- JUST has been expanding its plant-based egg business, which CEO Josh Tetrick says will lead the company to an operating profit by 2021 and an eventual IPO.
- Making the company’s scrambles and folded eggs more competitive on price with animal eggs is one of the steps JUST is taking to realize that goal, CEO Josh Tetrick told Business Insider.
- JUST has shifted focus to eggs after dividing efforts among a wide range of products and facing allegations that it inflated sales by buying its own product in its early years.
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Reaching profitability is a milestone for any young company. And turning a profit in the food industry, with its famously thin margins, can make reaching that goal even harder.
The CEO of plant-based food company JUST says he sees a clear path to accomplishing this achievement by going all-in on plant-based eggs.
The company, formerly known as Hampton Creek, spent its early years trying to perfect a wide range of plant-based and cell-cultured products, from cake mixes to burgers. It also faced controversies, including allegations that employees bought the company’s products to inflate sales. Federal authorities investigating the claims ultimately ended their queries without identifying any wrongdoing.
Now, CEO and founder Josh Tetrick says the company is dedicated to foods that replicate the taste and texture of eggs. JUST’s ambitions for this niche plant-based product are not just limited to turning a profit by the end of 2021. It also expects the existing strategy to enable the brand to IPO shortly thereafter, Tetrick said.
“We’ve come to the decision that this is even more compelling than when we started,” Tetrick said of the egg category.
JUST’s bottles of plant-based scrambled egg mixture and pre-cooked eggs that consumers can throw in a microwave or toaster now account for 99% of its annual revenue, the company confirmed. It first debuted plant-based eggs in 2017 at restaurants in San Francisco.
It now distributes its products through restaurants as well as retailers like Walmart and Kroger and plans to promote its products in cooking classes in Shanghai beginning in October as part of a push into China.
Tetrick told Business Insider that there are a few goals JUST wants to meet on the way to an operating profit and public-company status. Among them is narrowing the price gap between its products and animal-based ones. On average, consumers spend eight cents per chicken egg, he said. An equivalent amount of product from JUST retails for about 20 cents. However, that is less than half of what the company sold its products for one year ago, Tetrick added.
“Ultimately, we want to be the lowest-cost egg on the planet,” Tetrick said.
Becoming more price-competitive with animal products is a challenge for a variety of plant-based protein makers. Beyond Meat has told investors that it plans to offer some of its products to consumers for less than animal equivalents within the next few years — an objective it moved closer to this year thanks to rising prices for animal meat due to the COVID-19 pandemic and lower per-patty prices on larger packs of Beyond Burgers.
To reduce its on-the-shelf price in the long run, JUST needs to expand production and sales volumes. “If it stays where it right now, we won’t hit operating profit on-schedule,” Tetrick said of JUST Egg’s current cost to consumers.
The company has been expanding its production capacity, buying a facility to process the mung beans it sources from Africa and Asia into useable proteins. JUST is also growing the manufacturing muscle dedicated to mixing and packaging its final egg products with an unlikely partner: a Minnesota processor previously dedicated to working with animal eggs called Michael Foods.
In the early days of the business, “I thought that would be our chief competitor, not a partner,” Tetrick said of Michael Foods. JUST has also partnered with existing food processors in Western Europe and South Korea.
The company is also buying its mung beans in increasing quantities, making per-unit prices cheaper, as well as reaching out to new sources abroad in order to meet demand.
Another goal is to develop eggs mixtures that work well in baked goods and other foods — an application that will take the company beyond supply deals with grocery stores and restuarants to sourcing teams at major consumer packaged good players, the CEO said.
While mung beans have been a source of plant-based protein for thousands of years, JUST relies on specific varieties of the bean for its eggs, Tetrick said.
Early investors from India pointed the company toward growers in that country, where mung beans are common in local diets. But sellers who mixed beans from different varieties and growing conditions made for an unpredictable processed protein that did not gel like eggs, Tetrick said. The company has since found mung bean sources that sell only specific varieties.
“What I really didn’t understand is the complexity inherent in the plant kingdom,” he said.