ZURICH (Reuters) - Plant-based food startup JUST, shortly to launch its egg substitute in Europe as animal alternatives catch on, sees cutting costs as key to leaping beyond the niche alternative market and into the eating mainstream.
Demand for plant-based foods is growing fast as consumers worried about the environmental impact of meat production and keen to avoid a meat-heavy diet on health grounds look for alternative protein sources.
JUST’s products including JUST Egg, a scrambled egg imitation made from mung beans, are available in the United States, Canada, China and Singapore, with sales evenly split between retailers including Walmart (WMT.N), Safeway and Whole Foods (AMZN.O), and restaurants such as Tim Hortons (QSR.TO).
Chief Executive Josh Tetrick said cutting the costs of JUST Egg was key to broader acceptance.
It is “really important for us to become one of the lowest cost proteins on the planet,” he said. “Today, our cost is 22 cents per serving. Our goal is to get to 12 cents next year and then ultimately below five.”
The cheapest supermarket eggs from non-caged hens cost around 16 cents each.
Tetrick told Reuters that after launching in Europe a next logical step is achieving profitability, in advance of a possible listing to raise money.
He has already raised about $250 million from investors around the world, including Mitsui, Temasek, China Construction Bank, Founders Fund, the Benioff family and the Heineken family.
Tetrick, whose company employs about 120 people, sees his JUST Egg in European outlets in the next few months.
“We will be launching in some locations, retailers and restaurants in Europe,” he said on the sidelines of an event in Zurich last week.
Investors are taking notice of the growth in plant-based foods.
U.S. startup Beyond Meat’s (BYND.O) stock has nearly tripled since it went public in May even though it is yet to turn a profit.
Tetrick said his San Francisco-based company had hired longtime food industry executive Dave Wagstaff, with experience at global giants like McCain and free-range egg brand Happy Egg, to head its European team.
“Our partners in Europe today include (Italian egg company) Eurovo, they’re doing the manufacturing and distribution, as well as German poultry group PHW and (online food delivery platform) Delivery Hero (DHER.DE).”
Tetrick said he was confident the company could get a slice of the $260 billion global egg market “if we get it right”.
“We figured out the technology, but now we have to execute.”
Tetrick said the company was expecting low- to mid-double- digit million dollar revenues this year and should multiply sales by around seven next year.
“Our most important financial objective is operating profitability,” he said. “We’ll get there some time in the next year.”
Reporting by Oliver Hirt, additional reporting and writing by Silke Koltrowitz and John Miller; Editing by Alexandra Hudson