Dive Brief:
- Plant-based chicken nugget maker Rebellyous Foods raised a $9.5 million equity round to build its production technology.
- The Seattle-based manufacturer plans to use the funds to continue deploying its custom-designed equipment to make plant-based chicken nuggets, which the company says unlocks the goal of producing meat alternatives at the same price or less than animal-based products.
- This investment comes at a time that there is not much capital flowing to plant-based food companies because of the tight economy and slowing sales growth for some of the bigger brands in the space.
Dive Insight:
Since starting Rebellyous Foods in 2017, founder and CEO Christie Lagally has had her eye on undercutting Big Chicken on price. And she’s got a pretty specific game plan: Design a custom manufacturing process for plant-based meat that can most effectively turn high quality ingredients into a processed plant-based version of chicken.
In an August interview, Lagally told Food Dive that her company is not trying to make high-end chicken products or chase consumers looking for a nice dinner option. Rebellyous wants to take a bite out of the processed chicken comfort and convenience food market — products including frozen nuggets, tenders, popcorn chicken and patties, which make up more than half of the chicken sold today, she said. According to Statista, nearly 73.4 million people in the United States ate chicken nuggets in 2020.
Lagally said that many of those people are looking for an inexpensive, consistent and high quality product.
“Such a huge majority of consumers will totally replace their chicken if they can just get that price point there,” Lagally said.
Most plant-based chicken is manufactured using machinery and processes designed for actual meat, which Lagally said makes it inefficient. Lagally, a former Boeing engineer, said Rebellyous has been working on a production system it calls the “Mach 2.” Considering input and manufacturing costs, she said, it generally costs a company about $2.60 to make plant-based meat. With the new production system, she said, it will cost Rebellyous $1.47. The process, she said, is completely automated and designed to make 2,500 pounds or product per hour.
Mach 2 is still under development, and is slated to go into operation later this year, Lagally has said.
So far, Rebellyous has launched on a fairly small scale. It’s in about 1,000 retail locations and in about 100 school districts. Lagally said in August that about half of the company’s revenue came from the USDA National School Lunch Program. During the pandemic and afterward, she said, many chicken providers didn’t have excess product to provide to school lunches, giving Rebellyous an opportunity to sell its products as it ramps up.
The investment in Rebellyous comes at a slow time in the plant-based meat business. Larger companies in the sector, including publicly traded Beyond Meat and Maple Leaf Foods, have seen once-meteoric growth slow down in the last year. From the fourth quarter of 2022 until now, this is only the third big investment in plant-based meat — the other two are Black Sheep Foods’ $12.3 million Series A round in December and The Ish Company’s seed round topping $5 million last month.
Lagally said in August that she’s optimistic for Rebellyous, despite the slowdown other companies in the segment are seeing now. After all, she said, plant-based meat, which has been around for decades has already been “a graveyard of companies who just couldn’t scale the products because of the quality issues.” Once Rebellyous gets its new manufacturing system operational, Lagally said that it will have the price and quality consumers want, and sales will follow.
