Skift Take
As plant-based protein takes on a more welcomed status in the mainstream American diet, vegan chains like Veggie Grill are uniquely positioned to capitalize on diners willing to pay more for less meat.
— Erika Adams
In the last year, fake meat has ballooned from a shadowed substitute on the menu tucked at the bottom of the board in italicized fine print to a regular food item worthy of equal status as the half-pound beef burger on the menu.
Perhaps the best endorsement of this transition has come from the nationwide burger chains — A&W, White Castle, Carl’s Jr. — that are now adding plant-based protein to the menu and creating splashy marketing campaigns around the new launches.
One person who wasn’t surprised to see fake meat slide its way onto White Castle’s menu? Steve Heeley, the CEO of fast casual vegan chain, Veggie Grill. The California-based restaurant brand has been championing plant-based protein long before it was cool to do so, and is now riding the wave of national consumer interest in alternative meat products.
“I think what we’re seeing is that the innovation and development on the product side has finally caught up with and is intersecting with the consumer demand,” Heeley said. “The consumer has figured out that plant-based is probably the most healthy diet that you can adopt. They’re seeking great plant-based options, and there have been good plant-based proteins on the market, but I think what we’re seeing now is the mainstreaming of the development of some of these plant-based proteins.”
Previously, veggie burgers that were on the market were often lacking in taste because there wasn’t a whole lot of money fueling the innovation needed in the product development department.
“With the Beyond Burger, you finally have a breakthrough where you have a product that actually tastes like a meat burger, cooks like a meat burger, and has all the familiar qualities of a meat burger,” Heeley said. “There were lots of plant-based burgers prior to that, but none that really came close enough for the average consumer to say, ‘Wow, that’s good, and it tastes like the burger I usually eat, so that’s a win for me. I don’t have to give anything up. I pay a little bit more, but I know it’s better for me, and it’s pretty good.'”
Measuring the Plant-Based Competition
Two of the buzziest plant-based protein startups on the market, Impossible Foods and Beyond Meat, are competing head-to-head for grocery distribution deals and restaurant chain partnerships to put their products on as many shelves and menus as possible across America.
Impossible Foods recently released an upgraded version of its popular burger product, called “Impossible 2.0” at the Consumer Electronics Show in Las Vegas at the beginning of the year. The company initially planned for a two-month rollout of the new product across its distribution channels, but that timeline was pushed up when Impossible Foods ran out of the original burger recipe weeks ahead of schedule. The company also sealed a partnership with DOT Foods to get the Impossible Burger onto grocery shelves and more restaurant menus nationwide this year.
Meanwhile, Beyond Meat announced its intentions to go public late last year, rising high on unprecedented consumer demand for its products. The company has an exclusive distribution deal with Sysco, which helped tremendously in boosting sales of the Beyond Burger in grocery stores and thousands of restaurants across the country. (A move that Impossible Foods is looking to replicate this year through the DOT Foods partnership.) Restaurant chain partnerships with A&W and Carl’s Jr. have already proven to be successful with diners at those meat-friendly establishments.
At Veggie Grill, the company chose to partner with Beyond Meat to source its meat alternatives on the menu. “Their products are very clean, and there’s no weird science behind it,” Heeley explained. Impossible Foods has had ongoing run-ins with the Food and Drug Administration over its heme compound, a key ingredient in the company’s plant-based protein formula.
Veggie Grill’s Expansion Plans
The vegan chain is in the process of opening up its first locations on the East Coast this year, in both New York City and Boston. Heeley confirmed that leases are signed on locations in both cities, with projected opening dates sometime this summer. Overall, the company will open an estimated seven to eight new restaurants this year.
“The long-term trends are very positive for us as a brand as more people want to eat this food and are seeking to eat this food,” Heeley said. As far as how many units Heeley sees the chain growing to, there’s no specific number in mind. But, the overall goal for Veggie Grill is to become a national brand. “We know that there’s a huge market for our innovative plant-based food,” Heeley said. “That market’s growing every day.”
Veggie Grill most recently raised a $22 million round of funding that closed in late 2016. Investors include private equity firm Brentwood Associates and Powerplant Ventures, the venture capital firm launched by Veggie Grill founders Kevin Boylan and T.K. Pillan. The company was founded in 2006 and currently operates 32 locations across California, Oregon, Washington, and Illinois.
