The startup – which raised eyebrows late last year after its new president (ex-General Mills president Scott Tassani) suggested Meati could generate $1bn in sales by 2025 – has not seen any dampening of enthusiasm from prospective retail or foodservice partners amid stagnating sales of some meat alternatives, co-founder Dr Tyler Huggins told FoodNavigator-USA.

“Interest is higher than ever. The consumer demand is there, they just haven't found the products that meet the quality, eating experience and nutrition that they're looking for... yet."

'I would argue texture has been the challenge in this category'

He added: "There was that initial wave of excitement around new products and brands, but it kind of stagnated as the delivery on the potential benefits hasn't fully been realized yet.

"If you look at comments on social media [about Meati products], people were saying things like 'I don't normally eat alternative meats but holy cow, this is amazing!' I would argue texture has been the challenge in this category. We have a single ingredient whole food that is really high in protein and naturally provides texture without needing to add a lot of complexity and extra ingredients.

"It also holds a lot of moisture so the meat is juicy, and it holds flavors really well. We don’t add fat to it, but if you fry it in fat, it absorbs the fat really well."

Meat-retail-packaging-in store — Meati is piloting its offerings in the refrigerated and frozen aisles at selected Sprouts locations, and will also be available in the pre-made meals section. Image credit: Meati Foods

Whole food, minimally processed, PDCAAS score 1

Inherently high in protein (60%+) and fiber, Meati’s fungi (which is white with no particular flavor and has long fibrous filaments that mimic muscle structure) can be grown highly-efficiently in fermentation tanks fed with a carbon source like sugar, claimed Huggins, who said the platform can produce everything from chicken to pork by tweaking the post-harvest alignment process.

While several other players now use whole biomass fermentation to create meat alternatives, from Nature’s Fynd, MyForest Foods, Enough Foods, Better Meat Co (with whom Meati is currently embroiled in a legal dispute), and The Protein Brewery, according to Huggins, “I don't know anybody else that has our level of protein [in a whole food] and a PDCAAS of 1.”

When it comes to growing conditions, he said, Meati is different to MyForest Foods and Nature’s Fynd, as it deploys a submerged fermentation process, “so the speed of growth is incredible. As we harvest it, we can realign the fibers in different orientations, making everything from chicken breasts to beefsteak, to fish, which is harder if you’re using solid state approach."

And while some others are using submerged fermentation with mycelium, he argued, "No one [else] is able to maintain the inherent textural qualities."

Fermentation feedstocks: 'We want to scale fast and then we will start to optimize'

Asked about feedstocks, he said: "When [co-founder] Justin [Whiteley] and I first started, we developed a lot of IP and know how around how do we use residual sugars and carbon sources from food processing and we would love to be able to do that [instead of buying purified sugars from corn or sugarcane/beet, as it is currently doing].

"But right now speed to scale is most important, so we want to scale fast and then we will start to optimize."

meati products july 2022 — One Meati steak (pictured left) delivers 15g protein, 8g fiber, 0g fat, and 40% of the RDA for vitamin B12. Image credit: Meati Foods

Messaging: Mushroom root makes the most sense to consumers

As for labeling, the ingredients lists on Meati's website feature the word ‘mycelium’ (whereas Nature's Fynd, for example, has branded its ingredient as 'Fy Protein' followed by 'nutritional fungi protein' in parentheses).

However, in the firm's more recent press materials, it has started using 'mushroom roots' to talk about the products to consumers, given the lack of awareness of the term mycelium, said Huggins.

As for safety, he said Meati's mycelium products are self-GRAS, adding: "We have very strong documentation to support our GRAS status, and we will be submitting this to the FDA here shortly."

Asked how retailers would position his products, as Meati's steaks and cutlets are not technically plant-based, as they are made from fungi, he said, "Plant based' seems to be the catch all term right now. But we are going to continue to lean in towards more of a 'animal-free' positioning as I believe we're creating a whole new category of protein that is not plant-based or animal-based."

Litigation vs Better Meat Co

Huggins did not comment on the ongoing litigation with fungi-fueled startup Better Meat Co, which Meati has accused of intellectual property theft (a claim BMC vigorously denies), but said it had not impacted the fundraising.

He added: “I think we have a very clear position and are on the right side of things. We have a very robust IP portfolio ranging from the cultivation parameters, to the processing conditions, to the finished good."