Podcast #10: Patch Organics CEO, Gil Kernan, speaks with Andrew D. Ive from Big Idea Ventures about starting a company using Pumpkin Seeds as the base for their plant based dairy alternative beverages.

Big Idea Ventures is launching our very own podcast “The Big Idea Podcast: Food”. Each week Big Idea Ventures Founder Andrew D. Ive will speak with some of the most innovative minds in the food-space and talk about the exciting projects they are a part of.

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Transcript:

SUMMARY KEYWORDS

product, milk, patricia, people, company, business, patch, organics, co packer, challenges, food, dairy, working, consumer, customer, alternative, run, wall street, based, gallons

SPEAKERS

Gil Kernan, Andrew D Ive

 

Andrew D Ive  

Okay, look at that we’ve got music Holy schmoly!! Welcome to the Big Idea Ventures food podcast, where we are going to be talking to Gil Kernan from Patch Organics. Let’s get into the conversation. Hi Gail, how’s it going? 

 

Gil Kernan  

It’s going well, how are you? 

 

Andrew D Ive  

I’m very well. Thank you. So let’s talk everything Patch Organics. Perhaps the start point of this conversation is what is Patch Organics? Tell us a little bit about it.

 

Gil Kernan  

Well, first off, thank you, Andrew for having us and having Patch to be part of the first Big iIdea Ventures accelerator program. It’s been a great boost for us and we’re happy to be partnered with you. Thank you.  Patch Organics is a company that produces dairy free pumpkin seed milk. It’s the first to market with a plant based milk alternative that uses pumpkin seeds. It really creates a tasty and refreshing product and we think it’s a great vehicle for growth and is an essential addition to dairy alternative milks. 

 

We don’t have any almonds, soy and also people are really looking for alternatives to that.  Some people mentioned what was lacking in their alternative milk products and we filled that void. We think it’s the best allergen free friendly, milk alternative out there. You can you can have it straight straight up or we have got the chocolate, you drink this and you’re able to finish it. It’s great with coffee, with smoothies, with your breakfast in your granola or on your fruits.  Things that are nice about it are, it’s vegan, it’s rich in vitamins, minerals, and protein. 

Some people are a little worried about transitioning from dairy milk to all dairy. Afraid that they will miss some of the things they enjoyed. One nice thing about the Patch Organics pumpkinseed milk is that it is rich in vitamin D and, as I mentioned, it is calcium and electrolytes free which is excellent.  We are certified non GMO, which so many people in this day and age really want, and it’s important to them and their lifestyles as well. Certified USDA Organic and kosher. 

 

There’s a sustainability story with Patch Organics pumpkinseed milk in the pumpkin seed milk pocket seems rather odd or low water usage, obviously it’s low land usage compared to cow’s milk so that’s a nice story.  We are in shelf stable tetra pack packaging and tetra pack as you may know, are a global company they make billions of containers a year, and they’ve made a big effort on the sustainability part of their packaging. Also, another thing about the pumpkinseed milk is it’s great for diets, including gluten free, keto, paleo, vegan diets, Mediterranean, Atkins, whole 30, low carbohydrate diets and basically is great for anybody who is looking for clean and mindful food and beverages. So that’s a little overview.

 

Andrew D Ive  

So one of the downsides of plant based milks, obviously there’s the allergen piece, which you’ve touched on the fact that a lot of them use nuts and other things. But one of the challenges I found is it doesn’t have the same experiences as regular milk. It has a slight you know, slight aftertaste, sometimes it’s quite watery. You know, it’s second best to dairy and obviously if you want to make a conscientious decision about plant based versus regular dairy, then you’ll go that route, but you’re still looking for that kind of perfect experience.  How does Patch Organic stack up so if somebody went and bought a traditional kind of almond milk versus a Patch Organic milk, what would be the kind of key differences plant based versus plant based in this case, you know, break it down for us in terms of experience, case, nutrition knowledge and nutritionals, if you can.

 

Gil Kernan  

Sure. So what our customers have told us is that they like the mouthfeel of our product and although we use only organic, plant based ingredients, we were able to achieve a rich creaminess in our product that people enjoy. As I mentioned before, it works nicely with coffee and the taste is not too thin whereas I think you will see that criticism aimed at others.  So one thing that consumers don’t understand is that sometimes, if they want a little more protein in, a little more protein might have a slight aftertaste, but we have enough other things that hopefully it’s not overbearing, but the protein in general will create that mouthfeel, if you will.  

 

So you’re asking about the nutritional content.  In the original there were 110 calories per serving, four grams of sugar and five grams of protein. In the chocolate, we have six grams of protein per serving, and in the chocolate it is flavored with sweetener, other five day juice, as well as palm sugar and the nice thing about both those sweeteners is they have a lower glycemic index so you don’t have the spikes and sugar spikes that some people are concerned about. 

Andrew D Ive

So that’s an advantage. Sounds like by using date sugar, for example, you’re making conscious decisions about how you’re building the product, what are the ingredients? You know, you’re not, I haven’t looked at the back of the pack for a while but you know, you’re not choosing E numbers and processed ingredients and so on. 

 

Gil Kerman

 

No, and credit to Patricia the founder of the company for that because her background is in food and nutrition and mindful eating really. She’s a graduate of the Institute for Integrative Nutrition and really was insistent that we use all organic plant based materials. So there’s no artificial anything. Again, we’ve created a premium product and it’s a premium priced product, also. So while that’s a part of it, again, formulating it properly, the product has good enough mouthfeel and viscosity.

 

Andrew D Ive  

Got it. So let’s talk a little bit about how you guys got started and the team. Young business old business, did you kind of fall into it? What is the origin story of patch organics?

 

Gil Kernan  

Well we are lifelong enthusiasts for food and healthy living and realizing how important what you consume is for your whole health wellness. Like I already explained, Patricia had some training in food science and she started 10 years ago or so a company and I joined it five years ago after having met her and we decided to focus on a non dairy milk alternative based on a request we actually had from a coffee customer of ours in New York City, that was looking for a more sustainable dairy alternative that did not contain soy because of potential health concerns that the buyer expressed, as well as the water usage of almonds.  Patricia came up with a proof of concept period in New York City that worked out well. Then, it was so popular, it became kind of a black market product for the baristas who would sell it under the table to customers who liked it so much. So we decided to go for the CO Packer route in the shelf stable containers where we could really scale the business.

 

Andrew D Ive  

So, only the insane start companies, or at least you have to be a little bit insane to start a company either insane or completely passionate. What were some of the challenges, in the early days and as you built the business, what have been some of the hurdles you guys have overcome?

 

Gil Kernan  

Well, you  expressed it perfectly I think.  The first day of our accelerated program is, whenever you expect both for time and money, it will take multiples of what you actually think it’s going to.. And that’s been true for us too. Patricia, as far as perseverance, and, you know, we’ve crisscrossed the country to find co packers and formulators and things like that. So I do enjoy building a business. My background is on Wall Street, the second company I was with, Sandia Technology Group, I really helped build that business and so the process of building a company is exciting to me, as it is to Patricia, but it’s not without challenges. 

 

Andrew D Ive

You have done this during COVID. You guys have probably not been able to hang out and be in the same room every day all day working, you know, working through the challenges, working on communications, and so on. How have you coped? I assume you’ve been remote, maybe you haven’t, maybe you’ve been running around with masks in the same living room.  

 

Gil Kernan

Well it has created some challenges. As you know, and others may know, we did have a delay in production because of COVID. We were doing some final balancing and reducing sugar etc and our team literally couldn’t get into the laboratory because they were only letting in so many scientists at a time and they had about 100 scientists, so what would be a one or two day turnaround, turned out to be a two or three hour turnaround.  Internally Patricia and I talked daily and occasionally we would zoom with our team. One major challenge has been that the buyers are reluctant to really accept a meeting in person. So almost all the meetings are virtual, of course, we have some grassroots efforts where we meet local merchants, but the challenge is not to be able to, you know, we had plans to do Expo West and Expo East that needs to pass for the universities. So that’s been a challenge, not being able to meet people in person, buyers in person. 

 

Andrew D Ive  

So basically …… Go ahead. Sorry,

 

Gil Kernan  

I was just gonna say I don’t know, if you’re on the call with plant based foods association with, you know, Doug Brady, he talked about how COVID has helped put the online business and plant based in particular has, even though they’re looking for high single or low double digit growth last year, they experienced, you know, 25 to 30% growth. So overall, it hasn’t been terrible for the plant based business. For young companies like ours though, it’s a challenge. 

 

Andrew D Ive

So does that mean because the buyers are not wanting to get face to face and the kind of normal course of business has somewhat changed, that it’s delaying the go to market piece? and therefore when can consumers expect the products on the shelves? 

 

Gil Kernan

Yeah, so we have a little bit of that. We are available right now, shameless plug patch milk.com. We’re applying now and by the time you view this, we will be on Amazon, we trust, unless something really mysterious happens. But yeah, so there is always lead time. I was on another call recently, and the guy from one of the product companies was presenting and said, Hey, good news we’re in one of the major northeast retailers after two and a half years of calling. So you know some lead cycles have been increased, obviously, we are doing what we can to get on the shelves, and we are on some shelves in the tri state area to Chico’s, Palmer’s mart, and some local coffee shops and things like that and we are working with some progress in some other areas as well and hopefully we’ll have good news on those fronts soon. 

 

Andrew D Ive

So it sounds like COVID has sort of slowed the go to market a little bit. It also sounds like you’re pivoting to some degree to kind of move to continue the momentum by moving to a little bit more direct to consumer, and Amazon. From a production standpoint, we’ve kind of briefly touched on distribution from a production standpoint, how does a non food person, non food team, you know, a group of entrepreneurs with an idea, go from idea to product on shelf in a tetra pack? How do you go get it made? You got that? I’m guessing you’re not doing it in your own kitchen. So what’s that cycle? 

 

Gil Kernan

No, as I said, we did it in our own kitchen, Patricia Marshall’s kitchen and Mount Kisco. Tetra pak was identified as a potential partner and they turned out to be a great partner. And so I’ve leaned on them and they are quite wonderful as far as introducing us to the best in the industry. So with most things, if you find great people to partner with, you can end up with some great products.  So our co Packer role of a global company outside of COVID, they have a great procurement team so they have a good insight into the supply chain, and we work closely with them and our projections. They have gathered enough product to meet six months demand. So basically it’s about partnering with great companies and great people to create the product because, again, we take Patricia’s idea with the basic ingredients, but in order to have it in a large production facility, we lean on others with the experience. 

 

Andrew D Ive  

Just to make sure I’m getting this right, Tetrapack is the company who had the packaging, you reached out to Tetrapack and they recommended a contract manufacturer, a co Packer that would manufacture the product for you, is that pretty much how it went?

 

Gil Kernan  

Well, they introduced me to a list of CO packers and I literally hopped on a plane, several planes, and crisscrossed the country a couple of times and to Canada and met with the CO Packer that we ended up using. So the format is so popular, there’s been no shortage of line time, so we’re fortunate to be with who we are with. Another thing that I’d point out is the packaging. We met a great company CA Branding, ultimately CA Fortune in Chicago and they came up with what we think is pretty interesting. It stands out on the shelf package design, you know they talk about, you have half a second or a second for a consumer to see something and decide whether they want to pursue it further and we think they did a nice job with the work they did, again, an example of having an idea and using a good team to help bring that to life. 

 

Andrew D Ive

So there’s kind of two things that I want to unpick. One is you don’t just go and talk to a big company like Tetrapack and say, Hey, we’re kind of thinking about doing this pumpkin milk product, who Can you introduce us to? Because a contract manufacturer isn’t necessarily going to build the product for you, they’re going to want a recipe or they’re going to want at least a foundation of a recipe that they can work on with you. So you need to do that kind of product iteration stage of getting to a basic product or some kind of relevant, go to market potential go to market product, at least, you know, minimum viable product put it that way. 

 

Andrew D Ive  

Secondly, Tetrapack is a significant size company. The cost of the contract manufacturer you’re talking with and working with is probably, by the sounds of it, a significant entity in this industry as well. Why would they take you seriously or why would they take any entrepreneur seriously, and want to do business with them. So I guess there’s a kind of an A and a B. A is, how much product development do you guys need to do yourself before you go talk to companies like this? And how did you do that? And then B is, how do you get companies like that to take you seriously, if you’re an entrepreneur, so I don’t know which one you want to tackle, first, you can tackle them in any order.

 

Gil Kernan  

Working with a contract manufacturer they have to have an understanding of what it takes to put the product in the bottle. You know, if it’s like flow water, they understand you put flow water in, and that’s what it is. But with a new product, they have to understand the mixing and if it’s going to gum things up. And that’s how they get to the pricing so, before they can get to pricing, they have to understand the basics, you know, you don’t give them all of the details right away but you give them a general idea.  And the other part is, we had to make a volume commitment and fortunately the company we were working with, was able to share our vision so they let us have lower volumes. I mean, they’re still high volumes in the first year but you know it’s them believing in the product and believing that we can execute on it. 

 

Andrew D Ive

That was actually the second part of the question I think. So I think you answered why should they do business with you? The part one that was? How does somebody kind of come up with that minimum viable product themselves, before they even go to talk to a larger company that will then go on to build that product? So was Patricia as the founder in her kitchen sort of playing around with different things and experimenting with different ingredients and so on? Did she find a recipe somewhere and she kind of built upon it? What was the initial product development cycle like? 

 

Gil Kernan

Pamela had been making almond milks and cashew milks and she had a good knowledge of the food science and who was working with foods to be able to create  products. So when she heard that the customer wanted something without almonds, without soy, without nuts, she had the base knowledge to go into our commercial kitchen and, you know, work her alchemy, magic, and come up with this. And we brought it to the end customer and they tried it and loved it. And I really think that, one thing that really helped us was that, even though it was a small amount, 50 to 100 gallons a week process when we’re HPP in it, but we were selling out every week and so I think that helped people understand that we were onto something.  

 

Gil Kernan

So without that, I don’t think we could have done it and then as you may recall, we did a test at Tetrapack in their own kitchen and they ran it using the same equipment that the co Packer would have used and then we were able to take those test results and basically, in working with Tetrapack, they got on the phone, they got on the email and say this works. 

It’s not messing the machines up, you can run for 24 hours, you can run for 36 hours, you’re not going to have syrupy gum, which means no downtime, as they don’t get paid for downtime. So I think that was a concern for some that they would have downtime. And so the investment we made in the trial run ended up paying dividends at this point and again, time and money to get to these points. 

 

Andrew D Ive  

And did the alternate manufacturer, the contract manufacturer that you’re using, did they tweak the initial recipe and make it work at scale?

 

Gil Kernan  

They tweaked it in the sense of when we met with Fidel from NP IV they suggested we needed to reduce the sugar content in the original, and so they tweaked it in that regard but other than that, the test we did they were comfortable that we could go into production with. They have their own r&d facilities that they took our formula and called benchtop and you know, when they might whip up 10 to 20 gallons at a time in a production type setting in the lab, and then they take it and they do hundreds of gallons 1000 gallons, our first production. 

 

Andrew D Ive

So where are you guys at the moment? What kind of production number went when you go and produce a batch of product? How many either units or gallons or however you define it, what kind of water production run? 

 

Gil Kernan

The first run was about 40,000 units each, there were some issues. So a total of 60 but it should have been a little higher, but then the next production run, in order for the plant to run efficiently, will be about 100,000 units per flavor.

 

Andrew D Ive  

How many flavors?

 

Gil Kernan  

Right now we have five formulated. Part of doing the fundraiser, and one of the goals of raising money, is to increase our skills because we’d like to have a true barista blend, although it’s good with coffee, we could use a little more viscosity so people can do their rainbow art, lattes and things like that and so once again, that’s about 100,000 units. The five flavors we have formulated already are the chocolate and the original, as I mentioned, we have a coffee flavor formula, we have a ginger turmeric formula which those that love it, love it the biggest fans when we were making that on our own were sell out but again, it’s an acquired taste. And the other one we have formulated is spiced pumpkin seed milk, which will be a seasonal offering, playing on the All Things pumpkin spice around in the fall. 

 

Andrew D Ive

Got it, sounds like something Starbucks should be looking at, especially the seasonal version, because I know my pumpkin spice Latte on an annual basis is a tradition at this point …..  

 

Gil Kernan

And something more than one, Andrew, that’s everyday for you. 

 

Andrew D Ive  

So if we’ve covered the product, covered the distribution, the team getting started, from your point of view, where do you see Patch going? What are you guys trying to build here?

 

Gil Kernan  

Well, what we think we can do, we think we could be the next oat milk product. It’s a bit of a stretch to say we’re the next Oatley, but we think there are enough legs in this category. All milk in the US today is $2.3 billion Korean Nielsen plenty last October, growing 17% as I mentioned, Doug Brady’s talking about 30% growth in certain segments, and the global milk market about 20 billion today growing at 30 billion. 

 

Gil Kernan

As I say consumers are ready for another dairy alternative and we think we hit the mark there.  So we have three legs that are focused on as we’ve talked about, the direct to consumer and we are excited about that. Another one that has really been affected by COVID is the food service, particularly the office and university market, which we’ll have good legs there, as well as your hospitals and nursing homes, the quick service restaurants, you know, the grab and go section at your local Shake Shack, or at your Starbucks to grab and go.  

 

Gil Kernan

And then once we’re behind the counter, in the food service, at the coffee shop, so that’s, that’s a big part of it. And you know when you talk about most CPG products, people tend to talk about retail, and we think there’s a great opportunity with what we’re doing both because of the overall market growth and the uniqueness of our product and partnering with folks like you to spread the word and work on distribution to natural foods and to treat it more like traditional grocery and other retail.

 

Andrew D Ive  

Sorry, I did touch something. I have my mute on because, you know, we’re doing these things from home and I had all sorts of background noise. Apologies. You showed us a little pack. Is it 12 ounces?

 

Gil Kernan  

No, it’s a 243 milliliter fill of a 250 milliliter, which is 8.2 ounces? Is tough to see. 

 

Andrew D Ive

So 8.2.ounces. So that looks like a perfect lunchbox type product that you can put in for the kids who are going off to school. Are you doing other sizes? iIs this aimed at adults, children or all of the above? How are you thinking that it’s going to resonate? 

Gil Kernan

Well, it is aimed at all of the above. Perfect as you point out for children in their lunchbox or in their bag when they’re at their soccer practice or sports practice. Great for the millennial crowd, there are good calories there in the protein. So after your Soul Cycle workout or your other workout, your Elliptical workout, it’s great and the sustainable aspect too, people are just turning to vegan to non dairy options as part of their regular life.  So anywhere you are, any recipe where you’re using milk, as an adult or child, you can use our product right now.

 

Gil Kernan

 As I say, our first run was in the single serve. There is the leader available in the tetra pack that we hopefully will have later this year, early next year, and then service option. If we do find a large commercial customer that had an interest in using this in a baking project or what have you there’s also the possibility, we could do a bag in a box format as a one off large customers. So this product can be direct to the consumer, it can be in a grocery store. 

 

Andrew D Ive

You also see it being in food service. So coffee shops, etc. but you’re also thinking it can be an ingredient within a restaurant or some other kind of food production company. So using it as an alternative to milk in food production. 

 

Gil Kernan

Yes. We were with a consulting company last night, and they were quite interested in that possibility.

 

Andrew D Ive  

Interesting, really good. So currently in what locations? And how long do you think it’s going to take you guys to be national and then further afield? 

 

Gil Kernan  

Let’s see we’re in a dozen or two small, local grocery stores and restaurants quick service in the Westchester, New York and Connecticut area. Smattering in Washington, DC, Alexandria, Virginia area. We are in talks with regional and national accounts. Right now, as I mentioned, it’s a longer sales cycle. So hopefully, we’ll have some account wins on a monthly basis and some of the consultants we’re talking to so one of our use of funds is we have an active add to staff list.  And you know, when I use that term at the staff, we talk about internal and external hires. So, you know, I might be looking for three or four local sales and support.Then more on a national basis to your question is some of the consultants which are essentially outside have plug and play relationships with both the distributors and the end users. You know two universities, think large Safeway, prover type accounts. That would be the other side. Add to staff if you will, on a consulting basis.

 

Andrew D Ive  

Fantastic. What do we do? As the CEO, what are some of the things you’re sort of looking for? In the short and medium term? What are some of the ways that, you know, anyone listening should engage with you, and potentially help you?

 

Gil Kernan  

One thing that again, you’ve been great and BIV has been great about introducing us to the right people, whether it’s food service, or retailing, even some folks to help out the direct consumer. So anybody that thinks it’s an appropriate product that they want to, introduce us to somebody that wants to carry it, in any of the areas we talked about, that would be wonderful. 

 

Gil Kernan

I think everybody knows that the job of the CEO is to, essentially, always be raising money.  So if we complete this round, that will get us to a certain level, as we win some national accounts, we’ll be doing another raise and so that’s exciting and again, anybody that’s interested in us but doesn’t have the exposure they want, currently in the milk alternative space, might have a little FOMO of seeing some that you’ve missed out of, please contact me or contact you to get in touch with me and we can see if we connect there. 

 

Andrew D Ive  

That’s fantastic. I was just gonna say, if someone needs to reach out to you or Patch Organics, they go to patchmilk.com that’s the best location right?

 

Gil Kernan  

patchmilk.com or, like I say, reach out to you or your staff and they have my email gil@patchmilk.com 

 

Andrew D Ive  

Awesome. What about on the social media side of things? How do people reach out to you via socials?

 

Gil Kernan  

We’re at Petro organics, or Instagram and that’s where we’re doing a lot of work. We’re working with some influencers and Patricia’s doing a great job reaching out to them. We’re in part of a place media packaging next month and so hopefully, we’ll hear more about patch organics in the near future and, you know, on Facebook is Patch Organics but individually, we’re on LinkedIn.

 

Andrew D Ive  

And if we have entrepreneurs listening in on this conversation, what would be some of your key takeaways for them, or a key piece of advice in terms of starting a food based business. Apart from don’t do it.

 

Gil Kernan  

Firstly, make sure you have the time commitment, because things take longer than expected. So whether that’s keeping a job where you’re on payroll as you roll things out, or make sure you have the time and resources to stretch your budget again. It’s so exciting to finally make it to this point, but you know, hopefully it wouldn’t take others as long as it took us.  There were delays along the way but again, it’s very exciting to be your own boss, but one of the things you have to think about is you don’t get to walk out the door at five o’clock, right? 

You know you’re on the phone, you’re on your emails too at any time, day or night. Now, you might wake up at three in the morning thinking about stuff from time to time, which isn’t all bad.

 

Andrew D Ive  

Yeah, how do you make sure you don’t go crazy? How do you disconnect and make sure you do get some time that isn’t thinking about the business, especially if you’re working from home.

 

Gil Kernan  

The jury’s still out on that point but I do enjoy getting out and walking, pre COVID going to the gym and getting exercise, cycling. Spending some time in the water. I’m lucky, I’m in a seaside community in Connecticut. So water and fresh air with the dog, I get to go with my wife back to restaurants, hopefully, sounds great.

 

Andrew D Ive  

All right, so basically, your advice is it takes a heck of a long time, be prepared to take much longer than you expect to get things to fall together. I’m also hearing, if you can test the product to test the concept, while you’re doing your full time job and before you need to jump and commit, maybe that’s a consideration as well. I guess that also covers off how do you build a team, if you don’t have any money if things are taking too long?  Obviously, there’s the acceleration approach that you guys took by applying to us. We helped, I hope speeding things up a little. Obviously, we invested in the company, which gives you a little bit more breathing room as well but you know, it’s not an Nevana BIV, or any accelerator or any fund is not necessarily going to dramatically change the game and make it far easier.

 

It still requires the tenacity and the drive and the grind that you guys have shown over the last, what is it 18 months, two years since we started working together?  Yeah. And the funny thing is, I think one of the first things I remember saying as you said is, you know, however long you think is going to take, however much you think it’s going to cost, double it, however much money you think you’re gonna make half of it and then maybe it’s still not as pessimistic as it needs to be and even though I said that to you, I have at times got a little bit testy with you that it’s taking so long. So, you know, I can’t even listen to my own advice sometimes.

 

Gil Kernan  

No, but I think what you point out is testing might seem to be testing but to me, it’s just encouragement, it’s tough encouragement, sometimes that, you know, a mentor is appreciated. You know, you don’t feel good, necessarily at the moment, but the community of BIV has been a great community for business. Just you know, when we’re back to normal, folks that are thinking about food business, go to a conference, go to Expo east, go to Expo West go to World Food at the Javits, what do you have? It’s a welcoming community. 

 

So even though you’re struggling, you will meet like minded people, and you’ll feel good about what you’re doing.  And you know, a big, big thing about what we’re doing, and others in the BIV community and some of the good food Institute and other plant based foods Associations, you’re doing good things, you know, for the environment, you’re doing good things for health, healthy living. 

 

Gil Kernan

So you know, not every I mean, we’ve met people along the way that are happy selling at farmer’s market every week or two and that’s their life and that’s fine. Everybody doesn’t have to have a national international sales goal to find fulfillment in what they’re doing. That’s the beauty of working in the plant based world. What we’re doing and you know, the investors appreciate your consumers appreciating those that are there toiling day to day, you know, find fulfillment in what they’re doing.

 

Andrew D Ive

I certainly feel that of all of the industries I’ve worked in, food is the most collaborative, welcoming. People try and support each other, far less kind of challenges and backstabbing and all the other things you might find in other industries. 

 

I think you’ve come from finance. This is your second career, maybe third career. I’m not sure we’ve ever gone into the depths of that, but you started your career on Wall Street and now and now you’re and now you’re a you know, organic vegan plant based alternative dairy product CEO. That’s right. Yeah. I did start my career on Wall Street and actually prior to that I was the lawn guy growing up in Michigan, but yes, I spent 20 something years on Wall Street in capital markets. So I had a fun career and a great career and you know, appreciate that that helped me get this started. So well, back to the collaborative. Again, we had some collaboration in a good way on Wall Street as well. But this, you know, it’s a happier crowd, if you will, in the food and beverage business.

 

Andrew D Ive  

Absolutely. So thanks for answering my questions today. Thanks for our conversation. I just want to reiterate this one more time. If folks want to reach out to Gil or Patch Organics, you can find them on their website, patchmilk.com  It’s gil@patchmilk.com is his email and patch organics on Instagram, etc. 

 

So please do go along and follow them and become a customer of theirs.  I haven’t looked recently, but on patchmilk.com, you can find out where to buy the product. You can order it on patchmilk.com as well. So you can have it sent to the kitchen of choice and add it to your coffee in the morning. Your cereal at night because that’s when I eat my cereal and just have fun with a non allergenic very rich, very tasty milk product.  Just, so you guys know, Big Idea Ventures has seen a lot of plant based dairy products, plant based milks and this was the tastiest of about 15 we tried in one sit down session, and this product just blew the socks off of all of the others and it made  our decision to invest so much easier because the product was so darn good. So, Gil, I appreciate your time today. Thank you.

Podcast #9: Wild For CEO and Founder Aleem Ahmed speaks with Andrew D. Ive from Big Idea Ventures about starting a company centered on the world’s smallest grain, Teff.

Big Idea Ventures is launching our very own podcast “The Big Idea Podcast: Food”. Each week Big Idea Ventures Founder Andrew D. Ive will speak with some of the most innovative minds in the food-space and talk about the exciting projects they are a part of. 

To listen to the podcast episodes click the links below!

Podcasts

• Sticher
• Spotify
• Google Podcast

Watch the YouTube episode here.

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Read the transcript of the podcast below:

 

SUMMARY KEYWORDS

product, aleem, retailers, stores, ethiopia, people, opportunity, wild, chips, ingredient, founders, salty snack, important, food, brand, snacks, ethiopian, category, grain, farmers

SPEAKERS

Andrew D Ive, Aleem

 

Andrew D Ive  

 

Hello there, welcome to the Big Idea Food podcast. This is Andrew Ive,  your host from Big Idea Ventures and today we will be talking to Aleem, the Founder and CEO of Wild For Superfoods.So this is an interesting company. Normally we talk about alternative proteins and other sorts of innovations in that space. Wild For is using an ingredient from Africa called teff. Teff is the smallest grain in the world, has high nutrition and nutty flavor, a really interesting ingredient.  So let’s talk to Aleem and find out what he has to say about developing Wild For snacks. If you have any questions or comments, please do leave them at the end of the podcast or YouTube video. Whichever platform this is on. Please do like and subscribe so that we can send you more podcasts and more videos later. Thanks very much. Let’s get into the conversation with Aleem.  Hey Aleem, how are you? 

 

Aleem  

 

I’m great, Andrew, it’s good to see you again. 

 

Andrew D Ive 

 

Good to see you too, sir. Welcome to the Big Idea food podcast.

 

Aleem  

 

Yeah, it’s a pleasure to be here. Thanks for having me.

 

Andrew D Ive  

 

So we’ve known each other for probably a year, maybe a bit longer than that. 

 

Aleem

 

Yep. About a year. 

 

Andrew D Ive  

 

About a year and we’ve worked a little bit together. I think this is a great opportunity for people to find out about you and also to find out about your company. Would you mind telling us a little bit about what you’re up to?

 

Aleem  

 

Yeah, thanks, Andrew. I would love to. I am the founder and CEO of Wild for Superfoods and we help active families live healthier, through a line of high protein, nutritious and delicious snacks based upon the ancient Ethiopian grain teff, and teff is a secret source of lasting energy for Ethiopia’s elite marathon runners.

 

Andrew D Ive  

 

So, Teff, in terms of what people can actually consume to get this teff, that is sort of the secret energy source for marathon runners. What are you selling them? What do they get? Where do they go? What do they taste? You know, what is it?

 

Aleem  

 

Yeah, we’re selling high protein, air pop chips, at Whole Foods in the metro New York area, and all across America on Amazon Prime.

 

Andrew D Ive  

 

So how did you guys come up with this? Is there a story behind it?

 

Aleem  

 

Yeah, absolutely. I was inspired to start the brand when I worked for the Ethiopian agricultural transformation agency, helping some of Ethiopia’s 6 million farmers improve their yields. I realized that there was an opportunity to connect African farmers to international markets. There would be a huge opportunity to improve their livelihoods, but also to provide nutrition and functional ingredients that would help consumers drive their nutrition forward.

 

Andrew D Ive  

 

Fantastic. Let’s break down what Teff exactly is. It’s, it’s what? Take us through exactly what the product is, what the actual core ingredient is….

 

Aleem  

 

Yeah, tough growth. It’s a grass that looks almost like wheat, but it’s gluten free and it’s the world’s smallest grain. Because of that, by virtue of its ratio of the outside to the inside of the grain, teff has more fiber than any other product, all the fibers cover the body and the shell of the grain and so it gives us some really unique, interesting attributes. It’s got a nice mild nutty flavor. If you’ve had Ethiopian food before, you may have tasted teff in Ethiopia’s flat spongy bread NAJIRA that’s fermented and when it’s not fermented, it has kind of a nice, mild, whole grain flavor to it, which is really appealing.

 

Andrew D Ive

  

So a good energy source, a great source for fiber, and a nice nutty flavor, any other aspects that people should be aware of?

 

Aleem 

 

Yeah, it has about 12% protein, which is very similar and comparable to kinoa and, you know, from a sustainability perspective, we see that teff is a drought resistant crop, it uses maybe up to half the water that corn uses and, because of that, it’s going to play an increasingly important role as our climate goes through increasing variations over the next several decades.

 

Andrew D Ive 

 

So right now the core ingredient is sourced from Ethiopia. You think it may have applications in other places?

 

Aleem  

 

Yeah, I think so. Teff is indigenous to Ethiopia and is used there to make their bread NAJIRA. Najira is made with 100%, pure teff but it has a flavor profile that could fit many cultures, many cuisines that could be widely applicable all across the globe.

 

Andrew D Ive  

 

 And is it tough to get in the sense of needing to develop a supply chain from Ethiopia back to the US, so that you can manufacture your airport chips?

 

Aleem 

 

So supply out of Ethiopia is definitely a challenge. However, other African countries are growing teff. For instance, South Africa has been growing it for several years now, growing it for the International natural foods market so that it’s readily exportable and it supports the livelihoods of African farmers as well. So, in that sense, we’ve been able to work with some of the world’s largest Mills that have deep, diverse supply chains to work with South African farmers and source from there.

 

Andrew D Ive

  

So why, I mean, obviously, we should all care. But is there a reason why you in particular care about farmers in Ethiopia?

 

Aleem  

 

Yeah, because of my work experience working for the government of Ethiopia and getting to know some of the farmers and specifically having spent some time with them. I learned that the price the farmers receive is roughly 30% below the wholesale price and so the opportunity here is for farmers to connect directly with brands, receive access to the wholesale price and in turn use those higher profits, to invest in their own agricultural output, such as better seeds and fertilizer, but also into their own livelihoods like medicines for the family when they get sick, or uniforms for the kids to go to school. We think there’s a virtuous cycle, farmers get better prices for their grain, that their families prosper even more.

 

Andrew D Ive  

 

And you mentioned working in Ethiopia for the government. Were you walking past a notice board in college one day, and there was an Ethiopian advertisement for someone to go work with them. Is that how it happened? Or is there more to it?

 

Aleem  

 

Yeah, you’re right, there’s much more to the story. My mother’s family is actually from East Africa, she grew up there. So my grandfather lived in Tanzania, and then Kenya. That’s what originally led me out there to explore my roots in East Africa. My first job was in Kenya, working in western Kenya on drinking water safety projects, in rural and agricultural communities. I realized that what was really, really important to these communities was the agricultural prices they were getting for their crops, how to get new seeds, and new planting practices.  Through that opportunity, I became really passionate about agriculture, and then I learned about another opportunity at the Ethiopian Agricultural Transform agency from a friend who was living in Addison at the time. I immediately applied to work for them.

 

Andrew D Ive  

 

Fantastic. So now you’re in San Francisco.  You have found a great ingredient that you think has the potential to be beneficial, not just in Ethiopia, but other places as well, in terms of its nutritional profile, its fiber content, the taste, and on being the smallest grain in the world. Take us through how you ultimately arrived at an airport chip that you’re now selling in Whole Foods and direct to consumer.

 

Aleem  

 

During my time in Ethiopia, I saw this opportunity that I thought could  be really big. I thought it could be the next kinoah and decided to come back to the US to get my graduate degree. And when I came back, I saw that Kinoah had gone from the whole food salad bar to huge bags, in Costco.  I took that opportunity in grad school to write my first drafts of the business plan, and collected some advisors and showed them the idea and they said well this is great on paper, but prove to us that you can sell anything, just anything to your target customer. 

 

Aleem

 

That sent me down an r&d path with bags of tough flour and other gluten free flours in my kitchen in Cambridge. We started mixing different blends and the first product we came up with was actually a pancake mix and we commercialized that online and in Cambridge we started to sell it through our website.  We saw a 30% repeat customer rate within the first few months and took that data out to stores and sold it to independent natural food retailers in the greater Boston area. 

 

Aleem

 

Pretty soon larger natural food retailers were knocking on our door trying to get a hold of the product and that really forced us to circle up with our advisors again and ask if we want to take a pancake mix national?  Do we want to be able to? Can we support this product? And that led to a broader process where we looked across a range of categories, a range of opportunities, we looked at bars, pastas, cereals, and identified the salty snack category as an opportunity to do something incremental and to do something really tasty that customers would find valuable. 

 

Andrew D Ive  

 

So does the pancake mix still exist or not?

 

Aleem 

 

The pancake mix does not exist anymore? We hopefully one day will bring it back as a seasonal item for our early fans and supporters.

 

Andrew D Ive  

 

So a pop chip? What’s it similar to? Or is it not similar to anything, is it completly different from everything? What would you consider to be your kind of not competitors, per se? if someone was to look at your product and look at somebody else’s would they see any similarities to other things?

 

Aleem  

 

Yeah, I think it has kind of the airport attributes of a pop chip, but it has the hardier  texture of a pita chip. So in some ways, you get the best of both worlds, you get an air pop chip that isn’t fried, but you get a hardier texture of a pita chip. You get, you know, five or six grams of protein per serving, which is two to three times the amount of protein you would get from other chips in this product arena.

 

Andrew D Ive  

 

So is it keto friendly, or I mean, it’s probably not completely keto. But is it keto friendly?

 

Aleem 

 

It’s not keto friendly. Keto folks are really focused on reducing carbs. This is a whole grain product with carbs. One of the interesting attributes about teff is its starches and it’s made up of resistant starches, which our bodies digest slower like fiber and these are something that, in turn, feed friendly gut bacteria that support the growth of short chain fatty acids, which actually counteract diabetes and obesity. It’s a fascinating crop that we’re still learning more about and part of my mission is to really bring more attention to these crops so that more research can be done on it as well.

 

Andrew D Ive  

 

So where do people find the product if they want to check out you know, the product itself, the packaging, etc? Where can they go?

 

Aleem  

 

Yeah, if they happen to be in New York, they can go to Whole Foods, anywhere, any of the whole foods from Connecticut to New York, down in Jersey, and anywhere else in the world. If they want to take a look at it, they can look at it on Amazon by searching Wild For Teff.

 

Andrew D Ive  

 

So I went hunting for it in Florida. It’s not in Florida. Not yet. I was scanning the aisles in Whole Foods, desperately looking for your product here, but it’s not here yet. When are we going to see it down in other places aside from New York and Connecticut, New Jersey?

 

Aleem  

 

Yeah, we’re working with a lot of exciting opportunities. Currently, we think between q3 and q4 this year, we’ll be able to see it showing up in retailers and other regions across America.

 

Andrew D Ive  

 

So I’ve just managed to find it on Amazon. Wild for tortilla chips made with Teff, ancient grain, high plant protein superfood vegan snacks, gluten free, sweet and smoky barbecue. That sounds good. Wild for okay, so you’ve got a sweet and smoky barbecue flavor. I’m going to open up the store so I can see what other flavors you have. Okay, and a sea salt, six grams of protein in a bag. Okay, so yeah, it does look a little bit like air popped, but I can see what you’re saying about that sort of pizza chip or pita chip depending on who you are and what you want. The kind of pita chip angle to the texture and so on and high in protein. This looks like a great product. I’m so glad we invested in it. We’re, we’re happy to be your partners. So you launched the product when?

 

Aleem  

 

We launched the product about two years ago in Whole Foods in the northeast and we really learned a lot about how to build a brand in retail in bricks and mortar in Whole Foods, and that was a great experience for us. Then last year we  took on DTC through Amazon and we are learning a lot about how to reach customers across the US online. Awesome.

 

Andrew D Ive  

 

Where do you see Wild For going over the next, let’s say, three to five years, if everything goes to your plan? Where is this business going to be in three to five years time?

 

Aleem  

 

Yeah, we hope that it will be a familiar household name in three to five years and we hope that our products will be found in mainstream retailers across America in big box stores and in national food retailers. We expect to come up with a set of new flavors. We’re working on a delicious vegan white cheddar jalapeno right now, which we hope will be out before the end of the year. And yeah, we anticipate building some additional flavors and we also hope that customers in three to five years will be talking about Teff in a similar way to how they do now about Kinoah.

 

Andrew D Ive  

 

What do you think are the key challenges in terms of achieving that sort of vision of where Wild For is going to be in three to five years? What are some of the things you’re going to need to solve or address?

 

Aleem  

 

Yeah, I think we’re gonna have to continue to figure out how to build our presence in bricks and mortar retail, and work with retailers who want to help tell the story of Teff and we’ll have to help complement our in store presence with offline, online storytelling, working with influencers, who can tell the story of new grains, new crops, and be able to have people learn about the importance and value that Teff offers them before they even come into the store as well.

 

Andrew D Ive

  

Okay. And what about from a company perspective?  I’m wondering if there are things that you need to address and build so that you can be a stronger, bigger, faster moving company, whether that’s, I don’t know, team building, or, you know, whatever. 

 

Aleem  

 

We continue to look for fantastic folks with experience in sales and natural foods across the US. Also looking for professionals with industry experience, in selling specifically salty snacks. We think there’s some real specific category knowledge that can be really valuable and of course, we continue to look for great folks who’ve invested in other snack brands in the past and look for continued partnership with investors seasoned in the industry.

 

Andrew D Ive  

 

So basically, sales folks, people with experience in chips, investors who are sort of knowledgeable about this space, those are some of the things that you see as being critical for building this business. 

 

Aleem  

 

Yes, I do. 

 

Andrew D Ive 

 

Perfect. Okay, so from a fundraising perspective, however, I’m guessing that like all startups, like all young companies, that’s been an interesting road to date, any sort of, without naming names, any sort of horror stories, or any sort of interesting learnings that others coming up behind you should be aware of from a fundraising perspective?

 

Aleem 

 

Yeah, luckily, we haven’t had any horror stories. Okay, I think we’ve been lucky to have great folks who are both value aligned with us, but are also supporters of our cause as well. So I think that’s been great. And I think one thing that’s been important, not kind of understanding the length of pandemic and how that would change bricks and mortar retail, was to be able to maintain a low burn rate. I think that’s been critical and important as we’ve kind of adjusted to unforeseen circumstances over the last year.  

 

Aleem

 

And then I think this idea of velocity and momentum is really important as well. 

To share with other founders to build excitement around achieving a milestone and translate that milestone achievement into velocity and momentum, with conversations with investors. I think that can be really important, giving them a sense of urgency of coming into the round. I think that can be a really important thing to do and it can be challenging, but I think one way to do it is around traction in the business.

 

Andrew D Ive  

 

So how do you think you do that? I mean, one of the things, when I’ve been speaking to founders, getting investors to believe there’s a sort of a fear of missing out or some form of burning platform or need to make a decision. Most investors don’t feel that way, they feel like they’re in the driving seat, they can make that decision when they’re ready and sometimes that means never. What do you think are some of the ways for founders to be able to create that sense of urgency?

 

Aleem  

 

Yeah, I think one way is the launch of a product at a new retailer can often be because there’s a deadline and launch the product to order inventory. And I think this can really be used as a mechanism to generate both excitement, but also time pressure, to say, hey, we’ve got this great, fantastic National Retail rollout opportunity. We need cash in the bank to spend on inventory, we know how this will turn from inventory investments into revenue. And that can really help drive those conversations forward. 

 

Andrew D Ive  

 

One must also have the ability to say to those investors, you know, we’re about to get more distribution from a new account, that’s going to change our velocity as a company that’s going to change our revenues. When that happens, that will increase our valuation and you won’t be able to get such a good deal, then, as you can now. So you need to make a decision before we pull the trigger on that distribution and that revenue, because unfortunately, we’re going to have to change our valuation at that point and you’re going to get less of the company for your investment.

 

Aleem  

 

Yeah, I think it’s really kind of closing the logic there, closing the loop can really help that process.

 

Andrew D Ive  

 

Awesome. So we’ve covered the product, we’ve covered the story of how you got here, we’ve talked a little bit about fundraising from a startup perspective, is this something you would do again, would you recommend this to others, ie starting a company? 

 

Andrew

 

And by the way, starting a snack company is particularly tough. I mean, there are big, big companies that are dominant in this space, they own a heck of a lot of the shelf space. It’s tough for you, for the little brands, to support their products and get them the kind of distribution they need to be a fast growing company. So would you recommend starting a company to a potential future food founder? And would you recommend they get involved in snacks?

 

Aleem  

 

I think I would recommend it to them but only if they had a really clear incremental value proposition for the retailer and for the consumer. I think if the product looked and tasted very similar, or had ingredients very similar to what was on the shelf, I would warn some caution. I think one of the big upsides of snacks and food is that salty snacks is a huge, $20 billion category, with customers who are willing to try new products.  So there’s an opportunity if it tastes really good to drive a trial, and then some loyalty. And I think that, you know, some of these bigger incumbent players have really actually made their snacks less filling or less nourishing, in order to get customers to eat the whole bag. So that’s created a problem in the marketplace for some customers where they actually still want that salty snack product, they still want to get some nutrition and some nourishment from it and so we think we’re solving a problem for them.

 

Andrew D Ive  

 

How do you see the snack category segmenting? Because once upon a time it was, you know, Lay’s chips. And it was just a kind of quick snack, a little bit of salt, a little bit of savory at a certain time of the day. And I see the category segmenting into all sorts of different benefits, all sorts of different deliverables. They’re sort of segmenting the consumer differently in terms of, you know, parents versus athletes. You know, there’s all sorts of different use cases. How do you see the market segmenting and where, from your point of view, is the most growth and most interest for you?

 

Aleem

  

Yeah, so I think the biggest segment still today, Andrew, is the traditional potato chip. Potato Chips are the biggest in mainstream and conventional grocery and then tortilla chips. Traditional tortilla chips are the biggest. And then outside of those two categories you have interesting functional ingredient products. Using plantain, chips become more and more mainstream. We see chick pea chips come in there. We’ve also seen grain free paleo keto products that become their own segment, their own sub sub segment. We’ve seen others you know, so I would describe a whole other cat as a subcategory of interesting functional ingredients, cauliflowers becoming another one.  We’ve seen chips boasting kinoah probiotics. So I think there and then we’re bringing tests to the table here, which nobody else is doing. And I think that this is an opportunity for growth. I think the potato and tortilla chips are traditionally growing with the population at234 percent a year, but most of the growth is actually 10%. You know, double digit plus growth is really coming from these more interesting functional ingredients that are showing up in the salty snack aisle.

 

Andrew D Ive  

 

So it is actually possible now if they’re smart about it, for people to not only get the satisfaction of a quick snack, but actually to get, you know, whether some functional benefit from their snack. So a kind of a satisfaction of the kind we crave but also some form of benefit to the body.

 

Aleem  

 

Yeah, exactly. Some sort of feeling of satiation of feeling that you’ve put away your hunger for at least a couple hours till you can make dinner. So I think we are offering more than just momentary bliss. Now, the functional ingredients of the salty snack category.

 

Andrew D Ive

  

And also in your case, you’re benefiting the farmers who are creating the raw ingredients in the beginning of the process.

 

Aleem  

 

Absolutely. Yeah, helping them access new markets is, I think, a critical part of why I do this business.

 

Andrew D Ive  

 

Other people using your products in more ways than just popping open the bag and grabbing a handful of a snack, are they using it in recipes and things like that?

 

Aleem  

 

You know, they often use it. We see that our sea salt pairs really well with guacamole or hummus. People often supplement their salad or sandwich at lunch with this product. And we’ve even seen folks tweeting about discovering in Whole Foods who are buying something on the whole foods, hot or salad bar and then putting a few Teff chips alongside it. So it’s really cool to see how folks are finding new ways to incorporate teff nutrition into their meals and into their dips, sides and snack habits.

 

Andrew D Ive  

 

Do you see this has the potential, based on that kind of usage, to partner with companies that, for example, are in deep space, whether that’s you know, a Sabra or similar, are there opportunities to partner?

 

Aleem  

 

I think it would be really exciting. To be able to work with a large player to be able to merchandise the product alongside each other in store, we think it could be a really cool way that drives discovery and trial in retail. That could be really fun for customers.

 

Andrew D Ive  

 

How do kids respond to this product?

 

Aleem  

 

When I was doing demos with  Whole Foods kids tried the product and loved it. Kids respond really well to the sweet smoky barbecue because it the little bit of sweetness kind of draws them in and then the traditional barbecue flavors are kind of really interesting and exciting to kids. Not spicy. not spicy at all.

 

Andrew D Ive

 

How are you getting the barbecue flavor?

 

Aleem  

 

The barbecue? We use a little bit of smoked paprika but we also use some garlic and other spices but we do it without having to add chilies.

 

Andrew D Ive  

 

Okay, great. Awesome. So in terms of manufacturing this product, you guys manufacture it in your own facility, or have you found a larger organization that can do it for you. How’s that working out?

 

Aleem  

 

Yeah, we found a large organization that manufactures them for us and we gave them our product specifications and then they made it to our order. And then we take it and we focus on bringing it into retailers working with them to put it in the right spot and developing smart promotional strategies around it. Perfect.

 

Andrew D Ive 

 

What were some of the reasons why you decided to go for a larger organization from a manufacturing perspective?

 

Aleem  

 

We think they offer us the ability to scale cost efficiently and quickly. You can put costs directly into inventory rather than putting them into machines, capital expenses, that would actually take a whole lot more capital to do that and, quite frankly, we wanted to work with folks who have the expertise, decades of making snacks or the experience to leverage that, rather than have to learn that ourselves directly.

 

Andrew D Ive  

 

Consistent quality, high quality sourcing of great ingredients, etc. I would have thought, 

 

Aleem  

 

Yeah, it’s definitely made the process much faster to launch a brand.

 

Andrew D Ive  

 

So has this been something that you’ve been able to do without growing an enormous team as you’ve outsourced that aspect of production?

 

Aleem  

 

Yeah, I’ve been able to do it pretty leanly, at the moment I am the team.

 

Andrew D Ive  

 

You empty the waste paper basket as well as being the CEO. That’s super nuts. So if you got run over by a bus, the whole brand would disappear right? 

 

Aleem

  

Let’s hope I don’t get run over by a bus haha ….

 

Andrew D Ive  

 

From now on you are not allowed out. Okay, so this is step one. Grocery sector is currently where you’re at, particularly wholefoods direct to consumer. By the way, while we were talking, I know that I kind of kept focused on the camera, but I just placed an order for eight bags of the barbecue from Amazon for $44, which is great. I’m looking forward to it arriving on my doorstep on Tuesday.  But what it did say is that the product is getting sold out. I think it told me that there were eight left. So people if they’re listening to this should rush, because, you know, if we have more than eight people listening to this podcast, it’s quite possible that there won’t be any product left when you come to order yours. So does it ever go out of stock because people are sort of jumping at it quite quickly?

 

Aleem  

 

You know, if it does, it goes out temporarily. But we get the inventory alerts pretty quickly and we’re able to resend the product to Amazon for shipping pretty quickly. So if you do order the last batch, don’t worry. We’ll send more and right away.

 

Andrew D Ive  

So you got eight, there’s eight left in inventory right now. Just so you know. Perfect. We were on it. Okay, so a couple of quick questions just remain, and then we’ll disappear. One piece of advice for a startup founder in the food category?

 

Aleem  

 

I would say it takes time so just be prepared to have a longer time horizon and be patient. I think that goes hand in hand with common advice of being persistent and not giving up.  The other one that I wish I’d known at the outset would be to understand a little bit more about field merchandising and work that’s done in stores at the shelf level that can be really, really important in the early days, especially in natural stores to drive velocities, drive growth, drive awareness of the brand. So those are two things to think about. For founders.

 

Andrew D Ive  

 

Yeah, let’s unpack that product review cycle. What’s that? And how do they take that into consideration as they’re building their business?

 

Aleem  

 

Retailers will break down their inventory of 1000s and 1000s of skews into subcategories and then once or twice a year, they’ll review that category of products and that cycle will take three to four months of review where they’ll take in new products. They’ll review price cost promotional strategies, review it against other products they have on the shelf, they’ll also review products they have on the shelf today and see who’s underperforming as well.  

 

Aleem

 

And that’ll give them an idea of what products they want to bring in and then have three months in approximately three months after you submit. You’ll find out if you’ll go live with that retailer, and that can be anywhere from an additional three months to six months out from that and so on. Depending on when you start your conversations with retailers, you could be looking anywhere from a year to nine months before the product actually hits the shelf through a category review process.

 

Andrew D Ive  

 

So if for example, you launch your product in January, February, March, and then your cycle for a particular retailer isn’t until q4, or October through December, you may have to wait nine months before you can even start the kind of sales cycle engagement cycle with that company, right?

 

Aleem  

 

Absolutely, yeah. And then that could be an additional six to nine months from that beginning of that review cycle to hitting the shelves.

 

Andrew D Ive  

 

So it could be as long as 18 months, maybe more, and that’s if they say yes, straight away.

 

Aleem 

 

That’s right. Yeah. So be prepared for something like that. And I think one way to get ahead of it is even start planning the manufacturing launch date around the key retailer in advance.

 

Andrew D Ive  

 

So if that’s the case, how do you get samples to a retailer, if you’re not going to pull the trigger on a large production run? Because you don’t want to be sitting on inventory that becomes stale over time?

 

Aleem  

 

Yeah, you know, I think there’s approaches that I would advise founders to think about. One is to identify buyers or members of teams called foragers, whose job is to kind of identify local entrepreneurs, and send them even pre production samples just to get their feedback. 

 

Andrew D Ive  

 

So pre production samples, tell us what you mean? 

 

Aleem  

 

Yeah, pre production samples would be stuff that’s run on a line, but it may not have the fully finished packaging. It may not. It may just be in the kind of a silver plastic bag, but it’s something that’s come out of an r&d process that you know, is fairly representative of what you think you could make at scale. That can be a great way just to get the  retailer bought into the product. And then you know, sometimes if, if it’s a first time founder or brand that’s launching a brand new product before they’ll want to see the product, you know, in a finished bag, before they place a purchase order and finally approve the product.  

Aleem

 

And one thing I would advise founders to think about is discussing with your manufacturer, what an aligned trial might look like. So that’s something that’s not on the r&d line comes off the full production line, and it’s finished in finished packaging, you’ll pay more per unit for it because it won’t be a full scale production run.  But you’ll get a couple of pallets of inventory, a few 100 units of product that you can then show to these retailers. And then I would advise founders to sell the inventory online, set up a Shopify account and start selling online and drive some traffic to your brand and hopefully in that time, you will have gotten a retailer committed to bringing you the product and giving you a yes in a day for launch for the product.

 

Andrew D Ive  

 

So in that case, you potentially need to commit to a minimum order quantity with those manufacturers who will do a kind of small limited line. That minimum quantity of that limited line still could cost 30,000 40,000 50,000 dollars depending on the minimum order they need before they’ll start producing it right?

 

Aleem  

 

it can definitely be upwards in that range. You know, I think we were able to do it a little bit more cost effectively between 10,000 and $20,000 initially, but yeah, it can definitely be an expensive way to start. If you feel confident I would encourage the first step in the process, taking product off the r&d line, even if it’s not fully packaged, and start getting some sense of interest in the product from retailers.

 

Andrew D Ive  

 

Absolutely. And when and when they go through all of these different steps and processes to get to the point where a retailer says Yes, we’ll give you 100 doors or stores. When we talk sorry, anyone listening. We’ve talked about doors being doors and stores, they are the same thing, but people talk doors, I don’t know why they just do.  So there’s something to learn the lingo. If you want to get into one of the retailers. Once you get into those doors, you could find if your product doesn’t have the right velocity if the number of sales required on a week by week basis, that when the account goes through a review again next year. If you don’t have the velocity, your product could be taken off, right? Yeah, that’s correct. So what do people need to do? Once the product is on the shelf to make sure that they’re selling the product, they’ve got the velocity necessary to stick around.

 

Aleem  

 

Yeah, so we found what we call the three d strategy to grocery retail success. That is, demos, displays, discounts and we find this is an effective way to drive trials and really, I think the key is not to do them separately, but to do them synchronously around the same time. 

 

Aleem

 

So, yeah, another important thing to think about is when retailers plan the promotions or their discounts on products in stores, oftentimes, that can be three to four months lead time to get on that schedule early, figure out when your price is going to launched and don’t wait till you’re actually in stores to ask about the promotional schedule, ask about it once you get approved.  And then get that on the books early. And when that’s on the books, use that event, that promotional discount event to go into stores, either you personally or with your field team members, and talk to store managers about this promotion, and ask them for better spots on the shelf or additional spots off the shelf, over the salad bar by the checkout. 

 

Aleem

 

At the end of the aisle it’s hard to overstate the importance of this, this is critical.  And then simultaneous to this, I would schedule a demo in these stores, when the product will be on display, and discount and sample the product, get people to try it, you can do it yourself or you can also hire brand ambassadors to go out and help you do this, with you alongside or in multiple stores at the same time. And this combination of activities will really help drive the velocity rates up and get people to try the product for the first time and if it’s great, they’ll come back again in a few weeks and pick it up.

 

Andrew D Ive  

 

So a couple of things that occurred to me as you’re speaking Aleem, and I think that last point is probably the most important. You can do all the demos, all the discounts, etc, etc, as possible but if ultimately the product, when it goes into people’s mouths, isn’t compelling, and morish, where people are like, oh, I’ve got to buy myself another bag of these…. If it’s just a kind of a mehh, or an okay, product, all of the promotions, discounts etc in the world are not going to make that brand work. 

 

Aleem  

 

Yeah, that’s correct. It just isn’t. 

 

Andrew D Ive  

 

I think the other thing that Aleem mentioned, which I think is just a really, really great point and I’ve seen different approaches here, if a store says to you, we want to put it into all 300 stores or all 500 stores, that’s a risk. On the one hand, you’re going to be super excited about oh my goodness, we’re in 500 stores now but if you don’t have the capacity to really support those 500 stores, and in some way, encourage whether it’s through a direct relationship with the store and the employees, or promotions, etc. If you can’t support those 500 stores, it’s a risk. So am I wrong Aleem?

 

Aleem  

 

No, that’s absolutely right. I think until the brand has some exposure and awareness, it can definitely be a risk and I think that’s one of the reasons we stayed close to the metro New York areas that are in a focused geography, we’ve been able to provide much more support for the stores than we would have if we had the stores spread across the country.

 

Andrew D Ive  

 

You can figure out what works. You can fit like your 3d approach. You’re learning all the time how to make people love your products, which you know, again, it’s about getting it into their mouths and getting them to taste it. That’s the most important thing. But you’ll learn what works and then you can roll that out across more regions as and when you get those opportunities.

 

Aleem 

 

Yeah, that’s absolutely correct. I think a focused strategy is really important.

 

Andrew D Ive  

 

Aleem, this has been amazing. I’m sure that people want me to ask you another 110 questions but maybe the best thing to do in this situation is for people who are listening to this who have questions I haven’t asked whether their potential consumers, potential partners, potential retailers, or you know, distribution partners in that sense, or even investors, is for them to reach out to you directly. What’s a good way for people to learn about Wild For to engage with you around your company and your brand and your products?

 

Aleem 

 

Yeah, absolutely. They can find us on social media, instagram, twitter, facebook at wild for teff. And that’s a fantastic way to engage with us online in social media.

 

Andrew D Ive  

 

Can you spell that out for folks?

 

Aleem  

 

Yeah, that’s @wildforteff

 

Andrew D Ive  

 

From a website perspective, where do people go on the interwebs?

 

Aleem  

 

They go to www.wildfor.co

 

Andrew D Ive  

 

And on Amazon, they just type in…….what did I type in? I think I typed in wild for snacks and it pulled up your listing.

 

Aleem  

 

Yeah, wild for teff chips or wild for TEFF. All those should pull it out.

 

Andrew D Ive  

 

Awesome. Okay, so if anyone wants to get hold of Aleem and Wild For they can go buy a whole bunch of products off of Amazon. They are in the New York, Connecticut, New Jersey area, run to a whole foods store, your wild for.co website, I’m guessing you’ll update it as and when you decide to roll out to other stores, other regions. And that’s that’s, you know, that’s the best way to grab hold of you. Is that right?

 

Aleem 

 

That’s right. Yeah. And also, you know, follow us on social media and you’ll definitely be in the know about new retailers and promotions as well.

 

Andrew D Ive

  

Fantastic. Aleem, thank you for your time. I appreciate you. Thanks for being part of the Big Idea Food podcast today. 

 

Aleem  

 

Thanks for having me, Andrew. This was really fun. 

 

Andrew D Ive  

 

Cool. Thanks, man. 

 

Aleem  

 

Bye. 

 

Andrew D Ive  

 

Thanks for listening to the big idea food podcast today. Great conversation with Aleem and Wild For. If you have any questions for Aleem or want to reach out to Big Idea Ventures or Wild For, you’ll find contact details below this podcast or below this YouTube video. 

 

Always appreciate your feedback and comments. By the way, if there’s anyone you think we should speak with in the Food Innovation space, please do let us know. We’re always open to meeting and talking with new people doing great things in food. 

 

So thanks for your participation today. Please do like and subscribe, and maybe come back next week and watch or listen to next week’s podcast. 

 

Thanks very much Andrew, signing out. Bye bye

Podcast #8: Aqua Cultured Foods CEO and Co-Founder Anne Palermo speaks with Andrew D. Ive from Big Idea Ventures about starting a company producing whole cut seafood alternatives using fungi.

Big Idea Ventures is launching our very own podcast “The Big Idea Podcast: Food”. Each week Big Idea Ventures Founder Andrew D. Ive will speak with some of the most innovative minds in the food-space and talk about the exciting projects they are a part of.

To listen to the 8th episode click the links below!

Podcasts

• Sticher
• Spotify
• Google Podcast

YouTube Episode

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Transcript:

SUMMARY KEYWORDS

product, seafood, food, consumer, people, uncapped, based, oceans, restaurants, protein, growing, investors, reach, exciting, created, alternative, quick serve restaurants, piece, shrimp, excited

SPEAKERS

Anne Palermo, Andrew D Ive

 

Andrew D Ive  

Hi there, welcome to the big idea food podcast. This is Andrew Ive from Big Idea Ventures, your host. Today we’ll be talking to Aqua Cultured, a company producing a funghi based or mushroom based whole white fish and shrimp. It’s an incredible product, no processing, no added ingredients. Very clean, nutrition is fantastic and these guys are trying to kind of revolutionize the seafood industry. So why don’t you listen? Let me know what you think of the podcast, either via the chat box or the comment box or via reaching out to us on Instagram or LinkedIn or one of those places. Love to hear your thoughts on the podcast. Let’s get into it. Thanks. Bye.

 

Anne Palermo  

Hey Anne, how are you?  Hi Andrew, doing great. Really excited to be chatting with you today. Thanks for the opportunity.

 

Andrew D Ive  

No problem at all. Aqua Cultured. Great company. We’re really glad to have found you guys. Tell us what you do?

 

Anne Palermo  

Oh, well, this is great. What we’ve done is we’ve created the world’s first whole, mussel cut, seafood alternative through the process of fermentation. What makes this particularly exciting is our proprietary strain of fungi is grown and not extruded. This allows us to maintain a superior nutritional profile to other forms of plant based seafoods in particular, while maintaining that traditional seafood like texture. So it’s a really exciting product I’m excited to be working on it.

 

Andrew D Ive  

Did you rehearse that? Or did you have it written down or have you said it so many times in the last six months that it’s just verbatim? but unpack it for me, come on, let’s, give the people a more common man or common person, or common woman description of what that really all means. Okay, so Aqua Cultured, what’s the product? Tell me what people get to either eat or use?

 

Anne Palermo  

Sure. Okay. So Aqua Cultured foods has created an alternative to traditional seafood. How we do that is by growing a proprietary strain of fungi into a whole piece of like a shrimp or a white fish fillet. We’re working on aki tuna, which we’re really excited about. So with a goal to remove the strain on our oceans and create a more sustainable food source.

 

Andrew D Ive  

Okay, so a solid piece of white fish or shrimp and you’re using funghi to grow that and it has the same, and I’ve seen the product so I know because I have seen it. It looks like a piece of white fish. It looks like a piece of shrimp. It looks like it, it has the texture of it. It’s pretty uncanny actually. Then you are using that to create a product that people can then take take home to their kitchens and make some great dishes alternative to fish and seafood.

 

Anne Palermo  

Yes, exactly. So that’s what we’re particularly excited about. Our first product is a popcorn shrimp, we have three flavors, an original, a spicy and a coconut shrimp. These ones are going to be merchandised in the frozen section next to traditional seafood. It’s great. It’s got very similar nutritional qualities to that traditionally caught or raised shrimp and that it’s high protein. It’s got the macronutrients that you’re really looking for, it is as close to unprocessed as you can possibly be.  

 

So we’ve got a really great nutritional profile. But what I’m particularly excited about is our fresh, refrigerated product. This is the whole cut pieces that just have the similar texture, feel, nutritional, just absolutely look and appearance of traditional seafood. So what we’re creating is, for example, a piece of white fish that has the look and feel of white fish.  So it could be used as a piece of sashimi and that is kind of how we are marketing it at first, just because of the beauty of the product and its appearance. So we want to really be able to highlight that and really show how differentiated it is. And this type of product is going to be the first to market in the fresh refrigerated section, preferably next to the other forms of alternative proteins such as Beyond Meat or Impossible Meat in the fresh refrigerator section.

 

Andrew D Ive  

Got it. So one of the things we’ve experienced in the alternative protein space, the plant based, cell based, fermentations based side, is that complaints have been raised that the early iterations of these products include lots of ingredients, can be processed, and that is not a clean label, right? The labels are often, you know, pretty darn long for some of these products. 

 

Anne Palermo  

Right, exactly. See, I’m so glad you brought that up. That is one of the areas I’m really excited about. We’ve got an extremely clean ingredient list, it is just the protein. So through biomass fermentation is how we’re creating and growing this particular strain of fungi. So all of the nutrition is naturally occurring. It’s got high levels of protein, has high levels of fiber, it has macro and micro nutrients, vitamin B’s. It has everything you’d really need or want in a fungi based protein. 

 

Andrew D Ive  

Now, I think it’s fair to say that a lot of these companies that have been creating products over the last three to four years have taken on board that feedback and have done what they can to, to simplify and to clean up the ingredient nutritional panel, but in your case, it’s a solid piece of Funghi and therefore, no processing, no machines. Well, obviously, I’m guessing there is some preparation in terms of cutting and forming, but in terms of multiple ingredients, lots of processing, lots of steps in the manufacturing, you guys are just not anywhere near that, are you?

 

Anne Palermo  

Now, interestingly enough, mushrooms are not considered plants, they’re considered closer to animals. It’s a third unique Kingdom all and of itself. However, the FDA classifies it still as being a plant and so the industry is kind of out on whether or not fungie based protein products, such as Aqua Cultured Foods, should go by plant based, mushroom based, funghi based so we’re all kind of in it together working out the exact terminology but the beauty of the product is how clean it is, and nutritionally superior.

 

Andrew D Ive  

Now one thing I’d like to also dig a little deeper into, you mentioned you used the term biomass fermentation process. Now I’m sure that means something to scientists and people really involved in this space but, if I can simplify it, or can you simplify it for us, it’s just growing it, right? You’re just growing. I guess the fermentation side is what you would do with a beer or a product like that. So I don’t want people to start thinking about oh, my God, biomass fermentation processing. This is scary and horrible. What do you mean? Is it just growing a piece of something?

 

Anne Palermo  

I am glad you brought that up. For clarity sake, yes, we are just growing a mushroom. Very similar to how button mushrooms are produced by industrial level. I’m not sure exactly but they use trays with some form of sawdust or coconut husk and then they seed it with the pure spores, or they inoculate it with pure spores and then it grows.  Well, we’re doing something very similar to that only we are growing it in trays with liquid.  So it’s still going to be grown and produced vertically, which is very exciting, because it’s allowing us to create a very sustainable product in the fact that it uses significantly less water, energy and land acreage for production. So we’re having a very strong significant environmental impact that way which is exciting. But when it comes down to what we’re doing, yeah, we’re just growing a mushroom in a tray. So it’s very, very simple.

 

Andrew D Ive  

Okay, so biomass fermentation processing is growing little mushrooms or big mushrooms in a tray?

 

Anne Palermo  

Pretty much. Yeah, pretty much. The biomass has been bigger so it’s not like a powder. So yeah.

 

Andrew D Ive  

Okay, got it. So much more sustainable, low levels of processing, significant amount of protein, similar nutrition to a fish or a shrimp or whatever. I’m scratching my head a little bit. What are the downsides? What are the challenges? Why do we still say no, it’s not for me?

 

Anne Palermo  

I don’t know. I don’t think there’s a downside on a consumer level. It’s better for you. It’s better for the environment. It tastes great. It has the familiar texture that you’re really looking for, it’s tender. I don’t think there’s a downside at all from a nutritional point or a sustainability standpoint, or, of course, from an animal statement environmental impact. So it’s superior on multiple levels.  

 

Anne Palermo

I guess the challenges that we’re coming up with right now is the fact that this technology is just so cutting edge and new, that we’re going to have to create our own facility in order to grow it because co packers and co manufacturers of this type of product are not currently available, they don’t exist.  So on one hand, it’s really great, because we’re going to be able to safeguard our trade secrets, maintain superior quality of the production and just have a handle on that whole supply chain. On the other hand, it’s a significantly larger project that we’re entering into. 

 

Anne Palermo

However, understanding the importance of those trade secrets, it’s probably going to end up being for the best because, like I said before, we can really safeguard our trade secrets, in addition to the fact that we are going after three patents.  So highly defensible product, really excited about all that but throwing in the mix, having to figure out the facility it’s a lot to work to do but it’s very manageable. That’s part of the excitement about what we’re creating. If you’re going to build a facility, this is the one you want to build because of how straightforward it is, and how similar it replicates the industrial process of button mushroom production.

 

Andrew D Ive  

Absolutely, and in the last three to four weeks Seaspiracy has come out and a lot of people are talking about it. It’s raising a lot of questions and discussions around how we’re dealing with our use of fish and so on from an ocean perspective. Is that kind of discussion that’s going on right now helping Aqua Cultured? Is that part of the discussion that you’re getting into with potential investors?

 

Anne Palermo  

Yes it really is. It’s shining a light on what’s going on, and how changes are needed. What’s so important about that is that, from a consumer level, the consumers are looking and searching for these alternative products and at investor level, there’s more awareness so the opportunity is really having a light shone on it.  

 

There are significant case studies, there’s research, there’s due diligence out there for investors so that they don’t necessarily have to put in the 10s of 1000s of dollars to do it on their own. These case studies are already created and out there. So it’s just shining a light on the problems in general and it’s really good for everybody, you know, the more information that’s out there, the more it’s talked about, the better our chances of increasing and saving our oceans sooner rather than later. That, I think, is definitely an industry wide win.

 

Andrew D Ive  

Now, the great thing is that where the consumers go, the retailers and the food service follow. Because dollars and giving consumers what they’re looking for, is what the retailers and the food service folks are focused on. Are they expressing an interest in  these alternative seafood products? In Aquaculture in particular?

 

Anne Palermo  

Yes definitely and the industry itself is a nascent industry right now, so I think plant based seafood is about 1% of the size of the total plant based market right now.  However there is extremely high demand for this product. There just haven’t been a lot of companies diving into the space. So there’s very high demand.  Recent studies have shown there’s a 13 times increase in demand for the products in its growth. It is expected to grow to $1.3 billion within the next 10 years of plant based seafood itself.  

 

I’m not sure if that’s just America, but I feel like it probably is because globally we’re talking about the seafood market being a $206.9 billion market. So it’s a huge, massive industry.  With the number of people moving towards plant based everything… plant based meat, plant based milk etc means that plant based seafood is now starting to get the attention that it really truly deserves. So what we see here is massive demand. No players or very early smaller players, but no main one name which puts us at Aqua Cultured in a very uniquely interesting and exciting position to come to the forefront and be the household name that we hope to be.

 

Andrew D Ive  

Fantastic. I agree. So I’m guessing investors are knocking on your doors. How’s that been going? Have you had folks who are interested in supporting the mission and also seeing this as a potential wealth creation opportunity for their own investments?

 

Anne Palermo  

Yeah, you know, it’s going really well, which is exciting. Especially since the BIV announcement has come out, we’ve been having a lot of investors reach out to me and set up phone calls. Since Seaspiracy, people in my network have just kind of been reaching out and making introductions to VCs and all the VC calls have been going really, really well.  There’s high amounts of interest in the product, there’s high amounts of interest in the technology and the defensibility of the technology, there’s a lot of interest in being a key player early on, that’s really poised to become a major player and leader in the market but right now, as being the only whole muscle alternative for seafood, I think we’re in a pretty good position to take advantage of that, especially with the sources of BIV so this has been a real blessing for us.

 

Andrew D Ive  

You’ve been great as part of the program, you really have. Your attitude, your approach, your drive, your hustle, any dimension you care to think of from a founder perspective, we were all cheering for you and we think you’re amazing. Which brings us to you guys. Who are the founders? Tell us a little bit about your background and story, if you wouldn’t mind?

 

Anne Palermo  

Of course. We’ve got a very unique background and story. My partner and I have a combined 25 years of experience in food and beverage. So with CPG, food and beverage, we’re really experienced on the marketing, the sales, the product development side. We make a really great team with very complementary skill sets.  So, I started out in finance and I worked in finance for quite some time and then I realized that my calling was towards food, so I went to culinary school but always knowing that I wasn’t meant to be working in restaurants full time. I went for the passion and the love of the food and beverage industry.  

 

Anne Palermo

So I graduated and I combined my finance and entrepreneurial background with my culinary background and started a snack company which I took nationwide and grew really rapidly. So that was exciting. However, it wasn’t necessarily as close to my heart as this is. So just really seeing the world, seeing what was going on with our oceans, the fact that the global population is expected to increase by 2 billion in the next 30 years, understanding the significant impact of that and I’ve always had a tendency to want to reach out and help where I can.  

 

Anne Palermo

That’s when I discovered this product and through processing and the process of refining, experimenting and testing really created something that is game changing on so many different levels. The reason why I’m so particularly excited to be working with BIV is because they were able to help us with the networking and the support in order to make this product become what it has become.  My 

co-founder is truly amazing. She also has a background in food and beverage. She had a snack company as well that she has grown very successfully but prior to that she worked for Schreiber foods, which is a $6 billion global dairy company, where she worked in sales for both private label and quick serve restaurants or just the restaurant food service channels. Food service is exactly where we want to focus, at least early on, while we’re developing our value added product for the retail space.

 

Andrew D Ive  

Okay, so that’s you and that’s Brittany, you’re both f&b, a lot of experience, product development, marketing, culinary, so you’re kind of approaching it from lots of different angles. What do you see, from a business perspective, as the key challenges or things you need to get right. 

Obstacles over the next year or two as you grow, what are the things you’re sort of cognizant of and trying to solve as you move forward?

 

Anne Palermo  

Great, really good question. So some of the areas that we really need to work on is our recruitment. We need to hire a few truly powerful, motivated, industry changing key hires. Somebody for operations and somebody on our science and tech side, in order to help move the business forward. It’s a lot of work and right now, our small but very capable team are looking to hire and recruit those key hires.  Then also fundraising. So we’ve started, we are still very early on in the process, but we are in the process of fundraising and that is going to be truly game changing for us. It’s going to help us We will put all the key resources onto scaling up and getting the product out there, because the sooner we can get a product out there, the better it’s going to be for everybody.

 

Andrew D Ive  

Okay, so recruitment, and fundraising. From a recruitment perspective, there are two roles you’re looking for right now. Right? So one is an operations person just in case there’s anyone listening who happens to be in operations and is really excited about what you guys are doing or know someone that might be. What are the kind of couple of the key points you’re you’re needing, from an operations experience perspective?

 

Anne Palermo  

Sure. Well, somebody who is a good cultural fit, because they’re going to be joining the team very early on and working very closely with my partner and myself so they have to be experienced in the industry. Preferably if they have experience on food and beverage and food tech, because there are unique needs. Somebody who has supplier connections, somebody who has a lot of experience with forecasting across multiple channels. Somebody who’s good with mathematics. These attributes have come straight off my tongue, there may be more.

 

Andrew D Ive  

Yeah, that’s great. So in terms of your website, where people can go and find out about some of these things, both the product the team, maybe recruitment, etc, what website do they go to for that?

 

Anne Palermo  

Right, great. Well, right now it’s aquaculturedfoods.com So with a D, so Aqua Cultured Foods with a .com. We are going through a rebrand right now. We’re going through the process of a rebrand to be Uncapped Foods. It’s a much more consumer friendly name, that will allow us to really capitalize on the cross category potential.  So our packaging is going to have shrimp or seafood really big. So it’s not confusing at all. But we want to be able to, at some point, take advantage of the cross category potential of the product that we’ve created. So if we have something called Aqua Cultured Foods and the science side is very relatable and great, but at the consumer level we’re hearing that it’s got a little bit of a ewww, from consumers….

 

Andrew D Ive  

Really, because in England culture means someone that has class and elegance and style. So Aqua Cultured sounds perfect to me. So here’s the thing for everyone, anyone listening, and there’s probably only about seven people listening. So I’m not sure this is data driven but anyone listening if you want to add a comment, either a thumbs up or a thumbs down for the brand, Aqua Cultured versus Uncapped Foods ….. So, okay. Aqua Cultured, or Uncapped Foods. Give a thumbs up for one or the other and a thumbs down for the one you like least. And I will bet you Anne Palermo and maybe I shouldn’t say this, because then people are going to go against me, but I bet you 85% of the people are going to go for Aqua Cultured. But we’ll see. We’ll see.

 

Anne Palermo  

And this is something I’m glad we’re chatting about too, because the cultured side is in Posh as you mentioned, is exactly what we thought when we first named it. However, we’re getting one of the branding experts that we got connected with by BIV, telling us that it was the best product with the worst name he’s heard in a while.

 

Andrew D Ive  

Wow. Yeah, I guess that shows when you put the word expert at the end of a sentence for someone’s description, I don’t know if that means anything or not. But I think if you’re talking to somebody who is like deep in the weeds on alternative protein, cultured means cell based and means science and all those sorts of things, but to your average run of the mill, consumer who aren’t up to their elbows in alternative protein, saying something’s cultured doesn’t mean science.  

 

Andrew D Ive

It means it’s elegant, it’s stylish , it’s sort of nice. I guess cultured is nice. I guess it depends on where you come from politically, everything is political nowadays. But so yeah, Uncapped to me has no meaning. So, I know I’ve discussed this with you before, so I’m not going to bring up an old discussion, but yeah, anyone listening, thumbs up or thumbs down to Aqua Cultured versus Uncapped Foods, if you’d like one versus the other love to get your comments and feedback and if everyone says Aqua Cultured, then Anne, you’re going to have to listen to me and rethink.  

 

Anne Palermo

Okay, let’s not get off track completely. Back to Aqua Cultured. Sorry, back to Uncapped Foods. We’ve talked about you guys, we’ve talked about the challenges. We’ve talked about recruitment and funding, kind of being the key challenges. From your point of view, if everything goes to your longer term plan, where will Uncapped Foods slash Aqua Cultured Foods be in five years time? Talk about, if you wouldn’t mind, your place in the market, maybe talk a little bit about products and maybe even talk about geography, you can take that in any direction you want.

 

Anne Palermo  

Yeah, sure. I think Ideally, we’d have a similar trajectory as that of Beyond Meat or Impossible Meat. We’re coming in as an early player with a significantly improved upon product in the alternative seafood space. So we’ve got that, which is really great.  

We are targeting both food service and retail branded for multiples for a few reasons. Food Service, because 70% of all seafood is bought, purchased and consumed out of home in restaurants. So that’s a massive opportunity that we’re really and truly targeting. 

 

Anne Palermo

With that, then also, we want to leverage our name recognition and the experience of the whole eating experience with an in grocery store, in home eating experience. So we are going to be leveraging that recognition, as I said, to get our value added product onto the shelf in the grocery stores.  So that’s our initial strategy for go to market. However, we’ll also, since we’re American, be launching in America. However, we see this as a global play because seafood is consumed in significantly higher quantities per capita globally than it is in America and so we really see this being something that will have very high acceptance rates overseas. So we do see ourselves going globally with this.

 

Andrew D Ive  

Do you see yourself having the potential to partner with an existing seafood company?A company that has, for the last 20/50 or 100 years, been selling seafood as a core product with a strong understanding of the consumer distribution, all of the things that you’re going to need to understand to do well with your product, or based on what they’ve been doing? Do you think there’s just not a cultural fit, and it’s not a relationship that you would look at? 

 

Anne Palermo  

You know, that’s a really good point. On one hand, I love the idea of partnering with a global seafood company, because they do bring all of those fine attributes and experience and supply chain that you are talking about. On the other hand, seeing everything that’s going on in the industry it’s a little bit scary.  So it’s like, do I want to be associated with that side? But at the same time, if they are truly trying to make an impact and to have an impact, like why wouldn’t I be interested in having a conversation to see where things could potentially lead? 

 

I think that the opportunity for partnership could be wonderful.  As long as both companies are Mission aligned, I think it could make a lot of sense but like I said, we’d want to be mission aligned, we want to make sure that we are trying to save our oceans and we want to make sure that we’re trying to feed the 2 billion additional mouths and we want to do it sustainably, and deliciously so it’s something I hadn’t really thought of, but I think it’s something I should truly consider.

 

Andrew D Ive  

I think that’s a really great way of thinking about things. The biggest impact you guys can have on the ocean, you know, on what we’re doing to it, is to make your product as readily available and accessible, as delicious and as amazing as possible to as many people around the world as possible. So the more people that can consume Aqua Cultured products and Uncapped Food products, the more they won’t be consuming seafood.  

 

And you know, I think there’s the potential for a significant amount of profit for those traditional seafood companies, who know what consumers are looking for when they’re buying popcorn shrimp, or white fish, etc. So that consumer understanding is important. The distribution channels are important and, if you guys can sell millions and millions of units of your product, which is fungi based, that’s a number of fish that aren’t necessary to be farmed from the ocean. So let’s make you guys as globally successful as possible. I think that’s the solution to solving some of the challenges we have. 

 

Anne Palermo  

I feel you Yes, definitely. 

 

Andrew D Ive  

All right. So from an investor perspective, you’ve mentioned that you’ve already had some investment, obviously, we invested. What kind of investors are you looking for? And what kind of relationships on that side of the equation are you seeking out?

 

Anne Palermo  

So we’re currently seeking out smart money, because it’s a partnership, especially with where we are in the production cycle, in the growth cycle of our company, so we’d like to have smart money to help us invest, but also the contacts, the experience, the understanding of the industry, where we are, where we’re going, how we’re going to get there and then the ability for an investor to make introductions to some key players in the industry that we may need to speak with at some point, or maybe some buyer intros.  There’s always so much more value in smart money and so I think that is who we are initially targeting, especially because in this space right now, the alternative protein space, particularly alternative seafood, there’s a lot of money being thrown at it, especially because we’re fermentation and fungi based. So we kind of have all three really hot industry trends right now. 

 

Anne Palermo

So we’re trending towards the enviable position to be able to choose who is going to be on our investor team and I think we really want somebody who’s going to be part of the team with us.

 

Andrew D Ive

Absolutely. I don’t know where this is coming from but one of the things my wife has loved for quite some time is the occasional fillet of fish from McDonald’s now, she’s pretty high and she likes really nice food from really nice places. She also likes more accessible foods from companies like McDonald’s sometimes, I think there’s a time and a place for everything. Do you see the ability for Aquacultured and the kind of solid white fish that you guys are growing, being something that could one day be on the plant based fillet of fish menu for a company like McDonald’s?

 

Anne Palermo  

Oh, I definitely do, especially because our whole process, once we reach scale, is going to be really relatively inexpensive to produce. So it’s always going to be a premium product but we should be able to hit price targets that McDonald’s or any other QSR are really going to be interested in order for them to meet their customer demands on price. 

So we’re going to be able to provide a really delicious, better for you sustainable product at a price point that McDonald’s or any other quick serve restaurants are going to be interested in purchasing from us and it’s going to be a win win. I’d be very interested in pursuing that.

 

Andrew D Ive  

Perfect. From a prediction perspective, what? Where do you think you see Aqua Cultured Foods being sold first? Or where do you think you’ll see Aqua Cultured Foods being sold in first? Do you think it will be a restaurant? Do you think it will be a grocery store? Do you think it will be direct to consumer via your website? Where do you think people will first be able to find and consume your product?

 

Anne Palermo  

That is another great question. Later today, my partner has some phone calls set up with a really famous chef in the Chicago area so I’m going to hope that that’s going to be our first to market experience. In a really nice high end restaurant. However, our first experience, we were initially thinking we were going to go to market with our fresh, refrigerated product first. However, there’s going to be a level of consumer education so that they don’t overcook it and with that, we’re thinking we’re going to go to e-commerce first. However, going to launch with a frozen product first and so direct to consumer through frozen doesn’t make as much sense is a strategy.

 

Andrew D Ive  

Excellent. Explain that for a minute. For people that aren’t in the know, why does a frozen direct consumer kind of approach not make a lot of sense in the first instance,

 

Anne Palermo  

Well, the reason why is it costs $50 to ship something frozen overnight, and there are supply chain hassles and that’s just if you actually get it there overnight. I’ve shipped products out to you and a few more people on the BIV team overnight, and they took three or four days to get there, even though it costs $50. So I don’t think the average consumer is going to want to spend that type of money on a product to be shipped. So that’s why I don’t think frozen and direct to consumers is the way to go.  

 

Anne Palermo

Now fresh refrigerated is different because we can ship it out frozen with ice packs and insulation, and by the time it gets to the consumer, it will arrive partially frozen, partially thawed, which is fine because it’s a refrigerated product and doesn’t have the same requirements. So that may still be a strategy that we’re entertaining, but as far as our first product launch, we are simultaneously going after food service and grocery channels and we have connections in both so we’re getting a lot of excitement on both because of the fact that we are so new.  

 

One of the top three major distributors of grocery products in the US are having continual talks with us, about it and it’s looking very likely that they’re going to pick us up. So I think they they’re just waiting for their buyer to come back from maternity leave. So I don’t know if I can say that, I hope I don’t get in trouble. So, that’s looking really strong and really exciting. I think that we can reach a lot of people that way but at the same time with 70% of all seafood being bought out of home, we would be remiss to not target food service. 

 

Andrew D Ive  

So again for those people listening, who are not in the food space, food service is …break that down for us. What does that mean?

 

Anne Palermo  

Sure, restaurants, mostly restaurants, cafeterias, University lunch halls, workplaces like Google’s cafeteria, any place like that, just any out of home place where you are going to buy food.  We’re mainly targeting higher end restaurants with our first raw products. We like the idea of the pokey bowl shops, because you can see how beautiful these pieces are. So there’s a lot of restaurants that do that, that we want to target.  

 

Anne Palermo

But with our fried, we can make it in so many different forms. So we can have a popcorn shrimp or we can have a calamari and others and so when you open those doors up, that’s a really great opportunity for quick serve restaurants. That’s what the QSR is in case you’re not familiar. So quick serve restaurants, and also fast casual restaurants.  So like Olive Garden, Red Lobster Fridays, any of those sorts of restaurants as well because those are really great. Like when was the last time you went to a fast casual restaurant and didn’t see like fresh fried calamari on the menu or shrimp. Yeah, and so these are just two really great, value added ways, to really target that key plant base Consumer demographic that doesn’t always have new and interesting and exciting things to try on a menu in a restaurant.

 

Andrew D Ive  

So when you’re ready, remind me, we’ve got a really good relationship with the head of culinary for the Hyatt chain across Asia. So the chap is based in Singapore, but he’s responsible for, I think it’s something like 250 to 500 Hyatt hotels across Asia..  He was the chap who brought Beyond and Impossible to Singapore, where it was first tasted. It was the Hyatt people who were in a line around the building and down the street to test these amazing plant based products. I think it would be great to get you guys to have him play with your product and kind of maybe launch it in Asia at some point. 

 

Andrew D Ive

Obviously, let’s get some real traction going on in North America, because that’s the focus but you know, when you’re ready, let’s remember to go talk to the chaps at the Hyatt because they’re pretty forward thinking.  Which brings me to the point, if there’s anyone in the US who is either on the hotel side, the restaurant side, and your consumers are gravitating towards plant based and you’re looking at new ways of getting excitement around your restaurant around your hotel, please do reach out to Anne or myself and let’s talk about how we can get Aqua Cultured as part of that excitement in your new place.  

 

Andrew D Ive

So 40 minutes, and I don’t want to keep you too long as I know people have things to do in their lives when they’re listening to this. What can people do, whether they’re consumers, whether they’re retailers, restaurants, chefs, investors, and so on? What can people do to help Aqua Cultured / Uncapped Foods with its mission? How do you want people to engage with you today and moving forward?

 

Anne Palermo  

Oh, that’s a really great question. Um, maybe reach out over LinkedIn. I check it all the time. So I’m Ann Palermo on LinkedIn, Aqua Cultured Foods, and I would love to have any kind of conversation with anybody.

 

Andrew D Ive  

Anyone at all wants to reach out to Aqua Cultured Foods on LinkedIn. Just reach out. Maybe, when she is rich and famous, she won’t answer but right now, as she’s building an amazing food company, she will absolutely answer you. So that’s LinkedIn. I’m guessing you’re aquacultured.foods.com  Yeah, and it’s Anne with an E. So anne@aquaculturedfoods.com? Oh, email. 

 

Okay, now you’re gonna get all kinds of, I don’t know, hair growth, hair growth offers and all sorts of other random things now…. better change the name now!! What would be one last question before we head off into the podcasting sunset? What would be one piece of advice you would give a fellow entrepreneur that’s kind of coming up behind you. I know that you guys have been building this company for a little while now, what would be the one piece of advice you wish someone would have given you a year or two ago that you want to pass on to somebody?

 

Anne Palermo  

I think it’s don’t be afraid to reach out to people, you know, especially in this all protein industry. Everybody has the same goal and the same mission, you know, a rising tide raises all ships and I’ve been reaching out to people more and more and having more conversations. The more I have, the more I learn, the more they learn, just the better off everybody is. So, you get connected with people that way, and it’s just been really great for us overall. You just never know who might be interested in a conversation or who might think what you’re doing is really cool. So just put yourself out there is my number one advice. 

 

Andrew D Ive  

That’s fantastic. I hadn’t even thought of it. So, Anne Palermo, Aqua Cultured Foods, please do reach out if you’re a consumer,  retailer, food service chef, potential investor and if you want to find out more about big idea ventures, big idea ventures.com Big Idea ventures via LinkedIn. We’re always looking for great founders Like Anne and Brittany. I’m not sure we’re ever going to find as many great founders as Anne and Brittany but if you’re a founder in the alternative protein or food Innovation space, please do reach out to us and if you want to help Aqua Cultured Foods in their mission, reach out to Anne and Brittany. Thank you so much. Anne (with an E), thank you so much. I do hope people vote for Aqua Cultured Foods instead of Uncapped that will just kind of screw with your day. Just a little. Thank you for your time today. 

 

Anne Palermo  

Thank you, Andrew. It’s such a pleasure. I really appreciate being invited on your show. 

 

Andrew D Ive  

My show Oh, my goodness. All right. Thanks, everyone. back in a sec. Hi, it’s Andrew again. I hope you enjoyed the conversation with Aqua Cultured Foods. 

 

These guys are doing some incredible things so I know they’d love to hear from you. I know they’d love your engagement and support, please do reach out to them via their website and the various places like LinkedIn, Instagram, etc.  Big Idea ventures are the folks behind the investment in Aqua Cultured. We’re very focused on supporting the world’s best entrepreneurs to solve big, big problems. So love to hear from you about big idea ventures as well. All right, thanks very much for taking part in today’s podcast. Look forward to hosting you again on our next podcast. Subscribe, Like do all the wonderful things that mean we’re getting positive feedback in terms of what we do and, if there’s things we can do better, let us know that too. Thanks for joining the big idea food podcast. I look forward to chatting with you all next time. Bye.

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Podcast #7: Novel Farms CEO and Founder Nieves Martinez-Marshall speaks with Andrew D. Ive from Big Idea Ventures about starting a company that improves animal welfare, food safety and human wellbeing through development of the technologies necessary to advance cellular agriculture.

Big Idea Ventures is launching our very own podcast “The Big Idea Podcast: Food”. Each week Big Idea Ventures Founder Andrew D. Ive will speak with some of the most innovative minds in the food-space and talk about the exciting projects they are a part of. 

To listen to the 7th episode click the links below!

Podcasts

• Sticher
• Spotify
• Google Podcast

YouTube Episode

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Transcript:

SUMMARY KEYWORDS

meat, cells, scaffolds, pigs, companies, technology, product, scaffolding, farms, people, agriculture, cellular, grow, pork, protein, consumer, produce, bioreactor, animal, cuts

SPEAKERS

Nieves, Andrew D Ive

 

Andrew D Ive  

Hi, this is Andrew from the big idea food podcast. Thanks for coming. Today we’re going to be talking to Nieves, the CEO, and co founder of Novel Farms. Novel Farms is working with cellular agriculture, to create some amazing pork products and scaffolding, some really interesting technology and some interesting discussions around this new way of producing protein. I look forward to the conversation and look forward to your comments. Thank you. Hey, Nieves, how are you?

 

Nieves  

I am good and you ….. nice to hear your voice.

 

Andrew D Ive  

Nice to speak to you too. So Novel Farms, just tell everyone all about Novel Farms and what you guys are doing and why it’s amazing.

 

Nieves  

Oh, yes. Gladly. So Novel Farms is a cell based meat company that focuses on producing whole cuts of meat, and in particular, of premium meat, which means the most exceptional animals there are out there. And our edge is that we’re able to make whole cuts, because we’ve developed a scaffolding technology that is scalable, affordable, and that is the missing piece in premium agriculture right now, such technology does not exist. So that’s why we’re going for whole cuts.

 

Andrew D Ive  

Alright, let’s let’s kind of break this down for people who aren’t up to speed on whole cuts and the different kinds of terminologies and things. Just explain to us a little bit about what you mean by whole cuts and premium meat and so on. So for the people that are not in the space.

 

Nieves  

Yes, so cellular agriculture is a new industry that’s emerging, in which we can produce meat by taking a biopsy of an animal and then growing the cells in a bioreactor in that way, there’s, you know, no slaughter needed and it increases environmental and health benefits for the world.  So, of course, we are all working in this industry to create this meat, that is going to be beneficial. The problem is that when you take cells and just grow them in liquid solution, and then you make ground meat it actually means meat because it’s only the muscle cells, you know, but however, when you think about a steak, when you are a big meat eater, who really likes to eat a pork tenderloin, or brisket or all those things, well cellular agriculture right now is not able to recreate or form a tissue from an animal, like, that’s a whole different story, right?  In our body, we have our muscles, there’s muscle, there’s fat and there’s also a thing called connective tissue. So connective tissue is a structural network of proteins that serves as the scaffold for these muscle cells and the fat cells to grow on. So, without that structure, what you have is unstructured meat, you can make meatballs you can make sausages, etc. but you cannot, without the scaffold, you cannot make a whole gut.  So now, you know in regenerative medicine people can make organoids for transplant, etc. So it’s possible to create tissue in that particular case, however, the scaffolds that are used there are extremely expensive, of course, they’re going to be that organ is going to be put in your body and you know, the purity needs to be you know, very high grade purity. So for cellular agriculture, we want to use the same scaffolds because we know they work?  Of course it’s not possible because you can not produce a commodity. McDonald’s burger with such scaffolds, right because they’re extremely expensive. So Novel Farms was born to solve that problem, to enable cellular agriculture for us and later on for other companies to be able to make whole cuts, and then really show the world that, you can eat ethically, you can eat clean meat that doesn’t have these hormones and all these nasty things that are the result of growing and slaughtering the animals in factory farming.  If we don’t give the consumer something that is really attractive, that is as good as a pork tender loin right now from the animal.  So we think in other forms that the barrier can be surpassed by giving customers a product that  they are not going to be able to say no to, and that’s the reason why we are going in particular, to produce good red meats. Premium meats, the ones that are really highly valuable, expensive, in limited amounts to kind of entice the future consumer, and really convince them, not just by saying, Oh, this is the same meat, but by saying, hey, you now are able to eat this, look seriously at me. And this is thanks to cellular agriculture.

 

Andrew D Ive  

Got it. So, meat as a category is varied. Obviously, there’s many, many different kinds of meat products that people consume. Cell based, is a way of taking the cells of a basic meat, whether it’s pork, or chicken, or beef and being able to replicate those cells to the point where you can create meat without needing to slaughter the animal without needing to have an animal grow in a farm yard or in a factory for months at a time, right?  The premise here is that because meat is such a varied range of products, cellular agriculture right now is only able to produce unstructured meat. So to your point, meatballs and ground beef and basic meat products. But consumers want variety, different cuts, different thicknesses from the traditional meat products and so although cell based meat can create that grounded beef, meatballs and those sorts of things, the cell based industry needs to evolve, so that it ultimately can deliver the full range of products that we have grown up with as a species, consuming over time? So your company is part of that evolution from the ground beef basic cell structure product, to the more complex products that consumers are used to consuming in the meat industry. Is that is that a good summary of what you guys are all about?

 

Nieves  

Yes, and I would add that it’s an emerging industry, so of course, you don’t start building a house from the roof, what you do is you  start with the critical problems that need to be solved. So most companies started with the fact that cell based meat is expensive because of the media needed to grow the cells. So let’s fix that problem first and then what’s the second problem … scaling?  So we can produce large quantities, but of course, focusing on scaffolding in the very beginning of this process is kind of counter productive because of course you must deal with the first problems first, right? So we are ahead of the game. We know that once those problems are solved, and we’re very close to getting you the price and variety right, then we will have this perfect structured meat product to jump right in.  So, we have to start now because structuring is scientifically a complex endeavor, connective tissue has a lot of different proteins, different functions and are a  integrated matrix basically. So, my co founder and I happen to be experts in protein chemistry, molecular biology, in addition to tissue called dream. And so that’s why we see everything in molecules we see everything as proteins, and we know our forte is scaffolding the connective tissue. So I think the best thing to do is to tackle that problem and there are a handful of companies in the whole world aiming to solve these issues.

 

Andrew D Ive  

Two questions, A and B, what makes it so complex? Why is it so difficult? And what gives you the confidence that you guys are going to be able to crack this puzzle?

 

Nieves  

Well, it is complex because of the nature of the proteins that comprise the connective tissue and that is collagen. So collagen is a very important structural protein that we have in our body and in an animal’s body.  It’s a beautiful protein but its enormous, it’s huge and that means for scientists, it’s extremely difficult to purify a full length, like the whole thing. So that is why scaffolds are expensive. So now the the scaffolds used in regular medicine are made of animal collagen and it’s a full length, you have the whole thing, because you get it from the rest of you know, bones, animals, etc.  So, we cannot use animal collagen in cellular agriculture, because it defeats the whole purpose of slaughter free products and obtaining slaughter free products or reducing, factory farming. So making collagen and using all the methods from scratch is what makes those scaffolds expensive and why we are sure that we were going to recreate the texture is because we came up with an idea of how to use a mixture of ingredients that make these scaffolds affordable and a way that we can introduce the collagen that is needed in a very efficient and inexpensive way.

 

Andrew D Ive  

So you guys are doing collagen as well as scaffolding.

 

Nieves  

Well, our scaffold contains some collagen. Yes.

 

Andrew D Ive  

Got you. Okay, super. So how has it been going? How have you set yourselves up to do this? You’ve been focused on this now for what? 18 months, two years, something along those lines? How old is the company? 

 

Nieves  

Well, BIV was the first investor and we are going to be one year old in a week. 

 

Andrew D Ive  

Wow, congratulations. 

 

Nieves  

And by one year, what I mean is we incorporated officially in a week because you guys, you know, the money got us into the program. And we were like, okay, now I guess we should incorporate

 

Andrew D Ive  

Someone is giving us money, we should actually go do this thing. So take us through some of the highlights of the last 12 months minus one week.

 

Nieves  

So it was a roller coaster, especially starting the program. There were so many good workshop, classes, advisors, very intensive processing, which for me, as a molecular biology scientist, even though I have some background in venture capital and entrapreneurship classes I took at the university, you guys provided a lot of food industry distribution, manufacturing all the aspects.  So we incorporated. We started and set about finding a lab, which was extremely difficult because of COVID.  It meant that we were able to really produce or confirm our hypothesis mid summer and in July we produced a proof of concept. Right after that, we applied for a patent.  We submitted our provisional patent application at the end of August and then there was Demo Day. Followed by all the fundraising for our pre seed.  In November, we closed our pre seed to focus specifically on the  development of the technology, because we had a number of features that we we are adding to the scaffolds to make it even even better and to achieve the right texture. Because we proved that cells attached to other cells, grew well on our scaffolds and they started differentiating, that means forming muscle fibers. Now we want the density and the texture to be right.  So we are now focusing on that aspect in the first quarter of this year and we are going to open the seed round operations by fall.  The reason for that, is that we have a lot of things in the pipeline that we’re kind of finishing, like integrating the scaffolds into the bio reactors, for instance, one of the projects and, you know, finalizing number of cell lines. So once we have all of that ticked off, they will kick off the hardcore fundraising and show the world what we have in app two.

 

Andrew D Ive  

Okay, and you’ve got a couple of partnerships that you’ve been working on. Are they top secret still? I don’t know if you’ve announced them or not? If they are still top secret, we can leave it ….

 

Nieves  

Well, I can say what type of partnership but the name perhaps not yet. So one of our flagship products, the very first product we want to work on is meat from Iberian pigs. Iberian pigs are very ancient and extraordinary pigs. They are from the Iberian Peninsula which is Spain and Portugal. So these pigs their lineage traces back to ancient times, like the caveman times. Prehistoric, Neolithic even and these pigs bred with wild boars and they have particular genetics which makes them very special.  So, we’re going to start with these Iberian pigs and, because we want the 100% Iberean pigs bred through centuries, we need to go to the source, Spain. Luckily I’m Spanish,  so that makes it much easier to organize. So we have partners there who have farms, and they have a large Iberico production, they’re pretty big in Spain. So yeah, those are our partners and we’re very excited to have them because of everything that entails, you know, the history of the breeds, the quality of the meats. Also, these pigs are special because they are raised in Oak pastures, and they eat acorns, so of course the  diet influences your genetics as well. So these are the most spoiled pigs you could ever think of, and that is what makes their meat extra delicious. 

 

Andrew D Ive  

So the premise here is that it’s not just take a cell, any old cell or a piece of cow or a piece of pig and just grow it. The animal protein industry has spent decades and even centuries creating a lineage of great tasting meat by breeding and crossbreeding different animals. And so you guys have recognized that, and you’ve gone back to the best source of pork, arguably, in the world, and you’ve convinced the best breeders of that pork to work with you on a cell based version of that meat. So you’ve gone and got the best genetics, the best cells as it were, and you’re using them. Now just to be clear, when you harvest those cells, which sounds all very clinical, are these animals slaughtered so that you can capture the cells, or is it one little pig that’s getting a little bit of a biopsy? And it’s then frolicking in the field somewhere? What’s, what’s the route?

 

Nieves  

Well there’s a way to harvest cells that is, you know, you can take an embryo. But of course, that is not the option we chose because, again, that defeats the whole purpose of cellular agriculture. So basically, a biopsy, it’s actually a piercing, like imagine your ear when you want to wear earrings, and you make a piercing ….

 

Andrew D Ive  

A hole in the ear?

 

Nieves  

So basically, this pig is not going to be slaughtered, actually, it is going to stay with us and grow with us and will just wear earrings.

 

Andrew D Ive  

Basically, you’re taking a pig that has the genetics of the best pork breeds in the world. You’ve got one of those pigs, you’re going to have a small biopsy of that pig and use the cells from that pig. Does it have a name this little Piglet, or this little pig? And where will it be living once it’s contributed a few cells to science?

 

Nieves  

Well, his name is Demetrius, his same and we’re going to donate him to a school farm near my hometown, where my nephew can go visit and take care of him. So I’m excited. I’m going to meet him very soon, actually. And it’s going be a very useful.

 

Andrew D Ive  

As far as you’re concerned, given that this is your pig, this pig is going to have a very long happy, fruitful life. It’s not a usual horizon, the next 18 months or whatever is the normal period of time for a pig.

 

Nieves  

Oh, no, he’s gonna grow old. Yes, he’s gonna die of old age for sure. 

 

Andrew D Ive  

Unless he gets out of the pen, in which case he gets run over by a bus or something, but

 

Nieves  

Oh, no, don’t say that. He’s going to be so proud that from a small hole in his ear, is going to feed so many people and he’s still alive. Right? See, this is thanks to you, and he’s gonna be very proud of himself.

 

Andrew D Ive  

Okay, so you’re going to be opening up your fundraising round? Again in August, September. I think you said the fall right. August, September.

 

Nieves  

Yeah. Some time about then.  Well, right now I’m like meeting investors and seeing which ones align with our mission. The kickoff will be once we showcase our pork tenderloin, and then we’re able to show because we like to show rather than just tell. So that’s what is gonna kick off the seed one.

 

Andrew D Ive  

Got it. So you’ve already achieved a number of milestones to date. From the initial funding, you’ve got proof of concept. You’ve got cells being grown. You’ve got some key partnerships in place, with a major distributor, well with major producers and distributors of traditional animal protein, and so on. What do you hope to raise and what do you think that will help you accomplish from a company gross milestone perspective?

 

Nieves  

Yes, definitely. So we’re looking at $4 million seed round. And the reason for that is because I don’t know if I mentioned already, but scaffolding and bio reactors go hand in hand. One thing that we’re doing right now is integrating the scaffolding technology into a bioreactor that needs to be customized for our scratchers. So we’re creating a mini prototype of this bioreactor right now and we want to start with those teams for scaffolding, build a bigger team for scaffolding led by my co founder, Michelle.  Then a team that is going to be focused on kind of scaling up this bioreactor. So those are going to be our main focus for the next year and of course, so that we can make larger amounts of meat, etc, in the second product that we want to do as well. So with  Iberian pork, I have to say, even though our first product is going to be a pork tenderloin plain, you know, well plain, what I mean is like, fresh piece of meat, we also want to try, to save some meat to dry cure and,the reason for that is, because dry cured meats are very cool.  Hams are serious meats and it’s like a whole new experience that meat eaters, once they try it, they love it. So much so, that there is no Iberico, you know, easily readily available at the supermarket, you have to really go to particular stores, that people who visit Spain tried the Iberico, and then they tried to smuggle it into the US and they get caught. And you know, I have a friend whose father bought $1,000 leg of the Iberico and got caught at cost customs. So that would be the gourmet product and then we’ll have the fresh pork as well.

 

Andrew D Ive  

Got it. So Iberico ham, it’s often eaten. at Christmas time in Spain, it’s part of the family tradition, it’s a dry cured product, they have that special leg on the frame that you cut little slices off, and the whole family experiences that kind of cutting and sharing and you guys want to be able to ultimately produce a product that delivers that kind of good quality product. Post the investment. Now you mentioned $4 million from investors in the next round. You mentioned a production capability by reactors, etc. Will that $4 million get you to commercial scale? Or will that still get you to sort of proof of concept to the point where you can show people that, you know, if we put $10 million, or if we put $15 million into this, we’re going to be able to produce pork loin and ham Iberico in large quantities, or is that $4 million going to get you there?

 

Nieves  

Well, building a plant, even a pilot plan already is capital cost intensive. So for a commercial facility, like the one that Memphis meats is building right now, we would need serious money for that. But for a pilot plant, that’s precisely what the 4 million would deliver. So what we want is to generate more scale from lab bench to a pilot scale.

 

Andrew D Ive  

So you’re going to go from lab to pilot scale with that $4 million investment, which is not commercial scale so you won’t be able to produce it in quantities, which can be sold as a kind of revenue generating product. Why take that middle step? Is it necessary? Why not go straight to commercial scale? Or is it very much about aligning funding with with the technology? Obviously, there’s the regulatory piece as well, in terms of being able to sell this product commercially. Can you sell this product commercially today? Or are you still waiting for the government and the regulatory environment to catch up?

 

Nieves  

Well first of all, the pilot plant. As I said before, for commercial scale, you need over 100 million dollars. So as far as I know, there are very few companies that are at this point in fundraising, right now. So basically, they are going to require the regulatory approval way before us. So in that sense, I haven’t, you know, started that process because we’re going to be the second wave of commercial. 

 

Andrew D Ive  

First wave of companies are going to need $100 million to get it to commercial scale. And they’re going to be the folks getting the governments and the regulatory departments on side, you know, federal, the FDA and so on. Getting those folks to approve a permit …..

 

Nieves  

We also will start that process but first we need to create texture. As I said, we started by creating the technology and now we are further developing it to get the right texture. So we are still in the r&d phase, because we are dealing with this new technology we’re creating that is more complex than just growing the cells in a bioreactor it is more a tissue generating technology. So while we create this pilot plant, we need to see how they go into the process on a larger scale and then once we have that, then of course, we can expand.

 

Andrew D Ive  

Okay. In terms of the landscape, are there other companies, as far as you’re aware, tackling the same technology? Either product development? Or, you know, challenges that you guys are tackling? Are there other companies solving related problems? And there’s some form of cooperation?

 

Nieves  

Yes there are two types. So our direct competitors, or people who are also working on scaffolding there nare maybe five serious, funded companies that started earlier than us. The one we really admire is Olive Farms in Israel. So they are scientists from the Technion University team of 20 years or so and they started in 2017, and they released their steak prototype in 2018. Then last year, a little more advanced. So what I’m saying is that is how complex the endeavor is.  Then there’s in the UK, Higher Stakes, they are focused on pork, belly, and bacon. Then in the US, there are two companies, they are going for the b2b approach and they use techniques borrowed from tissue engineering. So in that sense, like nanofiber, technology, electricity technology, and the other one is 3D printing. So I’m not sure how scalable those technologies are, compared to ours. But I would bet, not as scalable mostly because we don’t need to use a 3d printer, or nanofiber technologies.  So we skipped that limiting factor that you need that equipment and those are relying on the speed of the fibers being produced, etc. We don’t have to do that. So I I’m gonna imagine that we were definitely going to be more scalable. Then perhaps a few others are more like, companies are making scaffolds for tissue engineering. They are switching to cell agriculture, but using the same techniques, nano fiber technology and 3d printing ….

 

Andrew D Ive  

So, I was going to ask you, how is the animal protein or the meat, the traditional meat industry responding to what’s going on around them with companies like yours? We’ve already discussed that the partnership that you will be shortly announcing with a very traditional meat company from Spain.  That shows that the traditional meat industry is divided into two parts.  The one part are the meat companies who are recognizing that this technology exists and they should be a part of it one way or another, whether that’s in terms of investing or partnering or you know, working with companies like yours, but I’m guessing there’s also meat companies out there that are putting their head in the sand and pretending that this technology doesn’t exist and won’t last for very long, and are hoping that it just sort of goes away. In terms of communications and conversations you’ve had with meat companies, are most of them moving towards the, you know, let’s talk and let’s figure out how we can be a part of this, or are most of them putting their head in the sand and hoping that this sort of disappears, and the technology just doesn’t work.

 

Nieves  

The ones I’m talking to are the ones who are interested in cellular agriculture, because we were approached by a pretty large number from different countries. They want to know, what are we making, and if we want to collaborate, etc. and I have said no to a couple of those already. There are a number of corporate programs who match startups with big companies, and they were interested in what we’re doing.  Then they want to collaborate in everything. But in our case, we’re early on, so we want to first consolidate and establish our brand and then afterwards, we will consider partnerships but for now, we are staying away from that and, in the case of the Spanish Company it’s not that I convinced them, it was a mutual interest, because the Iberico pigs are in limited number and also imited by the pastures they can be placed in because they anticipate going to a lower number of pigs in the future.  And they do not have many piglets etc. So they know they will have to come up with something and that it’s serious. So it’s mutual interest, because we wanted to sell lines, and they want to be in the future. So they, even though they’re very traditional, very, very traditional they have the vision. So I would say the most advanced meat companies are looking forward, are going to be interested no matter what, if they want to be included. Right. And the other ones that stick their head in the sand, I haven’t talked to anyone yet from that side.

 

Andrew D Ive  

I mean, the reality is the technology works, and you can’t stop it when it works. Like nuclear fusion, you can’t stop it, once people know that it exists. You can try and regulate it, you can try and control it, but you can’t just try to ignore its existence. It’s not the solution.

 

Nieves  

When it has so many benefits for the entire environment, world, health, wellbeing.  So even governments should start looking into subsidizing the plants, etc. If it’s required.  I think the people who are more wary of new technologies, and you know, GMOs or things like that, which has nothing to do with agriculture but what I’m saying is it’s all about education. If you know what something is about, what entails what, how this meat is done, and you see that there is actually nothing wrong with it, then, of course, you’re going to be okay with it.  So I think it’s going to take a lot of education from the companies or nonprofits to educate the consumer in that what we’re giving you is not Frankenstein meat, lab grown, yuk!! It’s actually very simple. If you take a tomato and take a seed out and you plant it then a tomato plant grows. Then the facilities where the meat is going to be made, is going to be very sterile, it’s going to be clean, is not going to be like the slaughterhouses where a lot of diseases can emerge, etc. So there are many benefits, but people don’t know that, and it’s our job to educate them before commercializing is out there.

 

Andrew D Ive  

So, BIV has had a number of conversations with governments, Singapore, China, other places in terms of cellular agriculture and how it can be useful and used to create the protein necessary as population grows. So you’re absolutely right, governments are taking a really strong interest in this technology. The other thing is, I don’t know why the animal protein companies or traditional meat companies, potentially see this as a threat.  But those traditional meat companies understand the consumer, they’ve been working with them, selling products to the consumer for decades, often, they’ve got the channels of distribution, they know how to market the product, how to package the product, how to get the product to the end consumer and they’ve got that inherent knowledge, that’s incredibly useful. There’s nothing to stop them producing the protein in this new way, in addition to or instead of the traditional factory farming or from a farming approach to animal manufacture, and using this technology to be able to manufacture protein, and do what they do best, which is understand their consumer, get the product packaged and ready to go and get it into the different channels of distribution and on the shelves. Those traditional meat companies are just as necessary in the cellular agriculture industry as they would be, and are obviously, in the traditional meat category. So it’s, I don’t see it as an either or I see it as an as well as…..

 

Nieves  

Exactly and I would say that it’s not just about eradicating the whole industry, but maybe just reducing the impact. Starting with that. When you industrialize something and get to the point where it’s super saturated with, more and more production we have to mitigate that with something that is more sustainable. To help the environment and save someone. I don’t think it’s a process that would happen overnight, it’s going to take many years. But we need to start now.

 

Andrew D Ive  

I think consumers are cognizant of this. So there will come a point in time, once this is deregulated, where consumers will make a conscious decision about you know, hey, I can get my meat, the meat that I want the meat that I’ve grown up loving in a way that’s very sustainable, or I can get it in a way that is traditional, but far less sustainable, what am I going to choose? And like it or not, there are going to be consumers who choose cell based over, you know…..

 

Nieves  

Who are those consumers? Young people is clear to everyone that the junk, GNC and the generations coming after them, they already care a lot about sustainability, they look for products that are better for the environment. They know climate change is happening, and they are going to live with  the consequences. Of course, they’re way more conscious.  So I believe that convincing someone who was born in the 50s is a whole different story than convincing someone who already has the mindset of reducing emissions and having cleaner food. So I think they’re going to be so open to well, I think I’m pretty sure they’re gonna be very excited about cellular agriculture in particular, like, you know, those products you know ….steak and you can eat it and it’s delicious.

 

Andrew D Ive  

So I’ve got two questions. Last questions for you. What help do you need to make novel Farm successful? How can people listening to this whoever they are, be helpful to you guys as as you scale Novel Farms?

 

Nieves  

Well, I would say there are two things right now that will be helpful to get from the outside. One is we’re starting the process of hiring and, as I said, we’re going to be focusing on bio reactors. So engineers, we want the best. Come to us knock at the door and also stem cell scientists and business people … so we’re gonna grow the team this year for sure.  And then the other thing is investors of course. Innovation cannot and does not occur without investment. Money drives innovation. We want investors who are mission aligned and not just going for the trend. We want someone who believes in a strong scientific team like us, that can be trusted to make this product right. So resources and money are the two things important to us right now. New team members and new investment.

 

Andrew D Ive  

Alright, so potential employees people who understand bioreactors, stem cell scientists, etc. and resources in terms of funding, partnerships, corporate investment, that sort of thing. Last question, Where do people find out more information about novel farms and about you and your team?

 

Nieves  

So right now we we have Novel Forums on LinkedIn that you can reach out directly to me on LinkedIn and also we have a website. There’s not much there yet because we’re focused on the product development. So yeah, I think the best ways to reach out is through LinkedIn directly to me ….

 

Andrew D Ive  

Now, of course, give us your full name on LinkedIn so that people can find you there and also give us the domain name for your company so that people can go type that in to Mr. Mr. or Miss You

 

Nieves  

Can find us as www.novelfarms.co that’s our website and LinkedIn is the same novel farms…

 

Andrew D Ive  

Spell it out if you wouldn’t mind just so they get it right.  Okay, so novelfarms.co and it’s also novel farms on LinkedIn. So if you want to support or get involved or get recruited by or just you know, give a thumbs up to Nieves Martinez, ni e v e s Martinez, m AR ti n e z. Nieves is on LinkedIn, novel farms is on LinkedIn. Any last words before we say thank you to you very much for your time today. And we head off into the podcasting sunset,

 

Nieves  

as well, that, yeah, we’re very excited to make these products as soon as possible and, and you know, enter the space and give them delicious meats. So that’s all I can say that we are really excited about it and that’s where we are up to so and thank you so much for listening.

 

Andrew D Ive  

Neves thank you so much for your time today.  Thanks for listening to the big idea through podcast. I really appreciate you. Please do subscribe, then you’ll get notifications of the next podcast. If you have any questions or comments, please do reach out. We can also be found by a big idea ventures.com and through Instagram, LinkedIn, all of those wonderful places. So enjoyed the conversation today. I hope you did too. I look forward to hearing from you. Bye.