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New Wave Foods launches plant-based shrimp with Tyson backing

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Yahoo Finance’s Alexis Christoforous and Mary McGovern, New Wave Foods CEO, discuss growth as the company completes its $18M series A fundraising.

Video Transcript

ALEXIS CHRISTOPHOROUS: Well, if 2020 was the year of the plant-based burger, then 2021 could be the year of plant-based seafood. New Wave Foods announced today it just closed an $18-million series A round for its plant-based seafood alternatives. Investors include New Enterprise Associates, Evolution VC Partners, and Tyson Foods, which owns a minority stake in the company.

Joining me now is the CEO of New Wave Foods, Mary McGovern. Mary, thanks so much for joining us, and congratulations on the series A round. Tell us what you plan to do with the money you've raised now. What will that allow New Wave Foods to do?

MARY MCGOVERN: Well, thank you. Yes, closing the $18 million series A puts us in a position to enter the market with great force. We are about to come in with a very aggressive go-to-market plan. We're coming in through food service where 80% of shrimp is consumed. The shrimp market itself is an $8 billion market, so we are really entering some huge white space with an extraordinary product that has the taste, the texture, and the versatility of shrimp. So we are very excited. We have deemed 2021 the year of the shrimp.

ALEXIS CHRISTOPHOROUS: OK. So tell us what-- I'm a big fan of shrimp, by the way. What is the New Wave shrimp made of, exactly?

MARY MCGOVERN: Well, New Wave shrimp is 100% plant-based. The cornerstones are, first of all, seaweed. So there is a seaweed derivative that gives it its crunch. And it's also the protein. The plant protein is mung bean. So those are two of the anchors of our product.

ALEXIS CHRISTOPHOROUS: So right now, you've got shrimp, plans for other products, I understand. Will we start seeing plant-based crab and plant-based lobster down the road?

MARY MCGOVERN: Absolutely. So in this coming year, our plan is to own shrimp. So we are going to enter the market, and not only with the first shrimp, which is like a frozen, pre-cooked shrimp. And it is the size that you would have in an entree. We're going to come with a second size, which is more of a popcorn size, as well as breaded and soft. So we're going to come in and give the full array of shrimp in this year.

And then we are going to follow next year to complete the shellfish portfolio with lobster, scallops, and crab, all plant-based, 100% plant-based.

ALEXIS CHRISTOPHOROUS: Mary, I want to talk about where we can find your products, because it's my understanding that they are not in retail stores or online. And I guess that leaves restaurants. If you're supplying restaurants, it's a challenging time to be doing that. Here we have this pandemic, lots of restrictions on indoor and outdoor dining. So how are sales right now to the restaurant industry for you?

MARY MCGOVERN: So we're just starting to ship this month. And we are very excited to have a wonderful partner for distribution which will give us national distribution very quickly. And because 80% of shrimp is consumed on food service, it's most certainly the channel to be in.

There have been, even in these difficult times, some really highly successful adaptive players in the market, and we're going with them first. But we think that the back half of the year, we're really going to see things pick up, which is perfect timing and perfect positioning not only for our product, but the fact that so many people want to get back out, normalize their lives, go out to dinner. And there's only that much more interest in plant-based, healthy, sustainable eating coming out of this pandemic period.

ALEXIS CHRISTOPHOROUS: I understand you are not a publicly traded company, so you don't have to tell us all. But can you share with us who any of your partners are, what restaurants we might expect to see your New Wave shrimp being offered in?

MARY MCGOVERN: I wish I could. But I can tell you that in the second quarter, and certainly in the back half of the year, you will see us in national chains as well as regional. And you'll see us in a variety of settings. So this year, you will start to see us in many locations.

ALEXIS CHRISTOPHOROUS: You are a veteran of the consumer packaged goods industry, having worked at a number of the big names there, including General Mills. I would imagine with a background like yours, getting this product into retail stores will be part of the equation at some point. Did you have a timeline as to when you hope to do that?

MARY MCGOVERN: We don't have so much of a timeline on retail. But I can tell you that from the CPG side of things, that this is a branded product. And we will be a branded food company. And so we're coming in with very, very strong branding.

We can see retail following at some point. But truly, probably the first inroads in retail will be through their home meal solutions. So we've already had some interest from leading retailers in that arena. So that could be a very good segue. But we're going to let the culinary force and the culinary leadership and innovation in food service be the way this is introduced and let the at-home follow.

ALEXIS CHRISTOPHOROUS: What does Beyond Meat and Impossible Foods, two leaders in the plant-based food industry-- what do those companies mean to a New Wave Foods, and do you view them at all as competition?

MARY MCGOVERN: Oh, we don't see them as competition. Honestly, what they have done is they have shown and validated and opened up minds and opened up the market. And honestly, our entry into this marketplace has been facilitated greatly by what they have done and the success that they have had.

And our plan is to come in and own this space. So they've focused on meat and poultry and meats of all types. And the seafood space is white space. So we plan to come in, and by coming in as strong as we are with all that we're bringing, to own the seafood, particularly the shellfish, space. In fact, one of our investors calls us the Beyond Meat of seafood.

ALEXIS CHRISTOPHOROUS: OK. All right. Well, the way the stock has performed, maybe that's not such a bad thing. Mary McGovern, CEO of New Wave Foods, thanks so much. And we look forward to continuing to follow your company.

MARY MCGOVERN: Thank you so much.