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Will this new substitute scramble the egg market?

April 7, 2013

Farm fresh eggs

According to the American Egg Board, “If it ain’t eggs, it ain’t breakfast.” This is the slogan that was devised in the 90’s to combat their loss of stomach-share to the growing popularity of breakfast cereals.

But the “incredible, edible egg” may soon be under siege from another threat — Hampton Creek Foods. This food startup from the Valley wants manufacturers and consumers to move “beyond eggs,” and they think they’ve got a product that will leave egg-lovers with few excuses not to switch. But before learning more about their product it may be useful to know what makes an egg so incredible, and why there’s good reason to think this market is ready to be scrambled.

What makes an egg so incredible?

Despite its unassuming form, you’ll often find an egg, or some part of it, at the center of most culinary miracles. The application of its whites are responsible for fluffy white peaks that are the stuff of meringues and souffles, and it’s yolks are the unctuous glue that binds together the sinfully delicious Hollandaise or custard. The egg’s proteins and fats are indispensable elements of modern cuisine. And even when they’re simply scrambled, eggs are pretty damn good.

“I have had, in my time, memorable meals of scrambled eggs with fresh truffles, scrambled eggs with caviar and other glamorous things, but to me, there are few things as magnificent as scrambled eggs, pure and simple, perfectly cooked and perfectly seasoned.”

James Beard, ‘On Food’ (1974)

So why get rid of it?

A hen today will lay approximately 265 eggs in a year, producing a pound of eggs on less than three pounds of feed. So it’s easy to see why our ancestors chose to domesticate these jungle birds of east Asia — they produce a regular supply of calories at a bargain rate. But technology has come a long way since then, and there’s a horde of eager entrepreneurs that are looking at food, and the task of feeding billions in an entirely new light.

Amol Deshpande of Kleiner Perkins frames this opportunity by looking at the big picture: “If you were starting from scratch, figuring out a way to deliver protein to human beings you wouldn’t use an animal. Science would tell you to do something different.”

How did Hampton Creek get its start?

Founder and CEO Josh Tetrick is a newcomer to the food industry. After finishing college he spent a number of years in Africa; he worked at the UN in Kenya, then directed his efforts toward reforming investment in Liberia. His resume, though impressive, is noticeably devoid of food.

So when I asked him how Hampton Creek got its start Josh explained that they began modestly, as most startups do. With the help of a chef they began by taking off-the-shelf ingredients and experimenting with different formulations. When their team of four approached Khosla Ventures they had prototypes in hand. Rather than laughing them out of the office they bought into Josh’s “big bet to change the world.”

From the very beginning Josh’s team has relied on “smart identification” of plant proteins and rapid prototyping, which he says allows Hampton Creek to remain “capital light.” Furthermore, they don’t own the manufacturing equipment that’s used to make their products. They outsource that in a contract manufacturing process that they negotiate by the pound. All of this allows them to remain laser focused on innovation.

What’s better than an egg?

Josh and his team have no interest in supplanting the free range eggs you’ll find at the farmers market. He’d be quite pleased if those models of production were the norm, but they’re not. Most eggs are laid by hens that spend their entire life in battery cages. With a bit of science, ingenuity, and elbow grease he thinks we can do a whole helluva lot better.

The ingredients in the faux egg mix include peas, potatoes, sunflower lecithin, rapeseed, and natural gums extracted from tree sap. Though they’ve done a great job building a consumer-facing brand Josh explained that currently 80% of their sales are directed toward manufacturers like General Mills. The remaining 20% is expected to come from consumer facing products like Eat The Dough, which cleverly capitalizes on every child’s desire to eat cookie dough before it gets popped into the oven. Without eggs there’s no need to worry about salmonella.

Hampton Creek Foods Cycle

Hampton Creek Foods

Creating a new product like this is no small feat. Donning an apron may have gotten him through the prototype phase but to grow the business he enlisted the help of some folks who have been there and done that. Namely Mattson and Delve. Mattson provided a framework for the endeavor as well as the means to “rev up” production, while the “wickedly talented” people from Delve provided the culinary braun.

When I asked Josh “What’s next for Hampton Creek?” he happily explained that his team is excited to explore other verticals while they continue to focus on eggs. He cited plant whey or pork substitutes as possible first steps.

Which came first, the chicken or the egg?

Startups like Hampton Creek and Modern Meadow are using science to reinvent food, and venture investors like Dave McClure and Khosla Ventures are eager to provide these entrepreneurs with the resources they need to disrupt stodgy, old markets.

The question of “which came first?” is an age-old riddle, but for the industrious entrepreneur or socially conscious manufacturer the question’s all wrong. They should instead be asking themselves, what will be next? If they don’t, then they may soon go the way of the Dodo.

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