Fable Food Co’s founder on $12 million raise, US expansion, and why shrooms trump all alt meats

Meat alternative startup Fable Food Co has secured a US$8.5 million ($12.2 million) Series A raise. Part of this fresh cash injection will be used to expand into the US, despite recent challenges large faux meat companies are having in that market.

But co-founder and CEO Michael Fox isn’t worried.

Fable Food Co was first launched in 2019 and focuses on ‘meaty’ alternative meats made from mushrooms. Since then it has received $6.5 million in seed funding, featured in Heston Blumenthal’s restaurants, and become a staple on the menus of Aussie chains like Guzman y Gomez and Grill’d. You can also find their products in boutique grocers such as Harris Farm.

Now it has scored a $12.2 million in Series A led by K3 Ventures and with participation from Greg Creed (former global CEO of fast food empire YUM!), Blackbird, AgFunder, Aera VC and others.

In addition to product development and scaling up its output, a big focus of the raise will be on accelerating expansion into the UK and US.

Fable Food Co confident despite alternative meat challenges in the US

It’s been a difficult 12 months for the tech sector, with staff being laid off overseas and in Australia. And this has also hit big players in the alternative meat industry.

Back in October 2022, Beyond Meat announced a 19% reduction in staff. And at the end of January, Impossible said it was planning on reducing its headcount by 20%.

But Fox is confident in Fable’s push into the US market and its ability to go up against the current competition.

“The current generation of products, typically the ones made out of soy and pea protein — the struggle they’re having is that they’re just not meeting consumers needs on taste, price and health,” Fox said.

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Fox says that while many meat alternatives taste good, they’re not rated as well as meat in most blind tastings. They also tend to still be more expensive than meat, and have a level of processing that leads some people to conclude that they’re not as healthy as meat.

“Our take on the market is that’s why those products are struggling,” Fox said.

“Fungi and mushrooms are more closely related to animals than they are to plants…  there’s a whole bunch of similarities between mushrooms and and animals, particularly in their meat.

“Mushroom cells are made from chitin. You can cook that to get a texture that’s very similar to meat. Cook them in the right way and you can amplify their glutamates and meaty umami flavours. It’s much easier to turn a mushroom into something that tastes like meat.”

Another advantage that Fable sees with mushrooms is their cost of production, an advantage the business has over competitors in the US which champion legume-based alternatives.

“It’s much easier to turn a mushroom into something that tastes like meat than a soybean or pea,” he said.

“They’re far removed from meat, you’ve got a lot of work to do to get the taste and texture.

“You’ve got to do a lot of processing to get it into something like meat. That is expensive, which pushes the price up.”

Fox also claimed this level of processing makes it harder to maintain micro nutrients which can improve a product’s healthiness.

“We think by using mushrooms we can produce products that taste better than meat,” Fox said.

“We don’t have to do a lot of processing and mushrooms are very efficient to grow so we can produce the products cheaper than meat.

“A lot of our products we do sell in the market at less than the cost of the equivalent animal meats.”

Looking into the future, Fox also cited the land-use efficiency of mushrooms compared to animals raised for meat — and that’s before you even get into how much water the animal industry uses.

“Mushrooms are about 1200 times more land efficient than beef,” he said, claiming if Fable Food Co’s 41 hectares of farming operations were dedicated to grazed beef cattle, it would barely feed four people.