Tim Bradshaw, ft.com
Oct 31st 2014 12:32 PM
Mayonnaise made without eggs, burgers without meat – and a beige drink instead of dinner? Welcome to the food of the future, Silicon Valley’s latest target.
The burger on the hotplate in front of me is sizzling like meat. The patty is browning like meat and gives off a beefy smell. When I bite into it, sandwiched between bun and lettuce, it certainly tastes like meat, its juices running down my chin.
If I hadn’t just talked to the people who created this burger and seen the lab where it was made, I would be convinced that it really was meat – a little grainy perhaps, and less chewy, but tasting exactly as a burger should.
If that sounds impossible, meet Impossible Foods, just one of several Silicon Valley start-ups that want to change what we eat, how it is produced and how we eat it. “We are not trying to make a meat alternative,” says Pat Brown, founder and chief executive of Impossible Foods. “We are making meat a better way.”
That involves transforming “cheap, abundant biomass” into meat in the same way that a cow does – only without the cow. “We have to fill in the gap that is currently filled by animals,” says Brown, a 60-year-old former biochemistry professor at Stanford University who lists “exploration” and “hacking institutions” as his main interests on LinkedIn.
This meat, however, has never been near a cow or a meadow: it is made entirely of vegetables here in Redwood City, in the heart of Silicon Valley. If that sounds impossible, meet Impossible Foods, just one of several Silicon Valley start-ups that want to change what we eat, how it is produced and how we eat it. “We are not trying to make a meat alternative,” says Pat Brown, founder and chief executive of Impossible Foods. “We are making meat a better way.” Impossible Foods is based in one of Silicon Valley’s many low-rise office parks, in a bland open-plan workspace where inspirational slogans such as “Live your dream don’t dream your life” and “It always seems impossible ’til it’s done” are scrawled on a whiteboard. Only a rack of white lab coats hints at the huge kitchen and laboratory spaces that lie beyond.
“Right now, there is a process that turns plants into meat and eggs that takes place inside an animal and in a slaughterhouse,” says Brown, whose grey mess of hair seems mismatched with his start-up logo’d T-shirt and jeans, the regulation uniform of the twentysomething internet entrepreneur.
“What we need to do is come up with a complete process, not just make a burger – a complete process that does that whole thing more efficiently, more safely, with a smaller environmental footprint, that makes a more affordable product that is healthier for consumers and more delicious.”
Brown’s particular method of hacking food is different to that of Josh Tetrick, founder of Hampton Creek, or Robert Rhinehart, co-founder of Soylent. But as the chiefs of food-science start-ups, they all share the same belief that the way food arrives on our plates today is offensively wasteful, harmful to the planet and unkind to its residents, both four-legged and bipedal.
While Impossible Foods wants to replace cows, Hampton Creek has chickens in its sights – or rather, the eggs that are produced by millions of battery hens. The company’s egg-free mayonnaise, cookies and other household ingredients are made from a particular (but top-secret) variety of Canadian yellow pea. Soylent, meanwhile, wants to replace entire meals with a gooey beige drink that provides all the nutrients without the hassle of producing, preparing and, well, eating. “Food is a very costly hobby,” Rhinehart says. “There is a higher joy and freedom that comes from eating on your own terms.”
In many ways, all this is a classic Silicon Valley recipe. Take one determined entrepreneur who is not afraid to “think different”. Add a new ingredient – “big data”, say. Mix with a market that is already worth tens of billions. Sprinkle millions of dollars in venture funding. Bring to boil.
“Food is one of the largest potential markets in the world,” says Howard Hartenbaum, a venture investor with August Capital. “Everybody eats. If it works, the market is ungodly huge.”
Given this opportunity, it was perhaps inevitable that food would become the next industry to face the bright heat of Silicon Valley disruption. Investors have pumped $75m into Impossible Foods alone, and tens of millions more into its peers, which also include Beyond Meat (plant protein products) and Modern Meadow, a New York-based company that uses muscle-cell cultivation to grow “novel biomaterials”.
Yet “food 2.0” might also be Silicon Valley’s riskiest bet yet. Just a few years ago, investing in biotechnology was considered only for the bold or the foolish, with massive upfront costs and long years of research required before making a breakthrough. Even if these companies can commercialise their technologies, huge cultural and industrial barriers exist to changing what appears on our plates. The innovation driving the latest wave of food start-ups rests less on the discovery of a brand-new magic ingredient and more on a combination of data science, marketing and sheer bloody-minded ambition.
“The only way to accomplish our mission is to give every possible pleasure a meat eater gets from their eating experience and, in the eyes of the most hardcore uncompromising meat lover, make the best burger they’ve ever tasted, and at a better price,” says Brown. “Our definition of success is that the world will look different from outer space, not that we see our label in Whole Foods.”
Impossible Foods’ burger patties cost $5 apiece, a price more suited to an upscale grocery. But as he moves from prototype to scaled-up manufacturing, Brown believes that the product could be at or below the mass market price within a couple of years.
Getting there will probably require even more venture capital funding and, until recently, few investors in Silicon Valley wanted anything to do with the physical world. Software, websites and apps are easy to distribute at scale; less so jars of mayonnaise. But following the success of Uber, the taxi-hailing app valued this year at more than $17bn, venture capitalists seem to have acquired a taste for atoms as well as bits. As Marc Andreessen, the Netscape founder turned tech investor (including in Soylent), is fond of saying: “Software is eating the world.” Soon, perhaps, the world will be eating better thanks to software.
Of all the companies chasing this goal, Hampton Creek is the best known and, in the eyes of its investors at least, the furthest ahead.
Backed with $30m from big-name investors including Bill Gates, Li Ka-shing and Founders Fund, Hampton Creek has already struck distribution deals for Just Mayo, its first egg-free condiment, with Walmart, Safeway, Target and Costco in the US and soon Tesco in the UK.
Most three-year-old food businesses would stay away from large retailers and their demanding terms for as long as possible. But while Hampton Creek is based in foodie-friendly San Francisco, Tetrick does not want it to be a small-time artisanal producer. After years in the non-profit world, which he describes as “extremely inefficient”, Tetrick wants to use Silicon Valley’s “explosive form of capitalism” to change the world for the better – and make a lot of money in the process.
“There’s so much interesting innovation in the mobile landscape and on the web but with food – this thing that goes in our bodies, that is so essential to us – it’s like we are using the Apple I and we haven’t advanced past it,” he says.
We are standing at a workbench in front of a massive TV monitor showing Hampton Creek’s investor presentation, in a chaotic, garage-like space in downtown San Francisco bursting at the seams with laptops, lab coats and mayo jars. Staff sit around a giant kitchen table, while beyond them, chefs rub shoulders with data scientists.
Tetrick is brawny under his tight T-shirt, the model of a health-food CEO. With his Alabama accent, he can also sound a little like an evangelical Southern preacher – but with more cuss words.
“Innovation in food was making a Dorito crunch a bit better in the mouth. It hasn’t been about how the f*** do we feed x billion people by 2050 in a way that enables their bodies? We think it’s an urgent need.”
Many of the eggs in regular mayonnaise today come from battery chickens, which in turn require corn to feed. Swapping all that out for a vegetable protein is 40 per cent more cost-effective, improves public health and benefits the environment, Tetrick says. But it only makes a meaningful impact on the world at scale, which means making something that appeals to the Walmart masses, not just the Whole Foods classes.
Tetrick says it’s “too easy for regular people to do the wrong thing” when they buy food. Hampton Creek has to make the right thing easier for them by improving on flavour. “People didn’t move away from the horse and buggy to the car because they cared about the horse. It’s just better.”
Using plant-based proteins in place of meat or other ingredients is not a brand-new idea. But Tetrick says that Hampton Creek can achieve better results thanks to its database of thousands of species of plants. A proprietary algorithm – that magic ingredient of many a Silicon Valley start-up – models out the likely properties of the different species, such as viscosity or how well they emulsify, to narrow down the cultivars most likely to be useful.
Fed with enough data, Tetrick says that the system can identify relationships between molecular properties such as weight and a particular “functionality” that makes food taste just right. After eggs, Tetrick believes his data crunching is closing in on a red bean that could be a substitute ingredient for sugar in cakes and cookies.
It was this big idea that makes Hampton Creek stand out to Silicon Valley investors. “Generally we are really interested in companies that sit at unusual intersections that aren’t intuitive,” says Geoff Lewis of Founders Fund, an early investor in the company. “For Hampton Creek, it’s at the intersection of machine learning and plant biological properties and branding. You don’t see many things like that.”
Alongside Khosla Ventures, a veteran of the biotech industry, the fund that has placed the most bets on these food start-ups is Horizons Ventures, the investment arm of Hong Kong billionaire Li Ka-shing.
Bart Swanson, an adviser at Horizons, which has backed Hampton Creek, Impossible Foods and Modern Meadow, says: “There has been an inflection point” in food start-ups. “It’s possible for someone to go out and raise single-digit millions [of dollars] and be able to get a proof-positive product.”
Success is not a question of technology but of economics, Swanson says. “In most cases we know they work, but are they going to get the costs of goods down?” Often that involves outsourcing production of both ingredients and finished product to more experienced food-service companies. “Hampton Creek came up with the idea but to implement it, they need it in large quantities,” says Kantha Shelke, food scientist with Corvus Blue, an industry consultant. “That knowledge and technical level they do not have in Silicon Valley.”
Hampton Creek is in advanced talks to raise tens of millions of dollars in new funding, less than a year since its last investment. And it is hiring data scientists from Google and luring Stanford PhDs in the face of competing offers from tech giants, Tetrick says. However, not every new hire has worked out. Ali Partovi, a serial entrepreneur who also backed Facebook and Dropbox before investing in Hampton Creek, joined the company as its chief strategy officer this September, only to leave after just nine days on the job. Accounts differ of the reasons behind his departure. Tetrick suggested that Partovi would remain on as an adviser, which the investor later denied.
That the departure came during Hampton Creek’s negotiations about its latest round of financing was all the more striking. In clubby Silicon Valley, the episode sends a confusing signal to potential investors. Tetrick says they simply “decided it wasn’t the right deal for both of us”.
Whatever is in Hampton Creek’s future, it needs to be more than just mayonnaise. “Hampton Creek luckily picked on the right ingredient,” says Shelke. “The boost they get with seamless invisible switching in the fast-food and food-service industry is more than justifying the valuation you’re seeing.” Just Mayo, which comes in a range of flavours, is indistinguishable from any other mass-produced mayonnaise (its cookie dough also tastes just as good as its less vegan-friendly rivals). But while Shelke believes the company can repeat the egg trick with a bean-based sweetener, “after that, it will be difficult to say”.
Hampton Creek hopes to expand its product range to include pancake mixes, salad dressing and even sour cream over the next year. I tried its scrambled eggs this summer – very similar to school-canteen powdered eggs and not an improvement on the original.
Not every food-science start-up wants to recreate existing foodstuffs. Some want to replace them altogether. Leading that movement is Soylent, the powdered nutritional drink that was the accidental invention of 25-year-old Rob Rhinehart.
As one of many start-up hopefuls in San Francisco struggling to reconcile fast-rising living costs with zero income, Rhinehart had tired of the archetypal entrepreneur’s diet of ramen and takeaway pizza. But it wasn’t just the nutritional limitations of these foods that he didn’t like, it was the “chores and drudgery” of shopping, cooking and cleaning.
“I started seeing food as an engineering problem,” he says. “If I can optimise my algorithms, why is my food so inefficient?”
While trying to grow his wireless networking business, he also steeped himself in nutritional biochemistry and settled on a concoction of powders and vitamin pills to supply his daily nutrition needs. Rhinehart says the resulting mixture, named Soylent after the soya-and-lentil steaks in Harry Harrison’s population-crisis sci-fi novel Make Room! Make Room!, is “ecologically efficient, convenient, shelf stable and affordable”. Right now, he can’t make enough of it to keep up with demand.
It currently costs about $3 per “meal”, if that is the right word for a glass of gloopy beige liquid that tastes a little like pancake batter with too much flour. It’s not exactly tasty but nor is it offensive. In fact, says Rhinehart, it is deliberately bland so that people – like him – who consume it for most of their diet do not tire of a strong taste. (At least Soylent doesn’t taste like it is made of people, the dark twist added to the movie adaptation of Harrison’s book.)
Regular Soylent eaters can add their own flavourings, and a community of enthusiasts has already sprung up to swap recipes online. But Rhinehart wanted to make his nutrition as basic as possible. “This is meant to be a life simplification tool,” he says. “Rather than a supplement to your diet, it could be the entirety.”
Soylent’s concept of a meal in a glass has already attracted competition in the form of Ambronite, a Finnish start-up creating an organic shake free from artificial minerals or flavourings, which recently relocated to San Francisco. Rhinehart, however, wants Soylent to be as “independent from agriculture as possible”, for instance drawing its fatty acids from algae.
“In the interest of efficiency, it is better to synthesise the chemicals directly rather than grow the plant and extract it out,” he says. “There are huge problems that would be solved by obsolescing traditional agriculture, by transcending it.”
Like Brown and Tetrick, Rhinehart uses the word “efficiency” a lot.
“Most food is optimised for pleasure. Soylent is optimised for utility,” he says. “The goal of the company is to create food with no waste. It’s absolutely possible – you just do what plants and animals do, but more efficiently.”
He hates grocery stores, “food warehouses” with their car parks, rotting stock and “so much wasted space”. Restaurants are places for indulgence of the “lascivious pleasures of meat consumption”, not nutrition. Home cooking is little more than “manufacturing”. While he does acknowledge the cultural value of breaking bread – actual bread – among friends and family, it is hard to argue with his assertion that most meals are fast forgotten.
With its sci-fi echoes, Soylent’s vision may sound far-fetched but a year ago it raised $1.5m from investors including Andreessen Horowitz, Lerer Ventures and Alexis Ohanian, a co-founder of Reddit. That is just a small portion of the $146m investors poured into food-related start-ups last year, according to CB Insights, which tracks venture capital funding. “No industry is safe from Silicon Valley,” CB Insights wrote in a report in February, saying that consumer-goods companies such as Unilever and P&G should “watch their back”. But it also cautioned that Silicon Valley’s “hubris” can lead investors “who know little about these industries to jump in and believe they can be successful”.
Investors love the fact that these food start-ups’ ambitions are far greater than just another photo-sharing app or, as one start-up recently pitched to investors, “Uber for lawn mowing”.
Hampton Creek is going from zero to what Tetrick claims will be $30m in revenues in the space of a year. “I feel like there is a little bit of a backlash against creating bullshit that doesn’t matter,” says Tetrick. “We want to take advantage of this.”
To listen to the entrepreneurs behind these start-ups, transforming the world’s meals can seem like a higher calling – even if it ultimately leads to replacing one kind of monoculture farming with another. “I think we are going to live in a post-energy, post-food society within our lifetimes,” says Rhinehart.
Despite the huge sums being invested in food science, he believes making that shift is more important than the riches that could flow from success. “I don’t see the point of optimising for money. Food isn’t sacred . . . food has always been changing.” More efficient food supply, he says, “has to happen for humanity”.