Eggless Egg-Maker Buys First Plant in Bid to Crack Costs
(Bloomberg) -- For anyone who thought the plant-based trend was a short-lived fad, Josh Tetrick, chief executive officer of egg-imitator Just Inc., has a message: They’re just getting started.
The San Francisco-based startup has acquired its first manufacturing facility: a 30,000 square foot location in rural Appleton, Minnesota. The aim, Tetrick says, is to make more of the product it sells as a substitute for eggs—and cheaper. “The biggest limiting step of us scaling has been transformation of the bean into protein,” Tetrick says. “We wanted to invest in a facility, in a community, that would allow us to remove that limiting step.”
Just bought the Del Dee Foods plant, which was already making Just’s proprietary mung bean protein as well as doing some research and development work for other customers. Now, as the plant’s owner, Just plans to expand the facility and its workforce. The acquisition also gives Just greater control over its supply chain, a move which lets companies limit costs, according to Christine McCracken, a protein analyst at Rabobank.
Bringing down costs is a top concern for Just, which says it has sold the equivalent of 17 million eggs already but hopes to grow the volume of its Just Egg sales at least ten times in 2020. It costs the company north of 20 cents to produce the equivalent of an egg currently. It hopes to bring that number down to 4.7 cents in the next two years. The company also makes eggless mayonnaise and is developing cultured chicken.
For Del Dee, the acquisition caps a nearly fifty-year history. The company started as a dairy brokering business, before moving to whey protein production, and in 2015 it started working with plant proteins. Lori and Mike Lind, who co-owned the plant with Lori’s brother John Droogsma, say the development means the company can keep its employees on the payroll and continue to support local businesses that help theirs run. “As Mike and I are getting older,” Lori says, “it became our goal to find someone who would want to acquire this. We’ve seen businesses have to shut their doors and have an auction.’’
The work done at Del Dee is the most complex and unique part of making Just Egg, which is sold in liquid form by retailers like Whole Foods Market Inc. and Walmart Inc. After the beans are sourced from Asia and Africa, the skin is removed and they are milled into a flour. From there, the flour is spun in a process called centrifugation to separate the fat, fiber and starch.
The protein is then dried and turned into a powder, bagged, stacked on a pallet and shipped to a network of facilities that will then turn it into Just Egg. That process—where it’s mixed with oil, water and other ingredients before being pasteurized, bottled and sent to warehouses for retailers and restaurants—is also important, but not as novel. The company has no plans to acquire a mixing and bottling plant, Tetrick says.
The company is also looking for buyers for the bean’s byproducts, like the starch, fiber and fat. Monetizing those, Tetrick says, is key to bringing costs down.
©2019 Bloomberg L.P.