Chilean plant-based food tech company NotCo and food giant Kraft Heinz are joining forces. Their joint venture announced this month will foster the development of co-branded products, but neither company is ready to reveal what that first product will be. (We’ll be holding our breath for vegan Kraft Macaroni & Cheese. It’s not fair that only Australia has it.)
For the seven-year-old vegan brand—and for the plant-based food industry—this is a landmark moment. Kraft Heinz brands, besides obvious Kraft and Heinz products, include household names like Oscar Mayer, Lunchables, and Philadelphia. Many US consumers may only be familiar with NotCo’s NotMilk, which hit the states in 2020. However, the Chilean company made a name for itself in the Latin American plant-based food market in the years prior thanks to its portfolio of products developed using artificial intelligence (AI), which includes mayonnaise, milk, ice cream, and burgers.
Kraft Heinz CEO Miguel Patricio said in a statement that the partnership will help the multinational food company “deliver on our vision of clean, green, and delicious products for consumers.”
The team-up will put NotCo’s unique AI platform, affectionately called “Giuseppe,” front and center, in order to create realistic products. Essentially, the AI is taught the composition of an animal product at a molecular level. Then, using an algorithm and its database, the AI pieces together a recipe that mimics the conventional version. (For example, NotMilk’s ingredients include pineapple, cabbage, chicory, and coconut—combined, it tastes pretty darn close to dairy milk.)
Can big brands and vegan companies really be friends?
For Kraft Heinz, which wants to create “greener” products, and for NotCo, which centers the environment as its raison d’être, it sounds like the perfect match. Animal agriculture is one of the key drivers of human-caused climate change. And, the scientific community is practically unanimous in saying that food production cannot continue unchanged if we’re to lower global greenhouse gas emissions enough to lessen the severity of the inevitable effects of global warming.
But, Kraft Heinz is a food giant—one whose products meat and dairy products are among those major contributors to climate change. Shouldn’t this partnership be an ethical dilemma for a company like NotCo? Not necessarily.
Kraft Heinz is the third-largest food and beverage company in North America and the fifth-largest in the world, and it has a mighty big reach. Its products are sold in over 40 countries, while NotCo’s products are available in 10. Despite this, NotCo has proven itself to have mainstream appeal: it’s available in Latin America’s biggest supermarket chains and its high-profile partners include Burger King Chile, Burger King Paraguay, and Papa John’s Chile.
NotCo is one of the fastest-growing food tech companies in Latin America. Last summer, it raised a $235 million Series D round, bringing its valuation to $1.5 billion, achieving “good unicorn” status. And, its investors include disruptor-driven venture capital firm The Craftory, Jeff Bezos’ Bezos Expeditions, and athletes Lewis Hamilton and Roger Federer. And, the company’s plant-based NotBurgers are about to hit the US market.
In order to truly disrupt the $1.33 trillion global meat market and the $827.4 billion global dairy market, though, you need to reach more people. Working with big brands, even ones that appear to be counterintuitive, is a way in for many plant-based businesses. And, that should come as no surprise: it’s been happening for years in a number of ways. Big corporations have taken several plant-based brands under their wings through acquisitions. Beyond Meat and Impossible Foods are working with fast food giants to put plant-based options on the menu. And, legacy food brands have been investing in plant-based startups for years—Kraft Heinz included. It’s backed the precision fermentation-based vegan dairy startup New Culture twice now.
Investments aside, the alternatives market is new territory for Kraft Heinz. Its only company in that category is Boca, a brand that was one of the earliest vegetarian meat brands to hit mainstream supermarkets back in the ’90s. But, a lot of things have gotten better since the ’90s, including plant-based food. Brands like Beyond Meat, Impossible Foods, Eat Just, and OmniFoods lean on ever-improving food tech to bring their products as close to “the real thing” as possible, courting discerning flexitarian consumers.
Precision fermentation, 3D printing, and AI are emerging as technologies that will usher plant-based food into its next generation. With NotCo and its AI platform, Kraft Heinz is getting ahead of the curve in an increasingly competitive market.
But, don’t big brands just care about profit?
Joint ventures with the end goal of launching co-branded products may also be the Next Big Thing for the plant-based food industry. More consumers, motivated mainly by sustainability and health, are dabbling with flexitarianism, and food giants are happy to cash in on it.
Last year, Beyond Meat and PepsiCo—the world’s second-largest food and beverage company—kicked off their own joint venture and their first product, a plant-based jerky. Though, it’s not co-branded.
For NotCo, working with Kraft Heinz will help it get more earth-friendly food products in front of consumers. Working with the brands who have the infrastructure to support their ambition was part of its goal all along. “When we started NotCo, it was our goal to make our technology a [catalyst] for a more sustainable food system not only for us, but for other brands and manufacturers who share the same ambition,” NotCo co-founder and CEO Matías Muchnick said in a statement.
And, this strategy could very well work: consumers gravitate towards the familiar. Seeing the Kraft Heinz label on a vegan product (or, perhaps, a plant-based version of one of its beloved products) could be the nudge that the consumers need to buy the product. For NotCo’s goal of getting people to eat more sustainably, it makes sense.
But what about Kraft Heinz, or any other food behemoth that’s acquired or worked with a vegan brand? Surely, it’s all about the profit to be had from the plant-based food market, which is projected to hit $162 billion over the next decade, rather than for a truly noble cause? (Case in point: Tyson Foods has a vegan brand, but their meat operations are still going strong.) Sure. We can assume that capitalists are going to capitalize. But, we cannot pretend that working with vegan brands will fix anything if the big brands continue to mass-produce meat and dairy products. If anything, they need to simultaneously launch sustainable options while scaling back on the ones that are responsible for the majority of the food industry’s GHG emissions.
We’re falling short on time to clean up food’s carbon footprint. The most recent UN IPCC report, released earlier this month, detailed some frankly depressing realities about the state of climate change. At this point, we cannot stop global warming, we have to adapt, and we have to do it fast. Governments and corporations need to be less incremental, and more transformative in their climate change solutions. And maybe a joint venture between a food giant and a plant-based food tech brand will inspire the former to dial it back on the animal products. Fingers crossed.