Fable leans in to mushrooms over ‘plant-based’, strikes deals from Wagamama UK to Zeus Street Greek

Fable leans in to mushrooms over ‘plant-based’, strikes deals from Wagamama UK to Zeus Street Greek

Fable Food founders Jim Fuller (left) and Michael Fox (right)

If there is a lesson to be learned from Fable Food Co for the venture capital investor community, it's that whilst the term "plant-based" carries all sorts of well-intentioned connotations about reducing carbon emissions, for diners it has become on the nose.

Studies show that demand for this category of products has risen in the foodservice sector, but market it as plant-based at your peril. 

The Sunshine Coast-based culinary startup was dropped off the menu of burger chain Grill'd shortly after raising US$8.5 million ($12.26 million) in a Series A funding round led by Singapore VC firm K3 Ventures in 2023.

However, since then it has thrived, learning from the experience and generating expected sales growth of 60 per cent this year.

Related story: How Fable Food Co founder Michael Fox tricked himself back into business after failed venture

Fable Food, with its products based primarily on Shiitake mushrooms, has very recently secured four menu items to be sold across the 170 restaurants of Wagamama in the UK, as well as a pita wrap item at Zeus Street Greek in Australia. 

The way its product is marketed in both cases links back to efforts taken in response to the discontinuation at Grill'd, which Fable's co-founder Michael Fox says prompted the company to engage in deep research to better understand its foodservice customers.

Luckily, the company had the "fuel" to do so thanks to the recent raise.

"We've done a lot of work focused around foodservice and how customers choose items on menus. For example, we've seen the importance of menu naming," Fox explains.

"For example, if we call our product ‘plant-based meat’ it doesn't sell very well, but if we call it, say on a Mexican menu, ‘Shiitake carnitas’, it sells really, really well."

The golden combo seems to be describing exactly what the product is - mushrooms rather than "alternative protein" for example - but also providing familiar flavour descriptors.

"From the worst possible name to the best possible name is an 8x difference, and even just in ones where we’ve stayed on the menu at we've been able to double or triple sales by getting the menu naming right," Fox says.

He says Wagamama has implemented Fable Food's naming insights work in its menus, with items such as Pulled Shiitake Crispy Otsumami and Edamame, Truffle and Pulled Shiitake Gyoza, while at Zeus Street Greek this has translated to the Ambrosia pita with Fable pulled mushroom, Greek salad salsa, lettuce, tzatziki, feta and bukovo flakes.

So what went wrong at Grill'd?

"That was one of the examples where we didn’t get the positioning right on the menu," Fox says.

"There were a few learnings from that Grill’d experience – they did call them mushroom burgers, but they had a couple of issues. They put them in the plant-based section of their menu, and Grill’d have quite a long menu so meat eaters tend to skip over the plant-based section.

"Because it was in the plant-based section, it was restricted to people looking for plant-based items."

Battling an identity crisis

The company, co-founded by Fox alongside chef Jim Fuller and mushroom grower Chris McLoughlin, has always highlighted the flavourful and healthy mushrooms its offering is based on, but also playing into the vegan, vegetarian and flexitarian markets seems to have created something of an identity crisis for a couple of years.

"We leant in to mushrooms before but I guess we were a little bit unclear. Are we mushrooms? Are we plant-based meat? But now we just heavily lean in to mushrooms," says Fox, who is CEO of the company with 21 staff.

"Most meat eaters like or love mushrooms. If you go to a steak restaurant, the mushroom sauce is the most popular sauce on a steak.

"They may be looking to reduce their meat consumption a little bit, or even if they're not, just having mushrooms as a delicious option, customers are choosing it."

Fox acknowledges the company's Shiitake-based food is still novel, so recommends sampling at foodservice to allow diners to get to know the taste.

"We’ve done work where customers will order an item off a menu, and we ask them what do you expect this is going to taste like? We literally get 100 different answers from 100 different customers," he says.

"People love it when they eat it, they just don’t know what it's going to taste like. We've seen in-restaurant sampling have a massive impact for us as well."

Another identity crisis for the young startup, which has only been around since 2019, is its dual channel approach to both retail and foodservice.

"I think in hindsight we were probably a little bit naïve and thought we can do foodservice, we can do retail, let’s do it all and take over the world," Fox says.

"But then we realised as we went into those channels that the consumer journey is so different, because in foodservice you’re selecting off a menu but then the product is all prepared and cooked for you, whereas in retail, you're selecting off a shelf. It's about the packaging you're choosing from, and then you've got to go home and cook it yourself.

"Shopping in a supermarket, people may be a little more health conscious and conscious of convenience, asking how quick and easy is this going to be to cook, and what kind of dishes they can cook with it.

"In food service, people are generally thinking health when they're selecting where they're going to eat, and then once there they’re really flavour focused."

Following the raise, the conscious decision was made to focus more heavily on foodservice, which is now more than 90 per cent of the business.

Super passionate customers

"We've just got it in some of the premium independent retailers like Harris Farm Markets, some IGAs, and some of the other premium independent ones for people who discover us in a restaurant chain and then want to eat us at home," Fox says.

"It’s not a big sales focus for us – it’s really just for the super passionate customers in those independent retailers."

Even at Woolworths, Fable's only sales channel is through the foodservice offering of its Sushi Izu bars that are present in 240-odd stores.

Fox says that before the capital raise, led by K3 which was already investor in Fable's Singaporean customer Salad Stock, Fable already had a small international presence in the UK, the US and Singapore. Since then, the business has grown substantially, including a launch into the Canadian market.

"In the UK Gousto is a big meal kit company like Hello Fresh or Marley Spoon in Australia – we’ve had really good success with Marley Spoon in Australia; they were our first customer. We’ve launched into Gousto in the UK, and they’ve quickly become a really big successful customer of ours," he says.

"Wagamama’s a great launch in the UK; Rosa’s Thai is a chain of Thai restaurants in the UK that are doing well and growing really quickly. They’ve been a great partner that we launched with maybe six months ago."

In the US, Fox points to a recent successful limited-time offer at Californian chain sandwich and salad bowl chain Mendocino Farms from February to March.

"It went well so they’re working on another one that’ll launch later this year or early next year," he says.

"Just Salad on the east coast are doing their barbeque mushroom salad bowl as a limited time offer, and that's going really well.

"Purple Carrot is a plant-based meal kit company in the US, and there our products are doing really well. We're expanding and doing some more SKUs (stock keeping units) with them."

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