February 1, 2023 • 37 mins
- An old episode from the Red to Green Podcast on Food Tech & Bio Tech. Listen if you are interested in the future of food, but this isn’t Scaling Nerds.
Red to Green was a podcast that investigated how to transition the food industry from harmful to healthy, from polluting to sustainable, from Red to Green. Each season had a different topic
- Season: Cultivated Meat
- Season: Plastic Alternatives
- Season: Food History
- Season: Food Waste
- Season: Biotech in Food
- Season: Book Reviews on the future of food
We lack bees, we lack insects and it's a severe issue for biodiversity. Because flowers are dependent on insects and vice versa, right?
So if you eat traditional honey, are you promoting bee health? No, large-scale monoculture is an issue in crop agriculture and beekeeping.
Hear from Darko Madrich, the co-founder and CEO of Melibio. I got to try their plant-based honey in Switzerland last year. And it tasted so similar I wondered whether they had just poured some natural honey into the bottle.
By the way, whenever I meet Darko, I feel his spirit animal would be a giant bumblebee. He has that vibe.
Anyway, Instead of using something like rice syrup, Melibio uses the compounds found in honey. Re-building it from the ground up.
In the future, they want to use precision fermentation to add a few compounds that are hard to replace. But is that necessary?
LINKS
Check out our supporter of this season ProVeg Incubator and their 12-month incubator program:
https://provegincubator.com
Connect with Marina Schmidt https://www.linkedin.com/in/schmidt-marina/
Check out our supporter of this season, FoodLabs, and their Climate Program:
https://www.foodlabs.com
For sponsorships, collaborations or feedback write Marina at change@redtogreen.solutions
Hashtags for this episode
problems with honey
honey production
honey farming
pesticide impact on bees
honey alternatives
vegan honey
animal-free products
animal-free honey
Hashtags for this season
Biotechnology in food
What is biotechnology food
Food biotechnology examples
Food biotechnology startups
Biotechnology food companies
Biotech food in usa
Food biotechnology examples
Editor's note: on 17.02. a 1,5-minute partnership message was added at minute 7.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
We like bees, we like insects, and it's a severe issue for
biodiversity, because flowers are dependent on insects and
vice versa, right? So if you eat traditional honey,
are you promoting the hell not really large-scale?
Monoculture is an issue in crop,Agriculture, and beekeeping
(00:20):
here, from Darko Madrick, the co-founder and CEO of Mellie by.
Oh, I got to try their plant-based honey in Switzerland
last year and it Stood so similar I wondered whether they
had just poured some natural honey into the bottle.
Instead of using something like rice syrup Mellie, bio uses the
compounds found in Honey, rebuilding it, from the ground
(00:42):
up in the future, they want to use Precision fermentation to
add a few compounds that are hard to replace.
But is that necessary come with us into the world of beasts and
honey, let's Jump Right In Red to Green, is the most in-depth
podcast on food and Cultural sustainability covering each
(01:02):
topic. Know for 12 episodes.
Let's move the food system from harmful to healthy from
polluting to sustainable from red to Green.
I'm your host Marina Schmidt andyou're listening to season 6,
biotech and food. Your personal connection to
Honey is that you actually also have a background in the
(01:24):
industry. So let's look at the issues.
Why does honey need to be changed?
It seems quite fine. Right?
We have honey. So what is the problem with the
honey bees? Oh, oh Marina.
Where should I start with all the problems?
I mean, let me start with givingfolks in the audience a little
bit of a context year. So I have over a decade of
(01:45):
experience in the honey industryin which I and most of that time
actually in a traditional honey industry that relies on
Commercial beekeeping and honey bees as a medium of production,
but I finished my business school.
The first job that I got was, I became a management training,
one of the largest honey companies in Eastern Europe and
I was collaborating with 12,000,beekeepers collecting honey from
(02:09):
them, homage in izing processing, that honey and
20-ton batches and shipping thathoney from Eastern Europe mainly
to Germany and Norway. And all these Western European
markets, where you can get those30 Euro per kilogram units of
honey and retailer. So I'm coming from the very
industry that I got frustrated about and the reason I got
(02:32):
frustrated is that after spending time and working for
the largest European honey companies I realized that
Reliance on that species is not only damaging the species
itself, the European honey bees or a person.
A liver. But actually, what was happening
is that there's a turf war between be species again.
(02:54):
Sounds crazy, but there's like, twenty thousand be species.
And most of them are actually not making honey.
Only the honey bees are doing that in scale.
And what started happening is that web, the rising demand for
honey. More.
People started doing beekeeping creating these massive Farms.
I've seen one in Hungary has 10,000, beehives 10,000 beehives
(03:16):
and each bee hive contains 50,000 honeybees.
It's a crazy. Number of one be specie that
once deployed doesn't allow other pollinators.
While they need to be species, bumblebee is to drive in the
same place. But what I'm trying to say here
is Marina, there's couple of issues here and sole Reliance on
(03:37):
that animal to to supply a ten billion dollar industry.
If you walk into Ed the car revving, you'll find honey in
Granola in bars in Juice. Cieszyn alcoholic, non-alcoholic
drinks, I would say that there'sno product category in a
retailer in Europe or in the United States in which, you want
(03:57):
fine. At least one SKU or one product
that contains honey. And thinking about a large
industry that honey is and thinking about the
unsustainable, Reliance on one animal, that is not liking the
process, not getting stronger out of that process and that
which pure existence and artificial.
(04:18):
Caishen is actually not helping the planet because if you just
have one bee species, you don't have essentially be biodiversity
and be biodiversity you need forthe diversity of the plants and
you'll need plans for food and CO2 absorption.
I guess some people would also say that if you create
plant-based honey that's in the end fraudulent honey.
(04:39):
So as far as I understood you have been working on a Precision
fermentation path to creating honey but so far you've been
been successful in creating plant-based honey.
Is that something you want to push forward plant-based honey?
Or has that? Just been one step in the
development to address the firstcomment that you made.
I understand that certain peoplethink that the product, if it's
(05:03):
not made in the same way like weare used to, for that draw to be
made. It can't be that product and I
understand that position, but I would like to provide a
different perspective here and thinking about harming, you
know, honey is a hard case study.
Because honey is a very complex product.
And if you think about this product that for the past nine
(05:23):
thousand years have been made byHoney Bee, it's a very hard case
study to be replicated on a molecular level.
So we have Mellie bio, we started with Precision
fermentation because Precision, fermentation allows us to build
a complex production model that replicates what's happening in
honey? Bees honey?
Stomach bees fly from flower to flower they suck up pollen and
(05:46):
nectar and then they have a certain and is mad The reaction
happening, helping them breakingthat into the building blocks of
honey. So we started with that and then
we realized that's one part of the honey.
But before that there are certain parts of honey that
directly come from the plants. And then they said, okay while
we are still working on this model that scale that will help
us get the complexity of our product on a hundred percent of
(06:09):
a molecular matching. Apparently, there's certain work
that we can do in the plant-based side that can help
us with the looks of the productwith the consistency.
Flavor. So what we achieved Marina is
that we were able to build to technological approaches that at
some point will intersect where plant based approach.
(06:29):
Helped us work with certain plants and turn them into a
plant-based part of the honey. And then Precision fermentation
is a long-term approach that will get the complexity of our
product matching a honey, or honey right now, isn't 100% of a
molecular matching, the funny. It's about 85 to 90% Sent and
the remaining 10% will be something that the Precision
(06:51):
fermentation will help us get there.
Precision fermentation at scale takes time takes resources takes
a lot of knowledge to be fully skilled on a level that really
does the job perfectly, while following, all the safety
measures and Regulatory measures.
So that's where we are today. If people reach out to us
specially chefs, they can taste the plant based product is that
(07:13):
our ultimate goal, know we really want to connect all the
knowledge and the plant-based side.
Plug in the Precision fermentation and essentially
produce honey. It at scale, I have not told you
this before, but red to Green kicked off at an event by
provigil incubator in March 20, 20, it was right before Corona
was about to shut everything down but during their event
(07:35):
uncultivated meet, I was lookingfor interview, guests and
contacts for the first season oncebula agriculture and I found
them. The provision curator was the
first to specialize. As an alternative protein
companies, if you're excited about the topic check out their
12-week program, it offers mentorship up to 300, K and
(07:58):
funding and most important me, lots of important contacts, they
are particularly interested in startups, developing egg
seafood, and chicken Alternatives.
But also other ingredients and technologies that can help
replace animal products on a mass scale.
Some examples for companies thathave gone through the Prove that
(08:18):
incubator are the fermentation company cultivated biosciences
aiming to replace Dairy, bosc Foods, the mycelium start up and
fly the P base. Terry startup.
According to Christopher Kong CEO of better nature.
Probe Edge is the world's best connected incubator and the
plant based industry, you can apply any time of the year.
(08:42):
So grab your chance to build a company for better world and
check out probe which incubator Dot-com probe, Edge
incubator.com. Increasing thought?
Yes I was able to taste the honey and I also talked with a
couple of people who tasted it and who also said the early
iterations were not that good. And then I also talked to like,
(09:07):
12 people who said it's so good,they are questioning whether you
just put honey in it. So part of that is also the
Wonder like what is in there. So as far as possible, can you
maybe add a sec? What are the main ingredients
and stuff ingredients? Yeah.
Absolutely Marina. And when we launched our product
into the market, it will be obvious and clear to everyone.
(09:30):
Our philosophy is very simple. We want to make honey and we're
making honey out of honey. Native ingredient for example in
real honey, you can't find rice syrup so we don't use right
syrup. We believe that in the market
for vegans right now, there's plenty of Honey Alternatives.
There's honey, May alternative made of tapioca Stevia or
(09:53):
sugars. His dates and stuff like that,
and we believe that market exists and that market is
something that it's not our Market.
We want to get into a position of replicating Honey.
Using honey native ingredients and using Science and Technology
to help us put that together in a product that tastes great.
That's Contrition and that's absolutely safe.
(10:14):
But back to your question surrounding we the ants.
So we have sugars that are present in Honey which are
mostly fructose and glucose. Have food acids that are found
in Honey, and we have a bunch ofplant extracts that make honey,
anti-oxidant anti-inflammatory. And of course, water is about
(10:36):
20% of the product. That's the most part of the
ingredients. There's a couple of more that
people will be able to see once the product is launched.
Well, if it's supposed to be thesame as be, honey, I thought,
let me research. What actual bee honey is
composed of and I got stuck In arabbit hole well, or a beehive
(10:57):
honeybees are sometimes called the chemists of nature.
They use a complex process, including enzymes and
dehydration, to transform the sugars.
And flower nectar into honey, honey contains at least 181
components creating its unique taste.
It's mostly made up of glucose and fructose and it is a
(11:17):
supersaturated solution. Meaning normally so much sugar
couldn't be in so little water. They're so let's look at the
process B stard with nectar, which is about 80% water.
It's a thin and colorless solution that isn't very sweet.
Nectar includes more complex, sugars and bees.
Use enzymes to break them down into simpler sugars, it's called
(11:41):
hydrolysis house bees, regurgitate, Andre drink the
nectar over 20 minutes, then deposited, in a honeycomb and
fan it to speed up the evaporation, you can Make this
process in a lab honey, manufacturers.
Pasteurize and filter light, honey.
This syrup contains fewer natural, antioxidants vitamins,
(12:03):
minerals and other natural nutrition.
An unfiltered. Honey Pollan nectar and be
saliva at most of the nutrition dark honey maybe less filtered
though. I wonder if many bio wants to
make it 100% molecular Lee the same how will they include some
be saliva? We are backed by food laps a
(12:26):
leading European food, VC that is teaming up with its sister
fund. Atlantic labs to launch a
Founders for climate program. So if you or somebody, you know,
is a passionate entrepreneur caring for the environment, this
is your chance. You can receive precede funding
for your Incorporated company mentoring and advisory and
(12:48):
access to the network which includes over 150.
Portfolio companies Dead now by going to food, labs.com, food
labs.com, let's Circle back to the problem with honey.
Actually I would like to look a little bit more into how having
one type of Honey Bee effects plant diversity.
(13:11):
Common Sense would tell me that.It's probably because honey bees
have their preferences, their Yum, Yum, Yum, Yum, their
preferred flowers and therefore only certain Lands become
pollinated. While others are left out is the
Yum, Yum Inc, the Right theory here, yeah honey, bees are an
(13:33):
important part of our Survival on the planet, but they are not
the only ones that we need to take care about and by using
them to make honey and do Precision pollination that
specifically happens a lot in the United States.
What we're doing is we're not leaving space for other species
to live, it's really like it's agame of diversity.
(13:53):
Or if you want to take a little bit car to approach, just like a
third for their species out there.
If you throw in bunch of artificially, created, new
colonies of honey, bees into a place that they haven't been
before. No butterflies bumblebees can
really feed themselves, they won't survive.
So it is not as simple as great bees not-so-great.
(14:14):
Be as we should get rid of thesebees and keep.
These means now, the story is very nuanced.
We need to be biodiversity because different species,
pollinate different types of Plants.
So ultimately our survival and this plant will be dependent on
the be biodiversity but since welike very simple Solutions such
as build hives, make more honey,bee colonies to make more honey
(14:38):
because we consume honey. And have the honey is a great
product, then we just play with the balance in the nature and
feet. Talk about pesticides and other
things that affect the bees. There's so many issues happening
in the be space. Ace.
And there's so many issues happen.
The honey speed. On a different note.
Have you heard about be bred be?Bread is essential for bees to
(15:02):
survive the winter or Poland? Empty summertime, it's their
food stash and it's made by storing Poland, with honey,
Poland, furman's and wax-sealed Honeycombs.
The process has two steps. The first is a bacterial
fermentation with lactobacillus bacteria.
These bacterial of environments with lots of fructose and
(15:24):
produce lactic acid. If you remember our Our episode
on traditional fermentation. Here's a recap lactic acid,
fermentation creates kimchi, sauerkraut, pickles, sourdough,
bread and yogurt. So of course, this is a fit for
be bread. So, the pH of the be bred
decreases, creating a perfect environment for yeast.
(15:46):
Fermentation also used for beer and sourdough the yeast.
Help preserve, the bee bread, which is nutritionally different
from Poland, and honey just likesauerkraut.
It's different from cabbage withsugar many honey colonies
struggle to survive the winter. Now a part of the problem is
pesticides because bees feed on pesticide treated plants and
(16:09):
this so interesting. So pesticides can also change
the microbiome of be bred. For example, fungicides can
interfere with yeast fermentation and lead to spoiled
be bread. I find it so interesting that
bees actually use Ian to survivethe winter and the pesticides
(16:30):
are not just directly, harmful to them, but also interfere with
their process of making food andsurviving.
I had a follow-up question to that.
My dad actually used to be a beekeeper.
One of those very micro scale ones, he had a little yard
outside of the city and he wouldgrow, not just such as
(16:55):
vegetables, but also different fruit.
And some of these flowers which were also than pollinated by the
bees and overall it was more of an integrated system, right?
And a lot of the talk that we have with regenerative
agriculture with developments, in agriculture, overall is we
need to think more holistically.We need to think in systems and
not just plug something in and expect it to just operate on its
(17:18):
own. So, I'm wondering what if the
beekeepers would start becoming flower people and how would that
look like, and I don't know, is that ever a practice that they
just have massive flower Fields next to them?
It's it's so exciting that you're mentioning this Marina
because I was thinking a lot about how many Technical
(17:39):
Solutions are bringing Evolutionand the price tag of that
evolution is a lot of people losing their jobs.
So I was thinking about this paradigm shift in which we would
help beekeepers actually transitioning to be protectors.
One of the best ways to protect bees is to plant.
Wild flowers and plants and imagine that one day and just,
(18:01):
this is just an idea. This is not something, you know,
that we have as the strategy right now, because this idea
requires a lot of thinking, whatif we can compensate, folks, for
planting plants processing them,and selling them as inputs to
food industry and that would take those as kind of plant
extracts and things like that. And I know that there are folks
(18:21):
out there that are small-scale beekeepers.
There are folks out there that to the extent that It's possible
gently approach bees versus someother folks that just put them
in some trucks and carrying themfrom one Coast to another.
There's nuances within the beekeeping world, and we all
should have a big conversation happening.
Mmm. Yeah.
(18:41):
I think there are some parallelswith the alternative protein
industry that overall demand forhoney is probably growing just
like it's growing, maybe not as steep, but also like it's
growing for me even just by the pure observation that we are
growing as a Human conundrum. I'll call it conundrum now and
(19:01):
but at first for a long time it won't be replacing honey
Keepers. Anyway it will be just adding to
a growing amount of necessary Supply to meet the growing
demand. Sometimes when I would talk to
people about Mellie bio, they would say well but it doesn't
make sense to do Precision fermentation, which is so
(19:23):
specific in which can only produce individual It's for
something that is molecular Lee.So complex as honey, and of
course, you're not trying to replicate the entirety of Honey
with Precision fermentation. But if you say that, it will be
molecular Lee identical, what are we talking about?
Like what percentage are we talking about?
And how many different types of molecules, would you need to
(19:46):
create with Precision fermentation?
Yeah, it's a great question. I was very happy that moving to
California. I realized that many companies
actually succeeded in changing. Our industry is by taking one
step at a time. I remember Marina when we
applied for our accelerator, bigidea Ventures.
That was one of the, you know, hard as accelerator to get in
(20:08):
and we were sending a sample of what we had at that time.
A product, we had an Ode to Andrew arrived and the team
saying, look at the sample that we are sending take a look at
the color. Does it look like honey?
It's there. Try to steer it.
Mix it with a spoon. Does the consistency look like
honey? Yeah, it's there.
But you know what? Don't taste it.
Because we need your money to work on the taste and the flavor
(20:30):
because what you're going to taste won't be as great as
something that we're going to make a year after that.
So you know, taking that approach is very important and I
don't think that the companies can achieve their visions and
missions in three to five years.I think we're rather talking
about seven plus years and probably over a decade of
knowledge that needs to give compounded resources that will
(20:53):
actually take us to change the honey industry.
And you know, when people Some of the folks that I really
excited about our launch and that are asking, okay guys,
you're promising deadlines. When is that going to happen?
I just think how these took ninethousand years to evolve and,
you know, make honey and how Mellie by is gonna change that
in a decade. And what's three years versus
(21:14):
six verses 13 in that grand comparison of the old and the
new industry. Yeah, when I was talking to
people about what is actually the value, proposition of many
bio, some one or two we're saying, Saying, isn't it already
enough to do plant-based, right?If it's better and The Taste is
better than the value proposition would be.
(21:34):
Well, it's a vegan honey replacement.
That is closer to actual honey. And I think from my marketers
and Brands standpoint, you know,I look at everything through
that the reason to add Precisionfermentation to it is that it
gives you a certain claim to addto it, which is that it is the
most close product to actual honey.
(21:57):
On the market at which point it completely up level and its
value proposition compared to the competitors.
And as I say Corporate social responsibility, the issue is you
get like 60% of the brand effectby just announcing things right
by sort of doing something and people aren't able to actually
(22:19):
check like how much has been done and whether the goals have
been achieved and I'm not proposing that that will be the
case with you but just like the The awareness that well, it's
some point you will be able to state that this claim without
needing to go further in terms of developing more and more and
more and more molecules to get to 98 and 99, the 99.5, The
(22:41):
Branding effect has already beenchecked off and it's possible to
be used and you were saying thatthis you are aiming to make it
more affordable and I guess the plant part of it, the what is
planned base camp? Be be more easily reduced and
its cost but the Precision fermentation is quite a costly
(23:03):
technology. So how do you plan to reduce the
costs? There, there's a couple of
important parts of making sure that the cost parity is reached.
And one of the most important things is definitely scale.
I know there's a lot of fermentation experts out there
and some of them have different opinions.
Some of them think that what we need is, the biggest tank
(23:25):
possible, is the Fermenter, someof the folks think that maybe
you know multiplication with midsize things is actually the
most appropriate approach. So we're looking into all of
those options. I am very interested and very
personally invested into the story of capex, capex is all the
funds that you need to invest into hardware and things that
(23:48):
don't exist. Right now, our position of
Malabar has always been to thinkabout, is there a creating way
to reduce capex? Because just Thinking more
facilities and things like that is actually, no way it's
important and it's important that certain groups are doing
but if everybody would be doing it would mean that a bunch of us
(24:08):
are starting from scratch and having our own separate
trajectories in helping the world become a better place.
That's something that makes startups right now slower
whereas in a different approach we can think about how creative
Partnerships can actually amplify each other in how
certain maybe I'm Us facilities with certain companies that use
(24:29):
certain facilities for other purposes and product, how that
can be reimagined for what we'reworking on.
And that's something that makes their PC indicators harder to
hit because at the end of the day, LP is put money in fines
and funds invest to have a return.
And when there's a significant capex, the return is not as
(24:50):
exciting and when it's not as exciting than the lp activity is
not backing the future of it. Here's a Venture Capital term
refresher Venture Capital funds,most companies in the food,
biotech space. It's a high-risk investment
funding high-growth startups. That hopefully end up having an
IPO like impossible Foods or a corporate Vice them, that's
(25:14):
we're investment bankers! Get in on the deal most PCS hope
to make their money not by having a bunch of profitable
slow growing companies but by finding a few home runs like the
next Facebook or are In be of food Tech Venture, money is
short term money because we seize need to fund raise
themselves. They fundraise from limited
(25:34):
partners or LPS, those can be corporations wealthy families or
individuals or Pension funds andthey expect to get their money
back plus 20 to 25% on top for an average fund.
So when VCS are slowing down their spending that in turn, is
because we seize have a harder time to raise money.
(25:57):
From their limited partners. Venture capital is crucial for
the industry. So learning about it, helps to
understand the system, just think about how much of a
progress there happened, becauseAmazon web services, and cloud
services exist, that certain people build.
And that now, any developer in the world just walking into an
(26:17):
Apple store and buying a computer can build on that
infrastructure. We need that in the food
industry, we can easily get in atrap of each and every the
company wanting to build everything their own from
scratch because I think they're just sucks more money and delay
Stein from providing great exit opportunities.
Because in the end of the day, Marina we really need to think
(26:39):
about who is helping this revolution happen and that
investors need to have a return on their Investments because
otherwise that's a non-profit work and nonprofit work is
important and great, but it has a certain ceiling that it can
hit and moving forward. Capitalism.
It's take over. No, oh wow.
Bold bold statements here are very interesting.
(27:02):
Yeah, I have read bit about companies in the sugarcane space
in the ethanol production that have excess capacity of for
mentors. For example, in Mexico, that can
be used by other players in the space.
We're saying that your honey at least a plant-based part
contains the sugar which is the easiest part probably the food
(27:25):
assets and also And extracts. And I wonder how much is there
already as supply chain for this?
How much do you need to build upfrom scratch?
Because it doesn't seem like these kind of ingredients of
Honey are so widespread in use or are they sugar is widely
available? Yeah, what's important with
sugar is that you get the best deal in terms of sourcing and
(27:46):
that you get an international reliable partner that can follow
you as you grow. The more difficult part was
definitely on everything. That's not sugar, understanding,
how we can build that. Successfully how we can create a
robust supply chain that can also Empower us to make
different varieties of honey. All right now we have one
variety of honey that somewhere between clover honey and Acacia
(28:10):
honey would have an affair and then they would have a baby out
of that Affair. That would be our product number
one, but in terms of further products, there's 300 varieties
of honey. We want to make at least ten
major ones, and we had to spend a lot of time, invest a lot of
time or supply chain, all the supply chains, right?
Now are under heavy pressure, and I need to say that.
I really feel fortunate and happy that we started in time,
(28:34):
so that we don't have to launch within the worst part of the
supply chain prices. I really think that all the
founders that had to scale and launched a year ago or today,
it's are there for them versus us who are still pretty Market.
I think that's something that a lot of VCS are realizing now
with their Investments that, oh,this is not software.
(28:56):
This is Hardware and terms. It's squishy Hardware, beautiful
Hardware. Let's stop acid heavy business.
And if you followed the Oatley recalls, if you actually think
about how hard it is to make a, you could say update on a food
product, if something goes wrongin the software product, you
launched a new version tomorrow,and nobody needs to know about
(29:19):
it, if something goes wrong witha hardware product or way, for
food product, especially you need to pretty much shout out.
Out into the world. We messed up, don't buy our
products, take it off the shelves.
You need to let all the Retailer's.
No, you need to let us many customers know, as possible and
the price of trying to collect all of these Goods back is just
(29:42):
enormous. Like I was telling this recently
to somebody and she is like you are making me question whether I
want to be in food and I'm like,no, no, no, it's fine.
It's fine. So it's really hard.
Now that you mentioned it. How Factoring is hard and all
the recalls and things like that, I just want to share that
one of the unconventional opinions that I formed during
(30:05):
building Valley by in the past almost three years now is that
the Lean Startup methodology? That's very famous in the
software development. There's this great book by Eric
Ries that I read couple of timesthat really wants to help
Founders, be Scrappy and be verylean.
I think that doesn't work in thefood industry.
And here's why from the moment you launch something new and
(30:26):
think about all of of us Founders that need to replace
bacon cheese, honey, with animal-free analogs.
If we just follow the Lean Startup methodology that says
work on something and launch andprove that actually doesn't work
well in the food industry because the moment you put
something to someone in their mouth to taste.
(30:46):
That's the moment where they create emotional connection with
that story with that name, and with that product.
And if it doesn't taste great, there's a chance that people
wouldn't want to Tastes 1.1, 1.2version, 2.1.
And the moment that they createdthat connection, that one be as
empowering connection as it could be with some other
(31:07):
products. So I really believe that we have
a responsibility. When I say we I want to start
with investors with the foundersConsultants employees everybody
in the space. We have a responsibility to
acknowledge that building a foodproduct that's something special
and that Requires a nuanced approach because we are making
(31:30):
something that people three or more times per day, putting
their mouths. But I just that's the energy.
That's the health. That's the nutrition for folks
and we can just do copy paste models from software or any
other industry. And we really need to be patient
because manufacturing is hard and to do it, right.
(31:51):
It requires a lot of resources and a lot of smart people to get
involved just looking into our Is product in our first
technology, and we have to technological approaches.
One is leaning more in the plan based science and the other one,
the Precision fermentation, justthinking about the one that is
supposed to be easier. And it's easier the plant-based
(32:11):
one, where we Advanced more justthinking about all the hurdles
and challenges that we've been solving.
You think about the benchtop scale?
You make a tasty product, peopletaste it and then you move it up
when the pilot facility and maybe it works.
There you have some tweaks. You have some learnings and you
take those learnings to a co-packer.
And then you realize that, you know, what, a co-packer doesn't
(32:32):
have that much of a patient's asthe pilot facility partner and
that may be that certain step, you know, it's not commercially
viable to be done in such a way that like, you did it at a Pilot
facility that you have just for yourself within a week.
And then you have a co-packer makes a product for you.
And for other companies, there'sthis dilemma.
(32:54):
Should I do a co-packer? Should I build a Manufacturing?
Facility, all of this Marina is really serious questions that I
think are really hard. So I always congratulate
investors that invest in the food and food Tech space and
Founders wanting to dedicate a decade of their lives.
Whereas in some other Industries, Founders can have
(33:16):
three exits within a decade building, you know, ads
management app or something likethat.
It's quite interesting. How a lot of the startups they
start with Very novel ingredients very Diversified
crops or they don't want to go with soy or P.
They take something more fancy and then it's fantastic and it
(33:37):
tastes great but then they go into growth stage and they
realize, there's no supply chain.
That's significant enough to actually Supply their business
or their other challenges with certain manufacturers.
Not being familiar with the processes for this specific
ingredient and it's just going to become so complicated and
let's Okay, okay, we go. To pee since I.
(33:57):
Okay. Maybe my last question on the
content part of it. You've already talked about the
controversy or like what you find is a controversial opinion
that you have, maybe we jump into the other question, which
is if you would have 50 million and you wouldn't be able to
invest it in Malley, bio, what specific startups or Solutions
(34:18):
what you invested in this very question.
I think we need to invest a lot of resources and money into
education of the Their population around what food is,
how is it made, and what's the impact of us producing food, so
that we can feed ourselves in our future Generations.
What's going on? Is that many folks don't see the
(34:38):
food industry beyond what they like to create as labels or
approaches or things like that? The future of food needs to
involve scientific and technological advancements
because without that, it's really not possible for us to
feed the entire world. If we just think about the
privilege that you I have as Europeans and people in the
(34:59):
Western Hemisphere that's a privileged place to be at and
there's a whole world out there that we need to feed.
And if we just think about creating cool brands that
satisfy certain geographies demographics, I don't think
that's actually moving the needle.
I would invest a certain amount of that 50 million into
educating folks, understanding how we can talk about certain
(35:21):
things without certain labels, how we can get, what's behind
different approaches and how Actually, throughout our
history, we've been changing howwe interact with food.
Even if you're not vegan, if youeat cheese today, that's not the
cheese. That was made in say way there's
a lot of Biotech in your cheese that in your French fries that
you are eating today and I'm sorry to all those that might
(35:42):
get offended with I'm saying. But you know what, your Brie and
Camembert is biotech versus how it was, it made 50 years ago.
So that's one thing. The other thing that I would
invest money is definitely back to the capex and infrastructure.
I really think that we need moreof a separate hardware and
infrastructure startups, essentially, Hardware platform.
(36:02):
Startups, I think developing those companies is going to be
essential for all of us out there that we're going to need
certain help that make sense forus to partner with someone
versus for us to plan, fundraising built for that, so
education and infrastructure platform.
I would put 50 million. What I would also make sure is
(36:23):
to communicate to investors thatmost likely test.
That another app or a software one actually, move the needle in
terms of our Evolution. I think we've probably reached a
maximum of it and it's hard for me to understand how we ended up
investing more money in metaverse, them in alternative
food, I'm not disrespecting. I'm not saying that crypto
(36:46):
metaverse and stuff like that isn't affecting our future.
I'm just saying that we need to prioritize to.
If you enjoy the season, we havea bunch more, check out.
Doubt season 1 and cell-based meat and season 3 on the
consumer acceptance of alternative proteins.
We seek to make our content as Evergreen as possible, so you
(37:07):
can still listen to it. Even if it was released a while
back, thanks to our senior producer Celeste Gupta, online,
content, editor, Robert Griffin,and Sherry Sussex for doing
industry research. Let's move the food industry
from harmful to healthy from polluting to sustainable from
red to Green.
We like bees, we like insects, and it's a severe issue for
biodiversity, because flowers are dependent on insects and
vice versa, right? So if you eat traditional honey,
are you promoting the hell not really large-scale?
Monoculture is an issue in crop,Agriculture, and beekeeping
(00:20):
here, from Darko Madrick, the co-founder and CEO of Mellie by.
Oh, I got to try their plant-based honey in Switzerland
last year and it Stood so similar I wondered whether they
had just poured some natural honey into the bottle.
Instead of using something like rice syrup Mellie, bio uses the
compounds found in Honey, rebuilding it, from the ground
(00:42):
up in the future, they want to use Precision fermentation to
add a few compounds that are hard to replace.
But is that necessary come with us into the world of beasts and
honey, let's Jump Right In Red to Green, is the most in-depth
podcast on food and Cultural sustainability covering each
(01:02):
topic. Know for 12 episodes.
Let's move the food system from harmful to healthy from
polluting to sustainable from red to Green.
I'm your host Marina Schmidt andyou're listening to season 6,
biotech and food. Your personal connection to
Honey is that you actually also have a background in the
(01:24):
industry. So let's look at the issues.
Why does honey need to be changed?
It seems quite fine. Right?
We have honey. So what is the problem with the
honey bees? Oh, oh Marina.
Where should I start with all the problems?
I mean, let me start with givingfolks in the audience a little
bit of a context year. So I have over a decade of
(01:45):
experience in the honey industryin which I and most of that time
actually in a traditional honey industry that relies on
Commercial beekeeping and honey bees as a medium of production,
but I finished my business school.
The first job that I got was, I became a management training,
one of the largest honey companies in Eastern Europe and
I was collaborating with 12,000,beekeepers collecting honey from
(02:09):
them, homage in izing processing, that honey and
20-ton batches and shipping thathoney from Eastern Europe mainly
to Germany and Norway. And all these Western European
markets, where you can get those30 Euro per kilogram units of
honey and retailer. So I'm coming from the very
industry that I got frustrated about and the reason I got
(02:32):
frustrated is that after spending time and working for
the largest European honey companies I realized that
Reliance on that species is not only damaging the species
itself, the European honey bees or a person.
A liver. But actually, what was happening
is that there's a turf war between be species again.
(02:54):
Sounds crazy, but there's like, twenty thousand be species.
And most of them are actually not making honey.
Only the honey bees are doing that in scale.
And what started happening is that web, the rising demand for
honey. More.
People started doing beekeeping creating these massive Farms.
I've seen one in Hungary has 10,000, beehives 10,000 beehives
(03:16):
and each bee hive contains 50,000 honeybees.
It's a crazy. Number of one be specie that
once deployed doesn't allow other pollinators.
While they need to be species, bumblebee is to drive in the
same place. But what I'm trying to say here
is Marina, there's couple of issues here and sole Reliance on
(03:37):
that animal to to supply a ten billion dollar industry.
If you walk into Ed the car revving, you'll find honey in
Granola in bars in Juice. Cieszyn alcoholic, non-alcoholic
drinks, I would say that there'sno product category in a
retailer in Europe or in the United States in which, you want
(03:57):
fine. At least one SKU or one product
that contains honey. And thinking about a large
industry that honey is and thinking about the
unsustainable, Reliance on one animal, that is not liking the
process, not getting stronger out of that process and that
which pure existence and artificial.
(04:18):
Caishen is actually not helping the planet because if you just
have one bee species, you don't have essentially be biodiversity
and be biodiversity you need forthe diversity of the plants and
you'll need plans for food and CO2 absorption.
I guess some people would also say that if you create
plant-based honey that's in the end fraudulent honey.
(04:39):
So as far as I understood you have been working on a Precision
fermentation path to creating honey but so far you've been
been successful in creating plant-based honey.
Is that something you want to push forward plant-based honey?
Or has that? Just been one step in the
development to address the firstcomment that you made.
I understand that certain peoplethink that the product, if it's
(05:03):
not made in the same way like weare used to, for that draw to be
made. It can't be that product and I
understand that position, but I would like to provide a
different perspective here and thinking about harming, you
know, honey is a hard case study.
Because honey is a very complex product.
And if you think about this product that for the past nine
(05:23):
thousand years have been made byHoney Bee, it's a very hard case
study to be replicated on a molecular level.
So we have Mellie bio, we started with Precision
fermentation because Precision, fermentation allows us to build
a complex production model that replicates what's happening in
honey? Bees honey?
Stomach bees fly from flower to flower they suck up pollen and
(05:46):
nectar and then they have a certain and is mad The reaction
happening, helping them breakingthat into the building blocks of
honey. So we started with that and then
we realized that's one part of the honey.
But before that there are certain parts of honey that
directly come from the plants. And then they said, okay while
we are still working on this model that scale that will help
us get the complexity of our product on a hundred percent of
(06:09):
a molecular matching. Apparently, there's certain work
that we can do in the plant-based side that can help
us with the looks of the productwith the consistency.
Flavor. So what we achieved Marina is
that we were able to build to technological approaches that at
some point will intersect where plant based approach.
(06:29):
Helped us work with certain plants and turn them into a
plant-based part of the honey. And then Precision fermentation
is a long-term approach that will get the complexity of our
product matching a honey, or honey right now, isn't 100% of a
molecular matching, the funny. It's about 85 to 90% Sent and
the remaining 10% will be something that the Precision
(06:51):
fermentation will help us get there.
Precision fermentation at scale takes time takes resources takes
a lot of knowledge to be fully skilled on a level that really
does the job perfectly, while following, all the safety
measures and Regulatory measures.
So that's where we are today. If people reach out to us
specially chefs, they can taste the plant based product is that
(07:13):
our ultimate goal, know we really want to connect all the
knowledge and the plant-based side.
Plug in the Precision fermentation and essentially
produce honey. It at scale, I have not told you
this before, but red to Green kicked off at an event by
provigil incubator in March 20, 20, it was right before Corona
was about to shut everything down but during their event
(07:35):
uncultivated meet, I was lookingfor interview, guests and
contacts for the first season oncebula agriculture and I found
them. The provision curator was the
first to specialize. As an alternative protein
companies, if you're excited about the topic check out their
12-week program, it offers mentorship up to 300, K and
(07:58):
funding and most important me, lots of important contacts, they
are particularly interested in startups, developing egg
seafood, and chicken Alternatives.
But also other ingredients and technologies that can help
replace animal products on a mass scale.
Some examples for companies thathave gone through the Prove that
(08:18):
incubator are the fermentation company cultivated biosciences
aiming to replace Dairy, bosc Foods, the mycelium start up and
fly the P base. Terry startup.
According to Christopher Kong CEO of better nature.
Probe Edge is the world's best connected incubator and the
plant based industry, you can apply any time of the year.
(08:42):
So grab your chance to build a company for better world and
check out probe which incubator Dot-com probe, Edge
incubator.com. Increasing thought?
Yes I was able to taste the honey and I also talked with a
couple of people who tasted it and who also said the early
iterations were not that good. And then I also talked to like,
(09:07):
12 people who said it's so good,they are questioning whether you
just put honey in it. So part of that is also the
Wonder like what is in there. So as far as possible, can you
maybe add a sec? What are the main ingredients
and stuff ingredients? Yeah.
Absolutely Marina. And when we launched our product
into the market, it will be obvious and clear to everyone.
(09:30):
Our philosophy is very simple. We want to make honey and we're
making honey out of honey. Native ingredient for example in
real honey, you can't find rice syrup so we don't use right
syrup. We believe that in the market
for vegans right now, there's plenty of Honey Alternatives.
There's honey, May alternative made of tapioca Stevia or
(09:53):
sugars. His dates and stuff like that,
and we believe that market exists and that market is
something that it's not our Market.
We want to get into a position of replicating Honey.
Using honey native ingredients and using Science and Technology
to help us put that together in a product that tastes great.
That's Contrition and that's absolutely safe.
(10:14):
But back to your question surrounding we the ants.
So we have sugars that are present in Honey which are
mostly fructose and glucose. Have food acids that are found
in Honey, and we have a bunch ofplant extracts that make honey,
anti-oxidant anti-inflammatory. And of course, water is about
(10:36):
20% of the product. That's the most part of the
ingredients. There's a couple of more that
people will be able to see once the product is launched.
Well, if it's supposed to be thesame as be, honey, I thought,
let me research. What actual bee honey is
composed of and I got stuck In arabbit hole well, or a beehive
(10:57):
honeybees are sometimes called the chemists of nature.
They use a complex process, including enzymes and
dehydration, to transform the sugars.
And flower nectar into honey, honey contains at least 181
components creating its unique taste.
It's mostly made up of glucose and fructose and it is a
(11:17):
supersaturated solution. Meaning normally so much sugar
couldn't be in so little water. They're so let's look at the
process B stard with nectar, which is about 80% water.
It's a thin and colorless solution that isn't very sweet.
Nectar includes more complex, sugars and bees.
Use enzymes to break them down into simpler sugars, it's called
(11:41):
hydrolysis house bees, regurgitate, Andre drink the
nectar over 20 minutes, then deposited, in a honeycomb and
fan it to speed up the evaporation, you can Make this
process in a lab honey, manufacturers.
Pasteurize and filter light, honey.
This syrup contains fewer natural, antioxidants vitamins,
(12:03):
minerals and other natural nutrition.
An unfiltered. Honey Pollan nectar and be
saliva at most of the nutrition dark honey maybe less filtered
though. I wonder if many bio wants to
make it 100% molecular Lee the same how will they include some
be saliva? We are backed by food laps a
(12:26):
leading European food, VC that is teaming up with its sister
fund. Atlantic labs to launch a
Founders for climate program. So if you or somebody, you know,
is a passionate entrepreneur caring for the environment, this
is your chance. You can receive precede funding
for your Incorporated company mentoring and advisory and
(12:48):
access to the network which includes over 150.
Portfolio companies Dead now by going to food, labs.com, food
labs.com, let's Circle back to the problem with honey.
Actually I would like to look a little bit more into how having
one type of Honey Bee effects plant diversity.
(13:11):
Common Sense would tell me that.It's probably because honey bees
have their preferences, their Yum, Yum, Yum, Yum, their
preferred flowers and therefore only certain Lands become
pollinated. While others are left out is the
Yum, Yum Inc, the Right theory here, yeah honey, bees are an
(13:33):
important part of our Survival on the planet, but they are not
the only ones that we need to take care about and by using
them to make honey and do Precision pollination that
specifically happens a lot in the United States.
What we're doing is we're not leaving space for other species
to live, it's really like it's agame of diversity.
(13:53):
Or if you want to take a little bit car to approach, just like a
third for their species out there.
If you throw in bunch of artificially, created, new
colonies of honey, bees into a place that they haven't been
before. No butterflies bumblebees can
really feed themselves, they won't survive.
So it is not as simple as great bees not-so-great.
(14:14):
Be as we should get rid of thesebees and keep.
These means now, the story is very nuanced.
We need to be biodiversity because different species,
pollinate different types of Plants.
So ultimately our survival and this plant will be dependent on
the be biodiversity but since welike very simple Solutions such
as build hives, make more honey,bee colonies to make more honey
(14:38):
because we consume honey. And have the honey is a great
product, then we just play with the balance in the nature and
feet. Talk about pesticides and other
things that affect the bees. There's so many issues happening
in the be space. Ace.
And there's so many issues happen.
The honey speed. On a different note.
Have you heard about be bred be?Bread is essential for bees to
(15:02):
survive the winter or Poland? Empty summertime, it's their
food stash and it's made by storing Poland, with honey,
Poland, furman's and wax-sealed Honeycombs.
The process has two steps. The first is a bacterial
fermentation with lactobacillus bacteria.
These bacterial of environments with lots of fructose and
(15:24):
produce lactic acid. If you remember our Our episode
on traditional fermentation. Here's a recap lactic acid,
fermentation creates kimchi, sauerkraut, pickles, sourdough,
bread and yogurt. So of course, this is a fit for
be bread. So, the pH of the be bred
decreases, creating a perfect environment for yeast.
(15:46):
Fermentation also used for beer and sourdough the yeast.
Help preserve, the bee bread, which is nutritionally different
from Poland, and honey just likesauerkraut.
It's different from cabbage withsugar many honey colonies
struggle to survive the winter. Now a part of the problem is
pesticides because bees feed on pesticide treated plants and
(16:09):
this so interesting. So pesticides can also change
the microbiome of be bred. For example, fungicides can
interfere with yeast fermentation and lead to spoiled
be bread. I find it so interesting that
bees actually use Ian to survivethe winter and the pesticides
(16:30):
are not just directly, harmful to them, but also interfere with
their process of making food andsurviving.
I had a follow-up question to that.
My dad actually used to be a beekeeper.
One of those very micro scale ones, he had a little yard
outside of the city and he wouldgrow, not just such as
(16:55):
vegetables, but also different fruit.
And some of these flowers which were also than pollinated by the
bees and overall it was more of an integrated system, right?
And a lot of the talk that we have with regenerative
agriculture with developments, in agriculture, overall is we
need to think more holistically.We need to think in systems and
not just plug something in and expect it to just operate on its
(17:18):
own. So, I'm wondering what if the
beekeepers would start becoming flower people and how would that
look like, and I don't know, is that ever a practice that they
just have massive flower Fields next to them?
It's it's so exciting that you're mentioning this Marina
because I was thinking a lot about how many Technical
(17:39):
Solutions are bringing Evolutionand the price tag of that
evolution is a lot of people losing their jobs.
So I was thinking about this paradigm shift in which we would
help beekeepers actually transitioning to be protectors.
One of the best ways to protect bees is to plant.
Wild flowers and plants and imagine that one day and just,
(18:01):
this is just an idea. This is not something, you know,
that we have as the strategy right now, because this idea
requires a lot of thinking, whatif we can compensate, folks, for
planting plants processing them,and selling them as inputs to
food industry and that would take those as kind of plant
extracts and things like that. And I know that there are folks
(18:21):
out there that are small-scale beekeepers.
There are folks out there that to the extent that It's possible
gently approach bees versus someother folks that just put them
in some trucks and carrying themfrom one Coast to another.
There's nuances within the beekeeping world, and we all
should have a big conversation happening.
Mmm. Yeah.
(18:41):
I think there are some parallelswith the alternative protein
industry that overall demand forhoney is probably growing just
like it's growing, maybe not as steep, but also like it's
growing for me even just by the pure observation that we are
growing as a Human conundrum. I'll call it conundrum now and
(19:01):
but at first for a long time it won't be replacing honey
Keepers. Anyway it will be just adding to
a growing amount of necessary Supply to meet the growing
demand. Sometimes when I would talk to
people about Mellie bio, they would say well but it doesn't
make sense to do Precision fermentation, which is so
(19:23):
specific in which can only produce individual It's for
something that is molecular Lee.So complex as honey, and of
course, you're not trying to replicate the entirety of Honey
with Precision fermentation. But if you say that, it will be
molecular Lee identical, what are we talking about?
Like what percentage are we talking about?
And how many different types of molecules, would you need to
(19:46):
create with Precision fermentation?
Yeah, it's a great question. I was very happy that moving to
California. I realized that many companies
actually succeeded in changing. Our industry is by taking one
step at a time. I remember Marina when we
applied for our accelerator, bigidea Ventures.
That was one of the, you know, hard as accelerator to get in
(20:08):
and we were sending a sample of what we had at that time.
A product, we had an Ode to Andrew arrived and the team
saying, look at the sample that we are sending take a look at
the color. Does it look like honey?
It's there. Try to steer it.
Mix it with a spoon. Does the consistency look like
honey? Yeah, it's there.
But you know what? Don't taste it.
Because we need your money to work on the taste and the flavor
(20:30):
because what you're going to taste won't be as great as
something that we're going to make a year after that.
So you know, taking that approach is very important and I
don't think that the companies can achieve their visions and
missions in three to five years.I think we're rather talking
about seven plus years and probably over a decade of
knowledge that needs to give compounded resources that will
(20:53):
actually take us to change the honey industry.
And you know, when people Some of the folks that I really
excited about our launch and that are asking, okay guys,
you're promising deadlines. When is that going to happen?
I just think how these took ninethousand years to evolve and,
you know, make honey and how Mellie by is gonna change that
in a decade. And what's three years versus
(21:14):
six verses 13 in that grand comparison of the old and the
new industry. Yeah, when I was talking to
people about what is actually the value, proposition of many
bio, some one or two we're saying, Saying, isn't it already
enough to do plant-based, right?If it's better and The Taste is
better than the value proposition would be.
(21:34):
Well, it's a vegan honey replacement.
That is closer to actual honey. And I think from my marketers
and Brands standpoint, you know,I look at everything through
that the reason to add Precisionfermentation to it is that it
gives you a certain claim to addto it, which is that it is the
most close product to actual honey.
(21:57):
On the market at which point it completely up level and its
value proposition compared to the competitors.
And as I say Corporate social responsibility, the issue is you
get like 60% of the brand effectby just announcing things right
by sort of doing something and people aren't able to actually
(22:19):
check like how much has been done and whether the goals have
been achieved and I'm not proposing that that will be the
case with you but just like the The awareness that well, it's
some point you will be able to state that this claim without
needing to go further in terms of developing more and more and
more and more molecules to get to 98 and 99, the 99.5, The
(22:41):
Branding effect has already beenchecked off and it's possible to
be used and you were saying thatthis you are aiming to make it
more affordable and I guess the plant part of it, the what is
planned base camp? Be be more easily reduced and
its cost but the Precision fermentation is quite a costly
(23:03):
technology. So how do you plan to reduce the
costs? There, there's a couple of
important parts of making sure that the cost parity is reached.
And one of the most important things is definitely scale.
I know there's a lot of fermentation experts out there
and some of them have different opinions.
Some of them think that what we need is, the biggest tank
(23:25):
possible, is the Fermenter, someof the folks think that maybe
you know multiplication with midsize things is actually the
most appropriate approach. So we're looking into all of
those options. I am very interested and very
personally invested into the story of capex, capex is all the
funds that you need to invest into hardware and things that
(23:48):
don't exist. Right now, our position of
Malabar has always been to thinkabout, is there a creating way
to reduce capex? Because just Thinking more
facilities and things like that is actually, no way it's
important and it's important that certain groups are doing
but if everybody would be doing it would mean that a bunch of us
(24:08):
are starting from scratch and having our own separate
trajectories in helping the world become a better place.
That's something that makes startups right now slower
whereas in a different approach we can think about how creative
Partnerships can actually amplify each other in how
certain maybe I'm Us facilities with certain companies that use
(24:29):
certain facilities for other purposes and product, how that
can be reimagined for what we'reworking on.
And that's something that makes their PC indicators harder to
hit because at the end of the day, LP is put money in fines
and funds invest to have a return.
And when there's a significant capex, the return is not as
(24:50):
exciting and when it's not as exciting than the lp activity is
not backing the future of it. Here's a Venture Capital term
refresher Venture Capital funds,most companies in the food,
biotech space. It's a high-risk investment
funding high-growth startups. That hopefully end up having an
IPO like impossible Foods or a corporate Vice them, that's
(25:14):
we're investment bankers! Get in on the deal most PCS hope
to make their money not by having a bunch of profitable
slow growing companies but by finding a few home runs like the
next Facebook or are In be of food Tech Venture, money is
short term money because we seize need to fund raise
themselves. They fundraise from limited
(25:34):
partners or LPS, those can be corporations wealthy families or
individuals or Pension funds andthey expect to get their money
back plus 20 to 25% on top for an average fund.
So when VCS are slowing down their spending that in turn, is
because we seize have a harder time to raise money.
(25:57):
From their limited partners. Venture capital is crucial for
the industry. So learning about it, helps to
understand the system, just think about how much of a
progress there happened, becauseAmazon web services, and cloud
services exist, that certain people build.
And that now, any developer in the world just walking into an
(26:17):
Apple store and buying a computer can build on that
infrastructure. We need that in the food
industry, we can easily get in atrap of each and every the
company wanting to build everything their own from
scratch because I think they're just sucks more money and delay
Stein from providing great exit opportunities.
Because in the end of the day, Marina we really need to think
(26:39):
about who is helping this revolution happen and that
investors need to have a return on their Investments because
otherwise that's a non-profit work and nonprofit work is
important and great, but it has a certain ceiling that it can
hit and moving forward. Capitalism.
It's take over. No, oh wow.
Bold bold statements here are very interesting.
(27:02):
Yeah, I have read bit about companies in the sugarcane space
in the ethanol production that have excess capacity of for
mentors. For example, in Mexico, that can
be used by other players in the space.
We're saying that your honey at least a plant-based part
contains the sugar which is the easiest part probably the food
(27:25):
assets and also And extracts. And I wonder how much is there
already as supply chain for this?
How much do you need to build upfrom scratch?
Because it doesn't seem like these kind of ingredients of
Honey are so widespread in use or are they sugar is widely
available? Yeah, what's important with
sugar is that you get the best deal in terms of sourcing and
(27:46):
that you get an international reliable partner that can follow
you as you grow. The more difficult part was
definitely on everything. That's not sugar, understanding,
how we can build that. Successfully how we can create a
robust supply chain that can also Empower us to make
different varieties of honey. All right now we have one
variety of honey that somewhere between clover honey and Acacia
(28:10):
honey would have an affair and then they would have a baby out
of that Affair. That would be our product number
one, but in terms of further products, there's 300 varieties
of honey. We want to make at least ten
major ones, and we had to spend a lot of time, invest a lot of
time or supply chain, all the supply chains, right?
Now are under heavy pressure, and I need to say that.
I really feel fortunate and happy that we started in time,
(28:34):
so that we don't have to launch within the worst part of the
supply chain prices. I really think that all the
founders that had to scale and launched a year ago or today,
it's are there for them versus us who are still pretty Market.
I think that's something that a lot of VCS are realizing now
with their Investments that, oh,this is not software.
(28:56):
This is Hardware and terms. It's squishy Hardware, beautiful
Hardware. Let's stop acid heavy business.
And if you followed the Oatley recalls, if you actually think
about how hard it is to make a, you could say update on a food
product, if something goes wrongin the software product, you
launched a new version tomorrow,and nobody needs to know about
(29:19):
it, if something goes wrong witha hardware product or way, for
food product, especially you need to pretty much shout out.
Out into the world. We messed up, don't buy our
products, take it off the shelves.
You need to let all the Retailer's.
No, you need to let us many customers know, as possible and
the price of trying to collect all of these Goods back is just
(29:42):
enormous. Like I was telling this recently
to somebody and she is like you are making me question whether I
want to be in food and I'm like,no, no, no, it's fine.
It's fine. So it's really hard.
Now that you mentioned it. How Factoring is hard and all
the recalls and things like that, I just want to share that
one of the unconventional opinions that I formed during
(30:05):
building Valley by in the past almost three years now is that
the Lean Startup methodology? That's very famous in the
software development. There's this great book by Eric
Ries that I read couple of timesthat really wants to help
Founders, be Scrappy and be verylean.
I think that doesn't work in thefood industry.
And here's why from the moment you launch something new and
(30:26):
think about all of of us Founders that need to replace
bacon cheese, honey, with animal-free analogs.
If we just follow the Lean Startup methodology that says
work on something and launch andprove that actually doesn't work
well in the food industry because the moment you put
something to someone in their mouth to taste.
(30:46):
That's the moment where they create emotional connection with
that story with that name, and with that product.
And if it doesn't taste great, there's a chance that people
wouldn't want to Tastes 1.1, 1.2version, 2.1.
And the moment that they createdthat connection, that one be as
empowering connection as it could be with some other
(31:07):
products. So I really believe that we have
a responsibility. When I say we I want to start
with investors with the foundersConsultants employees everybody
in the space. We have a responsibility to
acknowledge that building a foodproduct that's something special
and that Requires a nuanced approach because we are making
(31:30):
something that people three or more times per day, putting
their mouths. But I just that's the energy.
That's the health. That's the nutrition for folks
and we can just do copy paste models from software or any
other industry. And we really need to be patient
because manufacturing is hard and to do it, right.
(31:51):
It requires a lot of resources and a lot of smart people to get
involved just looking into our Is product in our first
technology, and we have to technological approaches.
One is leaning more in the plan based science and the other one,
the Precision fermentation, justthinking about the one that is
supposed to be easier. And it's easier the plant-based
(32:11):
one, where we Advanced more justthinking about all the hurdles
and challenges that we've been solving.
You think about the benchtop scale?
You make a tasty product, peopletaste it and then you move it up
when the pilot facility and maybe it works.
There you have some tweaks. You have some learnings and you
take those learnings to a co-packer.
And then you realize that, you know, what, a co-packer doesn't
(32:32):
have that much of a patient's asthe pilot facility partner and
that may be that certain step, you know, it's not commercially
viable to be done in such a way that like, you did it at a Pilot
facility that you have just for yourself within a week.
And then you have a co-packer makes a product for you.
And for other companies, there'sthis dilemma.
(32:54):
Should I do a co-packer? Should I build a Manufacturing?
Facility, all of this Marina is really serious questions that I
think are really hard. So I always congratulate
investors that invest in the food and food Tech space and
Founders wanting to dedicate a decade of their lives.
Whereas in some other Industries, Founders can have
(33:16):
three exits within a decade building, you know, ads
management app or something likethat.
It's quite interesting. How a lot of the startups they
start with Very novel ingredients very Diversified
crops or they don't want to go with soy or P.
They take something more fancy and then it's fantastic and it
(33:37):
tastes great but then they go into growth stage and they
realize, there's no supply chain.
That's significant enough to actually Supply their business
or their other challenges with certain manufacturers.
Not being familiar with the processes for this specific
ingredient and it's just going to become so complicated and
let's Okay, okay, we go. To pee since I.
(33:57):
Okay. Maybe my last question on the
content part of it. You've already talked about the
controversy or like what you find is a controversial opinion
that you have, maybe we jump into the other question, which
is if you would have 50 million and you wouldn't be able to
invest it in Malley, bio, what specific startups or Solutions
(34:18):
what you invested in this very question.
I think we need to invest a lot of resources and money into
education of the Their population around what food is,
how is it made, and what's the impact of us producing food, so
that we can feed ourselves in our future Generations.
What's going on? Is that many folks don't see the
(34:38):
food industry beyond what they like to create as labels or
approaches or things like that? The future of food needs to
involve scientific and technological advancements
because without that, it's really not possible for us to
feed the entire world. If we just think about the
privilege that you I have as Europeans and people in the
(34:59):
Western Hemisphere that's a privileged place to be at and
there's a whole world out there that we need to feed.
And if we just think about creating cool brands that
satisfy certain geographies demographics, I don't think
that's actually moving the needle.
I would invest a certain amount of that 50 million into
educating folks, understanding how we can talk about certain
(35:21):
things without certain labels, how we can get, what's behind
different approaches and how Actually, throughout our
history, we've been changing howwe interact with food.
Even if you're not vegan, if youeat cheese today, that's not the
cheese. That was made in say way there's
a lot of Biotech in your cheese that in your French fries that
you are eating today and I'm sorry to all those that might
(35:42):
get offended with I'm saying. But you know what, your Brie and
Camembert is biotech versus how it was, it made 50 years ago.
So that's one thing. The other thing that I would
invest money is definitely back to the capex and infrastructure.
I really think that we need moreof a separate hardware and
infrastructure startups, essentially, Hardware platform.
(36:02):
Startups, I think developing those companies is going to be
essential for all of us out there that we're going to need
certain help that make sense forus to partner with someone
versus for us to plan, fundraising built for that, so
education and infrastructure platform.
I would put 50 million. What I would also make sure is
(36:23):
to communicate to investors thatmost likely test.
That another app or a software one actually, move the needle in
terms of our Evolution. I think we've probably reached a
maximum of it and it's hard for me to understand how we ended up
investing more money in metaverse, them in alternative
food, I'm not disrespecting. I'm not saying that crypto
(36:46):
metaverse and stuff like that isn't affecting our future.
I'm just saying that we need to prioritize to.
If you enjoy the season, we havea bunch more, check out.
Doubt season 1 and cell-based meat and season 3 on the
consumer acceptance of alternative proteins.
We seek to make our content as Evergreen as possible, so you
(37:07):
can still listen to it. Even if it was released a while
back, thanks to our senior producer Celeste Gupta, online,
content, editor, Robert Griffin,and Sherry Sussex for doing
industry research. Let's move the food industry
from harmful to healthy from polluting to sustainable from
red to Green.
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