Dive Brief:
- Prime Roots, which uses koji mycelium to make meat analogs, closed a $30 million Series B round to expand its deli meat-style product.
- The round brings the company’s lifetime total fundraising to $50 million. Investors include noodle and alternative protein giant Monde Nissin and tech accelerator SOSV/IndieBio — which had worked with the company as part of its accelerator program in 2017. Other investors include Pangaea Ventures, Alumni Ventures, Gaingels and Hyphen Capital.
- While there are several alternative protein companies focused on meat categories such as hamburgers and chicken nuggets, only a few are working on deli meats.
Dive Insight:
Prime Roots, which got its start in 2017 when co-founders Kimberlie Le and Joshua Nixon used koji to create different meat analogs, landed on deli meat as their top go-to-market option last year.
In November, the Berkeley, California-based company had a small-scale retail launch of its sliceable mycelium-based deli meats and pate-like spreads. Prime Roots said in a statement its deli meats consistently sell out at those few retail partners, and sales are pacing five to 10 times higher than other meat alternatives.
These new funds will bring the company’s products to more grocery stores and deli counters. The company says its product portfolio currently covers more than three-quarters of the deli meat options on the market. Prime Roots’ products include Koji-Turkey in three varieties; Koji-Ham in three varieties; charcuterie in Koji-Salami, and two styles of Koji-Pepperoni; two varieties of Koji-Pate ; Koji-Foie Gras and Hickory Koji-Bacon.
Koji, Prime Roots’ key ingredient, has been commonly used in Asian cuisine for thousands of years. Traditionally, it’s used to create and ferment soy sauce, sake and miso. Prime Roots turns the roots of that fungus, known as mycelium, into its meat analogs. Le notes koji natually has an umami taste, making it a good base ingredient for meat-like products.
Deli meats have been getting more popular with consumers seeking healthy, convenient, protein-filled options. As the COVID-19 pandemic kept people at home in 2020 and 2021, sales in the segment climbed as consumers turned to sandwiches for comfort and sustenance.
As the U.S. has transitioned to a post-COVID period with consumers leaving home for work and school, sales have continued to do well as people went back to packing lunches. In the 52 weeks ending March 31, sliced deli meat sales generated $8.3 billion, according to Circana statistics reported by Supermarket News.
Last September, Le told VegNews Prime Roots believed it could make the biggest difference by having an option at the deli counter. After all, she told the website, U.S. residents consume more deli sandwiches than burgers every year.
Prime Roots isn’t the only player in the alternative deli slices. Larger brands including Nestlé’s Sweet Earth, Maple Leaf Foods’ Lightlife and Tofurky have deli slice products. Unreal Deli, a smaller brand, only has deli slices.
However, Prime Roots appears to be the only player that sells its bulk meat alternative to grocery stores to be custom-sliced. It’s also the only one made from mycelium rather than plant-based proteins.
