Good-Tasting Meatless Burger? It's Here and It's Selling

IT is no surprise to see ``gardenburgers'' on sale in the Puget Consumers Cooperative, an organic-food store here. But the meatless patty's trademark name is also winning its way into Safeway supermarkets, Hard Rock Cafe restaurants, IBM Corporation cafeterias, and Walt Disney theme parks.

One reason is that, unlike many competing products, ``you can eat a gardenburger twice,'' jokes Paul Wenner, founder and chief executive officer of Wholesome & Hearty Foods Inc., which makes the burgers in Portland, Ore.

The most prominent ingredient in the gardenburger is mushrooms, followed by brown rice, onions, oats, various types of cheese, and egg whites. There is no soy or tofu - core elements of rival products that can turn off many mainstream eaters.

Even so, not everyone is enamored of the gardenburger. At a recent Seattle conference, where Wholesome & Hearty treated several hundred dark-suited investors to lunch, the meal met with mixed responses. Many eaters, apparently, preferred crunching numbers to crunching oats.

Enough people are biting, though, for the company to have doubled its sales three years running. The products' supermarket availability nationwide grew from 300 stores at the beginning of 1993 to 3,000 by the end of the year.

The original gardenburger is joined on freezer shelves by the gardenMexi (which can be used as a taco filling), garden Sausage, and gardenVeggie, which has no dairy products.

``We're going to have a replacement for every meat item on earth within three or four years,'' Mr. Wenner says.

The company's wholesale business is also booming, with sales to restaurants, corporations, and food services accounting for 62 percent of total sales.

The challenge, Wenner says, is to grow fast enough to take advantage of the opportunity, but not so fast that quality suffers. The company wants to locate production plants in the East Coast and Midwest, in addition to three new Portland plants (one of which is already in the planning stage.)

For the first three quarters of 1993, Wholesome & Hearty had net earnings of $1.2 million on sales of $9.5 million. The company, listed on the NASDAQ market, developed out of a vegetarian restaurant Wenner founded in the 1980s.

Kevin Skislock, a securities analyst with Minneapolis-based Dain Bosworth Inc.,described fast-growing Wholesome & Hearty last fall as ``one of the food industry's most likely takeover targets.'' The potential market for good-tasting meatless entrees is ``so big that it's almost hard to put your finger on it,'' Wenner adds.

He cites two key reasons why the company has seen sales double for three consecutive years: Growing perceptions of health benefits to be derived from the low-calorie, low-fat, low-salt products. (A video clip shown to potential investors recently showed Richard Simmons, the bouncy champion of Deal-a-Meal weight-loss programs, saying, ``It's only 140 calories and it tastes great.'')

The second reason, which Wenner says is ``as big or bigger'' than the first, is concern for the world's environment. He says cattle consume about 5,000 gallons of water for every pound of beef they yield, versus 11 to 17 gallons for a pound of vegetables.

A recent study in Vegetarian Times, he notes, showed that Americans become vegetarians at a rate of 20,000 a week, totaling 12.4 million people. ``The number is much larger for people who are becoming semivegetarians,'' Wenner says. ``That's 80 percent of our business.''

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