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[US] Venture Capitalists Are Making Bets on Meat Alternatives

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  • Alex@FARM
    http://www.nytimes.com/2013/04/29/business/venture-capitalists-are-making-bigger-bets-on-food-start-ups.html?pagewanted=all&_r=0 The New York Times - April 29,
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      The New York Times - April 29, 2013

      Venture Capitalists Are Making Bigger Bets on Food Start-Ups


      What if the next big thing in tech does not arrive on your smartphone or
      in the cloud? What if it lands on your plate?

      That idea is enticing a wide group of venture capitalists in Silicon
      Valley into making big bets on food.

      In some cases, the goal is to connect restaurants with food purveyors,
      or to create on-demand delivery services from local farms, or
      ready-to-cook dinner kits. In others, the goal is to invent new foods,
      like creating cheese, meat and egg substitutes from plants. Since this
      is Silicon Valley money, though, the ultimate goal is often nothing
      short of grand: transforming the food industry.

      "Part of the reason you're seeing all these V.C.'s get interested in
      this is the food industry is not only is it massive, but like the energy
      industry, it is terribly broken in terms of its impact on the
      environment, health, animals," said Josh Tetrick, founder and chief
      executive of Hampton Creek Foods, a start-up making egg alternatives.

      Some investors say food-related start-ups fit into their sustainability
      portfolios, alongside solar energy
      or electric cars
      because they aim to reduce the toll on the environment of producing
      animal products. For others, they fit alongside health investments like
      fitness devices and heart rate monitoring apps. Still others are eager
      to tackle a real-world problem, instead of building virtual farming
      games or figuring out ways to get people to click on ads.

      "There are pretty significant environmental consequences and health
      issues associated with sodium or high-fructose corn syrup or eating too
      much red meat," said Samir Kaul, a partner at Khosla Ventures, which has
      invested in a half-dozen food start-ups. "I wouldn't bet my money that
      Cargill or ConAgra are going to innovate here. I think it's going to
      take start-ups to do that."

      In the last year, venture capital firms in the valley have funneled
      about $350 million into food projects, and investment deals in the
      sector were 37 percent higher than the previous year, according to a
      recent report
      <http://www.cbinsights.com/blog/venture-capital/food-technology> by CB
      Insights, a venture capital database. In 2008, that figure was less than
      $50 million.

      That money is just a slice of the $30 billion that venture capitalists
      invest annually, but it is enough to help finance an array of food


      Venture capitalists have strayed from pure technology to food before.
      Restaurant chains like Starbucks, P. F. Chang's, Jamba Juice and, more
      recently, the Melt, were backed by venture capital. Recipe apps and
      restaurant review sites like Yelp have long been popular.

      But this newest wave of start-ups is seeking to use technology to change
      the way people buy food, and in some cases to invent entirely new foods.
      Investors are also eager to profit from the movement
      toward eating fewer animal products and more organic food. They face a
      contradiction, though, because that movement also shuns processed food
      and is decidedly low-tech.

      "It's not Franken-food," Mr. Kaul of Khosla Ventures said. "We're
      careful not to make it sound like some science experiment, but there is
      technology there."

      Hampton Creek Foods <http://hamptoncreekfoods.com/beyondeggs/>, based in
      San Francisco, uses about a dozen plants, including peas, sorghum and a
      type of bean, with properties similar to eggs, to make an egg substitute.

      Mr. Tetrick, its founder, started the company after working on
      alleviating poverty in sub-Saharan Africa. He hired a protein chemist, a
      food scientist, a sales executive from Heinz and a contestant from the
      television show "Top Chef." Two large food companies are using the egg
      substitutes in cookies and mayonnaise, and he said he planned to sell
      them to consumers next month.

      Unreal <http://getunreal.com/>, based in Boston, makes candy that the
      founders say has no artificial colors or flavors, preservatives,
      hydrogenated fats or genetically modified ingredients, with at least 25
      percent less sugar than similar candy on the market and added protein
      and fiber. The candy is sold in stores including CVS and Target.

      Lyrical Foods <http://lyricalfoods.com/> makes cheese from almond milk
      and macadamia milk under the name Kite Hill, which is the first nondairy
      cheese to be sold by Whole Foods. Nu-Tek Salt
      <http://www.nu-teksalt.com/> uses potassium chloride instead of sodium
      chloride to lower sodium. Beyond Meat <http://www.beyondmeat.com/> and
      Sand Hill Foods <http://sandhillfoods.com/> are making veggie burgers
      that their investors say taste and grill more like beef than others on
      the market.


      Join us for the Animal Rights 2013 National Conference
      Washington DC, June 27-30, 2013 - www.ARConference.org

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