Nestle Invests in Maker of Fake Chicken That Has Skin and Bones

(Bloomberg) -- Nestle SA invested in a vegan startup that is trying to mimic chicken in the most realistic way possible, including fake skin and bones, as the world’s largest food company presses ahead with expansion in plant-based meat substitutes. 

Nestle led a funding round of about $4 million in Sundial Foods, said Jessica Schwabach, chief executive officer of the Albany, California-based company. The proceeds will help fund initial production as the company plans to introduce vegan chicken wings in the Bay Area in the spring and expand throughout California next year. 

The Swiss food giant has been investing heavily in alternative proteins as an increasing number of consumers forgo animal products amid environmental and health concerns. After a late start to the vegan market, Chief Executive Officer Mark Schneider now aims to have a plant-based substitute for every animal protein. Nestle is testing the waters for new technologies, including cultured meat with Israeli cell-based startup Future Meat Technologies Ltd.

Sundial was created in 2019 after co-founders Schwabach, who is vegan, and Siwen Deng met at the University of California Berkeley’s Alternative Meats Program where they explored issues like how to tackle dryness in plant-based meat alternatives. They spent a year at Nestle’s R&D Accelerator site in 2020 and did a test run together in Swiss grocery stores late last year. 

“People liked the realistic appearance and the high protein content -- but their favorite aspect was the plant-based skin,” CEO Schwabach, 22, said in an interview Thursday. “It added to the cooking experience and provided interesting texture while eating.”

A spokesman for Nestle declined to comment.

Sundial’s products, which are chick-pea based, use eight ingredients. Its chicken wing substitutes count 27 grams of protein per 100 grams, roughly the same as the original product. The skin is made out of a protein-lipid film that also helps lock in moisture, and the bones are fashioned out of bamboo stalks.

“We want plant-based products to replace the butcher, in the sense that it serves the same purposes without consumers feeling like they’re forcing themselves to eat vegan or vegetarian,” Schwabach said. 

The alternative-protein market has shown some signs of a slowdown. Beyond Meat Inc. shares dropped 13% on Nov. 11 after the maker of faux burger patties forecast sales below analysts’ forecasts.

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