"Hampton Creek takes crack at breaking up egg industry"
2014-08-16 by Stephanie M. Lee for "San Francisco Chronicle" [http://www.sfgate.com/food/article/Hampton-Creek-takes-crack-at-breaking-up-egg-5693576.php]:
The yellow batter splashed with a sizzle across the frying pan. Teased with a spatula, it thickened into dense, fluffy puffs.
Scrambled eggs are among the plainest of dishes, but these tasted even plainer than usual. That was because these were not, in fact, eggs, but plant proteins.
The dish, scrambled in a trendy San Francisco work space, was an experiment in both cuisine and science. The startup behind it, Hampton Creek, wants to do nothing less than rethink the way food is made. Its first challenge is to replace chicken-bred eggs with healthy, tasty plant substitutes, and topple a colossal industry that churns out 1.1 trillion eggs annually.
Such ambition might seem lofty for a company formed just three years ago, but it's right in line with the current philosophy of Silicon Valley. Venture capitalists are betting millions on startups that use technology to create food from ingredients that are healthier and gentler on the planet, they say, than traditional growing and manufacturing processes.
Your plate, in other words, is about to be disrupted.
"Food - it's just ripe for innovation," said Samir Kaul, founding general partner at Khosla Ventures, which has backed several food startups in addition to Hampton Creek. "There are massive health effects, the environmental impacts are terrible, you just see the way these animals are raised is horrible."
Silicon Valley is famous for funding ideas with dubious societal value, like messaging apps that say nothing but "yo." But high-tech food makers backed by the likes of Bill Gates and the co-founders of Twitter are finding a place on supermarket shelves. Hampton Creek's mayonnaise and cookies, both plant-based, are in 10,000 stores worldwide. Plant-protein-derived chicken and beef by Beyond Meat in Southern California will soon be in 6,000 stores nationally.
But this new wave of businesses must persuade the public they are not just for vegans seeking eggless and meatless grub. As Californian as their philosophy may be, they will need to whet appetites far and wide.
Plants don't scramble well -
It turns out a plant does not scramble as well as an egg.
The project began with a deep dive into Hampton Creek's database of 4,000 plant samples and their molecular structures. Using proprietary techniques and no chemicals, the proteins are extracted from plants in powder form, cleaned up and mixed.
The first prototype had an off-putting "bean-y" flavor, employees explained. Thousands of formulas later, the latest version tastes close to the real thing.
Hampton Creek's founder, Josh Tetrick, likes to think about creating food as starting from scratch. A Fulbright scholar who worked for seven years in sub-Saharan Africa, he started the company after talking to a friend who was trying to reduce dependence on factory-farmed chicken eggs.
"If we had to start over, we wouldn't cram nine birds into tiny little cages and require lots of land and water and fertilizer and oil," the 34-year-old said. "We might work with farmers around the world to grow abundant plant species that use less water, use less carbon, that are just as nutrient-dense, that don't have environmental externalities. What we've come to understand is if we approach things less like a food company, and in some ways more like a technology company, new things can open up."
Tetrick was standing, because he dislikes sitting, in the company's blended office, kitchen and lab in the South of Market. Biochemists in lab coats mingled with business strategists on laptops. Crouched over a stove were "research and development" chefs, all formerly of renowned restaurants.
Climate change and food -
Outside, it was another unusually warm day in San Francisco. California's historic drought is hitting its agriculture industry hard and by one estimate will cost $2.2 billion in losses this year.
With the world heating up and the population expected to cross 9 billion by 2050, Tetrick thinks the current food system makes it "perversely easy for people to do the wrong thing for their bodies and the planet." So Hampton Creek's mayonnaise, based on the Canadian yellow pea, is cholesterol-, trans fat- and gluten-free. Its cookies contain no dairy products. Prices vary by store but are more affordable than leading brands, Tetrick said, because they do not include the costs of chickens and feed. The company's egg-substitute powder, which is sold to businesses, costs 35 percent less per serving than a chicken egg, he said.
For that reason, Tetrick said, Ikea will soon cook the powder into some of its meatballs. General Mills will do the same with some muffins and cookies. Tetrick declined to disclose sales figures, but said Hampton Creek's products, which are in Safeway, Whole Foods, The Dollar Tree, Kroger and ParknShop, one of Hong Kong's largest supermarket chains, will be in 35,000 stores by 2015.
Eggs were the beginning, but Tetrick is thinking bigger. Sugar? Ice cream? Come December, the possibilities will be explored in a new, 85,000-square-foot home in the Mission District. The 61 employees are backed by nearly $30 million from Hong Kong billionaire Li Ka-shing, Yahoo co-founder Jerry Yang, hedge fund billionaire Tom Steyer, Gates and Khosla Ventures, among others.
Plant versus animal protein -
From a scientist's perspective, the difference between a meat burger and a meatless burger is a matter of semantics, Ethan Brown believes.
"If you think about what meat is - a collection of proteins, lipids or fats, trace carbohydrates, trace minerals and 70 percent water - all of those things are available to us through plants," he said. "And if we can arrange them in the same way they're arranged in animals' muscle and meat, why isn't that meat?"
Brown, 42, is the founder of Beyond Meat, an El Segundo startup whose backers include Gates, venture capital powerhouse Kleiner Perkins Caufield and Byers, and the Obvious Corp., founded by Twitter co-founders Evan Williams and Biz Stone.
Cut greenhouse gases -
A lifelong animal lover who used to work in clean energy, Brown started the company in 2009 in an attempt to help the Earth in a bigger way. About 365 billion pounds of cow and poultry meat are produced annually, according to the Food and Agriculture Organization of the United Nations. It estimates the livestock sector contributes 18 percent of greenhouse gas emissions, although some groups believe the figure is as high as 51 percent.
Licensing a technology from the University of Missouri, Brown is selling chicken strips and ground beef in Whole Foods and Safeway. These aren't typical veggie burgers, which are often ground-up vegetables or tofu, but derivations of soy and pea proteins. The list will soon include Target and Costco, and in October, a meatless burger will hit Whole Foods.
"You want to call it a food company, but it's a disruptive technology company because it's using sophisticated machines and technology and scientists to create the future of food and the future of protein," said Stone, a vegan. "And it's something that tastes better and it has no cholesterol, it has more protein." It also has more omega-3s than salmon and more antioxidants than blueberries, Brown said.
Meat alternatives -
Cooked for The Chronicle, the chicken tasted authentic, if slightly chewier. The beef was close, but crumbled faster than usual.
Beyond Meat costs slightly more than actual meat. Its 1-pound bag of prepared chicken or ground beef is $5 to $6, whereas 1 pound of an uncooked chicken breast or ground beef is $3.50 to $3.88 on average, according to the Bureau of Labor Statistics. But Brown said prices will go down as the company scales up: in less than two minutes, its equipment can create more meat than the amount on a standard chicken, using less water and other resources.
Brown declined to disclose sales. General sales of meat alternatives reached $553 million in 2012, according to market research firm Mintel. That's still a tiny part of national meat and poultry sales, which topped $150 billion in 2009.
"While there are some amazing food scientists out there who can achieve great results, it's hard to imagine that tofu or tempeh will compete with T-bones anytime soon among people who enjoy the beefy taste and texture of a steak," an American Meat Institute spokesman said.
Just 4 percent of the U.S. population is vegan, Beyond Meat's research shows. So the company also wants to draw a broader group of "meat reducers," an estimated 72 million people between 25 and 34 who want to cut back on, but not eliminate, meat.
"The science is coming out and saying, 'Hey, the amount of meat we're eating may not be good for us,'" Brown said. "But people aren't wanting to give it up, so why give it up? Why not try plant-based meat?"
To appeal to these people, the beef comes in a black bag with a bull's silhouette - imagery meant to be more rugged and less reminiscent of health food.
Marketing health, taste -
Hampton Creek faces the same challenge of selling vegan food to non-vegans. Its website mentions neither the word "vegan" nor its technology. It instead emphasizes health, taste and affordability.
The name, too, is strategic. It may bring to mind nature, but there is no Hampton Creek. "I asked a whole bunch of purchasing managers and big food companies what name of a company they'd feel comfortable with," Tetrick recalled. "And they said, 'You know, 'creek' sounds pretty good." "Hampton" was the dog of the friend who inspired Tetrick to start the company.
Other entrepreneurs must also become known for more than their novelty to succeed. Modern Meadow is growing leather from animal cells. Last year, Google's Sergey Brin paid Dutch scientists $330,000 to grow a burger in a lab. NuTek Salt's salt is natural, but has high potassium instead of the usual sodium.
Another challenge is natural-food devotees who see well-raised animals as more natural than processed products.
"People's attitudes toward technology and their food is very different from attitudes toward their phones or homes or all the other places we use" technology, said Michael Pollan, a Berkeley food writer and a fan of Hampton Creek. "I think it remains to be seen how people will feel about highly technological foods."
Brown isn't worried.
"I don't think it's realistic to transition the population to kale and quinoa," he said. "But I do think we're a culture that does embrace innovation."
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