Interviews

Daring Foods: “Plant-Based Meat Companies Are Facing an Important Question, “Who Do You Want To Be?””

Daring Foods is the #1 unbreaded plant chicken brand in both the natural and multi-outlet grocery sectors, holding 44.9% market share in the US, according to SPINS. The company focuses on whole-muscle plant-based chicken products, including wings, pieces, and a range of frozen entrees. Daring Foods products are currently available in over 15,000 doors across the US at retailers such as Walmart, Target, Albertsons, Whole Foods, Sprouts, and many more.

Jeff Gendelman took over as CEO in April of this year, transitioning from his role as COO. In this interview, Jeff explores Daring’s impressive growth in 2023, driven by new product launches and strategic pricing. He also discusses the company’s approach to supply chain management, key partnerships, and goals for 2024.

When you transitioned from COO to CEO in April 2024, what were your first priorities?
My first priority is to focus on our team because nothing happens without the team. Anytime there is a CEO change, it’s important to rally the troops and provide visibility to the path forward. I’ve been with Daring for over 3 years, so the team was already familiar with our ways of working. We are focused on profitability while maintaining measured growth.

We have the best product in the world in both taste and texture, a wonderful brand that stands out on the shelf and extensive frozen distribution in over 15k doors. Now, we are securing our pathway to breakeven, which is difficult to do for any nationally distributed frozen CPG business, let alone plant-based meats. There is a minimum scale threshold required, combined with a relentless approach to unit economics and the team is locked in.

Daring saw a 24% increase in revenue in 2023. What were the primary drivers behind this growth, and how do you plan to sustain or exceed this growth rate?
In 2023, we saw strong distribution gains and launched 2 new SKUs in frozen pieces (Teriyaki and Buffalo Wings) and 5 in frozen entrees, including a collaboration with Fly by Jing, using their amazing chili crisp to create a delicious Plant Chicken Fried Rice Bowl. We were able to do this in very challenging marketing conditions, with the frozen plant-based meat category down -7% YoY.

Despite category headwinds, our success comes from our product positioning. Daring delivers clean plant protein with short and familiar ingredient statements. Most of the competition doesn’t taste good and has long, unfamiliar ingredient statements. I believe the future of this category needs to be more aligned with our philosophy so we can bring back consumers who left the category in 2021.

In the last few months, we have experienced a +40% increase to velocities on a U/S/W basis relative to FY 2023. We were very strategic in finding the right price point on shelf while still protecting our “premium, but attainable” positioning. Many of the long tails of the venture-backed brands have also come off-shelf.

As I think about the broader growth outlook, I expect Daring to continue realizing velocity growth. In addition, there are at least another +10k doors of whitespace in the US that we want to go after. We average ~3 SKUs per door with 5 SKUs to offer on shelf, and we’ll be thoughtful with our approach to innovation to ensure it is aligned with our focus on profitability. We’re focused on sustainable growth and building a great company.

Daring Foods frozen entrees
© Daring Foods

The plant-based category has seen many operational changes in the past year. What specific challenges has Daring faced, and what steps are you taking to address them?
The supply / demand curve of this category was misaligned from the outset. Too much supply, not enough demand, combined with a highly fragmented co-manufacturing network. In my opinion, plant-based meat companies are facing an important question, “who do you want to be?”

Do you want to be an asset-light brand with established demand and technology, or do you want to own your own manufacturing? If you want to own both brand and manufacturing before establishing demand, it can be a +$500M problem. Daring’s positioning is the former while also developing exciting, new technologies led by our SVP of R&D and Innovation, Paul Neumann, that we intend to bring to contract manufacturers.

CPG is not tech and cannot be optimized overnight. We’ve learned it’s better to execute small wins that have high aggregate impact than wait for homerun supply chain outcomes. The market dynamics are evolving too quickly to wait. We made significant progress in 2023 to our network and now seeing material benefits on the P&L.

I believe Daring is very favorably positioned. We have proven demand and technology that very few independently owned brands have, and we will continue to explore strategic, operational partnerships.

Daring Foods has become a leader in the plant-based chicken category. What key strategies contributed to this success, and how do you plan to maintain and expand this position?
A lot of our success is a function of our product positioning. We are the #1 player in the US for unbreaded plant-based chicken. One of the main reasons consumers eat plant-based is for health reasons. However, most of the products in the category have long, complicated ingredient lists that consumers don’t recognize or feel good about eating.

Our Original Pieces have only 6 simple, high-quality ingredients – Non-GMO soy protein, water, salt, plant-based oils, spices, and natural flavor. Our pieces have a highly unique texture which mirrors that of whole muscle protein. Much of the competition uses ground-up texturized proteins that you find in a low-quality chicken nugget.

Our strategy is to deliver tasty, high-quality, clean protein. We think “clean protein” has the highest consumer appeal and will be the biggest driver of growth in the plant-based meat category.

Daring Crispy Breaded Chicken
©Daring

What motivated Daring Foods to venture into the frozen entrée market, and how has this new product line been received by consumers and retailers so far?
The Daring Frozen Entrees have been received really well by retailers and consumers alike. Our entrees were accepted in Target and Publix in 2023 and are now also available in Whole Foods. Later this summer, they’ll also be available at Albertsons-Safeway. We’re really thrilled by how excited retailers are, and we’re seeing that same excitement among our consumers.

We wanted to launch Frozen Entrees because we saw a huge gap in the category. Frozen Entrees are a +$9B category, but the better-for-you segment is ~$1B, and there are no clean-label, high-protein frozen entrees with plant-based meat. Daring Frozen Entrees are all incredibly tasty with +16g of protein and a really clean ingredient list that you feel good about eating and actually enjoy.

Tell us about the current product portfolio – which are the biggest sellers and what innovations will come next?
We have two product ranges – Frozen Plant Chicken Pieces and Wings – and Frozen Entrees. Within our Frozen Pieces and Wings line, our Original and Cajun pieces are our top sellers – but we expect Buffalo Wings to be a top SKU for us. It’s really delicious – spicy and tangy. Within Frozen Entrees, our Penne Primavera and Fly by Jing meals are both top items for us. Consumers are really responding to these flavors because they are meals you actually want to eat, and you feel good about putting in your body. Later this summer, we have two new Frozen Entrees that we’re really excited about, and we’ll announce at a later date.

We’ll continue to lean into what’s working great for us, which is the frozen plant chicken set, and we’re excited to bring different formats and technologies to market in the future.

Can you share some insights into your recent partnerships with restaurant chains and foodservice providers?
Daring uses foodservice to test, learn, and drive trials with consumers. For example, we launched unbreaded and breaded chicken patties in Foodservice in 2023. Testing new formats in food service gives us insight into what might work in retail.

We have some really exciting partnerships in the US with Amy’s Drive Thru, &Pizza, and Bluestone Lane – to name a few! We also launched a partnership with St. Hubert in Canada. Consumers trust these restaurant brands and so they’re more comfortable trying something new in that environment. They taste our products there, and then they’re more likely to try our products at home.

We also find that brand really matters as the category is evolving. I imagine this is why Impossible is having success with their SBX breakfast sausage and Whopper at Burger King relative to Mcdonald’s non-branded McPlant Burger.

There is significant opportunity in the K-12 and C&U segments. Each day in K-12, there are nearly 30 million student meals in America. At 2.5 ounces of protein per serving, that’s almost 1B lbs of protein each year. Daring is well positioned to deliver clean proteins to children in school, and with greater economies of scale, we’ll be able to eventually do this cheaper than animal protein. This is when volumes will make sense for vertical integration.

Daring Foods
© Daring Foods

What are your plans for expanding Daring Foods’ market reach internationally? Are there any regions that you see as key opportunities for growth?
The Daring brand seems to resonate globally, which provides strong confidence that we can eventually take Daring international. We’ve received interest from Asian, European, and Middle Eastern markets. We’re based in California, have a pulse on cultural moments as evidenced through our partnerships, and our packaging stands out on shelf. We’ll look first to our northern Canadian neighbors for retail expansion. We want to build off a successful partnership with St. Hubert and launch in Canada.

Looking ahead, what are your top strategic goals for Daring Foods in 2024? Where do you see Daring in the next few years?
Optionality is key for any business, so we are focused on fundamentals that support optionality. The best way for us to do this is by securing our pathway to profitability while maintaining measured growth. We have all the necessary ingredients to see Daring succeed in this next chapter.

We’ve built a great brand, have top quadrant velocities for our best SKUs, have #1 share in the unbreaded chicken space, wide distribution, and we’re focused on the right business fundamentals. The brand translates internationally, and the name has wonderful transferability to new product categories. Daring deserves to be a household name in CPG, and I couldn’t be more excited for our team to deliver this.

Bookmark
See all bookmarks

Share