September 12, 2024 • 49 mins
Find out all the details about micro fermentation. Discover how Formo is using this process to churn out Koji protein-based cheese alternatives that are hitting over 2000 stores in the DACH region.
The episode breaks down the differences between micro and precision fermentation and why micro fermentation's quicker market route is so exciting.
Learn about the sustainability perks and the cool science behind cheese without cows. Whether you're into biotech, sustainable food, or just love cheese, this deep dive offers a taste of the future.
LINKS / Mentions
The Bright Green Partners overview on different types of fermentation https://brightgreenpartners.com/precision-fermentation/
Formo - https://formo.bio/https://formo.bio/
Raffa - https://www.linkedin.com/in/raffael-wohlgensinger/
Connect with Marina - https://www.linkedin.com/in/schmidt-marina/
Check out R2G Media - https://www.r2g.media/
Turtle Tree - https://www.turtletree.com/
Flora Ventures - https://www.floravc.com/
Foodlabs - https://www.foodlabs.com/
00:00 Introduction to Micro Fermentation
04:11 Product Launches
05:32 Deep Dive Micro Fermentation
17:31 Product Development and Consumer Testing
20:56 PF vs. MF in detail
27:24 Benefits of Koji
29:23 Regulatory Landscape
31:47 Fundraising Perks
34:44 Sustainability Impact
42:50 Partnering with Traditional Dairy Manufacturers
46:06 Go to market
47:08 Future Innovations
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Today we're diving into something fresh and exciting,
micro fermentation. We found this huge universe of
application cases of these native proteins that nobody
really has been looking at before, at least not in the
sense of main ingredient for cheese and egg alternatives.
This is Rafael Volgenzinger, Co founder and CEO of Formal, a
(00:21):
German fermentation startup thatis changing the cheese game due
to a recent discovery. Josh, our Head of bioprocessing
in a strategy session basically said, hey guys, are you aware
that we're only using these native proteins today in very
minor subcategories in the food market, but they're super
functional and we could just look into those and see like if
(00:42):
we could find strains that have really functional proteins that
we could then also use as a champion product.
And then we actually did an R&D Sprint as a whole company.
And this discovery enabled Formoto raise a pretty significant
funding round, especially in this current market market
environment, 61 million U.S. dollars and they're serious B as
(01:02):
we are releasing this episode foremost launching in over 2000
stores all across the DACH region with cream cheese
products or should I say cream cheese alternatives that are
Koji protein based. But why would you care?
Well, it wouldn't be called Red to Green if there is no
(01:23):
sustainability angle to the story.
Fresh of the Press. Here are some results from their
life cycle assessments of their new cream cheese alternative
called Fresh Hein. 65% fewer emissions, 83% less land use,
96% smaller water footprint. Foremost.
Also known for their work on precision fermentation, which we
(01:46):
have covered on Red to Green in previous seasons.
But just to loop you in again, with precision fermentation,
formal aims to produce bioidentical milk proteins
without the need for cows. So you create the actual casein
and the actual way this involvestweaking the DNA of microbes to
make those proteins. It's fascinating stuff.
(02:07):
And if that piques your interests, you should definitely
check out Season 6 on biotech and food after listening to this
episode. Well, precision fermentation is
the moon shot. It's ground breaking, but it's
not without its challenges. First, getting approval in
Europe is a tough nut to crack due to the novel food
(02:28):
application process. Then quite a bit of R&D work is
still needed to bring down the price point, right?
And let's face it, it will also take some serious consumer
education and clear messaging toget everyone on board.
Where does micro fermentation fit in?
Think of it as a version of precision fermentation.
(02:48):
But the key difference is that micro fermentation does not
require genetic engineering. It uses naturally occurring
organisms. That means it doesn't require
any novel food application process.
It has a much faster go to market timeline.
And while consumer education is still essential, it's a bit more
straightforward. So this is a thrilling
(03:10):
development in the industry. And why is this thrilling to me?
Because I think there has been so much hype and so much rah,
rah and a little bit too little execution.
Can I say it this way? Yeah, we just need a little bit
more things actually happening. So I'm just celebrating some
(03:31):
real execution here together. We will dig into the details
quite a bit because since December 2023, I've been working
with formal on the terminology and communication side.
The term micro fermentation distinguishes this approach from
precision fermentation and it's essential because we need to
create transparency and understanding within the
(03:53):
industry and also towards consumers.
Rafa is a beacon of positive energy and I'm sure you will
enjoy this deep dive. This episode is very detailed
and will tell you everything youneed to know about micro
fermentation. Make sure to listen till the
end. But before we dive in, I've got
some quick news. Red to Green is back after a
(04:16):
little break. We're shaking things up with a
new mini master class format, releasing one monthly deep dive
episode. Each one will focus on a
different aspect of the food system, so hit that subscribe
button to stay in the loop. All right, let's jump right in.
You're listening to Red to Green, the deep dive podcast on
(04:37):
moving the food industry from harmful to healthy, from
polluting to sustainable, from Red to green, a production of
R2G Media. And I'm your host, Marina
Schmidt. Rafa, it's great to have you
again on Red to Green. It's been a while, but it's
great to be back. I love the podcast and it's
(04:57):
always nice speaking with you, Marina.
You know what's funny? I had to find something in the
Co working space that I can use to put my laptop higher.
And you know what I took? What did you use?
A package of almond milk and Dairy Milk.
So you mix it. Yeah, exactly.
(05:18):
It's like my laptop is sitting on both.
I guess they're equally suited for that purpose.
Yeah, exactly. Just height of the packaging is
all that matters. Exactly.
That would make it all much moresimple.
Yeah, great. Well, to get right into it, you
have very, very exciting news. Can you tell us what is what is
(05:39):
coming up? We are doing this interview end
of July already, but what's coming up beginning of
September? So the big news is that we're
launching our first line of products in Germany together
with Revere. So we're basically launching a
bunch of different cheese products powered by micro
fermentation. And I know we're going to talk
about that a lot, yes, later during the podcast.
(06:02):
But it's basically really the 1st wave of fermentation based
products hitting the market in Europe.
A couple of different product lines that we have been working
on for the past years and we're just super excited to get them
out to consumers after all the work that we put into them.
Yeah. And I actually saw somebody
comment on one of the platforms that it's surprising that you're
(06:26):
already going to market because,well, precision fermentation is
a technology that's not expectedto go to market soon.
And you mentioned micro fermentation, a term that has
never been used in the industry.How come we haven't heard about
micro fermentation before? Yeah.
It's been a bit of a process forus to understand.
(06:47):
How do we want to call it. Should we call it precision
fermentation still or do we needa new term for this?
And I think the major idea to call it micro fermentation is to
also do a bit of a differentiation to precision
fermentation, which in the mind of consumers and regulators and
partners in the industry very much associated with genetic
engineering of the microorganisms that produce the
(07:07):
proteins. Couple of years ago, we
basically have been looking intousing native proteins of these
microorganisms as main ingredient of our products.
So basically using non engineered microorganisms, but
really using the proteins they would naturally produce as a
kind of like championing agreement, which is easier to
launch in Europe because they'renot novel, which is also why we
(07:30):
have the chance to go to market earlier than anybody else now.
Can you tell us a little bit about how you stumbled upon it?
So it was not really a stumblingupon it, but more like a
targeted effort that we put intoit.
So Josh, our Head of bioprocessing in a strategy
session basically said, hey guys, we're in this process of
(07:51):
bringing way in Casein to market.
We're all aware of the regulatory challenges that we're
facing with that specifically inEurope and the timelines we're
facing with that. And in his previous work, he was
dealing a lot with with native proteins of these
microorganisms. He basically said, are you aware
that we're only using these today in very minor
subcategories in the food market, but they're super
(08:12):
functional. And we could just look into
those and see like if we could find strains that have really
functional proteins that we could then also use as a
champion product. And then we actually did an R&D
Sprint as a whole company included all the teams.
And basically we're trying to, you know, look at different
strains, look at different proteins they produce and also
look into products that we coulddo with those and the
(08:32):
functionality of those proteins.And out of that two weeks Sprint
that we did a bit more than two years ago actually, we found
this huge universe of application cases of these
native proteins that nobody really has been looking at
before, at at least not in the sense of main ingredient for
cheese and egg alternatives. Do you have?
Any kind of hypothesis why the space has been overlooked?
(08:58):
I mean, the proteins that we're working with have been used in
the food industry, which is alsowhy they're not novel and we can
launch them. But I think during the time when
they kind of became big in the food industry, there was no real
pull from the market for more sustainable alternatives for
animal based products. And then I think that the
(09:18):
natural go to that everybody waslooking at was plant based or
then as we also do it basically to say we replicated entirely.
But this whole universe of microbial protein, which is not
the biomass, by the way, so not the fungi itself, not the mold
itself, but the proteins they produce, has really been kind of
somewhat in between and overlooked at the end of the
day. Yeah, you were just saying this
(09:40):
is not biomass fermentation, so the actual microbes don't end up
or aren't meant to end up in theproduct, but what makes it sort
of feel closer to precision fermentation is.
That it is the protein that those microorganisms produce in
a process of fermentation. So if you think about your
classic model of or your conceptof precision fermentation, where
(10:04):
you put in a genetic code into amicroorganism so that protein is
being produced in a process of fermentation, you then also
separate the protein from the biomass.
Now on the other side of the spectrum, you have the biomass
fermentation companies and people who basically cultivate
the microorganism, the fungi, the yeast, etcetera as the main
source of protein. But somewhere in between would
(10:24):
be, and this is what we're doing, is fermenting the
microorganisms that they produceproteins, but that they
naturally produce that they secrete into the fermentation
broth. And then you can basically
separate the biomass from these proteins again and use those
proteins as a main food ingredients.
For some of the listeners who are trying to grasp the whole
concept, it might be understood as kind of somewhat of a mix
(10:45):
between biomass and precision fermentation in that sense.
We've already covered biomass fermentation in a separate
episode. Again, you can check out Season
6 on biotechnology and food to get a real deep dive into the
three different types of biomassfermentation.
But just to make it really clearright here, right now, the main
(11:06):
difference that Rafa is pointingout is that in biomass
fermentation, you grow yeast or bacteria or microbes in general,
and the actual biomass that is created is your end product.
So whatever is growing there. And with micro fermentation and
precision fermentation, the microbes that you grow are just
(11:29):
the factories. They produce your end
ingredient, but then you separate them from the end
ingredient. OK, wait, let me think of this
with a metaphor. Just imagine a cow precision
fermentation and micro fermentation works like when you
get milk from the cow. You do not want to drink your
(11:50):
milk with the cow inside the milk package, you just want the
milk. This is getting absurd with
biomass fermentation. It's like you're growing the
cows themselves right? And you want all the cows and
whatever the hell you want to dowith them, like you want all of
(12:11):
the biomass, including the hoofsand the horns and.
I think you get my point. And to get a bit into the weeds,
which I think some people appreciate, actually there's
this overview of Bright Green partners.
I will link it in the show notesthat showcases that they
actually associate precision fermentation as including
(12:32):
indigenous protein fermentation and foreign protein
fermentation. Right.
So indigenous protein fermentation, what you call
micro fermentation. Yeah.
But the reason to separate it isbecause that what I've just said
is so complicated, like to suddenly educate the entire
field, the entire industry, thatprecision fermentation is not
(12:54):
just exclusively connected to genetic engineering, which I
must say, in a past episode, I have also phrased it in a way
that people may think that is exclusively what is associated
with precision fermentation. Yeah.
Yeah. And.
This is exactly to the process that we also have been facing.
I mean, it's a nascent industry and there is different
definitions out there and peopleuse it differently.
Whether it's the concept you just mentioned or also if you
(13:16):
look into some of the other guidelines or early definitions
that have come out that basically say precision
fermentation is the production of any molecule through
microorganisms. It doesn't really say like is
this only genetic engineers, is only foreign protein or does
this also include native protein, right.
But as you said, I think what isreally important for us as we
are in the market and working with partners, partners and
(13:38):
regulators is that we have a very clear distinction.
Because otherwise specifically if people understand precision
fermentation exclusively in a sense of there was genetic
engineering, then of course everybody's asking like, so why
is it possible to go to market with that as non noble food.
So that was the idea of making it easier for our partners,
consumers, regulators to understand those microorganisms
(14:01):
have not been genetically engineered.
Maybe the best thing that we cando is to go for the process step
by step. What would the actual setup look
like? Like if somebody would go into
the factory and see something, what would they see?
I mean very similar to precisionfermentation.
It looks like a big brewery, like steel fermentation tanks
where we do a classic fermentation.
(14:22):
So same to precision fermentation.
We feed the microorganisms with carbohydrates, nitrogen,
micronutrients, so that they grow, that they start to produce
the proteins they would naturally produce.
In our case, we're working with Kochi, so aspertillas arise also
for the reason that it has been used in food for such a long
time in soy sauce production to ferment soy or socket
production. Or miso.
(14:44):
Or miso, correct? And you would have a classic
fermentation production, basically also an upstream
process, fermentation process. And then you know, similar to
precision fermentation, you would separate the biomass from
the broth. So you do a centrifugation.
You don't have the fermentate ofthat protein which is rich in
the proteins it produces and that again then can be dried,
(15:06):
made powder of and then we used this as a main ingredient for
cheese production. So just to make sure I'm trying
to do it step by step, understandable because I've
gotten a lot of feedback in the biotech and food season that I
would just rush through topics and then people would have to go
back like every minute or so andre listen to every section.
(15:28):
OK, so I'm trying to just ratherdouble it makes sense.
So just to make it very clear, the microbes, the naturally
occurring microbes, they get fedthe nutrients and then they spew
out the protein, the Koji protein Pew into the broth with
that exact sound. Correct.
(15:49):
With that sound there, that's also.
What the engineers are listeningto to optimize vacation process.
Yeah, you know, and then the biomass is separated, the
microbes are separated and the protein is sprayed, right.
So well. Just to be extra diligent, what
(16:13):
is spray drying? It is a process used in food
production to turn liquids into powders.
And here's how it works. Imagine you have some kind of
liquid like milk, juice, flavorings, and you spray them
into a big chamber filled with hot air.
So the tiny droplets of liquids,when they get sprayed, they heat
(16:34):
up quickly and then the water evaporates.
What is left is the dry powder. This method is great for making
things like powdered milk, instant coffee or fruit powders,
and it also helps food last longer and makes it easier to
store. So yeah, this is what spray
drying is. Back to the episode then let's
(16:55):
look into. The second part of the process
because art of the innovation lies.
And how do you make this white Koji protein owder into anything
that's actually tasty, right? So basically from there we add a
couple of other ingredients, plant based fats, sugars, we mix
it into a solution and then we do a very classic cheese making
(17:18):
process that is adapted to the ingredients that we have.
Do you think your innovation is focused on this first part of
the process or the second part of the process?
Where do you think you've moved the needle the most?
Yeah. When it comes to the micro
fermented products and the coaching protein specifically, I
definitely think we've moved to needle much more on the food
(17:38):
science and product development side.
Like for example, compared to everything that we do on Casein
and Way for example, where I think that the bulk of the
innovation and the work has goneinto the strain engineering, the
optimization of that. When it comes to the micro
fermented product, the innovation, the metric
predominantly lies really in thefood science and product
development. So really how to work with that
(17:59):
ingredient, how to form a good curd for the cheese, how do we
ferment that? How do we ripen that?
The process steps of actually getting to the end product, that
is really where the magic lies and also the big leap I think on
that product line, which is alsowhy, as I said before, this has
not been around before because nobody has been using that
(18:20):
ingredient in the same way that we're using it now.
Yeah, so in a first step, we have cream cheese in different
variations of that, a Greek fetacheese and a white mold Brie
like cheese. And then we very quickly also
will add a blue cheese to that. And now we have a bunch of other
products already in the pipeline, you know, from cottage
(18:41):
cheese to smoked hard cheese, hard cheese slices, etcetera.
But the initial products that wego to market with are the cream
cheese variations of that feta and Brie like white mold cheese.
How did you decide which cheesesto choose?
What were the main criteria? Kind of like an outward in and
inside out approach, which is you know inside out is mostly
(19:03):
about like OK, what is the coaching protein really good at,
You know, the texture that is kind of producing the
creaminess, the function of whatit can do.
And then also what we have been really good at.
I think historically we worked alot with also whey proteins in
the past where we were working already on a couple of those
prototypes. We worked a lot with casein.
So we kind of know different types of cheese already and we
(19:26):
also kind of existing knowledge.So kind of focus on the ones we
were already pretty advanced andgood at with milk proteins.
And then the other thing is alsokind of now more and more what
the market tells us what they want, you know, working with our
retail clients and wholesale gastro clients, basically just
telling us what are they most interested in doing tastings
with them and blind tastings with consumers and basically
(19:47):
just looking at OK, which are the products that perform best.
How often do you give the cheeseto people secretly and test
whether they just think it's normal cheese?
Have you done that? Well, with my friends, I've done
it a couple of times. And also with my family, I have
to say everybody's already, you know, very suspicious when I do
tastings or when I invite peopleover for dinner or lunch, or I
(20:11):
cook for my family and there's something related to cheese,
everybody's already like, is this yours?
Is this real? It's not so much in disguise
anymore, I have to say when I doit, but I've done it a couple of
times, yes. OK if you ever need some blind
tasting, my friends are not yet used to cheese alternatives.
Yeah, we do them very frequently, also in Berlin.
(20:31):
So we always also invite a lot of people.
So if they're ever interested tocome over to the Berlin
Development Lab, they should. Yeah, which is, I think
announced on your Instagram channel, right?
Correct. Frequently announced on our
Instagram channel. Follow formal dot bio, do it
good. So we have covered what the
products are. We talked about micro
(20:53):
fermentation, the process behindit.
Maybe we can look a little little bit more at the exact
differences between precision fermentation and micro
fermentation. And before that, I would like to
clarify that we are talking right now a lot about Koji
protein and Koji cultures, whichis the pathway that you've
(21:17):
chosen. But micro fermentation as an
approach is much bigger than that, right?
So it includes any kind of naturally occurring
microorganism used to produce a target ingredient.
So let's look at precision fermentation versus micro
fermentation. Actually, let's look at the
feedstock. Are there like any major
differences in terms of feedstock?
(21:38):
No, it's not like a structural difference.
No, there's no structural difference.
Like as with precision fermentation, it comes down to
the specific organisms that we work with, which type of
carbohydrate source they work with, they prefer.
So it seems as precision fermentation, with the
differences between different strains having a different kind
of natural tendency to work better with some feedstocks than
others. OK.
(21:59):
So then we have a difference in the types of microorganisms that
we've covered already. The fermentation process is
pretty much the same, right? Yeah, yeah.
But then the interim products are different, correct?
Right. Correct.
Because with precision fermentation, you know, let's
take dairy, but obviously there's also a company doing
(22:20):
that with egg protein, other proteins, right, Where you
basically say the whole idea is to say, OK, we want to have the
exact same protein that an animal is producing.
So in the case of dairy that is obviously whey proteins beta
lactoglobulin, lactoferrin, alpha lact albumin casein alpha
S 1A S 2 copper beta like different fractions or type.
Sorry, that's probably. Sound like you're speaking a
(22:42):
different language is very cool.OK.
So maybe for the listeners, a lot of people only know the
protein families in milk, which is whey protein and casein
protein. What a lot of consumers don't
know is that there's different fractions, so different types of
proteins within those families. When you look at whey protein,
the most abundant 1 is better lactoglobulin, but there's
(23:05):
others like lactoferrin where you have turtle tree for example
producing that you have alpha like albumin and some other
proteins. OK, just to intervene here
again, what Rafa is referring tois a company called Turtle Tree.
Yes, if you have heard that correctly, Turtle like the
animal and tree like trees. Turtle Tree, they produce a bio
(23:28):
active protein called lactoferrin by using precision
fermentation. Bio active means that it's like
a protein with benefits, pretty much like protein plus.
So the approach that they're following is quite interesting
because instead of trying to replace a commodity, they focus
on very high quality ingredients, which are
(23:51):
especially relevant for creatingbaby formulas.
By the way, I want to just do a little shout out here and give
props to a couple of companies that have told me they include
red to green in their obligatoryonboarding material for new
hires, including Food Labs, the Berlin based VC, but also Flora
(24:12):
Ventures. Shout out to Gill.
So if you find red to green valuable, why not included in
your onboarding material? If you do let me know, I would
love to give you a shout out. And now let's go back to Rafa
going into the detailed details of how to categorize different
(24:32):
milk proteins. In caseins, there's four
different fractions. They're called alphas 1 alphas 2
beta and Kappa casein. The whole idea of precision
fermentation is to basically replicate or produce those
exactly identical to what you would find in an animal.
Which then also explains why genetic engineering is
(24:53):
necessary. Because let's say a filamentous
fungi naturally doesn't produce a cows casein.
You need to put in another genetic blueprint in order for
that Organism to produce that protein.
So the interim protein that we get out of our casein
fermentation is a bioidentical casein, whereas with the product
lines where we use micro fermentation, we're not
(25:16):
engineering the microorganisms to produce, let's say, a protein
that is foreign to that Organism.
You called it indigenous proteinbefore.
You can also call it native protein or homologous protein.
There's different words for that, but basically a protein
that that Organism naturally already produces.
So you optimize the fermentationthat it produces a lot of that
(25:37):
protein that it naturally produces.
So then the intermediate or interim protein you're getting
out is a fungal protein or a microbial protein that that
Organism is naturally producing,which obviously is different
from the bioidentical animal protein.
So it does have a different structure, different shape
depending on which proteins alsothen slightly different
(25:59):
functionality. So that's kind of like where the
main difference starts to be very visible when it then comes
to go one step down the line of the production chain or value
chain when you then used it as amain ingredient for cheese
manufacturing, for example. Then again, there's a lot of
similarities again. So you use it together with
other ingredients that you wouldfind in milk, so fats,
(26:22):
carbohydrates, micronutrients, etcetera that are not
bioidentical to the animal. But it's the same for us, for
example, whether we work with caseins, whey or the native
fungal protein, the cochi protein, it's kind of like the
same thing. So we blend it with different
plant based ingredients with theadvantage obviously over plant
based that we have a better functionality from the protein
(26:43):
and then we go into cheese manufacturing from the initial
base. We would then do a calculation,
so going from a liquid into a solid curd, cheese curd, and
that then serves as the basis for all the different cheeses
that we do, which then differentiate themselves in
terms of how long we ferment them, what ripening cultures we
(27:04):
infuse into them, the conditionsduring which we ripe them, how
we season them, whether we pressthem, or whether they're more
liquids. Also, water content plays an
important role, kind of like youwould have it with a regular
cheese where you always start from milk and then you basically
go from there into different product categories.
In our case, that's the same thing.
We start from that emulsion which is the micro fermented
(27:26):
protein or you know for the casein Lance, the casein protein
we do occur and from there we gointo all the different types of
cheese. You mentioned that this has
better protein functionality. Yeah.
What does that mean? That it's easier to use that
protein, a structuring agent over over plant based proteins.
So you have a better creaminess.For example, in some of the
(27:48):
products you have less of notes.That's one of the really
important things that a lot of the consumers don't like about
the plant based products is withsoy based products or cashew
based products, you always have this off flavor of either soy or
not or whatever it is. Whereas the fermented protein is
very neutral in taste. So it's very useful to then
basically add to, you know, something that is ripened or
(28:09):
infused with cultures. So no off notes, no off colors
as well, right? So you get a very whitish base
and product that is very alike to milk proteins and milk
products, better emulsification because it's smaller particles.
So you have a lot of functionality benefits on the
structural side or sense side. You could also say from a food
(28:30):
science perspective, organoleptics, how does it
behave in your mouth? But you also have a lot of
advantages on the taste and lookside over some of the plant
based ingredients. Maybe as a little fire around
because I know that a lot of listeners are going to be
curious about that. So seems very obvious to you and
me, but is there any lactose? No, no lactose.
(28:51):
Is it vegan? It is vegan.
Does it have any gluten? No gluten.
Soy. No soy.
Any additives? No additives.
Any ghosts or demons? Ghosts or demons?
Well, if there are some, only the good type.
OK, only for Halloween. Exactly.
Only the ones that actually are likable.
(29:14):
Oh yeah, they're cool kind of ghosts.
Yeah, very good. Fantastic.
So I propose ghosts. Another topic, of course that
will come up, and that is a common question, is the whole
regulatory pizzazz. Right.
So you didn't have to go throughthe novel food application
process, right? And for some people, that may be
(29:37):
surprising. So why was that not necessary in
this case? Yeah, has a lot to do with what
we talked about like earlier in the podcast, which is using a
native microorganism that is notgenetically modified.
Obviously is is is big part of of the answer.
That's one that obviously compares to precision
(29:57):
fermentation where if an Organism doesn't naturally
produce a certain protein, that is a novel process.
You have to go through novel food in Europe, right?
The other part is you cannot do that with any microorganism.
That is really important also tounderstand because if you use a
microorganism that has not been used in the food industry in
products, then also it's novel because there's no history of
safe use or there is no history of safe consumption, if you
(30:20):
will, prior to 1997. However, with Kochi or
Aspergillo zarisi, which is the scientific term for the specific
strain, there is a history of consumption because whether you
talk about salke or soy sauce ormiso, there are a lot of
products that have been consumedhere that already use the Kochi
as an additive that then ferments those products with
those naturally occurring proteins.
(30:42):
So in that case, we kind of havethe check marks on both sides.
One is using an Organism that has been used in food production
for a long time. And the second thing is that
that Organism is not geneticallymodified.
Yeah. Can you elaborate maybe on the
1997 rule? Sure.
So the European Food Safety Authority is looking at novel
(31:02):
food. Basically they say anything that
has been consumed in the European Union in significant
quantities prior to 1997 is basically considered to have a
history of safe consumption or safe use in that case.
And that's obviously for a lot of the products that we talk
about sake, so and MISO, that's very much the case.
(31:23):
Yeah. And in the US, this is called
the grass. So Gras, in case anybody would
like to look into that. I mean, there's certain things
on the list that are also maybe not always great.
It's some way to judge whether something has been in the food
system and therefore can be evaluated better.
(31:45):
It's not considered novel, therefore.
So I mean, you're going to market much earlier than
expected and I would assume thatthis has been quite handy
because of the fundraising that is going on in the background
after a fundraisers before a fundraise, right.
(32:07):
So how has that helped you in raising?
Well, it's a couple of things, but since you're asking
specifically about fundraising, I will start there, but then I
will also probably elaborate on other levels a bit.
Of course, specifically in the current environment where we had
a correction in the market, it was super helpful to be in this
position where we say, hey, we still have the case in the way
(32:29):
and everything else hitting the market on our expected timeline,
but we're going through regulatory processes.
It's been super helpful to say, but we have started like two, 2
1/2 years ago with a new productline that we can launch quicker,
specifically the European Union,which helps to create revenues,
create profits, get an understanding of our operational
processes, stock in commercial partners, build out our
(32:52):
commercial team, which kind of like 3 super, super important
things to show traction. Specifically right now, where I
think it has become much harder to obviously raise a lot of
money that is needed to bring these innovations to market.
And it's still needed. But if you're raising only on
the promise of this might get tomarket in a couple of years,
(33:13):
it's obviously super tough. But when we say, hey, we've
already launched products and they're going to be like
nationwide in detail later on this year and we have signed
contracts that obviously helps validate and solidify some of
the claims that we make about, you know, commercial traction,
commercial onset and ramp up. This helps with fundraising, but
I also think it helps in generalin terms of, you know, getting
(33:35):
something tangible into the hands of consumers that have
been, as you said initially, like there's been a lot of talk
about it, but we have not seen alot of products hitting the
market in Europe. Actually, we have seen close to
none. That helps to show consumers
that this is real. Today, it's scaled up.
We produce at larger quantities.We have people tasting the
products not only in private settings, but in public
(33:57):
settings. We get feedback from the market.
We can show that this is, you know, a super viable product
that tastes great, that is affordable and all of that helps
us also I think to test some of the hypothesis that we have on
the market. And also, I have to say leading
the company now since its inception.
It also really helps to create excitement for the company and
(34:17):
the team, even if you talk to let's say our molecular biology
team who is working mostly on the strain engineering for
Casein. You know, being a company who
has products in market that is tangible and already creates an
impact that is already replacingsome of the products we'd like
to replace is a much more exciting offer than to say, you
know, we might be selling in a couple of years.
(34:39):
Yeah, which of course the topic of impact and being in the
market leads to a question of sustainability.
So what is the rationale behind arguing that this is and will be
more sustainable? Very clear that, you know, when
you look into the bioprocess andthe fermentation process to
produce these proteins, the inputs needed in terms of water,
(35:00):
land and energy is just much smaller than when you compare it
to animal farming. We have done a lot of LCA work
already before here. Now with the new product line,
we have done extensive work to basically look into the impact
also with our partners, some official government partners who
are very interested in assessingthe impact and that's super
(35:22):
crucial for actually signing commercial deals.
That's also what a lot of the players are interested in, to
kind of have like very solid data on the impact of the
products. Another question that was raised
literally in a call that I had just two hours ago.
If you already bring products out into the market, why keep
working on precision fermentation?
(35:43):
The last part of the process, weforgot to differentiate the
products, right? It's important to understand
that while micro fermentation products are much better in
terms of quality than plant based products, there are
certain limitations that precision fermentation will be
able to reach. Could you just elaborate on
that? Correct.
Specifically if you're thinking like caseins and kind of their
(36:04):
functionality they bring in terms of stretching and melting
of mozzarella, for example, there's something very unique to
the structure of the caseins themselves, which the coaching
proteins are not, let's say designed or not meant to do to
that extent. So the the difference or why
still going after some of the bioidentical milk proteins, It's
just because we are aware that there's certain product lines
(36:25):
that are harder to do with the coaching protein compared to the
milk protein. And our ultimate vision and goal
as a company is to be able to basically serve like the whole
cheese and also whole dairy universe.
And we don't want to be limited in terms of which products we're
launching. And we still believe that the
bioidentical milk proteins are somewhat of the Holy Grail in
the end. And at the same time, we were
(36:46):
already seeing today what the culture proteins can do and
said, okay, they're doing such afantastic job, we need to launch
this as quickly as possible. But we still see very much the
viability of bioidentical milk proteins because ultimately, you
know, this is where I think the whole fermentation sector now,
if you combine micro fermentation and precision
fermentation is moving, it's very clear that is a process
that is still very early and will become more efficient than
(37:09):
animals rather quickly when you scale the whole thing up.
And so going after that opportunity also of having
scaled up milk protein, I think it's still very, very relevant
today. Also, maybe we can do 1 little
more question regarding the process of coming up with the
terminology. First of all are.
You going to answer that question or am I going?
(37:30):
To. I can ask you.
So independent of of my kind of involvement in formal right, the
Cogi protein is actually such a good term for listening to the
Andrew Huberman podcast, the Huberman Lab podcasts, a great
podcast by a Stanford professor.And I must say that he is
(37:51):
promoting protein quite a lot. There's something about protein
in our popular culture that has a very positive connotation.
People worry about protein. They feel that protein is like a
really essential macronutrient, which I mean, it is to a certain
extent. And it just has like, a cool
image, like, it's better than carbs, it's better than fat, you
(38:13):
know? Yeah, it's so funny because he's
one of the essential macronutrients.
There's only three so. Like if you look at the
competition. Oh, for sure.
Fat has a bad reputation. Yeah, carbs have a bad
reputation. So protein is like the only one.
Yeah. I mean, if we're going to go
into this, we're going to be criticized by all the experts on
all these different types of diets.
(38:34):
But I think you're definitely right.
I mean, apart from let's say a small fraction of people who say
they're on high carb diets, which is usually low fat but
also still good amounts of protein, and then the ones who
only consume fat and protein andthen you have the high protein
people. It's actually interesting
because I've never heard of someone eating a high fat, high
carbohydrate diet. Maybe there are some, maybe some
(38:57):
do, maybe there are some or people who are excluding
proteins. But it's definitely true that
some people are avoiding fats inorder avoiding a lot of the
carbohydrates. So and in the US and also in
Asia, it's coming much bigger actually than in Europe is all
the products have front center. How much protein is in there?
So many products with added protein.
So I think your hypothesis of saying the protein has somewhat
(39:18):
been like the favorite macronutrient of at least this
century is definitely true. Yeah, I think calling it Koji
protein is a smart move in general, the association and it
also, if something is called Koji protein, people are not
going to be like, Oh my God, butwhat about my protein, you know?
Yeah. And regarding micro
(39:39):
fermentation, what were the iterations of other names that
you had before that? Should I actually mention
previous iterations? I feel like it's been so good
that we decided to go with microfermentation that probably if I
now name like other ideas we hador iterations we had, we'll
probably even anchor like some of the things, which is exactly
not what we want to call it. Maybe I could talk about why I
think it's a great idea to call it micro.
(40:02):
OK, yes, we can go with that. So of course the main
connotation that is really important to to get across is
that it is a fermented protein. So talking a lot about the
process of fermentation, which Ithink is the same with precision
fermentation, just kind of shows, you know, how will a
protein be produced well in large scale fermentation.
Do we that know from somewhere? Sure.
(40:24):
We already know it from other kind of food processes.
Again, it's not exactly the sameas a beer fermentation or a
bread fermentation, but the process of fermentation is
already known, well understood, and also very much liked, I'd
say in the market. So I think it's kind of two
things at the same time. One, it's really describing what
it is. And 2nd, it kind of has a very
good positive connotation. And then of course there's
(40:46):
different adjectives and add-onsthat we looked at in terms of
adding to fermentation. So that we use fermentation I
think was the backbone from the very beginning.
But then kind of how do you callit to kind of really also
differentiate it from other types of fermentation?
When we talk about going from animals to microorganisms as
formal, we always talk about going from domestication of the
(41:08):
macro to the micro. Naturally, I think in those
iterations, what came up is micro is encapsulating this
whole idea of going from macro farming to micro farming.
So I think it's just the best ofboth worlds really, at the end
of the day. And for those listeners who are
interested to look a little bit into the past, the third season
on Red to Green was about the consumer acceptance of
(41:30):
alternative proteins. And we happen to have an episode
with Rafa, which was episode 3.5.
And I think what's interesting here is also this two folded
strategy right there is the industry term for the category.
It's like biomass fermentation, precision fermentation, micro
(41:50):
fermentation, but then these arenot meant to be pushed towards
consumers. So these are more meant as like
broader terms to categorize for investors, for policymakers, for
other professionals and the way that you are going out with the
products mostly focused on the Koji protein.
(42:11):
Yeah, and I think you already see that today in consumer
behavior. The exact specific process of
how something is being produced is not so much interesting for
consumers, as long as you can look at the ingredients list and
see like, OK, looks clean, look straightforward.
Also, people, for example, wouldnever care, Like, has migraine
been harvested by this machine or by that machine?
(42:33):
Nobody really cares. What you care about is what's in
it. And so you're completely right
that that term is not really meant to be pushed like for
example, on the marketing side, but it's important to
differentiate for regulators andfor partners.
Whereas when it comes to consumers, again here we're
coming back to calling it what it is, which is Cochi protein.
Apropos partners. You are working with partners in
(42:54):
the process, right? Yeah, totally.
So we as formal, we're not producing our own products.
We have been for all these yearsvery much an R&D company.
Now what we do do with formal isobviously developing all the
processes to pilot scale and then we do a tech transfer to
our Coleman partners who then produce for us.
What we also do with form obviously is now that we are a
product company, meaning that weput our own branded products in
(43:15):
market. So we also own that part of the
consumer facing branding, marketing together with our
partners that we launched the products with.
So retailers that we work with, but we have decided to not do
production ourselves. So we have a common for our
protein and we have comments forour end products and how it
looks basically is that our Co manufacturers on the cheese
(43:36):
side, they get the process and the recipes from us.
They also have been doing some adaptations because when you go
from pilot scale to large scale production, there's always
adaptations you need to do. But they own the sourcing of the
ingredients, the protein is being shipped to them, they
source the other ingredients, and then they produce for us
kind of with us or with our recipe.
Basically. There's a lot of exchange
(43:57):
happening obviously on the team level, which is like our team
members go to our comments and help making the process smooth
or our comments are coming to our process at pilot level and
look at the process itself. But we don't do it ourselves.
And that's actually super cool on so many levels.
First of all, to experience the eagerness and willingness of
some of these Co manufacturers on the dairy side to work with
(44:19):
us and also to put in some work.I mean, that is also very clear.
You know, we coming up with new products as a growth startup.
It's not like working with your established corporate.
So also our partners are puttingin a lot of work and help us,
you know, also to scale, which we're super grateful for.
And at the same time, what we can offer to them is that, you
know, with our ingredients and with our products, it's a new
(44:40):
consumer segment that they can also go after, which previously
they couldn't. And we can also, and this has
been I think one of the most interesting incentives is that
through producing more of our products, it also allows some of
the core manufacturers to decarbonize their business and
to basically become more sustainable on a group level.
So it's kind of like a win win, I'd say, in these collaborations
that we've done and there's a lot of interest from a lot of
(45:01):
producers to work with us. And to make it clear, these
producers are traditional dairy Craftsman and women.
Traditional dairy manufacturers,correct.
Yeah. It's also nice, it allows, you
know, when we think about initially we're only available
in Germany, in Austria, Switzerland and other European
countries probably falling afterthat.
But also, if you're thinking about market expansion globally,
(45:22):
if it would produce ourselves with very, very specific
production processes that only we could do, it will be so hard
to scale this out because it would basically mean that we
would need to build our own manufacturing wherever we go
because we don't want to ship itlike around the world.
And so working with partners whoare established dairy
manufacturers allow us really also to replicate what we're
(45:42):
doing with our partners here in Europe, also overseas, for
example. At this point of our life cycle,
I think it's just CapEx friendlier, quicker.
And also at the end of the day, I think there's also very much a
product benefit that we get out of it.
Traditional dairy manufacturers are producing with us.
I mean, it says something about the product quality, but also we
benefit a lot from, you know, their experience in doing this,
(46:04):
you know, sometimes for centuries.
Yeah. So where can people get the
cheese? For those that have friends in
Germany or may happen to be at some kind of conference in
Germany in September, October onwards, where do they need to
go? They need to go to Reve.
So Reve is our primary partner for retail launch.
(46:24):
The products will be available at 2000 plus POS all across
Germany. So, you know, pretty much
wherever you can find your localReve that you will be able to
get our products. Yeah.
And it would also would like to do a huge shout out to Reve.
I mean, they have been incredible partners and bring
this innovation to market. And I think they're really, when
it comes to more sustainable products, they're really one not
(46:48):
only thought leader, but they have been putting in so much
effort into kind of giving theirconsumers more sustainable
choices and they're a great partner.
So wherever you can find us in Revere.
REWE. REWE.
Exactly and at Metro. And at Metro as well, so if you
have a card, if you're in gastro, then you can also find
(47:08):
us in Metro. The closing question that you
actually know already because it's always the same and you
already answered it, it's if youwould have 50 million, you'll
say EUR for now, what technologies, what approaches
would you invested in? Of course we'd love to invest it
in formal, but for the sake of the question.
(47:31):
OK, so I cannot put it in formal.
That would of course be the first option, but no.
Did I answer that last time around as well?
I wonder what I said. I can't remember.
So I'm just going to answer probably going to fluctuate
depending on the kind of what I see being really cool in the
market. I think something that is still
(47:52):
on the served on the developed is going more towards designer
proteins or designer ingredientswhere the whole idea is to add
very little hyperfunctional ingredient to let's say plant
based solutions or also animal based solution for that matter
and opt the quality of a productmassively.
Obviously there are big companies that are selling,
(48:14):
let's say flavoring or structuring, but I'm not even
talking about that. I'm basically talking about like
new types of ingredients that serve a new purpose.
I mean, something that is ratherknown in the market, for
example, is developing sweet proteins where you have proteins
that kind of give you the same kind of satisfaction as you
would have by adding sugar, but there's so much more jobs that
you could do with proteins. I think the search that we
(48:35):
currently see in AI and data in computational biology will allow
us in the future to really kind of analyze protein and their
functionalities and come up withcompletely new things we've
never seen before, produce them through fermentation.
Would be something very, very interesting to do when we talk
about, I guess, novel ideas thatI'm excited about.
OK, so back to the macronutrientof choice.
(48:59):
Back to the macronutrient of choice.
Rafa, thank you. This was a pleasure.
It was a pleasure, Marina, and thanks everybody for listening.
Well, I very much hope you learned a thing or two in this
episode. I want to give a big shout out
to our new producer, Sebastian Youches, or how I like to call
him Busty. And thank you for listening in
to this episode of Red to Green.I'm always happy to hear from
(49:23):
you. If you want to reach out or you
have recommendations for interview guests, just ping me
on LinkedIn. You can find me by looking up
Marina, Schmidt, like Marina, like the sea, and Schmidt like
the most German name ever for ease of use.
You'll also find my LinkedIn profile in the show notes, as
(49:43):
well as my e-mail. Until next time, let's move the
food industry from harmful to healthy, from polluting to
sustainable, from red to green.
Today we're diving into something fresh and exciting,
micro fermentation. We found this huge universe of
application cases of these native proteins that nobody
really has been looking at before, at least not in the
sense of main ingredient for cheese and egg alternatives.
This is Rafael Volgenzinger, Co founder and CEO of Formal, a
(00:21):
German fermentation startup thatis changing the cheese game due
to a recent discovery. Josh, our Head of bioprocessing
in a strategy session basically said, hey guys, are you aware
that we're only using these native proteins today in very
minor subcategories in the food market, but they're super
functional and we could just look into those and see like if
(00:42):
we could find strains that have really functional proteins that
we could then also use as a champion product.
And then we actually did an R&D Sprint as a whole company.
And this discovery enabled Formoto raise a pretty significant
funding round, especially in this current market market
environment, 61 million U.S. dollars and they're serious B as
(01:02):
we are releasing this episode foremost launching in over 2000
stores all across the DACH region with cream cheese
products or should I say cream cheese alternatives that are
Koji protein based. But why would you care?
Well, it wouldn't be called Red to Green if there is no
(01:23):
sustainability angle to the story.
Fresh of the Press. Here are some results from their
life cycle assessments of their new cream cheese alternative
called Fresh Hein. 65% fewer emissions, 83% less land use,
96% smaller water footprint. Foremost.
Also known for their work on precision fermentation, which we
(01:46):
have covered on Red to Green in previous seasons.
But just to loop you in again, with precision fermentation,
formal aims to produce bioidentical milk proteins
without the need for cows. So you create the actual casein
and the actual way this involvestweaking the DNA of microbes to
make those proteins. It's fascinating stuff.
(02:07):
And if that piques your interests, you should definitely
check out Season 6 on biotech and food after listening to this
episode. Well, precision fermentation is
the moon shot. It's ground breaking, but it's
not without its challenges. First, getting approval in
Europe is a tough nut to crack due to the novel food
(02:28):
application process. Then quite a bit of R&D work is
still needed to bring down the price point, right?
And let's face it, it will also take some serious consumer
education and clear messaging toget everyone on board.
Where does micro fermentation fit in?
Think of it as a version of precision fermentation.
(02:48):
But the key difference is that micro fermentation does not
require genetic engineering. It uses naturally occurring
organisms. That means it doesn't require
any novel food application process.
It has a much faster go to market timeline.
And while consumer education is still essential, it's a bit more
straightforward. So this is a thrilling
(03:10):
development in the industry. And why is this thrilling to me?
Because I think there has been so much hype and so much rah,
rah and a little bit too little execution.
Can I say it this way? Yeah, we just need a little bit
more things actually happening. So I'm just celebrating some
(03:31):
real execution here together. We will dig into the details
quite a bit because since December 2023, I've been working
with formal on the terminology and communication side.
The term micro fermentation distinguishes this approach from
precision fermentation and it's essential because we need to
create transparency and understanding within the
(03:53):
industry and also towards consumers.
Rafa is a beacon of positive energy and I'm sure you will
enjoy this deep dive. This episode is very detailed
and will tell you everything youneed to know about micro
fermentation. Make sure to listen till the
end. But before we dive in, I've got
some quick news. Red to Green is back after a
(04:16):
little break. We're shaking things up with a
new mini master class format, releasing one monthly deep dive
episode. Each one will focus on a
different aspect of the food system, so hit that subscribe
button to stay in the loop. All right, let's jump right in.
You're listening to Red to Green, the deep dive podcast on
(04:37):
moving the food industry from harmful to healthy, from
polluting to sustainable, from Red to green, a production of
R2G Media. And I'm your host, Marina
Schmidt. Rafa, it's great to have you
again on Red to Green. It's been a while, but it's
great to be back. I love the podcast and it's
(04:57):
always nice speaking with you, Marina.
You know what's funny? I had to find something in the
Co working space that I can use to put my laptop higher.
And you know what I took? What did you use?
A package of almond milk and Dairy Milk.
So you mix it. Yeah, exactly.
(05:18):
It's like my laptop is sitting on both.
I guess they're equally suited for that purpose.
Yeah, exactly. Just height of the packaging is
all that matters. Exactly.
That would make it all much moresimple.
Yeah, great. Well, to get right into it, you
have very, very exciting news. Can you tell us what is what is
(05:39):
coming up? We are doing this interview end
of July already, but what's coming up beginning of
September? So the big news is that we're
launching our first line of products in Germany together
with Revere. So we're basically launching a
bunch of different cheese products powered by micro
fermentation. And I know we're going to talk
about that a lot, yes, later during the podcast.
(06:02):
But it's basically really the 1st wave of fermentation based
products hitting the market in Europe.
A couple of different product lines that we have been working
on for the past years and we're just super excited to get them
out to consumers after all the work that we put into them.
Yeah. And I actually saw somebody
comment on one of the platforms that it's surprising that you're
(06:26):
already going to market because,well, precision fermentation is
a technology that's not expectedto go to market soon.
And you mentioned micro fermentation, a term that has
never been used in the industry.How come we haven't heard about
micro fermentation before? Yeah.
It's been a bit of a process forus to understand.
(06:47):
How do we want to call it. Should we call it precision
fermentation still or do we needa new term for this?
And I think the major idea to call it micro fermentation is to
also do a bit of a differentiation to precision
fermentation, which in the mind of consumers and regulators and
partners in the industry very much associated with genetic
engineering of the microorganisms that produce the
(07:07):
proteins. Couple of years ago, we
basically have been looking intousing native proteins of these
microorganisms as main ingredient of our products.
So basically using non engineered microorganisms, but
really using the proteins they would naturally produce as a
kind of like championing agreement, which is easier to
launch in Europe because they'renot novel, which is also why we
(07:30):
have the chance to go to market earlier than anybody else now.
Can you tell us a little bit about how you stumbled upon it?
So it was not really a stumblingupon it, but more like a
targeted effort that we put intoit.
So Josh, our Head of bioprocessing in a strategy
session basically said, hey guys, we're in this process of
(07:51):
bringing way in Casein to market.
We're all aware of the regulatory challenges that we're
facing with that specifically inEurope and the timelines we're
facing with that. And in his previous work, he was
dealing a lot with with native proteins of these
microorganisms. He basically said, are you aware
that we're only using these today in very minor
subcategories in the food market, but they're super
(08:12):
functional. And we could just look into
those and see like if we could find strains that have really
functional proteins that we could then also use as a
champion product. And then we actually did an R&D
Sprint as a whole company included all the teams.
And basically we're trying to, you know, look at different
strains, look at different proteins they produce and also
look into products that we coulddo with those and the
(08:32):
functionality of those proteins.And out of that two weeks Sprint
that we did a bit more than two years ago actually, we found
this huge universe of application cases of these
native proteins that nobody really has been looking at
before, at at least not in the sense of main ingredient for
cheese and egg alternatives. Do you have?
Any kind of hypothesis why the space has been overlooked?
(08:58):
I mean, the proteins that we're working with have been used in
the food industry, which is alsowhy they're not novel and we can
launch them. But I think during the time when
they kind of became big in the food industry, there was no real
pull from the market for more sustainable alternatives for
animal based products. And then I think that the
(09:18):
natural go to that everybody waslooking at was plant based or
then as we also do it basically to say we replicated entirely.
But this whole universe of microbial protein, which is not
the biomass, by the way, so not the fungi itself, not the mold
itself, but the proteins they produce, has really been kind of
somewhat in between and overlooked at the end of the
day. Yeah, you were just saying this
(09:40):
is not biomass fermentation, so the actual microbes don't end up
or aren't meant to end up in theproduct, but what makes it sort
of feel closer to precision fermentation is.
That it is the protein that those microorganisms produce in
a process of fermentation. So if you think about your
classic model of or your conceptof precision fermentation, where
(10:04):
you put in a genetic code into amicroorganism so that protein is
being produced in a process of fermentation, you then also
separate the protein from the biomass.
Now on the other side of the spectrum, you have the biomass
fermentation companies and people who basically cultivate
the microorganism, the fungi, the yeast, etcetera as the main
source of protein. But somewhere in between would
(10:24):
be, and this is what we're doing, is fermenting the
microorganisms that they produceproteins, but that they
naturally produce that they secrete into the fermentation
broth. And then you can basically
separate the biomass from these proteins again and use those
proteins as a main food ingredients.
For some of the listeners who are trying to grasp the whole
concept, it might be understood as kind of somewhat of a mix
(10:45):
between biomass and precision fermentation in that sense.
We've already covered biomass fermentation in a separate
episode. Again, you can check out Season
6 on biotechnology and food to get a real deep dive into the
three different types of biomassfermentation.
But just to make it really clearright here, right now, the main
(11:06):
difference that Rafa is pointingout is that in biomass
fermentation, you grow yeast or bacteria or microbes in general,
and the actual biomass that is created is your end product.
So whatever is growing there. And with micro fermentation and
precision fermentation, the microbes that you grow are just
(11:29):
the factories. They produce your end
ingredient, but then you separate them from the end
ingredient. OK, wait, let me think of this
with a metaphor. Just imagine a cow precision
fermentation and micro fermentation works like when you
get milk from the cow. You do not want to drink your
(11:50):
milk with the cow inside the milk package, you just want the
milk. This is getting absurd with
biomass fermentation. It's like you're growing the
cows themselves right? And you want all the cows and
whatever the hell you want to dowith them, like you want all of
(12:11):
the biomass, including the hoofsand the horns and.
I think you get my point. And to get a bit into the weeds,
which I think some people appreciate, actually there's
this overview of Bright Green partners.
I will link it in the show notesthat showcases that they
actually associate precision fermentation as including
(12:32):
indigenous protein fermentation and foreign protein
fermentation. Right.
So indigenous protein fermentation, what you call
micro fermentation. Yeah.
But the reason to separate it isbecause that what I've just said
is so complicated, like to suddenly educate the entire
field, the entire industry, thatprecision fermentation is not
(12:54):
just exclusively connected to genetic engineering, which I
must say, in a past episode, I have also phrased it in a way
that people may think that is exclusively what is associated
with precision fermentation. Yeah.
Yeah. And.
This is exactly to the process that we also have been facing.
I mean, it's a nascent industry and there is different
definitions out there and peopleuse it differently.
Whether it's the concept you just mentioned or also if you
(13:16):
look into some of the other guidelines or early definitions
that have come out that basically say precision
fermentation is the production of any molecule through
microorganisms. It doesn't really say like is
this only genetic engineers, is only foreign protein or does
this also include native protein, right.
But as you said, I think what isreally important for us as we
are in the market and working with partners, partners and
(13:38):
regulators is that we have a very clear distinction.
Because otherwise specifically if people understand precision
fermentation exclusively in a sense of there was genetic
engineering, then of course everybody's asking like, so why
is it possible to go to market with that as non noble food.
So that was the idea of making it easier for our partners,
consumers, regulators to understand those microorganisms
(14:01):
have not been genetically engineered.
Maybe the best thing that we cando is to go for the process step
by step. What would the actual setup look
like? Like if somebody would go into
the factory and see something, what would they see?
I mean very similar to precisionfermentation.
It looks like a big brewery, like steel fermentation tanks
where we do a classic fermentation.
(14:22):
So same to precision fermentation.
We feed the microorganisms with carbohydrates, nitrogen,
micronutrients, so that they grow, that they start to produce
the proteins they would naturally produce.
In our case, we're working with Kochi, so aspertillas arise also
for the reason that it has been used in food for such a long
time in soy sauce production to ferment soy or socket
production. Or miso.
(14:44):
Or miso, correct? And you would have a classic
fermentation production, basically also an upstream
process, fermentation process. And then you know, similar to
precision fermentation, you would separate the biomass from
the broth. So you do a centrifugation.
You don't have the fermentate ofthat protein which is rich in
the proteins it produces and that again then can be dried,
(15:06):
made powder of and then we used this as a main ingredient for
cheese production. So just to make sure I'm trying
to do it step by step, understandable because I've
gotten a lot of feedback in the biotech and food season that I
would just rush through topics and then people would have to go
back like every minute or so andre listen to every section.
(15:28):
OK, so I'm trying to just ratherdouble it makes sense.
So just to make it very clear, the microbes, the naturally
occurring microbes, they get fedthe nutrients and then they spew
out the protein, the Koji protein Pew into the broth with
that exact sound. Correct.
(15:49):
With that sound there, that's also.
What the engineers are listeningto to optimize vacation process.
Yeah, you know, and then the biomass is separated, the
microbes are separated and the protein is sprayed, right.
So well. Just to be extra diligent, what
(16:13):
is spray drying? It is a process used in food
production to turn liquids into powders.
And here's how it works. Imagine you have some kind of
liquid like milk, juice, flavorings, and you spray them
into a big chamber filled with hot air.
So the tiny droplets of liquids,when they get sprayed, they heat
(16:34):
up quickly and then the water evaporates.
What is left is the dry powder. This method is great for making
things like powdered milk, instant coffee or fruit powders,
and it also helps food last longer and makes it easier to
store. So yeah, this is what spray
drying is. Back to the episode then let's
(16:55):
look into. The second part of the process
because art of the innovation lies.
And how do you make this white Koji protein owder into anything
that's actually tasty, right? So basically from there we add a
couple of other ingredients, plant based fats, sugars, we mix
it into a solution and then we do a very classic cheese making
(17:18):
process that is adapted to the ingredients that we have.
Do you think your innovation is focused on this first part of
the process or the second part of the process?
Where do you think you've moved the needle the most?
Yeah. When it comes to the micro
fermented products and the coaching protein specifically, I
definitely think we've moved to needle much more on the food
(17:38):
science and product development side.
Like for example, compared to everything that we do on Casein
and Way for example, where I think that the bulk of the
innovation and the work has goneinto the strain engineering, the
optimization of that. When it comes to the micro
fermented product, the innovation, the metric
predominantly lies really in thefood science and product
development. So really how to work with that
(17:59):
ingredient, how to form a good curd for the cheese, how do we
ferment that? How do we ripen that?
The process steps of actually getting to the end product, that
is really where the magic lies and also the big leap I think on
that product line, which is alsowhy, as I said before, this has
not been around before because nobody has been using that
(18:20):
ingredient in the same way that we're using it now.
Yeah, so in a first step, we have cream cheese in different
variations of that, a Greek fetacheese and a white mold Brie
like cheese. And then we very quickly also
will add a blue cheese to that. And now we have a bunch of other
products already in the pipeline, you know, from cottage
(18:41):
cheese to smoked hard cheese, hard cheese slices, etcetera.
But the initial products that wego to market with are the cream
cheese variations of that feta and Brie like white mold cheese.
How did you decide which cheesesto choose?
What were the main criteria? Kind of like an outward in and
inside out approach, which is you know inside out is mostly
(19:03):
about like OK, what is the coaching protein really good at,
You know, the texture that is kind of producing the
creaminess, the function of whatit can do.
And then also what we have been really good at.
I think historically we worked alot with also whey proteins in
the past where we were working already on a couple of those
prototypes. We worked a lot with casein.
So we kind of know different types of cheese already and we
(19:26):
also kind of existing knowledge.So kind of focus on the ones we
were already pretty advanced andgood at with milk proteins.
And then the other thing is alsokind of now more and more what
the market tells us what they want, you know, working with our
retail clients and wholesale gastro clients, basically just
telling us what are they most interested in doing tastings
with them and blind tastings with consumers and basically
(19:47):
just looking at OK, which are the products that perform best.
How often do you give the cheeseto people secretly and test
whether they just think it's normal cheese?
Have you done that? Well, with my friends, I've done
it a couple of times. And also with my family, I have
to say everybody's already, you know, very suspicious when I do
tastings or when I invite peopleover for dinner or lunch, or I
(20:11):
cook for my family and there's something related to cheese,
everybody's already like, is this yours?
Is this real? It's not so much in disguise
anymore, I have to say when I doit, but I've done it a couple of
times, yes. OK if you ever need some blind
tasting, my friends are not yet used to cheese alternatives.
Yeah, we do them very frequently, also in Berlin.
(20:31):
So we always also invite a lot of people.
So if they're ever interested tocome over to the Berlin
Development Lab, they should. Yeah, which is, I think
announced on your Instagram channel, right?
Correct. Frequently announced on our
Instagram channel. Follow formal dot bio, do it
good. So we have covered what the
products are. We talked about micro
(20:53):
fermentation, the process behindit.
Maybe we can look a little little bit more at the exact
differences between precision fermentation and micro
fermentation. And before that, I would like to
clarify that we are talking right now a lot about Koji
protein and Koji cultures, whichis the pathway that you've
(21:17):
chosen. But micro fermentation as an
approach is much bigger than that, right?
So it includes any kind of naturally occurring
microorganism used to produce a target ingredient.
So let's look at precision fermentation versus micro
fermentation. Actually, let's look at the
feedstock. Are there like any major
differences in terms of feedstock?
(21:38):
No, it's not like a structural difference.
No, there's no structural difference.
Like as with precision fermentation, it comes down to
the specific organisms that we work with, which type of
carbohydrate source they work with, they prefer.
So it seems as precision fermentation, with the
differences between different strains having a different kind
of natural tendency to work better with some feedstocks than
others. OK.
(21:59):
So then we have a difference in the types of microorganisms that
we've covered already. The fermentation process is
pretty much the same, right? Yeah, yeah.
But then the interim products are different, correct?
Right. Correct.
Because with precision fermentation, you know, let's
take dairy, but obviously there's also a company doing
(22:20):
that with egg protein, other proteins, right, Where you
basically say the whole idea is to say, OK, we want to have the
exact same protein that an animal is producing.
So in the case of dairy that is obviously whey proteins beta
lactoglobulin, lactoferrin, alpha lact albumin casein alpha
S 1A S 2 copper beta like different fractions or type.
Sorry, that's probably. Sound like you're speaking a
(22:42):
different language is very cool.OK.
So maybe for the listeners, a lot of people only know the
protein families in milk, which is whey protein and casein
protein. What a lot of consumers don't
know is that there's different fractions, so different types of
proteins within those families. When you look at whey protein,
the most abundant 1 is better lactoglobulin, but there's
(23:05):
others like lactoferrin where you have turtle tree for example
producing that you have alpha like albumin and some other
proteins. OK, just to intervene here
again, what Rafa is referring tois a company called Turtle Tree.
Yes, if you have heard that correctly, Turtle like the
animal and tree like trees. Turtle Tree, they produce a bio
(23:28):
active protein called lactoferrin by using precision
fermentation. Bio active means that it's like
a protein with benefits, pretty much like protein plus.
So the approach that they're following is quite interesting
because instead of trying to replace a commodity, they focus
on very high quality ingredients, which are
(23:51):
especially relevant for creatingbaby formulas.
By the way, I want to just do a little shout out here and give
props to a couple of companies that have told me they include
red to green in their obligatoryonboarding material for new
hires, including Food Labs, the Berlin based VC, but also Flora
(24:12):
Ventures. Shout out to Gill.
So if you find red to green valuable, why not included in
your onboarding material? If you do let me know, I would
love to give you a shout out. And now let's go back to Rafa
going into the detailed details of how to categorize different
(24:32):
milk proteins. In caseins, there's four
different fractions. They're called alphas 1 alphas 2
beta and Kappa casein. The whole idea of precision
fermentation is to basically replicate or produce those
exactly identical to what you would find in an animal.
Which then also explains why genetic engineering is
(24:53):
necessary. Because let's say a filamentous
fungi naturally doesn't produce a cows casein.
You need to put in another genetic blueprint in order for
that Organism to produce that protein.
So the interim protein that we get out of our casein
fermentation is a bioidentical casein, whereas with the product
lines where we use micro fermentation, we're not
(25:16):
engineering the microorganisms to produce, let's say, a protein
that is foreign to that Organism.
You called it indigenous proteinbefore.
You can also call it native protein or homologous protein.
There's different words for that, but basically a protein
that that Organism naturally already produces.
So you optimize the fermentationthat it produces a lot of that
(25:37):
protein that it naturally produces.
So then the intermediate or interim protein you're getting
out is a fungal protein or a microbial protein that that
Organism is naturally producing,which obviously is different
from the bioidentical animal protein.
So it does have a different structure, different shape
depending on which proteins alsothen slightly different
(25:59):
functionality. So that's kind of like where the
main difference starts to be very visible when it then comes
to go one step down the line of the production chain or value
chain when you then used it as amain ingredient for cheese
manufacturing, for example. Then again, there's a lot of
similarities again. So you use it together with
other ingredients that you wouldfind in milk, so fats,
(26:22):
carbohydrates, micronutrients, etcetera that are not
bioidentical to the animal. But it's the same for us, for
example, whether we work with caseins, whey or the native
fungal protein, the cochi protein, it's kind of like the
same thing. So we blend it with different
plant based ingredients with theadvantage obviously over plant
based that we have a better functionality from the protein
(26:43):
and then we go into cheese manufacturing from the initial
base. We would then do a calculation,
so going from a liquid into a solid curd, cheese curd, and
that then serves as the basis for all the different cheeses
that we do, which then differentiate themselves in
terms of how long we ferment them, what ripening cultures we
(27:04):
infuse into them, the conditionsduring which we ripe them, how
we season them, whether we pressthem, or whether they're more
liquids. Also, water content plays an
important role, kind of like youwould have it with a regular
cheese where you always start from milk and then you basically
go from there into different product categories.
In our case, that's the same thing.
We start from that emulsion which is the micro fermented
(27:26):
protein or you know for the casein Lance, the casein protein
we do occur and from there we gointo all the different types of
cheese. You mentioned that this has
better protein functionality. Yeah.
What does that mean? That it's easier to use that
protein, a structuring agent over over plant based proteins.
So you have a better creaminess.For example, in some of the
(27:48):
products you have less of notes.That's one of the really
important things that a lot of the consumers don't like about
the plant based products is withsoy based products or cashew
based products, you always have this off flavor of either soy or
not or whatever it is. Whereas the fermented protein is
very neutral in taste. So it's very useful to then
basically add to, you know, something that is ripened or
(28:09):
infused with cultures. So no off notes, no off colors
as well, right? So you get a very whitish base
and product that is very alike to milk proteins and milk
products, better emulsification because it's smaller particles.
So you have a lot of functionality benefits on the
structural side or sense side. You could also say from a food
(28:30):
science perspective, organoleptics, how does it
behave in your mouth? But you also have a lot of
advantages on the taste and lookside over some of the plant
based ingredients. Maybe as a little fire around
because I know that a lot of listeners are going to be
curious about that. So seems very obvious to you and
me, but is there any lactose? No, no lactose.
(28:51):
Is it vegan? It is vegan.
Does it have any gluten? No gluten.
Soy. No soy.
Any additives? No additives.
Any ghosts or demons? Ghosts or demons?
Well, if there are some, only the good type.
OK, only for Halloween. Exactly.
Only the ones that actually are likable.
(29:14):
Oh yeah, they're cool kind of ghosts.
Yeah, very good. Fantastic.
So I propose ghosts. Another topic, of course that
will come up, and that is a common question, is the whole
regulatory pizzazz. Right.
So you didn't have to go throughthe novel food application
process, right? And for some people, that may be
(29:37):
surprising. So why was that not necessary in
this case? Yeah, has a lot to do with what
we talked about like earlier in the podcast, which is using a
native microorganism that is notgenetically modified.
Obviously is is is big part of of the answer.
That's one that obviously compares to precision
(29:57):
fermentation where if an Organism doesn't naturally
produce a certain protein, that is a novel process.
You have to go through novel food in Europe, right?
The other part is you cannot do that with any microorganism.
That is really important also tounderstand because if you use a
microorganism that has not been used in the food industry in
products, then also it's novel because there's no history of
safe use or there is no history of safe consumption, if you
(30:20):
will, prior to 1997. However, with Kochi or
Aspergillo zarisi, which is the scientific term for the specific
strain, there is a history of consumption because whether you
talk about salke or soy sauce ormiso, there are a lot of
products that have been consumedhere that already use the Kochi
as an additive that then ferments those products with
those naturally occurring proteins.
(30:42):
So in that case, we kind of havethe check marks on both sides.
One is using an Organism that has been used in food production
for a long time. And the second thing is that
that Organism is not geneticallymodified.
Yeah. Can you elaborate maybe on the
1997 rule? Sure.
So the European Food Safety Authority is looking at novel
(31:02):
food. Basically they say anything that
has been consumed in the European Union in significant
quantities prior to 1997 is basically considered to have a
history of safe consumption or safe use in that case.
And that's obviously for a lot of the products that we talk
about sake, so and MISO, that's very much the case.
(31:23):
Yeah. And in the US, this is called
the grass. So Gras, in case anybody would
like to look into that. I mean, there's certain things
on the list that are also maybe not always great.
It's some way to judge whether something has been in the food
system and therefore can be evaluated better.
(31:45):
It's not considered novel, therefore.
So I mean, you're going to market much earlier than
expected and I would assume thatthis has been quite handy
because of the fundraising that is going on in the background
after a fundraisers before a fundraise, right.
(32:07):
So how has that helped you in raising?
Well, it's a couple of things, but since you're asking
specifically about fundraising, I will start there, but then I
will also probably elaborate on other levels a bit.
Of course, specifically in the current environment where we had
a correction in the market, it was super helpful to be in this
position where we say, hey, we still have the case in the way
(32:29):
and everything else hitting the market on our expected timeline,
but we're going through regulatory processes.
It's been super helpful to say, but we have started like two, 2
1/2 years ago with a new productline that we can launch quicker,
specifically the European Union,which helps to create revenues,
create profits, get an understanding of our operational
processes, stock in commercial partners, build out our
(32:52):
commercial team, which kind of like 3 super, super important
things to show traction. Specifically right now, where I
think it has become much harder to obviously raise a lot of
money that is needed to bring these innovations to market.
And it's still needed. But if you're raising only on
the promise of this might get tomarket in a couple of years,
(33:13):
it's obviously super tough. But when we say, hey, we've
already launched products and they're going to be like
nationwide in detail later on this year and we have signed
contracts that obviously helps validate and solidify some of
the claims that we make about, you know, commercial traction,
commercial onset and ramp up. This helps with fundraising, but
I also think it helps in generalin terms of, you know, getting
(33:35):
something tangible into the hands of consumers that have
been, as you said initially, like there's been a lot of talk
about it, but we have not seen alot of products hitting the
market in Europe. Actually, we have seen close to
none. That helps to show consumers
that this is real. Today, it's scaled up.
We produce at larger quantities.We have people tasting the
products not only in private settings, but in public
(33:57):
settings. We get feedback from the market.
We can show that this is, you know, a super viable product
that tastes great, that is affordable and all of that helps
us also I think to test some of the hypothesis that we have on
the market. And also, I have to say leading
the company now since its inception.
It also really helps to create excitement for the company and
(34:17):
the team, even if you talk to let's say our molecular biology
team who is working mostly on the strain engineering for
Casein. You know, being a company who
has products in market that is tangible and already creates an
impact that is already replacingsome of the products we'd like
to replace is a much more exciting offer than to say, you
know, we might be selling in a couple of years.
(34:39):
Yeah, which of course the topic of impact and being in the
market leads to a question of sustainability.
So what is the rationale behind arguing that this is and will be
more sustainable? Very clear that, you know, when
you look into the bioprocess andthe fermentation process to
produce these proteins, the inputs needed in terms of water,
(35:00):
land and energy is just much smaller than when you compare it
to animal farming. We have done a lot of LCA work
already before here. Now with the new product line,
we have done extensive work to basically look into the impact
also with our partners, some official government partners who
are very interested in assessingthe impact and that's super
(35:22):
crucial for actually signing commercial deals.
That's also what a lot of the players are interested in, to
kind of have like very solid data on the impact of the
products. Another question that was raised
literally in a call that I had just two hours ago.
If you already bring products out into the market, why keep
working on precision fermentation?
(35:43):
The last part of the process, weforgot to differentiate the
products, right? It's important to understand
that while micro fermentation products are much better in
terms of quality than plant based products, there are
certain limitations that precision fermentation will be
able to reach. Could you just elaborate on
that? Correct.
Specifically if you're thinking like caseins and kind of their
(36:04):
functionality they bring in terms of stretching and melting
of mozzarella, for example, there's something very unique to
the structure of the caseins themselves, which the coaching
proteins are not, let's say designed or not meant to do to
that extent. So the the difference or why
still going after some of the bioidentical milk proteins, It's
just because we are aware that there's certain product lines
(36:25):
that are harder to do with the coaching protein compared to the
milk protein. And our ultimate vision and goal
as a company is to be able to basically serve like the whole
cheese and also whole dairy universe.
And we don't want to be limited in terms of which products we're
launching. And we still believe that the
bioidentical milk proteins are somewhat of the Holy Grail in
the end. And at the same time, we were
(36:46):
already seeing today what the culture proteins can do and
said, okay, they're doing such afantastic job, we need to launch
this as quickly as possible. But we still see very much the
viability of bioidentical milk proteins because ultimately, you
know, this is where I think the whole fermentation sector now,
if you combine micro fermentation and precision
fermentation is moving, it's very clear that is a process
that is still very early and will become more efficient than
(37:09):
animals rather quickly when you scale the whole thing up.
And so going after that opportunity also of having
scaled up milk protein, I think it's still very, very relevant
today. Also, maybe we can do 1 little
more question regarding the process of coming up with the
terminology. First of all are.
You going to answer that question or am I going?
(37:30):
To. I can ask you.
So independent of of my kind of involvement in formal right, the
Cogi protein is actually such a good term for listening to the
Andrew Huberman podcast, the Huberman Lab podcasts, a great
podcast by a Stanford professor.And I must say that he is
(37:51):
promoting protein quite a lot. There's something about protein
in our popular culture that has a very positive connotation.
People worry about protein. They feel that protein is like a
really essential macronutrient, which I mean, it is to a certain
extent. And it just has like, a cool
image, like, it's better than carbs, it's better than fat, you
(38:13):
know? Yeah, it's so funny because he's
one of the essential macronutrients.
There's only three so. Like if you look at the
competition. Oh, for sure.
Fat has a bad reputation. Yeah, carbs have a bad
reputation. So protein is like the only one.
Yeah. I mean, if we're going to go
into this, we're going to be criticized by all the experts on
all these different types of diets.
(38:34):
But I think you're definitely right.
I mean, apart from let's say a small fraction of people who say
they're on high carb diets, which is usually low fat but
also still good amounts of protein, and then the ones who
only consume fat and protein andthen you have the high protein
people. It's actually interesting
because I've never heard of someone eating a high fat, high
carbohydrate diet. Maybe there are some, maybe some
(38:57):
do, maybe there are some or people who are excluding
proteins. But it's definitely true that
some people are avoiding fats inorder avoiding a lot of the
carbohydrates. So and in the US and also in
Asia, it's coming much bigger actually than in Europe is all
the products have front center. How much protein is in there?
So many products with added protein.
So I think your hypothesis of saying the protein has somewhat
(39:18):
been like the favorite macronutrient of at least this
century is definitely true. Yeah, I think calling it Koji
protein is a smart move in general, the association and it
also, if something is called Koji protein, people are not
going to be like, Oh my God, butwhat about my protein, you know?
Yeah. And regarding micro
(39:39):
fermentation, what were the iterations of other names that
you had before that? Should I actually mention
previous iterations? I feel like it's been so good
that we decided to go with microfermentation that probably if I
now name like other ideas we hador iterations we had, we'll
probably even anchor like some of the things, which is exactly
not what we want to call it. Maybe I could talk about why I
think it's a great idea to call it micro.
(40:02):
OK, yes, we can go with that. So of course the main
connotation that is really important to to get across is
that it is a fermented protein. So talking a lot about the
process of fermentation, which Ithink is the same with precision
fermentation, just kind of shows, you know, how will a
protein be produced well in large scale fermentation.
Do we that know from somewhere? Sure.
(40:24):
We already know it from other kind of food processes.
Again, it's not exactly the sameas a beer fermentation or a
bread fermentation, but the process of fermentation is
already known, well understood, and also very much liked, I'd
say in the market. So I think it's kind of two
things at the same time. One, it's really describing what
it is. And 2nd, it kind of has a very
good positive connotation. And then of course there's
(40:46):
different adjectives and add-onsthat we looked at in terms of
adding to fermentation. So that we use fermentation I
think was the backbone from the very beginning.
But then kind of how do you callit to kind of really also
differentiate it from other types of fermentation?
When we talk about going from animals to microorganisms as
formal, we always talk about going from domestication of the
(41:08):
macro to the micro. Naturally, I think in those
iterations, what came up is micro is encapsulating this
whole idea of going from macro farming to micro farming.
So I think it's just the best ofboth worlds really, at the end
of the day. And for those listeners who are
interested to look a little bit into the past, the third season
on Red to Green was about the consumer acceptance of
(41:30):
alternative proteins. And we happen to have an episode
with Rafa, which was episode 3.5.
And I think what's interesting here is also this two folded
strategy right there is the industry term for the category.
It's like biomass fermentation, precision fermentation, micro
(41:50):
fermentation, but then these arenot meant to be pushed towards
consumers. So these are more meant as like
broader terms to categorize for investors, for policymakers, for
other professionals and the way that you are going out with the
products mostly focused on the Koji protein.
(42:11):
Yeah, and I think you already see that today in consumer
behavior. The exact specific process of
how something is being produced is not so much interesting for
consumers, as long as you can look at the ingredients list and
see like, OK, looks clean, look straightforward.
Also, people, for example, wouldnever care, Like, has migraine
been harvested by this machine or by that machine?
(42:33):
Nobody really cares. What you care about is what's in
it. And so you're completely right
that that term is not really meant to be pushed like for
example, on the marketing side, but it's important to
differentiate for regulators andfor partners.
Whereas when it comes to consumers, again here we're
coming back to calling it what it is, which is Cochi protein.
Apropos partners. You are working with partners in
(42:54):
the process, right? Yeah, totally.
So we as formal, we're not producing our own products.
We have been for all these yearsvery much an R&D company.
Now what we do do with formal isobviously developing all the
processes to pilot scale and then we do a tech transfer to
our Coleman partners who then produce for us.
What we also do with form obviously is now that we are a
product company, meaning that weput our own branded products in
(43:15):
market. So we also own that part of the
consumer facing branding, marketing together with our
partners that we launched the products with.
So retailers that we work with, but we have decided to not do
production ourselves. So we have a common for our
protein and we have comments forour end products and how it
looks basically is that our Co manufacturers on the cheese
(43:36):
side, they get the process and the recipes from us.
They also have been doing some adaptations because when you go
from pilot scale to large scale production, there's always
adaptations you need to do. But they own the sourcing of the
ingredients, the protein is being shipped to them, they
source the other ingredients, and then they produce for us
kind of with us or with our recipe.
Basically. There's a lot of exchange
(43:57):
happening obviously on the team level, which is like our team
members go to our comments and help making the process smooth
or our comments are coming to our process at pilot level and
look at the process itself. But we don't do it ourselves.
And that's actually super cool on so many levels.
First of all, to experience the eagerness and willingness of
some of these Co manufacturers on the dairy side to work with
(44:19):
us and also to put in some work.I mean, that is also very clear.
You know, we coming up with new products as a growth startup.
It's not like working with your established corporate.
So also our partners are puttingin a lot of work and help us,
you know, also to scale, which we're super grateful for.
And at the same time, what we can offer to them is that, you
know, with our ingredients and with our products, it's a new
(44:40):
consumer segment that they can also go after, which previously
they couldn't. And we can also, and this has
been I think one of the most interesting incentives is that
through producing more of our products, it also allows some of
the core manufacturers to decarbonize their business and
to basically become more sustainable on a group level.
So it's kind of like a win win, I'd say, in these collaborations
that we've done and there's a lot of interest from a lot of
(45:01):
producers to work with us. And to make it clear, these
producers are traditional dairy Craftsman and women.
Traditional dairy manufacturers,correct.
Yeah. It's also nice, it allows, you
know, when we think about initially we're only available
in Germany, in Austria, Switzerland and other European
countries probably falling afterthat.
But also, if you're thinking about market expansion globally,
(45:22):
if it would produce ourselves with very, very specific
production processes that only we could do, it will be so hard
to scale this out because it would basically mean that we
would need to build our own manufacturing wherever we go
because we don't want to ship itlike around the world.
And so working with partners whoare established dairy
manufacturers allow us really also to replicate what we're
(45:42):
doing with our partners here in Europe, also overseas, for
example. At this point of our life cycle,
I think it's just CapEx friendlier, quicker.
And also at the end of the day, I think there's also very much a
product benefit that we get out of it.
Traditional dairy manufacturers are producing with us.
I mean, it says something about the product quality, but also we
benefit a lot from, you know, their experience in doing this,
(46:04):
you know, sometimes for centuries.
Yeah. So where can people get the
cheese? For those that have friends in
Germany or may happen to be at some kind of conference in
Germany in September, October onwards, where do they need to
go? They need to go to Reve.
So Reve is our primary partner for retail launch.
(46:24):
The products will be available at 2000 plus POS all across
Germany. So, you know, pretty much
wherever you can find your localReve that you will be able to
get our products. Yeah.
And it would also would like to do a huge shout out to Reve.
I mean, they have been incredible partners and bring
this innovation to market. And I think they're really, when
it comes to more sustainable products, they're really one not
(46:48):
only thought leader, but they have been putting in so much
effort into kind of giving theirconsumers more sustainable
choices and they're a great partner.
So wherever you can find us in Revere.
REWE. REWE.
Exactly and at Metro. And at Metro as well, so if you
have a card, if you're in gastro, then you can also find
(47:08):
us in Metro. The closing question that you
actually know already because it's always the same and you
already answered it, it's if youwould have 50 million, you'll
say EUR for now, what technologies, what approaches
would you invested in? Of course we'd love to invest it
in formal, but for the sake of the question.
(47:31):
OK, so I cannot put it in formal.
That would of course be the first option, but no.
Did I answer that last time around as well?
I wonder what I said. I can't remember.
So I'm just going to answer probably going to fluctuate
depending on the kind of what I see being really cool in the
market. I think something that is still
(47:52):
on the served on the developed is going more towards designer
proteins or designer ingredientswhere the whole idea is to add
very little hyperfunctional ingredient to let's say plant
based solutions or also animal based solution for that matter
and opt the quality of a productmassively.
Obviously there are big companies that are selling,
(48:14):
let's say flavoring or structuring, but I'm not even
talking about that. I'm basically talking about like
new types of ingredients that serve a new purpose.
I mean, something that is ratherknown in the market, for
example, is developing sweet proteins where you have proteins
that kind of give you the same kind of satisfaction as you
would have by adding sugar, but there's so much more jobs that
you could do with proteins. I think the search that we
(48:35):
currently see in AI and data in computational biology will allow
us in the future to really kind of analyze protein and their
functionalities and come up withcompletely new things we've
never seen before, produce them through fermentation.
Would be something very, very interesting to do when we talk
about, I guess, novel ideas thatI'm excited about.
OK, so back to the macronutrientof choice.
(48:59):
Back to the macronutrient of choice.
Rafa, thank you. This was a pleasure.
It was a pleasure, Marina, and thanks everybody for listening.
Well, I very much hope you learned a thing or two in this
episode. I want to give a big shout out
to our new producer, Sebastian Youches, or how I like to call
him Busty. And thank you for listening in
to this episode of Red to Green.I'm always happy to hear from
(49:23):
you. If you want to reach out or you
have recommendations for interview guests, just ping me
on LinkedIn. You can find me by looking up
Marina, Schmidt, like Marina, like the sea, and Schmidt like
the most German name ever for ease of use.
You'll also find my LinkedIn profile in the show notes, as
(49:43):
well as my e-mail. Until next time, let's move the
food industry from harmful to healthy, from polluting to
sustainable, from red to green.
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