These days, most of my investing takes place via Blitzscaling Ventures, which has a laser-focused approach of investing in the emerging leaders in extremely valuable winner-take-most markets which have already taken investment from one of the world’s premier venture capital funds. (To hear the full Blitzscaling Ventures story in five minutes, you can watch this video from my recent trip to Monaco.)
When my friend Scott Anthony introduced me to Next Gen Foods, I wasn’t sure it would fit with the Blitzscaling Ventures thesis. Alternative proteins are clearly a high-growth area, but are they truly winner-take-most when I can visit my local grocery store and see a huge array of products from different manufacturers. Yet I couldn’t stop thinking about the company.
I really liked the founding team, and I kept coming back to the fact that a great plant-based chicken product could be both a commercial blockbuster, and a boon to sustainability.
I also liked their approach–rather than trying to sell directly to consumers, the Next Gen team was focused on rolling out the product at premium restaurants. This clever strategy lets them hide the higher costs (while plant-based meats should be lower cost at massive scale, in the beginning, they are generally more expensive than their animal flesh counterparts) and leads to a better consumer experience. Raw materials costs are much less relevant in a restaurant setting (costs like rent and labor are greater), while professional chefs generally produce tastier output than frozen prepared foods.
Of course, none of this would make a difference if the product wasn’t stellar. And unfortunately, traveling to Singapore to try the product in a restaurant wasn’t going to make much sense, especially during a global pandemic that would necessitate a 14-day quarantine. Instead, the Next Gen team shipped me some frozen product. Due to customs delays, it completely thawed out, and had to be re-frozen before delivery to my home, but thanks to being plant-based, it didn’t spoil.
Despite this less-than-perfect set of circumstances, when I finally cooked the product (based on instructions given to me over Zoom by celebrity chef Andrew Zimmern of “Bizarre Foods” fame), the results were great. All of the fried “chicken” sandwiches I made were wolfed down by my family (several of whom had no idea that they were eating a plant-based meat). And this was the first-generation product, that had been frozen, thawed, left to languish in Customs, refrozen, and thawed again, before being cooked by an amateur in a home kitchen. I’ve been told that the lead investors got a chance to sample the second-generation product; they taste-tested the Gen 1 and Gen 2 products, and were under the impression that the Gen 2 product was real chicken provide for comparison purposes.
While I still couldn’t argue that plant-based meat is a true winner-take most product like a Facebook or Airbnb, I loved the product and its potential, so I made a personal investment in Next Gen Foods.
The thing I’m most excited about is the concept of supernormal stimuli. Step 1 is to produce a product that is indistinguishable from animal flesh. But Step 2 is to take advantage of the different characteristics of plant-based meat to make something that is better than “real” chicken.
For example, Popeye’s Fried Chicken makes a fried chicken “hand” by partially slicing a chicken breast into a “palm” and five “fingers”. The result is an even crunchier friend chicken that is delicious. Now imagine taking advantage of plant-based chicken to make something similar. But instead of a “hand” you could produce a chicken “mesh” that would offer maximum crunch. Or perhaps you could make a friend chicken “churro” that would be easier to eat on the run. The possibilities abound!
I’m looking forward to working with the Next Gen Foods team to blitzscale their product and bring the power of plant-based chicken to everyone.