With $35 million of venture funding in its war chest, Australian startup v2food last year purchased a 55,470sqm site in Wodonga to manufacture its plant-based meat products locally.

More than $20 million will be invested in refitting the Wodonga site to be a food-grade facility, expected to be operational in the second half of the year. With backing from CSIRO’s venture fund Main Sequence Ventures and Jack Cowan, the founder of Hungry Jacks, the startup is moving as quickly as it possibly can to capitalise on the growth of the category and put itself on the path to profitability.

Startups in the plant-based meat sector are already thinking globally, as they try to make up the shortfall between the amount of meat we produce today and the amount needed to feed the growing global population.

Nick Hazell, CEO at v2food

“There’s a business opportunity which all of the leading venture capital funds in the world have recognised. They’re looking around for solutions [to the meat shortage] and the most sustainable solution that is scalable today is plant-based meats,” v2food CEO Nick Hazell told Which-50.

Founders in the sector argue Australia has a unique opportunity to leverage its agriculture sector, food product reputation and geographic position to serve markets where meat consumption is growing.

“I think that this is a huge opportunity to add value in Australia and supply this huge market, which is growing exponentially,” Hazell said.

Michael Fox is one of the co-founders of Fable, an Australian plant-based meat company that launched in December and has raised $1.5 million from Blackbird Ventures, Grok Ventures, and food industry angel investors.

“There’s plenty of capital out there and there are plenty of mission-driven investors who were keen to back companies in the space,” Fox told Which-50.

For Australian manufacturers, there’s a “huge opportunity” to produce plant-based meats for the domestic market and even more so, for consumers in Asia, Fox says.

“The exciting thing for Australia in this industry is that we are close to Asia. Asian consumers love ‘brand Australia’ — particularly when it comes to food and we have a great reputation for high health and safety food standards and for great produce.

“We leverage that in the animal meat industry to export quite a bit of beef for example, but the same thing applies to plant-based meats.”

The nascent sector also presents an opportunity to increase the value of Australia’s national exports.

Hazell, a former Masterfoods and PepsiCo Research Director, says Australia has a strong fundamental food industry, but as a nation we fail to add value to the commodities before they are sent overseas.

“I think there’s an opportunity for us to add a lot more value to the commodities that we grow in Australia. There’s still very much a philosophy that we’ll grow way more food and commodities than we will consume and we will export the commodities. We fail to add value to those commodities,” he said.

“Interestingly, plant-based [meat] is an enormous value-adding opportunity for Australia.”

However, adding that value will require a significant investment in capital in the form of establishing scalable manufacturing onshore.


Allen Zelden founded Intrinity Global to assist companies looking to scale up and execute growth in the plant-based foods space through increased sales, funds raised and access to global networks and manufacturing.

“Essentially, we connect markets, investors, retailers, food service providers, brands and manufacturers to accelerate the growth of the plant-based industry,” Zelden explained.

v2food hotdogs and sliders

In his view, cash is the biggest concern for Australian plant-based food brands trying to manufacture their products.

“The enormous cost of entry is the most significant challenge, followed by the lack of access to independent contract manufacturers and specialised production requirements for their unique product offerings,” Zelden said.

“An example of this is the use of ‘extrusion’. Due to the demand for improved plant-based meat offerings, extrusion — commonly used in manufacturing cereals, pastas, etc. — has become an innovative yet expensive component in the production of plant-based meat, with extruders costing upwards of $1 million.

“As many of these Australian plant-based food companies are relatively young brands in what is still a new but fast-growing market, the barrier to entry can be very high due to these expensive upfront costs, alongside the scarcity of businesses with access to manufacturing that have a genuine interest to support their growth in a disruptive market.”

Nimble approach  

It’s still early days for plant-based food products and there’s a lot of experimentation using different base ingredients underway. Fable’s Michael Fox says it’s not yet clear which products will have broad appeal to consumers.

“The market is at an early stage where there are lots of new products coming out. Some of those products are great, some could probably still use some improvement,” he said.

“While that experimentation is happening it’s not necessarily super clear yet what products the consumer is going to want at scale.”

Until a company has a clear, proven value proposition it makes sense to set up manufacturing in a nimble way that can be modified and adapted. Rather than investing in factories, a nimble approach to manufacturing involves using pre-existing equipment and production lines and setting up the product lines so it’s flexible, adaptable and interchangeable.

Michael Fox, co-founder, Fable

“We weren’t able to do that in Australia so we’re producing the first versions of the product in Malaysia. But we’ve got new versions of the product under development and ultimately we see ourselves manufacturing in multiple different markets as we grow but we want to make sure we have the value proposition right,” Fox said.

The approach is a similar philosophy to Fox’s previous business, Shoes of Prey, which relied on very lean just-in-time manufacturing to fulfill each of its customers’ bespoke orders.

“At least in these early stages with Fable we are not investing too heavily in scaled-up production so we can be nimble — we can adapt our recipe based on the feedback we are getting from consumers. That was the whole thesis behind the manufacturing operation for Shoes of Prey and we are very much reapplying it here.”

Fable’s meat alternative is made from shiitake mushrooms, and Asia’s much larger mushroom industry meant the startup was able to source the product, professional expertise, and equipment it required to get its first product to market quickly.

“We only launched in December. It’s going very well for being ten weeks in, but it’s still early days. So we want to leverage that to prove out that the value proposition works and then we can review our manufacturing plans from there.”

Fable is partnering with up-market restaurants to get its products on menus and will soon be offering its mushroom-based meat products in Harris Farm supermarkets.

It also has plans to develop an agaricus-based product made in Australia later this year, which if successful would create more demand for Australia’s mushroom farmers.

“The first step for us is to prove that we can develop a mushroom-based meat alternative that consumers want. Once we‘ve done that I think the industry in Australia is primed to supply mushrooms and help us do the manufacturing.”

Within the industry, alliances have been created between meat producers and the new vegetarian alternatives to meet the manufacturing demands.

“Interestingly, we are even seeing some of the biggest meat suppliers such as OSI Group (producer of patties for fast food chains like McDonald’s), as well as producers such as Tyson Foods (largest US chicken producer) take an active interest in the meat substitute space via co-manufacturing and investments with Impossible Foods and Beyond Meat respectively,” Zelden said.

“Locally there are a handful of existing contract manufacturers that specialise in this space, most of which don’t actively promote this service as they are already at capacity working tirelessly for their partners. However, similar to the US, we are also seeing some of our own leading food and beverage companies, such as Besten Global Food, sign contract manufacturing agreements with plant-based meat companies so it’s likely we’ll see many others follow this trend too.”

However, Zelden warned contract manufacturing can have its limits.

“It’s also important to note that contract manufacturing is fraught with trepidation by many plant-based meat companies given the sensitive nature of their products’ unique IP that so many bigger companies work industriously to emulate. There’s a reason why Impossible Foods and Beyond Meat invest millions in R&D, and naturally they are extremely cautious who they partner with,” Zelden said.

The race is on 

With its product already in Hungry Jack’s burgers, v2food is entering the phase of scaling up its operations with its own $20 million facility. The scale offered by the new facility is also expected to bolster the company’s balance sheet.

“[As a startup] you don’t have the scale initially so your costs are high, but we have a clear roadmap with our facility that we are building in Wodonga to get to scale very quickly. As soon as we are at scale, we will be profitable and that will fund our future growth,” Hazell said.

“We are going extraordinarily fast. We’re investing in assets and in factories as we develop our product and as we develop our processes. So it’s an extraordinarily fast trajectory, but in our view we’ve got no time to lose. This is a developing market.”

The change is coming, according to Fox. Demand for meat alternatives is being driven by consumers who want to reduce their meat consumption for health, environmental, cruelty reasons.

According to Fox, Australia has two options: try to resist the change, or embrace it.

“I think in this case because ‘brand Australia’ is held in such high regard in Asia, we have such an amazing opportunity to lead the trend and lead in growing raw ingredients — whether it’s soybeans, pea and lentils, or in our case mushrooms. To grow that produce in Australia and turn them into delicious meat alternatives that consumers want to eat.”

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