Prime Roots, an alternative deli meat startup, announced today that it has successfully raised $30 million in its Series B funding round, despite recent reports suggesting a cooling consumer interest in plant-based products.
With this latest investment, the company’s total funding now stands at $50 million. The funding round saw participation from notable investors, including True Ventures, Pangaea Ventures, Prosus Ventures, and others. Prime Roots has chosen not to disclose its valuation or revenue figures at this time.
Founded in 2017 by Kimberlie Le and Joshua Nixon, who dropped out of Berkeley to pursue the development of meat and seafood alternatives, Prime Roots has gained recognition for its innovative use of koji mycelium, the thread-like structure of fungus, to replicate the texture of meat on a microscopic level. The company currently offers a range of plant-based deli meats, including cracked pepper turkey, black forest ham, hickory bacon, salami, and pepperoni, which are available in deli cases across the San Francisco Bay Area.
In addition to the culinary benefits, plant-based meats offer significant environmental advantages. Livestock production for food accounts for nearly 15% of global greenhouse gas emissions, surpassing the combined emissions from all modes of transportation, according to the Food and Agriculture Organization of the United Nations (FAO). Furthermore, it utilizes over 70% of agricultural land, exacerbating deforestation, biodiversity loss, and water pollution, as stated by FAO.
Prime Roots claims that its production methods are 89% to 92% more sustainable than traditional meats, with reduced emissions and land usage. The company’s growth process for koji mycelium protein takes just a few days, and additional processes, such as drying and smoking for salami, require only a few more days, compared to the years associated with animal agriculture. Moreover, Prime Roots’ turkey and ham products are free from nitrates, preservatives, cholesterol, soy, or wheat, and they boast a longer shelf life compared to conventional deli meats.
However, recent surveys have indicated a potential slowdown in consumer interest in plant-based meats. A Deloitte survey revealed that the number of consumers who occasionally purchase plant-based meat for themselves or their households did not increase in 2022. Additionally, cultural resistance poses a challenge in reaching the 53% of consumers who are not buying plant-based alternatives.
Some speculate that the plant-based market may be experiencing a decline. Beyond Meat, for example, recently faced a significant drop in its shares, and its sales decreased by over 22% in the third quarter of 2022 compared to the previous year. Other players in the industry, such as Planterra Foods (owned by Brazilian meatpacking giant JBS) and Impossible Foods, have also encountered challenges, resulting in layoffs and operational changes.
According to Ben Pierce, an analyst at The Good Food Institute, taste, cost, and perceptions of processed foods remain the primary barriers preventing plant-based meats from reaching mainstream consumers. However, Pierce notes that products aiming to replicate the taste, texture, and experience of meat have been the key growth drivers in the plant-based meat category. These products, although often requiring more processing, continue to gain a larger share compared to veggie-forward options like black bean burgers.
