Impossible meat from Maloyaroslavets How a Russian startup is changing Europe's vegetarian food market
A decade ago, demand for vegan and vegetarian products began to grow rapidly across Europe and in North America. By 2018, the global vegan food market size was valued at $12.69 billion and expected to expand to over $24 billion by 2025. Vegetarians and vegans account for only part of this growing demand. Consumers who eat meat are convinced that cutting down on animal protein has major health benefits, so omnivores are also in the market for meat substitutes. A Russian company called “Greenwise” is now shaking up the faux meat sector. The three young founders, Georgii Zheleznyi, Yulia Marsel, and Artyom Ponomarev, have figured out how to make a plant-based meat replacement that tastes like the real thing. They manufacture their own products in a small town called Maloyaroslavets, about a two-hour car ride south of Moscow. Meduza tells the story of how this new meat-free food made it from its small factory onto the international arena.
“We’re doing well on the Russian market. Each month our sales are three times bigger than the previous month,” says Georgii Zhelesnyi, co-founder and accountant of Greenwise. He and his business partners, Yulia Marsel and Artyom Ponomarev, are sitting next to him at an inexpensive café in central Moscow. They are all under 30.
Zheleznyi continues praising his company: “In 2020 we’re preparing to introduce some new products. Our profits should amount to about 60 million rubles [just under $1 million]. We want to take over about one-third of the Russian market over the course of the next year. Not just with two products [which they sell now], but a whole line of them.” The two products he mentions are soy and wheat-based meat and jerky. The jerky can be eaten straight out of the pack, or you can use it for cooking. If you cook it, it needs to be soaked, then you can fry, boil, or braise it. The list of recommended recipes includes beef stroganoff and cheeseburgers with “beef,” rolls with “chicken,” or salad with “bacon.” The type of meat the plant-based protein will resemble depends on how you prepare it and the spices you use.
These plant-based meat alternatives resemble animal protein, but they are made from 100-percent plant-based products and contain between 35 and 58 percent protein. “They are juicy and chewable,” says Zheleznyi. The meat-like “chewability” of their products is Greenwise’s main selling point: they are convinced this trait will ensure their success on the global market.
From the Netherlands to Maloyaroslavets
After speaking with Meduza, Georgii, Yulia, and Artyom hurry off to catch a train to Maloyaroslavets. This small town, just south of Moscow in Russia's Kaluga region, is home to the factory where they were able to experiment and finally obtain the right meaty texture of product they sell today.
Artyom Ponomarev has a family connection to Maloyaroslavets. His father’s firm, “Partner-M,” is also based there. Partner-M is one of the biggest food firms in Russia that specializes in products made from soy and wheat protein, which are sold to the major meat companies in the country, including “Mikoyan,” “Cherkizovo,” and “Tsaritsyno.” These companies use wheat, soy, and pea texturizers as additives to their cold cuts, pelmeni, cutlets and patties, as well as for animal feed. Partner M’s additives make it cheaper to produce the meat. Artyom’s father, Vasilii Ponomarev, employs over 100 people and turned a profit of 810 million rubles ($13.3 million) in 2018.
Vasilii has been in the business for about three decades. He told Meduza that he always enjoyed tasting meat alternatives during his trips to the U.S., Israel, and Europe in the 1990s, and often brought some back home: “Artyom liked this type of food since he was a child. I would give them to him to try, so all of this has been on his mind for ages. Now it’s all coming together.” Artyom recalls that he was 14 years old when his father built the factory in Maloyaroslavets, but says he was not that interested in the trade at the time.
Vasilii describes the current relationship with his son’s company as one founded on “trusting, yet commercially sound” terms. He says their cooperation is “harsh and balanced”: the son’s company rents a space in the father’s factory and offers separate pay to the Partner-M employees who go to work for them. The raw materials used for making the meat replacements are taken as trade credit by Greenwise from Partner-M.
Greenwise has grown as a family business. Artyom, who oversees production at Greenwise, brought his wife on to create a marketing division. “I didn’t have any experience in the field. My first degree was a bachelor’s in criminal law, and my second degree was in law and digital technologies. I had never had anything to do with public relations, marketing, or communications before. They just sad, ‘Yulia, help!’ And I started to help with rebranding, with networking with people from the industry. I started to create a name for us.” Yulia is now in charge of product promotion.
Artyom and Yulia said that the idea of going onto the vegetarian food market occurred to them about three or four years ago, when they were both studying law and digital technologies at Leiden University in the Netherlands. They realized then that they wanted to come back to Russia and launch a startup. They were idealistic: “We spent a whole year riding bikes, eating wonderful locally-grown food. Everything was so environmentally-oriented [in the Netherlands]. Everything got recycled. And there were wonderful people all around, leading happy lives. Environmentalism was very high up in the list of people’s priorities,” says Yulia. Students on her course in the Netherlands were surprised at Artyom and Yulia’s decision: “After graduation, a lot of people went to work for IBM, Legal Tech, or for various startups. And we were like — well, we’re off to Mother Russia!”
Mud and straw
Right now the most famous producer of plant-based meat in the world is the American company Beyond Meat, which invested $9.6 million in research and development 2018. The founders of Greenwise have spent 200,000 Rubles ($3,246) on their innovation (which does not include rent). This is the price for one ton of raw materials, which was how much it took to generate a good prototype. The Russian entrepreneurs followed the examples of European plant-based meat producers, who sent them free samples, thereby helping a competitor enter the market.
The first attempts to create the Greenwise plant-based meat began back in 2017, and it took more than a year to generate the final product. Yulia explains: “you take a Russian wheat or peas, you divide them into starch and protein, and then you get ingredients with super high levels of starch and super high levels of protein. So from regular raw materials you can make some kind of incredible superfood. And all of this happens only through physical processing, which means there are no chemicals — it’s a totally ‘green’ process. So why wouldn't you make the final product from these awesome ingredients?”
The founders decided that their main goal is to make the food taste good. Vasilii Ponomarev, Artyom’s father, says that he was the one to come up with the idea behind Greenwise: “The population is growing, in some countries there is not enough water, but we need it not only for food for people, but also for producing meat from animals. So I told them [Artyom and Yulia], ‘I have some interesting products, and you can get them to the final consumer. Our goal would be to create a product that is as close as possible to real meat.’ And Artyom got started.”
Several people are crowding around a little room in a big factory next to a conveyor belt. One of them is putting plant-based powder into a machine, which then gets heated up and extrused, which means the protein changes its structure and turns into ropey, fibrous pieces which are barely distinguishable from meat. The workers put the “meat” into another machine that cuts it up into pieces, then it is sent to a special room for drying. This is how the Greenwise jerky is made, and it really resembles air-dried meats.
The other product Greenwise makes is meant to be an alternative to raw meat. Like the jerky, it does not taste like other vegetarian faux meats. When you pan-fry it, it looks like medium rare steak.
“We got a unique, highly fibrous product that imitates meat. We are the only ones in Russia who produce it,” says Georgii Zheleznyi. When the product was being developed, he was not yet part of the team, but he's very proud of the result. The recipe itself was the company's first major breakthrough.
Zheleznyi is responsible for finance and business process management. Before this job, he worked in corporate finance, including wine and oil trading companies, and in 2018 he started looking for a new gig: “I met Artyom, and he proposed that I begin developing Greenwise. They had a prototype then, but no business strategy. [Artyom wanted to know] what in direction they should head, how much they should sell it for, how much production costs, what the channels of distribution are, and so on.”
Georgii says that 2018-2019 were good years to get the company going: “Just one year before that, plant-based meats weren’t such a big deal yet, and one year down the line, the market will be full of competitors.”
Yulia Marsel poses a rhetorical question: “So did these guys without any education in the field [of food production] manage to make something that is totally comparable with products on the German and British markets? You know, I think this is some kind of real secret of our nation, this incredible Russian nation. For some reason, in our country...” Artyom chimes in: “You can always make something cool from mud and straw!”
The factory as punishment
To make sure the product made it to supermarket shelves, the team had to wade through layers of complex Russian bureaucracy and obtain special certification. The first major challenge was that the existing Russian bureaucracy did not recognize Greenwise’s products as food. “No one from the certifying state agencies could understand what method to use in order to evaluate this entirely new product. We had a major problem with getting approval for the expiration dates of the jerky we make. In the end, they categorized us as ‘tinned meat.’ They [the bureaucrats] said to us, 'okay, we don't know what this is, but let's just take the most extreme equivalent.' The idea was that if the tinned meat would survive the inspection, then everything should be fine. In the end, we got a 6-month expiration date, and that was a huge relief,” explains Artyom.
The next hurdle had to do with distribution channels. We had to convince supermarkets and cafes that consumers will like plant-based meat. No one on the Greenwise team had any previous experience negotiating with retailers and restaurant owners, so they decided to go to meetings with the simple hope that potential buyers would like the idea of plant-based meat. “We’d show up, and they would say to us, 'So where do you sell this?' And we'd be like, 'Well, nowhere. But this is such a cool product,' and they'd be like 'goodbye',” says Ponomarev. Hip vegetarian cafes were as difficult to negotiate with as the major supermarket chains, he recalls.
Even their own employees were skeptical. Workers at Partner-M who were hired by Greenwise often perceived their job at the Greenwise factory “as punishment,” said Ponomarev. Yulia adds: “Their first reaction was that the son of the head of the factory decided to build a little playground for himself to play in.”
This attitude was partly the result of the strict rules imposed on workers at Greenwise. Workers had to wear hairnets, shoe covers, and face masks to ensure total cleanliness. “It was hard. For example, you are conducting an experiment in food production, and all of a sudden a mechanic runs into the room in his work clothes, and says, 'We have to do some urgent welding in here,' and then everyone tries to get him as far away as possible from the products. It was all excruciatingly difficult,” complains Artyom.
There were other organizational issues. The factory at Maloyaroslavets initially did not have a line for packaging the food. The team did not want to hire workers to do the packing by hand because of their high cleanliness standards. The founders started to pack the food themselves. Artyom, Yulia, and Grigorii would put on gloves and put the jerky into packets of 36 grams (1.3 ounces). “The three of us right there on the factory floor, in hairnets, shop coats, white crocs — all of it. The first outputs were about three thousand packs each. You spend a day or two sorting them, at the end you’re totally exhausted,” says Artyom. Sometimes they would stay at work until 2 a.m., spend the night at a work apartment near the factory, continue in the morning, and set off to Moscow then in the evening, catching up on sleep during the commute. In Moscow, they would busy themselves with looking for partners who would be willing to sell their products.
Supermarket chains in Russia were in no hurry to buy the plant-based meats, but the Greenwise team had to make ends meet to pay their factory workers. Artyom and Georgii changed their strategy and started visiting small independent shops in Moscow, often located in the basements of apartment buildings. “I would run from shop to shop with bags [full of our product], I’d find their owners, force them to take the first supply of goods,” Zheleznyi describes his method. About ten shop owners agreed to take on the vegetarian meat and start selling it.
Meanwhile, Artyom, Georgii, and Yulia were becoming the rising stars of the European world of vegetarian food producers.
A lunch in Frankfurt
In the spring of 2018, Artyom Ponomarev and Yulia Marsel went to “Vegan Life Live,” a vegetarian food expo held in Manchester. Over the course of four days, they sold the entire stock of product they had brought with them. Consumers loved the taste and were fascinated by the story behind the Russian startup. “They asked us: Russians? Why are you not in the defense industry? Why not weapons? Why not hackers? Why have you gone into plant-based meat?” Ponomarev recalls. The expo revived their spirits. The entrepreneurs were especially inspired by clients who were not vegetarians, but who simply wanted to buy the jerky as a snack to go with beer or cider.
Another expo, called “Health Ingredients Europe,” took place in Frankfurt in the fall of 2018, and this time the team came as attendees, but brought along a suitcase full of their food. It turned out this was the right move: at the show, they met Albrecht Wolfmeyer, one of the heads of “ProVeg International,” an international food awareness organization promoting a plant-based lifestyle. He is also the leader of the startup incubator “ProVeg” that supports businesses in the sphere of vegetarian products. One of the goals of the organization is to cut down meat consumption around the world by 50 percent by 2040.
When Artyom, Georgii, and Yulia encountered Wolfmeyer, he was having lunch. The head of the incubator listened to their tale about veggie meat from Russia in silence, and when he was offered a piece of their product, he sliced it up and mixed it in with the salad he was eating. He chewed in silence. After he was finished with his meal, he looked up at the three young people and said, “So, tell me what it is that you do.” Meduza reached out to Wolfmeyer and he confirmed the meeting went exactly like this. “We talked over lunch, I tried their soy meat with the salad I was eating. It was very tasty.” According to Wolfmeyer, Greenwise “presented the idea of the project clearly and convincingly — they had a good team and a good skill set, they had production capacity and suppliers.” The next day after that lunch in Frankfurt, the Greenwise team presented their startup in Berlin and won the incubator's support.
Wolfmeyer thinks that the project is “promising,” and that “the market for plant-based food is in its growth phase, and it's very competitive.” He lists the advantages a small firm in Maloyaroslavets could have on the European market: “The alternatives to meat are close to real meat in texture and taste. Besides this, Greenwise could scale up their production, and this would be profitable.”
Thanks to the partnership with Wolfmeyer, Greenwise's founders became famous in the vegetarian food industry. In April 2019, the team was called to the New Food Conference in Berlin. “We were called over a couple weeks before the start of the programme, says Yulia. They [the organizers] were like ‘Guys, oh my gosh, amazing product, please come present on stage.’ And there were 200 of the most influential people in the industry of vegetarian food. And there we were, sporting our sweatshirts with the Greenwise logo, hands shaking, up on that stage with Mark Post from Mosa Meats, who was the first to present the idea of meat from a test tube in 2013. I understood that these people were the Elon Musks and Steve Wozniaks of the industry. And there I was, talking about my startup and what we make, which isn’t even sold yet in a single shop yet — a product that Artyom and I had just been scooping into packets by hand.”
Around this time, in addition to the ten shops in Moscow, a St. Petersburg health food cafe chain called “Greenbox” agreed to start selling the product. As news about Greenwise’s global successes began to spread, new clients in Russia started expressing interest. “Jagannath,” a health conscious vegetarian café that had previously rejected Greenwise, called the team up and asked them to bring over some of their fake meat. As soon as the first group of outlets started ordering their second batch of Greenwise product, other chains began to reach out, says Georgii.
In the first quarter of 2019, the company delivered only one batch of food to St. Petersburg for 15,000 rubles ($245). By the third quarter of the same year, the company’s earnings reached 3.2 million rubles ($52,000). Now you can find Greenwise products in more than 1,000 stores, including some of Moscow’s biggest supermarket chains (“VkusVill,” “Azbuka Vkusa,” “Globus”) and online stores (“Yandex.Market” and “Yandex.Beru”). Greenwise has already signed a contract with leading Russian food retailer X5 Retail Group, which includes major Russian retail brands like “Pyaterochka” and “Perekrestok.”
Rasa Neopolitanskaya of Jagannath says that Greenwise is unique: “Beautiful packaging, high quality food. There is nothing else like it, only soy meat by itself — which is just vegetable protein. But they managed to cover everything, from presentation to quality. And that's why we started selling their stuff.” Neopolitanskaya says that Greenwise has done a particularly great job of advertising. Despite rising popularity, however, their veggie meat is not as popular in Jagannath cafes as veggie sausage and cold cuts. But Neopolitanskaya is optimistic: “Those who have been on the market for a long time are already well-known to customers. But in about a year, I think Greenwise should catch up with the companies that produce soy meat, cold cuts, and wheat sausages.” Natalya Tolstova, the production manager of the supermarket chain VkusVill, says that the chain first got interested in Greenwise thanks to food expos: “We started to look for suppliers that could produce vegan and vegetarian products in Russia. And we found them.”
Artyom Ponomarev is happy not only about the improvement in relations with retailers, but also about the particular niche Greenwise has occupied. The major supermarket chain Azbuka Vkusa sells jerky in the same section as real meat, which means that the product is competing with animal protein: “It used to be that if the thing is plant-based, it goes immediately on the shelf for diabetics and other people who need to be wary of the food they eat and careful about the life they lead.”
Meatballs, ham, and expansion to Europe
The Greenwise team does not plan to limit itself to the Russian market, and envisions an international future for the company. The startup already sells its product to companies in Hungary, Estonia, Lithuania, Kazakhstan, Uzbekistan, and Belarus. It plans to reach bigger and richer markets soon. “Out of a total population of 80 million in Germany, about 60 million people are flexitarians. These are people who like meat, but who are enthusiastic about vegetarian alternatives if they taste good,” says Georgii. In mid-2019, he moved to Berlin in order to find a way into the German market for his company.
From March 2020, Greenwise plans to negotiate with German retailers “EDEKA,” “REWE,” “Aldi,” and “Lidl.” Yulia has big plans: “We want to open a small factory in Europe to be able to get the ‘organic’ certification. After making it in Germany, we plan to spread to the [other] DACH countries.”
In Russia, Greenwise is due to release two new types of products: burger patties and cold cuts. Later this year they will also make ham and meatball alternatives. This strategy will allow them to compete with other companies, including global ones that have already made it into Russian markets. The American company “Beyond Meat” started selling its burger patties in 2019. In October they appeared in Moscow’s restaurants, and by November they were on the shelves of the major supermarket Azbuka Vkusa. Greenwise is expecting to compete by offering a lower price: Beyond Meat sells 200 grams (7 ounces) of its product for a retail price of 750 rubles ($12), while Greenwise can sell the same amount for 200 rubles ($3.25). Greenwise can afford to sell a cheaper product due to logistical advantages and thanks to the fact that it has its own raw materials. The recipe makes it easier too: Beyond Meat has twenty ingredients, while Greenwise will be using only ten for its burger patties.
Rasa Neopolitanskaya of the café chain Jagganath is convinced demand for Greenwise food will grow in part because bureaucratic red tape complicates the import of plant-based meat from the U.S. and Europe to Russia. She also says that consumers in Russia are so suspicious of Asian meat substitutes that some Chinese companies have been driven to pose as Russian companies to keep sales up.
Anastasia Anisimova, the marketing director of “Moscowfresh,” an online health food store, says she still has many questions about faux meat: “Cold cuts made from substitutes is a sort of psychological replacement. You can live without it. If you have given up meat, then you turn to meat substitutes only if you really want to remember what meat tastes like. And even so, the taste [of the substitutes] is totally different. So the whole thing is a bit suspicious,” she says.
But Yulia believes her company’s product will win over markets specifically thanks to how they taste. If human beings will have to significantly cut down on consumption of animal-based protein for economic, ethical, or health reasons, people will be looking for alternatives. Yulia’s hunch is that people will turn to food that reminds them of meat. She speaks from experience, since she’s the only vegetarian among the three founders of Greenwise.
Translation by Olga Zeveleva