v2food, one of the biggest local names in fake meat, has changed strategy after its founder departed

A torrid 12 months for startups in the food sector has also had an impact on one of the most high profile ventures, the billionaire-backed faux meat company v2food.

V2food launched in October 2019, and raised around $185 million, including a second Series B round of $72 million for global expansion in August 2021. Europe’s largest impact investment fund, Astanor Ventures led that round, with the company valued at $500 million.

A first Series B in late 2020, worth $77 million, saw several Asian investors join the cap table, including Singapore’s state-owned Temasek Holdings. John B. Fairfax”s family investment vehicle Marinya Capital and Sequoia Capital China are also investors.

Jack Cowin, former v2food CEO Nick Hazell and then innovation minister Karen Andrews at the launch of v2food in 2019.

Part of that round was allocated towards completing its $20 million production plant on the NSW-Victoria border at Wodonga. Earlier this year, a little over two years after it opened in December 2020, the company announced it would close the factory.

The plant protein startup is joint venture between Hungry Jacks billionaire Jack Cowin and the CSIRO, via its VC fund, Main Sequence Ventures. Made from legumes (aka protein-rich pulses), the startup’s ‘mince’ looks and tastes like meat. The product range includes burger patties, mince, sausages, nuggets and schnitzels.

You can buy the v2food burger as the Rebel Whopper at Hungry Jacks for $10.45. (Add a second patty for $2.70, and/or bacon for $1.35.)

This time last year, in additional to its mince the startup rolled out a range of $9 ready-made pasta-based meals, which it sells through Coles and Woolworths. The company also launched in China via 2,300 store supermarket chain Shanghai Lawson with a plant-based steamed bun containing beef-flavoured v2 “mince”.

While the rapid ascendance of v2food was widely covered in mainstream media thanks to the advocacy of an energetic PR firm, few noticed the change of direction in February this year, aside from the ABC, regional papers and specialist titles including alternative protein publication Future Alternative, which spoke to Hazell’s replacement as CEO, the company’s COO, Tim York.

“At the end of last year, we started to reassess where our growth was going to come from in the next year, and what sort of changes needed to happen in our supply chain. That led to the eventual decision to shut Wodonga,” York told Future Alternative.

He went on to say that since the idea for the plant was conceived in 2019, “the market has matured” and they’re able to outsource product under the “v2 proprietary recipe”. There were interest in looking for ways to split the soy beans that are the building blocks of the v2 “mince” but those plans are now on hold.

York said v2 had 50% year-on-year growth locally in the past 12 months, and while execution tactics may have changed to address supply chain issues in international markets, the mission stays the same.

“The plan has always been to globalise and be one of the global leaders in plant-based meat. That hasn’t changed,” he said.

“But it does mean that as you go more and more offshore, you need to look at where your costs are in the supply chain, and the resilience of those supply chains. And there is a decision change there for us, that says we should source more of our ingredients closer to the end markets.”

v2foods is also grappling with a highly competitive global market with plenty of rival VC-boosted startups, including Silicon Valley tech ventures such as Beyond Meat and Impossible Foods, trying to grab real estate in the alt meat space. There are also local challengers such as Made with Plants, The Vegan Factor, Wildly Good, Veef, Next Gen and Why Meat Co, as well as “braised beef” made from mushrooms by former Shoes of Prey founder Michael Fox’s Fable Food Co.

The changing of the guard at v2food was explored by entrepreneur Mark Bouris on his podcast, The Mentor, last month in a conversation with Main Sequence partner Phil Morle, a v2food director, and Nick Hazell. They discuss knowing when it’s time to move on.

You can listen to the conversation on Spotify here, or Apple Podcast here.