Pete Speranza, who co-founded General Mills’ venture arm 301 Inc., has joined Unovis Asset Management as operating partner to help scale businesses in the alternative protein sector.
Speranza has more than 20 years of CPG experience ranging from supply chain enhancement, ingredient procurement, as well as sales and marketing.
Creating 301 Inc. has not only enabled General Mills to participate first-hand in early consumer trends through investing in companies such as no cow, Rhythm Superfoods and Farmhouse Culture, but has also allowed Speranza to develop a great appreciation for young entrepreneurs launching sustainable food businesses from scratch.
“It is a probably the hardest job in the world knowing the intimate, personal relationship consumers have with food,” Speranza recently told me.
“The amount of sacrifice and patience that is needed requires unique talent, and while you are managing the chaos, you still have to be able to listen to your consumers and follow the problems they are solving.”
Better analysis on processes and costs
The opportunity to join Unovis Asset Management came naturally to Speranza, since he has personally known Chris Kerr, the founding partner of the New York-based investment firm, for nearly a decade.
In addition to being an early investor of Beyond Meat, Unovis currently has about 40 fast-growing alternative protein companies in its portfolio, including Geltor, Alpha Foods, Memphis Meat, Starfield Food & Science Technology (星期零), and Good Catch, where Kerr remains as executive chair.
Kerr describes his team as a “rag-tag bunch, [who’s] good at finding little gems and getting them polished up,” since Unovis is primarily focused on seed and early-stage investing.
However, the accelerated growth of the plant-based market beginning around 2016 has pushed Unovis to look beyond its previous strategy — co-investing with other firms, such as General Mills, Greenleaf Foods, and Bumble Bee — to ensure companies’ continuous upward trajectory.
Kerr told me: “We needed seasoned veterans under our umbrella… and Pete brings that talent, network and reach into our house.
“Many start-ups make early decisions that can be really problematic and are hard to unwind later. Pete helps us predict that trajectory at a much earlier point in the engagement process — whether that is deal structure, operations scaling, brokerage, marketing, international JV, or exit plans, it is a longer-term point of view and one that brings a very practical and focused approach to plan execution.”
Additionally, Speranza explains how a growing demand for plant-based foods requires well-seasoned analysis of the processes and costs used to bring them to market.
“While Unovis had been focusing on the science of cellular agriculture, we are now turning our attention to the engineering efforts, which is where I bring my skills as an operator,” Speranza said.
Competitive advantages and future IPOs
Speranza believes the current COVID-19 pandemic will accelerate certain areas of interest, including proactive nutrition, animal wellness, and the ability to feed the growing worldwide population.
“COVID impacted our method of gathering food,” he said. “There will be some areas, like restaurants that have been hit hard. On the flip side, ambient and frozen food offerings saw a huge spike. Heath awareness has also increased, which improves the outlook for plant-based foods in general.”
In the meantime, the increasingly crowded category is driving later entrants to find new points of differentiation to stand out in the market.
Speranza added: “It will always be a combination of technology and culinary experience to create a competitive edge. The ability for these companies to utilize technology for superior texture and nutrition profiles, while minimizing cost of goods is a key for long-term success.”
He notes how food and beverage companies always need to start with their taste experience for consumers to join their missions.
“This is where culinary attributes are the secrete sauce,” Speranza said, “when a product is delicious, consumers will spread the word and things will grow organically.”
Moving forward, the Unovis team expects more companies focusing on taking animals out of the food system, including those currently under its wing, to go public as consumer interest in the sector sees no sign of diminishing.
IPOs made by plant-based companies had not historically been considered viable until Beyond Meat went public in 2019, according to Speranza.
“We are also seeing a rise in SPACs that are effectively pre-registered IPOs. These are generally used when previous valuations were set on the high side, and an IPO ends up being the best way to keep the exit valuation high enough to allow all investors to see a gain,” he said. “M&A activity will certainly pick up as well.”