Plant-based fish is the new plant-based meat

This year, investors have poured money into plant-based meat, with Beyond Meat now worth more than $9bn after its IPO in May. Photo / 123RF

Chris Kerr spent nearly two decades investing in vegan food without finding a convincing plant-based alternative to fish.

This year, investors have poured money into plant-based meat, with Beyond Meat now worth more than US$9 billion ($14b) after its IPO in May and Impossible Foods valued at US$2b ($3.1b) after raising $300m in the same month.

But "there was an absolute gap in fish", said Mr Kerr, who co-founded New Crop Capital in late 2015 to invest in food start-ups that could disrupt industrial animal farming.

So in early 2016 he launched a new company, Good Catch, to create a plant-based tuna from 16 different legumes, including peas and soyabeans. Part of a tight knit band of vegan tastemakers, entrepreneurs and investors in the US, he teamed up with vegan chefs Derek Sarno and his brother Chad.

Earlier this year, Good Catch's alternative product began to be stocked on supermarket shelves in the US alongside cans of real tuna and the company is now in talks to enter the UK with Tesco, which has hired Mr Sarno as "executive director of plant-based innovation".

It is a nascent market. Annual sales of fish substitutes in the US are only around $10m compared with $800m for plant-based meat, according to Good Food Institute, an alternative protein advisory and lobby group.

Consumers tend to eat less fish anyway, at about 10kg a year in the US compared with more than 40kg for chicken and 25kg for beef.

But the gap in the market that Mr Kerr identified three years ago is closing fast. There are now about 20 companies in the US developing plant-based seafood, and Impossible Foods recently said producing a fish substitute was a high priority.

Mr Kerr pointed out that the market for fish elsewhere in the world was larger than in the US and that the total global seafood market is worth roughly $500bn a year, making it an enticing target for disruption. "From wraps to chowders to pastas, seafood makes its way into a lot of things and just about every culture has it. We have a lot of entry points around the globe," said Mr Kerr.

Alternative fish products can offer an environmentally friendly solution to overfishing, the negative impacts of fish farming, such as sea lice and antibiotics, and problems such as mercury contamination.

Good Catch has focused on tuna, one of the most popular and overfished species. "[Canned] tuna is pretty much sitting in just about everybody's cabinet at home and it's considered a staple," said Mr Kerr. Yet, he added, tuna is "one of the few sources of food that we still hunt. It's diminishing."

The start-up raised almost $9m last year in a seed funding round led by New Crop, with a list of investors which included German poultry producer PHW. It is in the final stages of closing a $30m funding round, which will help expansion of production capacity.

Having eschewed meat, fish and dairy since 2002, Mr Kerr says he has been a "frustrated vegan", with limited options available at meal time, but that has started to change in the past five years or so. "We're going from mediocre products to exceptional products. We're coming to a new world," he said.

New Crop has roughly $70m under management and a portfolio of about 30 food start-ups, including Beyond Meat and cell-grown meat start-up Memphis Meats, which is also backed by Tyson Foods, the biggest meat producer in the US, and the agricultural trader Cargill.

A third of its portfolio is made up of companies making seafood substitutes. Ocean Hugger transforms tomatoes into raw-tuna like slices and aubergine into faux eel, while New Wave Foods produces vegan shrimp substitutes from seaweed and soya protein.

BlueNalu, which grows fish flesh from fish cells in bioreactors, launched last year after raising $4.5m in a seed funding round led by New Crop. It is expected to announce another funding round soon. Lou Cooperhouse, chief executive, said the company planned to begin test marketing cell-grown mahi-mahi, also known as dorado or dolphin fish, around its home base in San Diego within two to three years.

The smell and mouth feel of fish are even more important for consumers compared with meat, and at Good Catch, the first few years were spent getting those two factors right. "We've had thousands of years being poisoned by fish. A mealy apple won't poison you but a bad shrimp will," said Mr Kerr.

Chad Sarno said that in the product development phase, he would test it on his cat Milo. One day, after a tweak in the ingredients, "I literally opened the bag, and [the cat] came running. I remember sending Chris a video and saying 'we've done it'."

Written by: Emiko Terazono

© Financial Times 2019