July 22, 2020

By Lynda Kiernan, Global AgInvesting Media

NUGGS, a New York-based pea protein chicken nugget startup founded by 19 year-old Ben Pasternak, announced its official launch aligned with a $7 million funding round led by McCain Foods.

Also participating in the round were Rainfall Ventures, Greylock Discovery Fund, Maven Ventures, NOMO Ventures, M Ventures, and ACME Capital.

MTV founder and iHeartMedia CEO Bob Pittman, Casper founder and COO Neil Parikh, and former Tumblr President John Maloney also made individual investments in the company. 

After a year in development, NUGGS has created a chicken nugget made from texturized pea protein that are free of wheat, eggs, dairy, soy, cholesterol, and antibiotics, but with 22 grams of protein per serving have more protein than poultry-based chicken nuggets, and at 180 calories per serving, are lower in calories also.

As NUGGS’ products are currently only available direct-to-consumer, the startup’s development process is unique whereby it is a constantly evolving process based on consumer feedback.

“NUGGS is an incredible product in itself and a very tasty chicken nugget simulation,” said Mauro Pennella, chief growth officer at McCain Foods. “Furthermore, the NUGGS team’s approach to fast, iterative innovation, based on constant consumer feedback is a great way to create products people love.”

The partnership with McCain signals varying advantages for both parties. By partnering with McCain, which is a long-established, global leader in frozen french fries and potato products, NUGGS will have access to an extensive and deep-rooted supply and distribution system and network. McCain’s production expertise will also likely play a role in achieving scale and reducing cost of production for the startup.

For McCain, which stated that the deal aligns with its long-term sustainability priorities, this partnership with NUGGS also adds the company to the list of large CPG food manufacturers exploring venture capital investments as a means to meet rapidly-changing consumer expectations and demands for product innovation.

“We believe the combination of the NUGGS approach and McCain’s production and commercial expertise will accelerate the brand’s growth and deliver market scale,” said Pennella.

While plant-based meat, mostly in the form of burgers, has seen meteoric growth and popularity, plant-based chicken nuggets have been harder to crack. However, NUGGS is not the only startup working for market share.

In April 2020 Seattle-based Rebellyous Foods, whose business centers on plant-based chicken tenders, raised $6 million through a Series A co-led by Clear Current Capital, Fifty Years, CPT Capital, and Liquid 2 Ventures.

The reality of COVID-19 has also made now an opportune time for investment in plant-based meat startups.

“Bird flu, swine flu, and now COVID-19 demonstrate that keeping large numbers of animals in close contact with one another presents a tremendous risk for global health,” said Christie Lagally, founder and CEO, Rebellyous. “However, to transition away from our heavy dependence on meat, it’s critical that we make plant-based meat affordable and widely available…”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.