TOKYO -- The Japanese company behind soy-based Miracle Meat has attracted more than 3 billion yen ($27 million) in funding from a range of businesses, underscoring the broad interest in the up-and-coming industry of meat substitutes.
Just this August, Mitsubishi Chemical Holdings became the 23rd company to invest in Daiz. The private placement for an undisclosed sum marked the chemical company's first time buying into a Japanese startup.
Daiz sells Miracle Meat to food manufacturers and restaurant chains, employing proprietary technology to come closer to the taste, texture and nutritional value of the real thing. Mitsubishi Chemical will also develop fats and oils to improve the texture of plant-based meat.
Ten other companies have formed capital and business tie-ups with Daiz. Founded in 2015 in the southern Japanese city of Kumamoto, it once went by Daiz Energy and fully launched its plant-based-meat business in late 2019.
Demand growth has driven the deal-making. Amid rising interest from retailers and restaurants, Tokyo consultancy Seed Planning expects the Japanese market for plant-based meat to jump by a third from 2020 to 46.3 billion yen in 2025 -- and to more than double to 78 billion yen in 2030.
Product development is part of Daiz's two-pronged strategy. Issues with texture and flavor have hampered acceptance of plant-based meat. Daiz has made advances on both fronts with its technology, and the partnerships will help create an even better product.
Daiz agreed in August to a capital and business tie-up with T. Hasegawa, a major Japanese supplier of food flavors and fragrances. The startup now looks to improve on Miracle Meat's aroma, an area where it had not invested much until now.
Last November, Daiz agreed to a 100 million yen investment from Ajinomoto, whose seasonings the startup will use to upgrade its own offerings.
Reaching more clients is the second part of Daiz's strategy.
Daiz announced a 100 million yen investment from Marubeni in December. The trading house will help the startup expand Japanese sales channels and backed the establishment of a U.S. unit in May so that Daiz can start selling there next summer.
Daiz is also partnering with Kanematsu, a trading house with a strong footing in the food industry, to propel its overseas expansion.
Roughly half the Japanese market for plant-based meat is controlled by rival Fuji Oil Holdings. But Daiz has nevertheless carved out a place for itself through aggressive tie-ups. Miracle Meat has been available at Yokohama-based chain Freshness Burger since 2020, as well as in deli offerings of retailers Aeon and Life since this spring.
Plant-based meat is also on a roll outside Japan as consumers hunger for healthier and greener alternatives. Seed Planning estimates that the global market will grow by eight times to $88.6 billion from 2020 and 2030.
Big American fast-food chains are hopping on the fake-meat wagon. Beyond Meat supplies plant-based "chicken" to KFC, while Impossible Foods sells patties to Burger King.
Beyond Meat debuted on Nasdaq in May 2019 and has reached a market capitalization of more than $7 billion. Though the California-based company still trails Tyson Foods, the gap could narrow as plant-based offerings gain ground.
Daiz is valued at around 8.6 billion yen in a Nikkei estimate. Funds raised from tie-ups will go toward expanding output.
The company expanded its Kumamoto Prefecture factory this June, quadrupling annual capacity to 4,000 tons, and aims to build an American plant in 2022.
An initial public offering is also in the works. "We've already started internal preparations and aim to go public by 2023," founder and President Tsuyoshi Ide says.