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One bite of the vegan ceviche at San Francisco restaurant West of Pecos is an eerie experience. The slippery cubes feel like raw tuna, with a similar briny, oceanic flavor. But they actually consist of bamboo, pea protein and algae, produced by a process that its creator, a local food tech startup, wont disclose.

The faux fish dish is a sign that the plant-based food industry is moving far beyond veggie burgers and soy nuggets. While the main players are focused on replacing products made from beef, chicken and pork, several new Bay Area companies are branching out. Theyve been quietly developing products, such as a surprisingly gamy lamb alternative, for years before finally hitting the market.

Analysts say the industry is at a turning point, and consumer demand for more variety is high. In 2021, retail sales of plant-based foods grew by 6.2% over the previous year, according to data released by the Plant Based Foods Association, the Good Food Institute and data technology company Spins. The year saw $1.4 billion in vegan meat sales the same as 2020, but 74% more than three years ago.

Meanwhile, investment in food tech is surging: The industrys deal value from mergers and acquisitions more than doubled from $6 billion in 2020 to $13.1 billion in 2021, according to a new report from Deloitte. Investors pooled more than $2 billion into plant-based proteins in 2021, said Heather Gates of Deloitte, with the industry expected to surpass $15 billion in value by 2026.

Fascinated by the food technology world, West of Pecos owner Tyler MacNiven said hed been searching for the first great vegan tuna when he heard about Current Foods, formerly known as Kuleana.

I was shocked at how convincing it was, he said. Its not the same (as tuna) but when its surrounded by accompanying flavors, the texture is so close.

The plant-based cerviche is served at West of Pecos in San Francisco. It pairs raw vegan tuna from Current Foods with corn, avocado and chipotle.

Current Foods CEO Jacek Prus said he entered the plant-based seafood realm because relatively few companies were tackling it. While its easy to find faux fish sticks and vegan crab cakes, whole cuts are rare. Prus said his company uses novel machinery and a secret process to turn bamboo fiber into a fillet.

West of Pecos became the first Bay Area restaurant to carry the tuna in November and is seeing rising sales every month, MacNiven said. Diners can expect the tuna-less tuna and a smoked salmon-esque product in more restaurants this year, Prus said, and the company is in the process of building a production facility in San Francisco.

Other plant-based meat options abound as well. The new vegan lamb from San Franciscos Black Sheep Foods, for example, is more widely available: tucked into wraps at Greek mini-chain Souvla, as a kebab topped with pickled persimmon at high-end Indian restaurant Rooh, and paired with labneh at a couple of Peninsula locations of Israeli spot Orens Hummus.

San Francisco mini chain Souvla was the first restaurant to carry plant-based lamb from Black Sheep Foods.

Black Sheep co-founder Sunny Kumar sees opportunity in wild game. After perfecting lamb it took 2 years to develop the first version he plans to tackle duck and wild boar.

To make the lamb, Black Sheep takes animal tallow from Tunis lamb, a New Zealand breed, through a biopsy to understand its fat and mouthfeel. The company determines which flavor compounds it needs to replicate, and then finds plants that produce those compounds as well. Black Sheep then sources those compounds from plants, ending up with a ground meat-like product bulked up with pea protein.

At first, Kumar said, his team put in all of the compounds before realizing they could actually improve the flavor of lamb. They could skip the pastoral, barnyard notes while still making sure you get the lamb burps, he said. Were not going to be shy.

Vegan lamb meatballs are served at Chezchez in San Francisco. The lamb comes from new food tech company Black Sheep Foods.

At hip San Francisco wine bar Chezchez, chef Timmy Malloy serves the lamb in meatball form with a spiced tomato sauce and garbanzo beans. He said he likes trying different vegan burgers. But at no point do I bite into them and think, This is cow, he said. Tasting Black Sheep, I went cross-eyed.

Perhaps the most stunning animal-free product being made in the Bay Area right now is the mozzarella from New Culture in San Leandro. While there are plenty of plant-based cheese outfits, theyre typically unable to produce the meltable, stretchy quality of real cheese. Thats because they lack casein, one of the proteins in cheese that co-founder Matt Gibson said allows milk to curdle.

New Cultures mozzarella melts because it contains real casein, though no cows are involved. Instead, the company uses microbes, genetic engineering and fermentation.

Microbes already produce proteins can we convince microbes to produce casein for us? said co-founder Inja Radman.

Pizza comes out of the oven with melted, animal-free mozzarella from New Culture.

The process called precision fermentation is an emerging sector of the food tech world. Its also used by Berkeleys Perfect Day, though that company is focused on whey, which can produce milk and cream cheese. Animal-free dairy is seeing rapid growth, according to Deloittes Gates, with $90 million invested in companies focused on vegan cheese in 2021.

New Cultures cheese is already virtually indistinguishable from real dairy. Raw, its bouncy and mildly sweet. In a 750-degree oven, it bubbles like lava in just one minute, sticking to a pizza wheel as its cut. The company is talking to San Francisco pizzerias, with plans to debut next year.

In Gibsons view, nut-based cheeses arent winning enough people over. He argued that the current array of plant-based foods is a stepping stone to better products. The only problem is these products wont reach the masses quickly, he said. It takes time to scale up; Black Sheep, for example, produces about 500 pounds in 90 minutes, which is already not enough to meet the demand from the many Indian, Middle Eastern and African restaurants that have been waiting for a lamb option, according to Kumar.

For now, however, there are still a lot of burgers. Theyll remain the industrys core, said Julie Emmett, the Plant Based Food Associations senior director of marketplace development. At the same time, theres the boredom factor, she said, with consumers wanting to see new options across every category.

August Schuchman, executive chef West of Pecos, sprinkles salt as he prepares the plant-based cerviche, using vegan tuna from Current Foods.

Despite promising sales data for the overall industry, not all players are finding continued success. Beyond Meat made headlines last fall when its stock fell by 48%. Some major chains are removing or looking into dropping the companys vegan meats, citing a niche market. Adam Parrish, a partner with Deloitte, chalked it up to larger food manufacturers entering the scene.

Some plant-based companies have done better. Some have had challenges, he said. Certainly, the competition is increasing.

And with those new competitors pitching themselves to Bay Area restaurants, the default vegan menu item may no longer be Impossible Burger in the not-too-distant future. MacNiven of West of Pecos said hes seeing a steady rise in diners scanning his menu specifically for plant-based options.

The tidal wave of plant-based customers, its coming. We feel it, he said. Everyone with a head start now is very wise.

Janelle Bitker is a San Francisco Chronicle staff writer. Email: janelle.bitker@sfchronicle.com Twitter: @janellebitker

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The Bay Area food tech industry is creating more than vegan burgers. Heres whats next - San Francisco Chronicle

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