Walk into any European supermarket today and you’ll find an expansive range of plant-based meat substitutes. Retail sales of plant-based foods in Europe reached €3.6bn in 2020 — a 49% jump in two years — and more and more startups are looking to tap into a market set to be worth at least $290bn by 2035, according to BCG.
But while vegans and flexitarians are no longer lacking in choice, more often than not the products available to them still don’t quite hit the spot.
With most companies focused on perfecting the protein component of their substitutes, they've so far failed to crack the code on another essential ingredient: fat. Fat is key to mimicking both the flavour and cooking experience of meat, yet many brands rely on plain vegetable oils like coconut or palm oil.
These oils don’t just lack the flavour profile of animal fat — they also melt quickly, making for a cooking experience that is far removed from the sizzling and caramelisation of seared meat.
But don't despair: a new wave of startups is elevating fat to its rightful place on the alt protein podium — and catapulting the entire industry towards better-tasting substitutes.
The approaches startups are taking to develop new kinds of fats mirror those for alternative protein companies more broadly.
Startups like the Time Travelling Milkman and Bflike — both based in the Netherlands — and France's La Vie are following a plant-based approach focused on vegetable oils. La Vie’s patented fat is based on sunflower oil and water, for example.
Others including Swedish startup Melt&Marble and Swiss Cultivated Biosciences engineer yeast cells to convert sugars into fats through fermentation. A similar method is used by Sweden's Mycorena, which unveiled the first fungi-based fat last November.
Finally, the likes of UK-based Hoxton Farms, Spanish Cubiq Foods and Belgian Peace of Meat grow fat using real animal cells.
While the plant-based approach is cheaper, and easier to get consumers and regulators behind, the fermentation and lab-grown approaches result in fats that are chemically more similar to their animal counterparts.
Cultivated fat is much easier to make than cultivated muscle; it's cheaper and more scalable
Gary Lin, founder of foodtech-focused VC Purple Orange Ventures, has invested in Melt&Marble and two US startups, one each with a plant-based and a cell-based approach. He says that while “people can just grow a few cells” easily enough, the upscaling process of lab-grown fat hasn’t yet been solved. Startups rely on large tanks called bioreactors to grow cells at scale, but the process remains costly and inefficient, in part because existing reactors were developed for applications like beer brewing or vaccine manufacturing rather than cultured meat.
Meanwhile for fermentation-based startups, Lin points out that “the upfront metabolic engineering is not as straightforward” when it comes to perfecting alt-fats’ structures and properties, in particular their melting points and flavour capacity. But, he adds: “The upscaling is arguably easier, in terms of just leveraging the playbook of fermentation.”
The road to riches
Startups can either provide their alt-fats as an ingredient to clients in the food sector or use it to develop their own products.
While Hoxton Farms eventually plans to sell its cultivated fat as an ingredient to cell-based meat companies, its first customers will be those working on plant-based meat. It wants to create hybrid products combining plant-based protein and the startup’s fat to reach a sweet spot for both price and taste.
“Cultivated fat is much easier to make than cultivated muscle; it's cheaper and more scalable — and you only need about 10% of that to make a huge difference to the product. So hybrid products are a low-cost solution to a problem that's existing right now in what's already a really big industry, the plant-based industry,” says cofounder Max Jamilly.
Its first partnerships have already been forged in Europe. Israeli cultured meat startup MeaTech acquired Belgium-based Peace of Meat in 2020, while Bflike entered into a joint venture with Cargill last April to help the US food giant launch new plant-based products.
La Vie has retained its focus on research and half of its employees have a science background
Lin says that startups licensing their fat technology may face “intense [product] codevelopment” with their partners and lower margins, but they can also take advantage of existing infrastructure and production capabilities. For big plant-based companies, the appeal is obvious — working with alt-fat startups would allow them not just to replace plant oils but ideally to “knock out four or five [other] ingredients” — mainly aromas, but also salt and thickeners. That could improve nutritional, flavouring or even binding capabilities, Lin adds.
Other startups are now going at it alone. La Vie launched plant-based bacon and lardons based on its patented fat and lean technologies last October — and became the first startup to get a national listing with French supermarket chain Carrefour. At the same time, the company started partnering with vegan restaurants across France. It’s looking to provide its products to larger food chains such as Burger King in the future.
La Vie marketing director Romain Jolivet isn’t fazed about increasing competition from plant-based companies on supermarket shelves: “We have more and more products which are acceptable, but very few products that are really competitive in terms of taste.”
He reckons La Vie will be able to make some real taste breakthroughs; the company has retained its focus on research and half of its employees have a science background. “Short-term growth partly comes from new product development, but there is no added value if you don’t have something that’s totally breakthrough,” he explains.
Lin thinks that startups should think carefully about their go-to-market approach. “I guess if I were an entrepreneur in this space, I would be thinking along the lines of, if your solution marginally improves the product, then maybe as an ingredient it’s a little bit more straightforward. But if it can really make a head and shoulders difference, then maybe it warrants an even bolder approach to actually create end products — but that also requires different skill sets and different kinds of resource intensity.”
Investment is coming
Compared to their protein-focused counterparts, few startups working on fat alternatives in Europe have raised growth-stage funding — yet.
It’s unclear how those following a fermentation or cell-based approach will commercialise in Europe. Lin says that “in terms of the new wave of foodtech companies in the last five-plus years, I don’t know any that’s been approved in Europe” where regulatory requirements are “less clear” than in the US.
And regardless of the technology startups use, they have long research timelines. La Vie, for example, went through a two-year R&D phase that included over 5,000 trials.
Lin says startups working on fats simply weren’t on investors’ radar until recently. “They've just been slow to really prioritise that, but now I see a huge boost in terms of the number of VCs — whether it's foodtech, climate tech or generalist investors — specifically going out and speaking with all of these teams to make an investment in this space.”
Recounting the very beginnings of La Vie, when the cofounders camped out in friends’ apartments and Airbnbs while staging their first cooking experiments, Jolivet says: “Honestly, we wouldn’t have raised a single euro [back then].” Fast forward less than three years, and the startup raised a €25m Series A in January — France’s biggest alt protein fundraise to date.