I wouldn’t usually be tucking into a platter of sausages, bacon and chicken thighs at 10am on a Tuesday — but I made an exception for a visit to the office and innovation lab of plant-based food startup THIS.
London-based THIS uses patented technology to create a range of plant-based products that substitute traditionally meaty food staples, from its brand new ‘chicken’ thighs to its most popular ‘pork’ sausages.
The sausages, one employee tells me, are made to look more like the real thing using a machine bought specifically for a very unusual purpose.
“Andy [Shovel], the cofounder, wanted to make sure the sausages have what he calls ‘the nipple’,” they say, meaning the tiny twist at the end of the sausage which would traditionally link them in a chain. It took the team a while to find machinery that would honour that design choice, but it seems to have been worth the effort: the product has now won several awards.
But consumer interest in plant-based foods seems to have waned in recent years: in 2023, it was one of the fastest-falling grocery categories in terms of sales in the UK, which dropped by 13.6% year-on-year.
One competitor, vegan food brand Meatless Farms, almost went bankrupt last year before being acquired; THIS saw its product presence per store go up by 42% and was named in the Sifted 100 list of fastest growing companies by revenue in the UK and Ireland. It’s recently hired a new CEO, has grown to 50 employees and is aiming to have its first profitable quarter by the end of 2024.
So, how exactly is THIS planning to get consumers to fall back in love with plant-based meat?
Reconnecting with consumers
There’s an elephant in the room when it comes to plant-based meat alternatives, says CEO Mark Cuddigan, who was previously managing director of baby food brand Ella’s Kitchen. “Generally, as a category worldwide, it’s letting consumers down in terms of price and taste.”
“It is expensive to produce and is almost in its infancy in terms of the meat category. That’s just an obstacle we need to overcome,” he says. “In terms of our profitability, the team has transformed the business in the last 12 months.”
“We have transformed our margin,” he adds (without giving specifics) “but we need to go much further to become a sustainable business.”
Part of tackling that problem has been reducing the complexity of the business; THIS has recently streamlined its operations, consolidating its production from 17 sites down to just three. It combined its separate lab and office spaces into one London-based site, where food scientists working on new products and office-based employees are separated by a glass wall, and has factories in Northern Ireland and Rochester in England.
Cuddigan replaced cofounders Andy Shovel and Pete Sharman — who’s been co-CEOs — as the new CEO in February 2024.
“They said they had to take a self-awareness pill and realise they’re not the people to take the company on its next journey,” says Cuddigan. “As you grow, you need different things — they’ve been very open about the fact that they feel the time was right to bring someone in to deliver on the company’s vision and mission.”
Cuddigan hopes to resurrect the plant-based industry’s brand image to fill a gap for consumers looking to adopt a less meat-intensive lifestyle, he tells Sifted. “There are a lot of people who would declare themselves as flexitarians but aren’t transitioning away from eating meat, and the reason why is because I feel they’re let down by the taste and the quality when they try plant-based meat, and they go back. So you’re sort of knocking on an open door,” he says.
The London-based company is the fourth largest brand in the UK’s plant-based category, with products on the shelves of several major supermarket brands in the country and almost 8% of the chilled meat-free market share. Other companies in the space include Quorn, which was one of the first plant-based brands to launch back in 1985, Linda McCartney Foods and Quorn sister brand Cauldron.
THIS has raised around $53.9m so far, according to data platform Dealroom, with investors like BlackRock, ITV and footballer Chris Smalling on its cap table.
The challenge now is to get consumers hooked. “We will start to do a better job of emotionally connecting with our consumers and really building the brand into a landmark brand. It almost has a cult following [now] — we need to make that bigger!” Part of that lies in the marketing: the company closed a £1.5m media for equity deal with broadcaster ITV in September last year — its first foodtech deal — to build brand awareness through advertising on a media source trusted by the public.
It all relies on consumer behaviour, he says — and after a tough couple of years, there are positive signs that the industry could be bouncing back.
While 2023 saw a fall in sales across the UK’s plant-based industry, there are indications that the market is on the up: grocery chain Tesco reported that sales of plant-based steaks and ‘chicken’ breasts are up 20% since the start of 2024, and meat-free burgers have sold 10% more than the year before.
The cultivated meat threat
One potential threat to the plant-based sector is the emergence of cultivated meat; meat alternatives that are grown in labs from cells. The nature of this tech means that the products technically are meat, just without the slaughter — and so will taste just like the original.
“We see it as complementary rather than competitive,” says Luke Byrne, innovation director at THIS.
Cultivated meat is also only approved for sale in the US, Singapore and Israel. In Europe, regulators remain hesitant; in Italy, the production and marketing of cultivated meat was banned in November last year.
Byrne says that if cultivated meat does eventually make it to our dinner plates, the new market will still have a mountain to climb when it comes to consumer reception.
“As consumer awareness of environmental and ethical concerns surrounding meat consumption grows, we’re seeing continued interest in plant-based products, particularly with a lean towards health-focused choices and an ingredients list people recognise,” he says.
“Plant based meat is still on that journey of acceptability, whereas consumer acceptance of cultivated meat is unknown.”
The “tofu of the future”
Alongside reconnecting with current consumers, THIS is also looking to lead when it comes to the novel foods of tomorrow.
In the innovation lab, its scientists are working on a plant-based ‘superfood’ that could be used by consumers as an ingredient in a variety of ways, like tofu, but with more nutritional value than anything currently available on the market, the company says.
This focus on the future of food is a major one for the company — over the past few years, THIS has partnered with the universities of Reading and Brunel to work closely with PhD students on plant-based food related research that could help the company iterate on and improve its products. “It’s all about knowledge sharing to make our products as realistic as possible,” says Lily Nur Sulaiman, a senior research scientist at THIS who led the project.
While profitability is next on the roadmap, the company’s growth plans also include expanding internationally. Last year, it established a presence in the Netherlands, where it hopes to access a community of plant-based enthusiasts.
“The Netherlands has the highest per capita spend on the plant-based industry in the whole of Europe,” says Cuddigan, “we’re dipping our toe in the water to prove that the brand can work internationally.”
Read the orginal article: https://sifted.eu/articles/this-plant-based-interview-ceo/
