Investment

Family offices dominate alternative food growth, investing $500 million in 2020

Family offices have pioneered meat-free alternative food investing over the last decade and their appetite remains healthy.

They have invested $497 million through an involvement with 37 transactions this year, according to Marc Debois, head of single-family offices at Dutch wholesale bank ING. 

The lion’s share of the money came from US-based family offices, which invested $318 million.  Europe came second with $88 million. Asia, slightly behind the curve, invested $65 million.

Family Capital’s analysis of meat-free fund raisings this year shows that a growing proportion of capital is coming from venture capital, mainstream food manufacturers, institutions and stock market investors. Banks interested in facilitating bids and deals are also popping up. 

This partly reflects the growing maturity of meat-free companies but it also illustrates their hunger for capital to compete globally.

The importance of family offices to the sector could decline from this point although meat-free companies still appreciate their support, as well as celebrity endorsement of their products. 

Alternative food has travelled a long way following Ethan Brown’s decision to quit his job at fuel cell engineer Ballard to start Beyond Meat in 2009.

He believed his patties would taste sufficiently good to change American eating habits. And he was right. 

Meat-free food now boasts a triple win by offering a protein switch to sustainable, ethical and profitable products through the use of plants, animal cells or biochemistry. 

According to research by ING, 25% of respondents to a European survey expect to eat less meat in five years, with health and animal welfare the key factor behind this view. 

Nestle US chairman Paul Grimwood says: “In the US, we’re experiencing a consumer shift toward plant-based proteins.” 

Tyson Foods, a US family business for three generations, has reported: “rapid growth” in meat-free food.

Asia is further behind, but a consumer revolution is brewing. Hong Kong-based Green Monday is daring to propose the production of an alternative to pork, greatly loved in China.

Beyond Meat has become an international sensation. Its market value has hit $8.9 billion following a rise in its share price of 113% since its IPO in May 2019. It has just branched into vegetable protein through a tie-up with French family-owned company Roquette. 

Family offices were Beyond Meat’s earliest fans including funds linked to Bill Gates, Gigi Pritzker, Gary Lauder, Lukas Walton, Jack Welch and Steve Cohen. Formula One champion Lewis Hamilton invested in a fast-food chain serving its products. 

Funds backed run by Bill Gates (again), Serena Williams and Li-Ka Shing invested in rival startup Impossible Foods which hit a $1.4 billion funding milestone this year after winning support from Philippe Lafont’s Coatue Management. 

In its early years, Memphis Meats found support from Bill Gates (yet again), Sir Richard Branson and Saudi Arabia’s Khaled Al-Waleed bin Talal. Elon’s brother Kimbal Musk is another supporter. 

But Memphis is now being nourished by large investors like Tyson Foods, SoftBank, Temasek and Norwest Global Partners.

Green Monday of Hong Kong has reached into the Beyond Meat playbook, to capture a rich mix of financiers, family offices and celebrities. In a fundraising this year it found backers such as the Sino Group’s Ng Family Trust,  singer Wang Leehom,  filmmaker James Cameron, Sir Paul McCartney’s daughter Mary McCartney, pro-vegan family office CPT Capital led by Jeremy Coller and Jefferies Group. 

Better-established alternative dairy specialist Perfect Day has just turned to Temasek and Canada Pension Plan Investment Board, plus Li Ka-Shing’s Horizons Ventures. 

Nature’s Fynd which makes food from microbes enjoyed strong support from family offices in 2019. By March, heavyweight investors were its supporters, such as Breakthrough Energy, Generation Investment Management, Archer Daniels Midland and Danone.

In July, Protein developer Geltor raised funding from several venture capitalists. But the round was led by CPT Capital and supported by Lord Jacob Rothschild’s RIT Capital. 

A July fundraising by Sweden’s Oatly was led by Blackstone and supported by Rabobank, but it also won backing from television’s Oprah Winfrey and actress Natalie Portman. 

Fungi food company Meati Foods has used specialist venture capital. Israeli food colour start-up Phytolon won backing from venture capital, but also individual investors like property man Vincent Tchenguiz.

Eat Just has expanded with the help of funding from Julien Machot, a banker based in the United Arab Emirates. It has funded further expansion in Asia through a fake-egg production deal with Proterra Investment Partners, spun out of Cargill. 

Machot has also found backers for Impossible Foods, as has This, a UK alternative food startup, further boosted by crowdfunding in August.

Very Good Butchers of Canada won seed capital in 2019 from Capital V’s Michiel van Deursen, a Belgian internet pioneer, to jump straight into an IPO in June. 

At the outset, its shares were priced cheaply at 25 Canadian cents. They have now risen to C$5.67, valuing VGB at C$415 million.

 

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