It’s no secret that alt-meat sales are not setting the world on fire in US retail. But the devil, as always, is in the detail, says the CEO of Prime Roots, which is carving out a successful niche in the deli counter with koji-based turkey, ham, and salami with plans to expand nationally next year.
Unlike chicken, beef, and fish, which many consumers perceive as simple and healthy, deli meats are seen as more processed, making shoppers more open to consider alternatives, says Kimberlie Le, who co-founded Prime Roots with Joshua Nixon in 2017.
“We’ve leaned into being a clean, whole food source of protein, as there are health issues that come with a lot of these very processed meats and nitrates and we’re feeding them to our kids every single day,” she tells AgFunderNews.
“People see chicken breasts as healthy, single ingredient products, so it’s hard to compete with that. But when you’re talking about deli meats, the bar is pretty low on the meat side.”
Prime Roots is targeting the deli counter in supermarkets and foodservice outlets with products that can be sliced on-site, rather than packaged products that sit in the chiller alongside a plethora of other meat alternatives in a part of the store many shoppers walk straight past, she says.
“We’re creating a new category as there generally aren’t plant-based options at the deli, so we have a unique positioning. We’re definitely not seeing what some of the headlines seem to suggest about the [grim performance in the alt meat] industry. We’re priced the same as meat, seeing steady growth in all the markets that we’re in and opening up new territory.
“We made a decision strategically not to go into burgers and nuggets but position ourselves in the deli counters, which is a more premium priced area of the store. We can actually be very competitive there.”
And while some high-profile players in the segment such as Meati raised vast sums of money to aggressively scale up submerged fermentation before building meaningful sales traction, Prime Roots has been taking a slower and steadier approach, says Le.
“We’re hoping not to need to raise in the future, because we are unit profitable.”
‘We’ve had quite a few years to figure out the scaling’
Prime Roots—which like Meati and The Better Meat Co grows its mycelium in steel fermentation tanks fed on sugars—was part of the inaugural Alt:Meat lab at UC Berkeley, says Le. “The premise around the program was how can we find more sustainable protein sources where you don’t have to compromise at a time when consumers are demanding healthier, less processed natural products?”
Prime Roots’ core ingredient Aspergillus Oryzae (or Koji) is “pretty similar” to other sources of mycelium on the market “in the sense that the fungi “take carbon and nitrogen and turn it into protein” in a way that is “less processed” than plant-based options involving protein extraction and extrusion, claims Le.
On the manufacturing front, “We’ve had quite a few years to figure out the scaling,” she adds. “Mycelium-based is not going to be the cheapest option, but the question is how do you transform the material into products that people actually want, as mycelium can make anything.”
During the pandemic, Prime Roots did a lot of consumer testing before launching into deli counters in retail stores in the Bay area about three years ago, says Le. Since then the firm has been expanding in grocery retail and foodservice across the West Coast and is now looking to build a national presence.
How to talk about mycelium
When it comes to labeling and communications, meanwhile, it’s a work in progress, as most consumers do not know what koji is, says Le.
As Quorn discovered when trying to market another filamentous fungus (Fusarium Venenatum), using the term ‘mushroom based’ can land you in legal hot water. Meati also found itself at the receiving end of a lawsuit after using the term ‘mushroom root’ to describe products made from the fungus Neurospora Crassa.
“We did a lot of testing, and we’ve found using terms such as ‘cracked pepper ham-inspired’ actually works a lot better [than koji],” says Le. People who want to know exactly what’s in the product can see that on the ingredients list, she says.
“We never say it’s mushroom roots on labels, although when we talk to people we sometimes say it’s like the mycelial network that gives life to mushrooms so consumers can visualize what that looks like. Our company name—Prime Roots— also alludes to that because it is the most accessible thing that people can latch onto.”
‘We have been very measured’
As for production capacity, she says, “It’s always so tough at the early stage. We’ve definitely gone through periods of not having enough product; that’s kind of part of the journey. But we have built a great operations function and we now have capacity that can be scaled as we need it.
“We’re in a really good place now but we have been very measured, and we’ve been able to do a lot with the 50-something million we’ve raised to date. That’s gotten us from ideation to scaling our operations and getting to market, so we’ve been a lot leaner than a lot of companies in our space.”
The goal, likely “sometime in 2026,” is to expand nationwide, she says. “It’s one thing to have a great product and to get a retailer to want to take it. The next step, how you get it to them, is the most difficult part, and that is what we’re thinking about a lot right now.
“One challenge is that we’re not cleanly retail or cleanly foodservice, so we have to do at least twice the work.”
Further reading:
Infomercial exec Yasir Abdul emerges as prospective buyer for Meati as firm navigates ABC process
Breaking: Ecovative raises $11m, plans aggressive expansion of mycelium-based MyBacon
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