The Burger King Jack Cowin on trying to sell fake meat to the masses

Top players bought in big to the fake meat industry. But, as many companies fail, Burger King’s billionaire boss Jack Cowin remains convinced Australians will want plant-based burgers.

Fast-food franchise king Jack Cowin is at the forefront of the fake meat push in Australia — but it hasn’t been easy goings.

Jack Cowin is the burger billionaire who sells millions of beef patties to happy Hungry Jack’s customers. But, trying to convince them to eat fake meat looms as his toughest test yet.

The 82-year old businessman was an early investor in plant-based meat alternatives after seeing interest in the industry suddenly surge in the US and some of the world’s richest men such as Bill Gates and Jeff Bezos pour millions of dollars in.

What he and his fellow one-percenters have discovered instead, is American and Australians “with big meat eating populations” and a “cattle culture” as Cowin describes it, have a lower base of interest in trying the likes of soy sausages than they’d first banked on.

“One learning experience we’ve had is changing peoples’ eating habits is not easy,” Cowin told The Australian.

There’s been a wipe out of fake meat companies in the past 12 months and those which have survived have cut jobs, closed plants, and pivoted to ready-based meals to find growth.

“Cattle culture” in Australia and the US has hurt the fake meat industry, according to Mr Cowin. Picture: Carl de Souza/AFP

Cowin is behind V2 Food Co which, because of its billionaire backer, was able to take advantage of market weakness and snap up a few fallen rivals, taking its share of the retail plant based meat (PBM) market to 30 per cent in 2024.

“Some companies have fallen by the wayside, but our business continues to grow,” says Cowin. “This is an investment that will continue to grow if you don’t run out of money. What happened to a lot of these people that have fallen … is they didn’t have that backing, so they’ve gone broke and we’ve absorbed some of those businesses, which helps us grow.”

It’s a Warren Buffett-style confidence in an outflowing tide wgucg comes from having many years of good business decisions behind him.

V2’s books are definitely looking better, albeit from a low base. The company was founded in 2019 as a joint venture with the CSRIO and is yet to make a profit. Its losses have narrowed this year to $16m from $44m in 2023.

In its mandatory reporting to the securities regulator in December, V2 said revenue was “in line with the prior year, which is a positive outcome in context of the sharp decline of 15 per cent in the PBM Category over the financial year”.

“Profitability is not necessarily the answer,” Cowin says without a hint of humour, although companies such as The Aussie Plant Based Co, which entered administration in October, may disagree.

“If you have any growing business, you have to reinvest in new markets. We endeavoured to get into China, which didn’t work. It’s (just) a longer and slower road than what had been anticipated.”

Real meat

He wasn’t alone in getting it wrong. Estimates for the size of the plant-based market have been cut across the board. Four years ago think tank Food Frontier and Deloitte predicted it would reach $3bn in Australia by 2030.

Now, its latest forecast is for the market to be half the first estimate, reaching a still-noteworthy value of $1.65bn by 2033.

V2 Food’s plant-based sausages. Picture: Peter Hemphill

Food Frontier chief executive Dr Simon Eassom says a big part of the reason the market has failed to thrive is because people have tried a schnitzel or fake chicken breast which either tastes or feels bad and it’s put them off trying again.

“The big challenge is people try a bad product, and then don’t return, and they tell their friends, ‘I tried that stuff — it’s rubbish’,” says Eassom. So they’re buying the crap product, whereas if they bought the best product, they’d go ‘oh wow!’.”

The wide range in quality is not helpful for a fledgling industry aimed at people who are trying to reduce their meat consumption for health or environmental reasons, rather than at vegetarians or vegans who may already eat tofu or a wholefoods-heavy diet.

Let’s face it, “throw another genetically modified soy-based sausage on the barbie,” just doesn’t sound quite right. It certainly needs to taste right.

“Taste and texture are crucial,” says Eassom. “It’s one thing to make a burger. It’s quite another thing to make a chicken chunk that holds up and is robust enough to put into a curry … (Sometimes) within five minutes the whole thing has disintegrated and you’re eating mush.”

Eassom is remarkably frank about the problems in the industry he clearly loves and represents. The doctor and his wife don’t eat meat and he says there are many plant-based substitutes which are so good dinner guests are unaware it’s not “the real thing”.

His Christmas certainly does not involve a turkey.

“Mid-morning on Christmas, I always make a shakshuka and I make it with Beyond Meat’s, hot Italian-style sausages instead of chorizo. We will have plant based meats in whatever we do.”

Supermarket pricing power

The problems with plant-based meats extend beyond the consistency of product.

The PBM industry also has a “chicken and egg” issue with supermarkets, according to Eassom, because it doesn’t yet have the volume of sales to help offset production costs.

The product is a “discretionary spend” item which many people aren’t even trying — this is before they get to taste and texture issues — because the cost of purchase is too high.

It’s a factor clearly exacerbated by the cost of living crisis.

Retailers are telling manufacturers if they want their product stocked, they want 55-60 per cent of the margin until the volume of sales increases, he says.

“It’s a bit of a chicken and egg. The customer isn’t able to make a choice about whether they want the product because of its taste or flavour,” says Eassom. “They’re saying ‘this is ridiculous. I’m not spending $8.50 on two burgers when I can buy a family pack of cheap, big burgers for $6,’ so they’re just not trying the product.”

He compares the situation to Europe, where German discounter Lidl sells plant-based mince side-by-side with beef mince for the same price, or the UK, where plant-based meats are also growing in demand.

Lidl Great Britain plans to triple its plant-based products after seeing a 12 per cent increase in demand over the past year and was the first UK retailer to set specific plant-based protein targets.

Woolworths says demand for plant-based products had grown by more than 50 per cent in recent years, but softened at the start of 2024, whereas demand for products such as tofu have risen.

“While plant-based proteins continue to grow in popularity, red meat remains a firm household staple for the majority of our customers,” said a Woolworths spokesperson.

It’s a similar story at Coles, where growth in the plant-based meat category has been flat over the past 12 months, and the supermarket doesn’t expect a lift in consumption in the foreseeable future.

McDonalds has also released meat free burgers. Picture: Jason Edwards

Methyl cellulose ad

After “lots of hype,” according to Cowin in the early days, valuations for synthetic meat companies have now gone to the slaughterhouse.

The US has seen the greatest bloodbath when it comes to the PBM industry. Beyond Meat was an early winner in the synthetic meat business. It was backed by Bill Gates and Leonard De Caprio and cinched partnerships with KFC and McDonalds.

The company listed in 2019 and its shares surged 163 per cent on the first day to give it a market value of US$3.8bn.

But, the market suddenly soured when the meat industries fought back, with campaigns questioning the health benefits of lab-based foods. Beyond Meat is now worth US$242m.

Just a year after it listed, the Center for Consumer Freedom ran an ad during the Super Bowl — the average cost for a 30-second slot was US$5.25m — where children in a spelling bee were asked to spell methyl cellulose and antifreeze agent propylene glycol, two common additives in synthetic meat.

The call to action “If you can’t spell it or pronounce it, maybe you shouldn’t be eating it,” marked a shift in sentiment.

This is certainly a fair question for any cook to ponder.

Eassom says the problem with this is people are comparing the ingredients list of a prime steak, which should just say beef, with the list for a plant-based sausage or schnitzel.

Taking the example of methyl cellulose (also known as 466), a quick search on the internet reveals it’s included in a multitude of foods including chocolate Up & Go, Mission wraps, and the range of Herbert Adams pies (made of real meat). Both Coles’ and Woolworths’ basic beef sausages contain a range of additives too.

Plant-based meats were also marketed as better for the environment in the early days, when compared with methane emitting cow burps.

The reality is there are pros and cons on the environmental side. Most PBM comes from soy and the soy industry has been battered by revelations about the amount of deforestation around the Amazon which takes place to plant soy crops.

“There are problems wherever you look, when it comes to food,” says one food expert.

The future for fake meat

Whatever you think of Jeff Bezos, Bill Gates or our own Canadian-born Cowin, they all have displayed a crystal-ball ability to know what people will want in the future.

As said above, even Food Frontier’s dramatically downgraded estimates for the size of the plant-based meat industry in Australia remains a hefty $1.65bn.

Someone will make money out of that.

Cowin’s V2 looks very likely to survive and maybe even thrive. He sells his PBM into his Hungry Jack’s business with the “Whopper Rebel,” of which he declares I “would not be disappointed in the taste.”

And, through the Hungry Jacks chain, Cowin has vast corporate knowledge as a manufacturer, meatpacker and food exporter.

As an aside, over in the US, Burger King (which Hungry Jack’s is the Australian version of) sells Impossible Whoppers made using Impossible Food’s plant-based patties.

Another who seems to be thriving is Evan Tsioukis, the owner of Flexitarian Foods in Melbourne, which manufactures under its own labels and also white labels for both Woolworths and Coles under the Plantein and Nature’s Kitchen brands.

While V2 has the benefit of a billionaire backer and a front door entrance into one of Australia’s biggest fast food chains, Flexitarian Foods has the benefit of being part of a family run business, NMPS Food Group, which already supplies the likes of (real) chicken schnitzels, nuggets and potato cakes to the supermarket chains.

This means its distribution is already tied up in a neat bow.

“We’d been supplying all the supermarkets for many years with animal protein products, but there were meat eaters who were looking for alternative proteins,” says Tsioukis.

Tsioukis is a food technologist by trade and started looking into non-meat protein sources after his father passed away from bowel cancer.

“I thought, let’s look at changing our lifestyle a little bit,” he says.

“It’s good to have a balanced diet, which means you can have a little bit of meat, you can have veggies, you can have salads, it’s good to have a wide range of foods. So, we started looking at different products and developed a veggie burger, and put that in Woolies in 2016 and saw some really good numbers.

“At the same time, we started hearing noise out of the US, where manufacturers were making meat products out of different plant proteins, but they were attracting the meat eaters, and we started developing that way.”

His company now sells burger meat, meatballs and mince at prices in-line with meat pricing. It’s something the company can manage because the PBM products share the same management, administration and distribution chain as the larger NMPS business, which he also runs.

It’s not so surprising then that Flexitarian Foods is running at a profit. Tsioukis won’t reveal the size and is also deliberately vague about revenue, which he says is between $10 and $20m.

It would not be possible to find this from an ASIC search because it’s not broken out from the rest of the broader company. It equates to about 20 per cent of revenue earned from the “meat” part of the broader NMPS business.

As for the failure of many of his rivals, Tsioukis agrees flavour was definitely a problem, as was over-marketing.

“A lot of companies were spending 50 per cent of their total revenue on marketing. We have never done that. We let the products speak for themselves and pass those savings on to the consumers,” he says.

And as for the much discussed pricing pressure from the supermarket chains, Tsioukis just doesn’t agree.

“We trusted in the retailers, Coles and Woolies and as well as Aldi to do what they’re good at, which is retail. We know how to manufacture but we let them retail it. So without them, we wouldn’t be where we are today.

“They have helped us out tremendously in this space and backed us and there’s different people within these big organisations that really have supported this movement as well.”

As for Cowin, it’s clear he’s relying on his own business acumen. And, while he says it’s not always about profit, the Hungry Jacks billionaire clearly likes to make one. His interest in the sector certainly didn’t come from a personal, enlightened desire to eat less meat.

“I eat anything,” he laughs. “The great majority of meat that I eat would be real meat, but I’ve also been tricked into testing product and saying which one’s the real meat, and I’ve got it wrong on occasion, which brings great joy and delight to some of the product development people.”

Originally published as The Burger King Jack Cowin on trying to sell fake meat to the masses