(CNBC) As consumers become increasingly comfortable eating faux-meat burgers that look, cook and taste like the real thing, a food-tech start-up backed by Jeff Bezos and Bill Gates is using fungus as the primary ingredient to create alt-meat foods.
Nature’s Fynd, based in Chicago, has raised $158 million in funding from investors including Bezos, Gates, and Al Gore. The company’s meatless breakfast patties and hamburgers, dairy-free cream cheese and yogurt, and chicken-less nuggets are scheduled to hit grocers’ shelves later this year.
The alternative foods sector skyrocketed in 2020, growing U.S. retail sales 27%, and bringing the total market value to $7 billion, according to the Plant-Based Foods Association (PBFA), a trade group comprising more than 200 member companies. Meanwhile, shipments of alt-protein products from food service distributors to commercial restaurants rose 60% year-over-year in April, according to research firm NPD Group.
The ascendant industry is headlined by Beyond Meat and Impossible Foods, whose alt-meat burgers, chicken and sausage products have disrupted the $733 billion U.S. food manufacturing industry.
That has prompted Tyson Foods, Purdue, Hormel, Cargill and other traditional meat producers to launch their own products in the category.
Some alt-meat sales growth slowed amid the pandemic and restaurant closures. A recent report from J.P. Morgan claims that Dunkin’ has dropped its breakfast sandwich using a Beyond sausage patty from most restaurants, though that has not been confirmed by either company (Dunkin’ and Beyond Meat did return calls by press time.)
Still, plant-based and cultured foods are projected to take a 60% market share of global meat sales by 2040, according to consulting firm AT Kearney.
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Not surprisingly, the greatest appeal for alt-meat products is among younger consumers.
“Gen Zers and millennials are the largest purchasers in the plant-based space,” said Sabina Vyas, director of strategic initiatives and communications at the PBFA.
