Astonishing developments in the next gen proteins space... Join Tommaso Di Bartolo, founding partner of Awesm Ventures, along with industry fellows Rosie Wardle, Senior Advisor at the Coller foundation, and Viral Shukla, Food Scientist, Technologist and Activist, hosts two passionate game-changers in the next gen proteins space: Darko Mandich, CEO at Melibio, mission-driven startup in Silicon Valley, focused on transformative innovation in plant-based honey; and Anton Pluschke, Head of Research and Development at VlyFoods, a mission-driven startup in Berlin, focused on transformative innovation in plant-based dairy products.
TopFloor: Where handpicked startups present sector-specific innovations to a jury of industry fellows
In Season 2, recognized world-class Researchers, Scientists, Faculty Members, Senior Executives, Experts, Chefs, Investors and Entrepreneurs from around the globe, engage in strategic exchange of views and share startling intel on viable transformative innovation in Agriculture, Food and Beverage, zooming in the next gen proteins space.
Topfloor is where inspiring and passionate game changers, visionary entrepreneurs share startlingly impressive intel on food of the future with a panel of experts.
With Special participation of
[Industry Fellows] Topfloor: S2:E15
Investor at CPT Capital
Science of Food Activist | IFTSA | AAPM
Serial entrepreneur w/ 2 exits, author, advisor, faculty, investor.
Tommaso Di Bartolo
Episode's 🔖 Transcription
Tommaso: Good morning everybody. Super excited. We have our industry fellows and our entrepreneurs here today for our grand finale. What is actually Top Floor? Well, we have been running Top Floor in a season for the entire year. We have been picking startups to present sector specific innovation to a jury of industry fellow and the focus has been on next gen protein. I would like to introduce two amazing entrepreneurs. I would like to start with Darko. Darko Mandich, CEO at Melibio, mission-driven startup in Silicon Valley, focused on transformative innovation in plant-based honey. I'm so excited to hear more about that Darko. Welcome here Top Floor. And I have Anton Pluschke, head of Research and Development at VlyFoods, a mission-driven startup in Berlin, focused on transformative innovation in plant-based dairy products. Anton, such a pleasure to have you here on board and super excited and curious to hear more about you.
On the other side, we have our industry fellow kicking off things with Rosie Wardle, senior advisor at Coller Foundation, also a long standing dedicated investor in the next gen protein space, it's such a pleasure to meet your acquaintance and have you here. Last but not least, Viral Shukla, food scientist, technologist and activist, also a member of Institute of Food Technologist Association-IFTSA, and the American Association for Precision Medicine. Viral, such a pleasure to have you here today.
Plant based honey
I would like now to start with Darko Mandich, representing as a CEO at Melibio. So please take it from here. I'm super curious to hear what you guys are doing.
Darko: Thank you again, Tommaso. Once again, thank you very much for this amazing opportunity to talk about Melibio and to talk about animals that we really care about and that we really think are important to this planet. You'll find out soon what animals we are going to talk about. And as you can see on the cover slide we're going to talk about the future of honey. It's my pleasure to be here today to talk to the amazing audience of your episodes, of your series that you made. As you said, my name is Darko Mandich and I'm a CEO and co founder of Melibio from Berkeley, California, but I'm calling you from San Francisco where I live.
Honey is a product that everyone knows about it. Everyone's tasted it, at least once in their life. We did some studies and we saw that around 50% of the planet consume honey at least once on a weekly basis. And it's a really amazing product, it comes in so many varieties. We recognize around 320 main varieties of honey and in different regions of the world it's known either as Acacia honey, if we talk about Europe. Clover honey, if we talk about the United States. Manuka honey, if we talk about New Zealand and Australia. Wildflower honey, if we talk about Eastern Europe. So this is, as I said, it's an animal product that we are looking to find a way to produce without the animal.
A little bit more about honey, it's a sweetener, but we believe it's a superior sweetener. Besides the sugar it has anti inflammatory, antioxidant, antibacterial properties. It can be an antidepressant and cough suppressant. It's been a home remedy for many civilizations. We've found traces of people using honey back to five to 5.000 to 9.000 years ago. So it's really an amazing product. I think that there was a story of finding canine egyptian pyramids. It was 1000s of years old, but it was still good to eat thanks to its amazing composition.
So how honey is made using the bees? It's a very, very complex process and it’s a very energy and resource intensive process. We have honey bees that are foraging flowers, collecting nectar and pollen, bringing it back in the beehive, and passing it onto each other, and then they dehydrate and then the honey as a product appears. It's very difficult to produce honey, you need from 10,000 to 22,000 bees to produce a jar of honey, you need them to fly around. You need them to fly the length of three times around the planet and they need to visit 8 million flowers to produce that jar of honey. The issues come that the honey production is mainly focused on commercial beekeeping is becoming definitely expensive, because it's very human labor, intensive operation and also because you have animal labor, it's inefficient. It's definitely from the animal welfare perspective on ethical and the biggest thing and the biggest driver of the problems that have been recently identified as it's unsustainable and I'll talk more about that in the next slide.
There are 20.000 bee species and among those 20,000 bees pieces, only 7 to 11 are honey bees and subspecies and they produce honey. Other bee species are wild native bee species, bumble bees, green metallic bees, they don't produce honey or they produce much less honey. And the issue with honey production is that commercial beekeeping in order to get to the to fulfill demand for honey position so many bee hives out there with honey bees, and those honey bees have taken over the territory for a while. The native bee species, they push them back and they are influencing their disappearance. Meaning that basically with humankind catching up for producing honey, we actually kill the bees.
Honey bees will never go extinct, if we have one human left on this planet and that human is a beekeeper, he or she would be able to multiply that pile. The bees that are really problem are while the native bee species that ones die, we cannot return them. And those are the 20,000 bees species that we identified as being out there on the planet. In North America, there are 4.000 bee species. Interesting story is as honeybees are actually not native to North America, they've been brought in 1620 on Spanish galleons by Conquistadores. So we at Melibio are looking for ways to produce real honey, so that we can stop that pressure on while the native bee species, because we believe that catching the opportunity to consume this amazing product while killing the bees doesn't make sense.
But understanding that honey is a great product, we started looking into a way how to produce it. My co-founder and I started Melibio on the premises of building a novel and proprietary technology that's based on the intersection of plant science, synthetic biology and bio fermentation. So we are making real honey without bees. With the ingredients only found in the maze Honey, what we are doing is we are meeting the real delicious taste and the mouthfeel of honey plus the functional benefits that go along with this product.
Honey will be an assumed $14 billion market. But what we are really aiming for is the bigger, almost $100 billion dollars market of sweeteners where we believe that producing our honey, real honey without bees that it can really position itself as one of the default sweeteners of the industry. The characteristics of our product besides of the positive impact, that it's definitely vegan.
Finally, we won't be able to have all these vegan discussions, you should be standing in circles zooming calm, you are not we are making real honey to be vegan. We are also meeting the price point because honey is very expensive. We are offering our customers the customized flavor, because honey is different for beverage, for foods, for pharma. We provide consistent supply chain and our products will be adulterated free, because most of the honey unfortunately found in the market is either adulterated with other low quality sweeteners or bees pick up some toxic adulterants from scrape orchard, which we won't be having in our product.
Our business model is to sell. This is a brand new ingredient meaning that Melibio owns the story around helping the bees. But we provide the product for our customers in the packaging that they require from larger balls packaging to the smaller ball packaging. We are also staying open one day for having a brand new product. But that's not our main goal in the next few years. The idea was accepted in 2019, the end of the year and this year was a blast, we joined the amazing big idea of interest program, which helped us scale in terms of the r&d. And in terms of finding the first 15 customers that sign letters of intent for purchasing our product once it's in the market. We filed a provisional patent application for our technology. Next year we are looking to launch our first product into the market. It won't be using the full magnitude of anthropology. But it will be the first product that we'll be able to claim the first to market and further we will continue developing r&d and perfecting the product.
We are a passionate team about bees and honey. For the last eight years the only product that I've been really taking care about and Kevin as a significant part of my life with honey. I come from Europe from Southeast Europe, specifically Serbia. Serbia is a huge honey country. And I've been selling Serbian honey in 15 countries. And I know this industry, I know the problems and realizing how this technology of bio fermentation is enabling us to make our favorite animal products without animals is really something that I really care about that went along with my personal mission of turning vegan. So I'm really happy about working on this project together with my co founder who is a scientist with a PhD degree in biochemistry from UC Berkeley. Aaron is a passionate chef and gardener. And we are happy to be strategically advised by Dr. Maha Tahiri, an amazing corporate executive and a professor and a scientist. Also we have a couple of new advisors, Mark Warner who is one of the best bio fermentation scallop advisors, and Douglas J. Taylor, who is advising us on IP strategy.
So we are a team very passionate about saving the bees, about food innovation, and we believe that we will get MeliBio as one of the leading future food companies that is going to deliver sustainable, sweet food that is nutritious and has a positive impact on the human time. We believe that what we are doing is better for humans, and definitely better for bees. And we are looking forward to have a conversation with companies, organizations, individuals who are interested in knowing more about bees, knowing more about the sweet food, talking from either perspective of carrying our product as a part of their product or potentially investing in MeliBio. Thank you very much again for this opportunity. And I'm happy to take the questions.
Tommaso: Outstanding Darko, thank you so much for the presentation, and congratulations on your endeavor. I'm really curious to see in detail what you guys do. By the way, how are you saying Serbians? Do you say hvala as thank you?
Darko: Yeah, it's the same language basically. Yeah.
Consumers awareness on honey bee market and its sustainability
Tommaso: Outstanding. Well, thank you so much. Rosie, what are your thoughts?
Rosie: You know, thanks, Darko. Oh, well, fantastic presentation first of all. Very clear, very engaging. And I love your slides. The design is beautiful as well. And yeah, I mean, the concept is fantastic. Clearly, as you very well explained that, this is a big kind of global problem that needs to be solved as part of the kind of broader food systems transformation. And clearly there are many different kind of sustainability factors linked to honey production, in particular, whether you look from food fraud, as he pointed out to the kind of broader issues around pollination, which is like an existential threat to the food system.
But I guess my first question would be around, if you could elaborate a bit more on your customer and what you see the drivers for your customers, because although as me being active in the food sector, I'm aware of all of the issues linked to honey specifically. I guess the sustainability risks aren't as well known as, for example, with beef production or with aquaculture, for instance. And I very much appreciate your kind of vegan perspective, which I think is fantastic. But it's maybe even potentially not as big an issue for even vegans, as you know, animal production.
So if you could expand a bit on the kind of target customer, I guess, and how you see that evolving over time, and not sure if you can share anything about those initial customers that you've got signed up, but I’ll be very interested in that too. But fantastic presentation.
Darko: Thank you so much, Rosie. Thank you for the opportunity to talk more about our customers, we believe that what we are doing is definitely beyond just one important and rising group that's definitely vegan. We believe that these are really important for everyone. Because I tell everyone, imagine a world where we lose all these 20,000 bee species, you would go out from your home and you wouldn't be seeing any flowers, the grass wouldn't be that green, you know, you wouldn't be having amazing fruits and vegetables. So these are about the existence of the planet that we are used to having. And we believe that our customers either talking about the business customers or and consumers are people who really want to be heroes. They want their business to be heroes. When we offer an opportunity for a huge company to replace a pound of bee made honey with bonds of MeliBio honey, we together, we empower them to vote for the greener planet, for the planet 20, 30 years from now, that still has a wild native bee species.
So that's, that's the hero moment. Of course, the hero moment wouldn't be sufficient if there is no financial gain included. And the financial gain is that honey bee made honey is extremely becoming expensive. I come from a country where I saw with my eyes this year, where because of the lockdowns and heavy rains, for the Acacia honey crop, the first price paid in the supply chain. That's the price that honey collectors based beekeepers went from four euro per kilo to almost seven euro per kilo. And that builds up in the supply chain, meaning that a company in Germany or a company in the United States now needs to pay double the price on the same volume of honey that they paid last year. They become very frustrated. So what they do, they still advertise honey on the front of their product. But if you look back, they add cane sugar next to honey, they add lower quality sweeteners, because they just promote themselves honey, but every year they rethink their formula, because they need to reduce it. So to all these r&d teams, we tell them it's enough, we can really deliver that taste of honey that's familiar viscose texture that you need for the price that can be stable, and that you can plan to be stable in the next couple of years. Because the bio fermentation when you really reach the point of scale up on a large scale, that's the price that you knock there, you setting in stone, that price can really go only down.
So combining the hero moment and the financial gain. We believe that there's no any reason for any company that has at least something that's called an overall sustainability strategy, not to include MeliBio in our product within that.
To the second part of your question regarding the letters of intent. He focused on the United States as our primary market, myself coming from Europe and being a European, very in love with Europe. I really prefer us not to be working on euro first, because in my opinion, Europe is a little bit slower than the United States. And the United States is much more open to innovation in my opinion. And within those 15 companies, we have one huge food service company from California, they are one of the biggest in the United States. They operate 1000 restaurants and cafes and they're really heavy in honey, they use it as in dressings, they use it for desserts.
We also have midsize CPG brands that are using maybe bee made honey but want to switch to vegan and plant based community and they would prefer to have honey rather than experimenting with a gobbler Maple because they've been using honey for years. For them, it's much easier to have vegan honey. So that's a little bit about our first customers. We are currently a very scientific and technology company. We are really focused currently on how to optimize this process to be really efficient and scale. That's why we kindly invited Mark Warner to be helping us on the scale part. Because we believe that once we produce bee honey at scale, that it can really become a default sweetener, because why would you choose just white sugar when for a little bit more price you can have honey made without bees that has benefits that white sugar doesn't have?
So I hope this answers your question. And I'm really excited for all these conversations and sharing a lot about MeliBio.
Rosie: Thank you. And I think the supply chain transparency point is a really great one and something that is even more important in today's world with COVID just having that kind of transparency and resilience in your supply chain. So the fact you can offer that is really compelling I think.
Bee made honey versus plant based honey and its benefits
Tommaso: Thank you very much. I can feel the passion, Darko, in what you're doing. So congratulations.
Vitor, what are your questions? What are your thoughts? What intrigues you at Darkos mission?
Viral: Darko, that was a great presentation. I love what you're doing at sustainability. A little bit about customers, actually. A lot of people buy honey because of its various health benefits. So I was wondering, have you done any testing to see how your honey stacks up against conventional honey and the anti inflammatory or the polyphenols and antioxidants? And then a little bit beyond that is do customers feel hesitant about buying your honey? Because it's not made from bees, so is it really honey? And how do you work through that?
Darko: Thanks for the amazing couple of questions, Viral. When my co founder and I decided to enroll with this journey, we really said to ourselves, we made a promise to each other that we won't be stopping until we get that parity of benefits of our honey versus bee made honey as a huge milestone number one. The huge milestone number two is down the road, potentially enhancing it, because we recognize that there are certain super ingredients like fully phenolic that you can find in honey, that can be really amazing. And potentially enhancing them any more of them in our product will also make our product really superior compared to any anything else in the market.
As for the customers, definitely and honestly, there are people that don't feel great about honey coming from the lab. And I understand all these concerns. But on the other side, I definitely think that the future of food production is going to be heavily focused on producing food in a safe environment. Natural and raw honey that you buy at farmer's market can be a better product than a honey that you buy in the supermarket. Because this could be something that's coming from a familiar beekeeper, something that someone maybe was not mixing with any sugars. But on the other hand, the beekeeper can be your family member, that beekeeper can be yourself and you cannot track if your bees are applying to your neighbor's orchard and picking up some some toxic sprays from there, you cannot guarantee that. You cannot pay expensive analysis reports, because then a jar of honey will not be 20 bucks, it will be 120 bucks. So understanding that the world around us is shaped with the number of people that are living on this planet, and the more of us will be living on this planet, the more control they would need to have for our food production supply chain.
So we believe that providing the same honey on the same parity from a controlled environment is actually better for everyone. In order to make sure that we are on track with that, we discussed with the most prominent honey testing laboratory QSI from Germany, and we are talking to them when we are ready in terms of the r&d, we'll be conducting tests to make sure that everything is fine. We really want as a company to provide the full customer experience where using our products, you're only showing benefits and you're only giving benefits to yourself, to the planet, to animals, you're not missing out on anything. You won't be needing to sacrifice anything that customers enjoying hunting today, when people will be consuming our product. And I'm really excited about that. Because I believe that people care about the environment, but I know that taste is the key. And that's a reality and will be reality for a while. So we started approaching this from the taste perspective. That's our first R&D goal.
Our secondary goal will definitely be the benefits. And even with the first product that we launched, we expect to have some of the extensive benefits in it. Down the road, we really plan to make this product and hence powerful and really to make bees proud. Because I think it's a part of evolution. We have animals that taught us how to make these products. And now we are empowered. We take this knowledge from them, and we shape it to help them and to help us out.
Viral: Thank you very much. I'm looking forward to seeing what this enhanced honey can do in the next few years.
Strategy and value on the plant based honey market
Tommaso: Okay, you made us smile all together when you said you make bees proud. I was literally visioning a bee clapping on your shoulder. Joking aside, congratulations on also the way that you lean into this topic. And as an entrepreneur Darko, I've been done that multiple times. So you have a lot on your plate, which is not sub sequential, but in parallel, right? What are key decisions to be taking, a lot of things have priority. Is there a priority one, priority two, priority three? And you are still early stage, you put it on a timeline, your product is not on the market. I like always to reverse engineer and envision when the product is done and it's almost in the hands of the customer or the buying moment. The moment when the customer is in front of your case, most probably a shelf and looks at traditional honey and then looks at your honey. So what is your strategy in terms of messaging, of value proposition? How are you going to stand out at the moment where the customer is intended to take a decision? How much of the movement are you intended to create? What's the strategy behind this? Tell us more about that Darko.
Darko: Tommaso, thank you for this great question. You mentioned this moment of purchasing things or buying things. With my experience in visiting supermarkets in more than 50 countries in the world, I have my Google Maps start with all the supermarkets I visited because I love spending time in supermarkets. I realized that the purchasing moment is kind of an intimate moment. Because you as a customer, you enter the store, you have this 10 seconds or less times the time span, you came in to buy a bread and hummus maybe. But you've been advertised with so many products, and actually sometimes is overwhelming because everyone there wants to share some message. Everyone wants to make a point. So understanding that, definitely we as a company, and this one we have too much to say, we have to say about saving the wild and native bees, about toxic adulterants, about cutting honey with low nutritional sugars. So we are kind of nerds of our company. And in order to be efficient in the market, sometimes maybe you should be less nerdy and more appealing to the masses. So in order to craft the best message, I definitely anticipate that our team will be onboarding experts who will help us probably stay a couple of weeks with us and understand what bees mean to Aaron and myself and our team. And then choosing the best messaging, the simple message. Because at the end of the day, I think in this sea of brands and impact driven organization, you need to have one word or one short sentence to be reminding customer of your company. And frankly, we don't have it yet, we have half an hour of me talking about this. But we approach closer to market launch will definitely simplify this message and really get this messaging crafted and oriented towards masses.
My way of doing business so far is that I only do business with people that are smarter than myself. If I'm the smartest in the room, I shouldn't be in that room. So my superpower is to put puzzles together. But in terms of the crafting the message, we will definitely talk to some people that we really care for their knowledge. I also use this opportunity to invite people that are really passionate about bees and are coming from a communication sector that can really ping us and reach out because I would definitely care about their opinion and to connect with experts coming from that field.
Tommaso: So you heard it dear honey aficionados, Darko is inviting you to join and to pick your brains and to add value to MeliBio, so please feel free to reach out either through us or directly to Darko. Also we have a question here from Kimberly, Darko. Kimberly's asking how does this label, Darko, US, Canada or Europe?
Darko: Labeling is a specific issue. As for the FDA, there's a two part of the definition of honey. One, we will definitely satisfy that it's a product made of certain compounds. And the other part of the definition is there's going to be something that we will definitely need to negotiate because the honey is seen as a product made by bees. In the light of everything what's going on with the Food Innovation, in the life of being woken up two days ago with the news that the Singapore was the first country to allow cell based meat and congratulation to each just as the pioneer in this space, we definitely believe that honey will get on the agenda of the regulators. And definitely regulators would definitely appreciate that we can make real honey without the bees, and showing them reports why this is important. And why we believe the customers will be after this.
We think that the regulators will be in favor of rethinking this definition. Until that time comes we definitely need to be in the market, we won't be waiting for the regulator's to innovate on this. And we will use the power of trademarks that would clearly communicate to customers that it's the real company just made without bee, so we don't want to confuse anyone. We want to be clear and transparent with what our product is. And we'll use the power of trademark until we get to the point of potentially rethinking that definition of honey. First with the FDA and then with other regions that we plan to penetrate those markets.
Tommaso: Awesome Darko. Thanks for replying and I think Kimberly has a follow up question. I see another question too. So you still need to make an ingredient level? What will it say? Kimberly to Darko. I mean, what is your secret sauce?
Darko: If you go to Google and if you Google, what is it in honey and the things that you see in the maze honey, you will see in our honey. Definitely there are some ranges there because different honey types have different range of different compounds. We are currently looking at one first product that's honey we're not yet looking into different types in terms of manucho or wildflower. So this first thing is kind of our recipes, that we are making. But as I said at the beginning of the presentation, everything found in our honey will only be the compounds that are found to be made honey. We are not putting anything there that bees have not put in their honey.
Tommaso: Awesome outstanding. Another question for you Darko. This is from Azim, thanks for the question. Do you expect legal challenges from the honey manufacturers and association regarding colleague honey? What are your thoughts?
Darko: I've met so many beekeepers in my life. I definitely visited around 1000 bee farms during my career of eight years of selling honey. And I think most of the beekeepers are actually good people. I know that some of you are probably watching me and thinking that I'm crazy, what I'm doing? But I know me from my previous ventures. But I definitely think that we as a company will be inclusive, we'll be facilitating conversation. And we'll definitely be explaining why we think this is the future of the food industry. And we would rather focus on that than any fights because I think the biggest fight as a startup has is actually the fight of the innovation, the fight of the hard work to bring something new into the market. And definitely lead the conversation with anyone in the industry to understand how each and everyone's role would definitely be.
As you can see, definitely the Food Innovation is going in the direction that removes the work of the animals, the work of the humans, that is going towards transparency, sustainability, efficiency. And we believe that there should be honey made without bees as the future of this industry. But we definitely appreciate that some transition will take time, that some people will stick to the traditional methods. And we definitely believe that there's space for everyone in this space.
Plant based milk made from pea protein
Tommaso: While the transition takes time we need to change behavior. We need to create more awareness. That's why these initiatives like we do it right now create content, educated people. Darko again, congratulations. I love it. Great representation of your brand and your vision. Thank you so much for allowing us to pick your brain. Thanks to our audience to engage, as Kimberly asked here.
Now let's switch gear from honey into dairy products. I would like to start getting a sense of VlyFoods and Anton, head of research and development. Please take it from here. Let's switch gears into plant based dairy products with VlyFoods. The stage is yours.
Anton: Thanks Tommaso. Thanks, Darko. Awesome presentation. So yeah, I'd love to begin. I'll do a short context. So as I mentioned in the introduction, I was born and raised in Australia, and a balanced diet in Australia, you know, unfortunately, I guess you could say, consists of meat or animal based products for breakfast, lunch, and dinner. And throughout my education and later research, I was fortunate enough to have time to really reevaluate what balance means. And also after my PhD at the University of Queensland, I was able to work for and had an incredible experience in an animal nutrition company, and they started seeing some numbers that were pretty astounding, and some really interesting lifecycle analyses. And I know there's a lot more work that needs to go into that space. But one that always stuck in my mind was, if everyone on the planet ate like Australians do, we would need seven planets from a sourcing perspective in order to feed everyone, and I was just like, this is unbelievable.
So I had the choice to keep optimizing that industry and making it more efficient, or change and really help a company that challenges people's way of thinking, living and eating. That's why I joined Vly. So you see the name Vly in German, and v is pronounced like an f. So we pronounce it fly or fly foods. And I'm going to present the next generation dairy. So this is a nice little representation that we use. Look, we started with cow's milk, and then our pro took on the sustainability angle. And really that was their messaging only came across and made a consumer market widespread. Very cool. And Vly comes now. And our value proposition is really all about the health aspect, the moment the products in the market predominantly, when we look at them.
I'm pretty poor from a macronutrient perspective in the plant based milk space. Protein alone sits between 0.5% to 1% protein, okay, there are some others out there. And we believe that there's no product out there that really answers all the consumer needs. So we looked at all the different legacy crops that are used to make these plant based milks. And on the screen, I've just put four here for you and the very top soy. Now soy is by far the largest crop that is using the alternative milk space, but its growth new products is stagnating and it's starting to decline. And that's there probably a couple of reasons for that. Maybe from a sustainability perspective, maybe also some research on both sides of the camp coming out now regarding health aspects. Still, I think more research is needed in that case.
In the middle, we've got almonds and coconuts. You know, from a sustainability could be debatable as well depending on how water intensive those crops are. And actually comes back to Darkos point here on the bees as well, on the almonds as well, as a direct correlation there. From a nutrient perspective, also those milks are pretty low. On the very bottom, I've included oats here, and traditionally the milks made with oats are incredibly high in carbohydrates and quite low in proteins. So I really think there's a big step here. And that's why we believe peas are the answer to this, specifically the yellow split peas where we started. And we did a lot of analysis on this and looked from a nutritional perspective, the amino acids, incredibly balanced. And especially if you think for milk, even though it's not the FAO regardless as one of the best quality proteins from a plant base to exist so far. And you can combine it with your cereal in the morning and therefore have a complete amino acid protein meal essentially.
From a sustainability standpoint, these are incredibly efficient protein sources regarding co2 emissions. And also the nitrogen fixing is really an important part here. The functionality is really where it starts to stand out because it's so high in protein. We're really able to look and start having these products that have great flammability, emotions, and creaminess is there. And we're able to really work with this taste challenge. All of these crops that I mentioned in a previous slide, they all have their unique flavor profile. And that's key for us to really work on here. And we believe we've been able to practice and really have something here.
Now we know that pea proteins are already winning in the meat category, Beyond Meat and Impossible Foods are showing that quite clearly. So in terms of the scaling here, the capacities that are coming online and available pretty soon will be absolutely enormous. So the growth potential is really good as well. In terms of what we've done, launched our note varieties at the beginning of the year, on a previous slide, you saw those three different milks, we have an original, unsweetened and a barista version. And here the challenge was really how do we deal with those undesirable off nights, a typical bendiness, bitterness and grossness. And so what we've done there is we've created after two and a half years of research and development and screening multiple different pea proteins in the market from across the globe. And then also a number of different natural flavorings combined with our large test database with people from in Germany and across.
We’ve been able to figure out which of our masking compounds is most successful to deal with the grassy notes. And that's protected today as a trade secret. And we've also submitted a patent for Vly’s process ingredient combination here moving forward. So in terms of what we think here, if we've got Vly on the left hand side with our unsweetened variety, currently, pieces seem to be allergen free, and very impressive amino acid profile, we're able to design these products and formulate them to have the vitamins and minerals and trace elements that we like, and this is why we believe we have the best health profile in the market, especially compared to the other products yet.
We don't just think that ourselves, we're actually asking our consumers, and we're getting a lot of feedback online from this. There are some consumers with over 1300 reviews at the moment. And this is only within eight months of launching. So we launched the beginning of the year. And now there's people saying like cow's milk is out. This is a healthy addiction, the first low milk that I can recommend one of a kind, I'm hooked. And so these reviews keep coming back. And so we have been really pleased with this initial product launch year. So that's really encouraging. So basically, just from brief figures here, in eight months with a 600,000 euro budget, we achieved around 5 million euros annualized gross revenue terms, we actually have produced and sold over a million litres of milk. And in Germany alone, we now have just under 6000 POS. So the large supermarket chains are really taking off and seeing a real high rotation in those supermarket chains.
From our direct to consumer online, we can see that we have such a retention with over 30% now actually nudging closer to 50% of return buyers. So this speaks to what Darko was also mentioning about this love brand and that intimate moment, people really are engaging and interested in this message that we're bringing. And that brings me pretty much the end of this presentation of what we're doing at Vly here, we're really looking to disrupt dairy, we started in milk and now we're moving towards more these drinks and fermented range. And this is where it gets really interesting as well from being able to use additional technologies to maybe have higher percentages of protein from the peas, and then deliver nutritionally more exciting and just as delicious products in our product line. So my details are on the board there. And I'd love to hear anyone that would like to get in touch from an r&d perspective. Of course, ingredients and supplies are incredibly interesting to talk to. We're at the moment raising our series A around so for any other investors out there that would like to get in touch. Absolutely fine. We've got some brilliant founders in the company that would love to speak to you. So I hope you enjoyed this brief presentation and happy to take questions.
The nutrition and digestibility behind pea protein
Tommaso: Well, amazing. So first of all, you're like a Swiss watch. You know, it's exactly eight minutes. So congratulations. Secondly, I loved your slides, the way you present very much to the point and then thirdly, I mean the context: it's a success story. There are a lot of seeing entrepreneurs from nothing to boom, 5 million euros, right? Which is today currency conversions, almost 6 million in US dollars. It's 10 X on your budget. Congratulations.
I'm really curious now to hear maybe we start with Viral. Viral, what are your thoughts?
Viral: Great presentation, I really loved all they talked about. I love that you're using peas proteins, super sustainable, hypoallergenic. So very cool. I actually had some questions about your proteins. So first question is, how did you find the functionality of pea protein compared to cashew nut because of its globular nature? How does that work for you say, and I quote, for coffee shops, who have to steam and foam the milk. And then my next question was, how did you deal with peas, various anti nutritive, like phytates? And just a little bit more about the digestibility of your protein that you're able to share, that it's really quite interesting.
Anton: Thanks, Tommaso and Viral for your comments as well.
So regarding the functionality, this is something that's really important, especially in the barista, and milk that you point out there. And there's a lot of screening to really figure out which proteins, so in the whole production chain we're not producing our own proteins. Yeah. So we don't have the capital to go and build a massive plant to go and produce. So we have to work with suppliers. And they're doing extensive and very high level work to try and improve the functionality there. And so they're looking into different enzyme technologies, different extraction methods, all the way from aqueous to air classification to this very new companies doing membrane filtration.
So they're trying to keep a lot of the protein structure as good as possible. Or indeed, if they need to hydrolyze it and cut different proteins jet down to improve solubility, for example. They're also able to do that. So this is what I call upstream from before I get the product inside Vly. But for sure, we have to do a lot of testing there. And that's what we do with our test database. But that also includes the cafes that we've worked very closely with. And we're lucky in Berlin here to have such a good hipster cafes right next door. And that's super important, because that feedback they're the ones that are using these and working with the milk every day. So that's super important.
To your second question about the anti nutrients, this, again, is upstream from me. So it's something that I take very, you know, it's very important, especially because we don't want a product where there's a lot of minerals bound to this phytate molecule. That's not interesting to us, we want to have something where the companies have gone through a selection on cultivars. So that's one thing they can do to find a cultivars that has a lower phytate or phytic acid in there. And then also the second step, which I know I've seen a fair bit of research now to show that through the different processing, they can reduce the anti nutrition effects that exist in a raw substrate. So that's through extraction methods as well. And I believe you had a third question. But if you could repeat that one.
Viral: No, that was it. Very interesting.
Competitors in the pea milk market
Tommaso: Thank you so much, Viral. Thank you, Anton. Rosie, what are your thoughts?
Rosie: Well, thanks Anton. I mean, that was another great presentation. And it's really impressive to see what you've achieved in a relatively short space of time here as Tommaso said, and those trustpilot reviews, I mean, really do speak for themselves to have so many positive reviews. And again, a short period is really fantastic. And I guess my main question is around differentiation to other products that are on the market. And Newberry kind of clearly spelled out compared to other plant protein milks. And obviously, compared to cow's dairy, the advantages of your product are clear. But could you tell us in a little bit more detail about how the Vly milk compares to other kind of direct competitors in the market who are also using pea milk?
Anton: Yeah, that's a really good question. Thanks, Rosie. And thanks for the feedback. So I think the first thing is a point on tastier. So that as Darko also mentioned is one of the first drivers into consumer choice. Yeah, sustainability. And health is also important. But if a consumer buy something they try the first time and they are not impressed, they're not coming back, and you're gonna have a hard time to bring them back. So that's really important. And what sets us apart here is the extensive screen that we did on the different marketing compounds for these milks. But also that starts from the very first ingredients, the raw materials, the different oils that we're able to use, understanding how they oxidize, and then understanding how that impacts and the different processing so when you put these products through UHT process that also changes the sensory profile.
So it's about doing many iterations and a tech like way, testing each one with a panel. And that's what we're able to do. Because we've got that high engagement with I think over 13,000 Instagram followers, and like a really active Facebook group that were able to figure out, okay, who would be willing to become a tester? Who could be trained? And so that's really important. So we can get this iterative feedback. And so at the end of the day, when we put our product on and compare it to some of the competitors, quite simply, it's different from a functionality standpoint. So in coffee and splinting, for example, in an acidic pH, it's very different. But also from a taste perspective. There we were coming out on top. And that's just because of the iterations we've been able to do.
Rosie: Awesome. Well, I'm even more keen to try it then you go shipping to the UK yet.
Anton: No, I mean, we can direct to consumers on Shopify, if you go onto our website, you can probably get it to the UK, but we're not any UK supermarkets yet.
Tommaso: Yeah, I want to piggyback, actually the question was do you mind breaking down the channels of your revenue, you said direct to the consumer, the 5 million euros? What is direct? What is the channel? Where your channel partners?
Anton: Yeah, look, I don't have top of mind these exact figures. I know retail is a majority of that, just because of the five and a half thousand retail stores that we have across Germany with the real high rotations in the shelves. So that I would imagine, but after speak closer with my business partners there, but I think that's where the majority would be. Yeah.
Tommaso: So what brands are embracing this in terms of the return? I lived a very long time in Germany, there are different brands that convey different values as a retailer. You have the Audi's of this world and then you have the Tangle Mounds, which are different prices. Where are you guys in? Where were you placed?
Anton: Yeah, great question. So we started in Berlin with the supermarket chain, the first one was called Edica. And Edica and the way they have modernized their approach, they've informed that they have like in house Herbes growing in their supermarkets. They have completely redesigned the whole concept. They're very open to testing new products. And so we traveled with 25 of their stores in building first. And we looked at the numbers on the shelves, we said Hey, guys, like check this out? Would you be interested in trying in Munich, for example? So we then went to Munich, same story. So even though we're in Berlin, and advertising strong in Berlin, Munich went crazy. And so then they went from there. Then, just three months ago, we were on the equivalent of the German Shark Tank, which is the hood of the lovin, so yeah, it's a shark tank equivalent, and that put a huge boost in into the supermarket, retail pool.
And at that same time, we then went into Haver, so Haver nationwide, which is like a massive Haver group in Germany. And just recently, horseman has picked us up as well, so is more like a pharmacy and they also sell a lot of food as well.
Expansion plans and market goals
Tommaso: In a city like CVS, you're in the States. Yeah. So very interesting. Very intriguing. Congratulations. So it sounds a lot of inbound. So no no outbound right? So no proactive outreach, but more inbound and top down approach on.
So what's your expansion plan? I mean, put this on a go to market goal. Where do you want to expand? What are your thoughts on expanding?
Anton: Yeah, so it's a really good question and something that founders probably can speak to very specifically, but from my conversations with them, it's clear that just the milk alone is far more supermarket like the Audi’s, the NATO's of the world. And there's three of these varieties. So the expansion would be first “Hey, look, we've got in Germany a lot more potential and to get all those shelves that's already one point.”
Then we've got this really exciting chocolate drink that we've just launched, a high protein chocolate drink with like 25 grams of protein, no grams sugar, and five grams of dietary fiber, which is our beta version, and we've launched that to get feedback, and that’s a really good feedback they've received. And that can be a real iterative process. So like a seasonal. Like maybe a chai comes out a protein, chai or coffee. Chai would be delicious.
That's before we move into the fermented range. So here I just talked about products. And this is just within Germany, Switzerland and Austria a little bit now. And with the series A, I really expect that we'll be able to go much more aggressively into the countries that we choose.
Tommaso: Well, outstanding guys. I want to be respectful of everybody's time. But we had two outstanding entrepreneurs who went from honey to dairy products, great success stories, great teams, great brands So thank you so much allowing us to pick your brain. Thank you so much for the industry fellows for having such great questions.
And I see here we have some questions also from Aston. Yeah, I want to run this one very last one before I wrap up. What is the PDCAAS as value? Never heard of that one? And can it be executed into textured proteins? Anton, do you know what it is?
Anton: Yeah, so the PDCAAS value of pea protein is around 0.8. And this is a measure of protein quality. Now, the thing is, the PDCAAS value looks at the fecal digestibility. So this comes from looking at rat fecal samples to see how much protein or nitrogen is leftover in the fecal matter. The FAO prefer from a quality standpoint to look at the ileal or the digestible ileal amino acid score, which is taken at the end of the small intestine, which is a better measure for protein quality. Now, this shows that pea protein is a very high quality protein. And this is why the FAO has declared that protein, the pea protein to be one of the few plant proteins that is considered to be like a real replacement from meat. So from the protein quality standpoint, it's one of the best.
And especially when we talk about these branched chain amino acids, which a lot of people in the health minded world look at these PDCAAS. Here, we have incredibly high above all thresholds scores when using this substrate. So I'm really happy that we're able to deliver that message. And when people take these products, I'm speaking about dairy not so much texture, but if they're using pea protein here as well, I'm expecting the same benefit there if there's enough protein in the product at all. So it's you know, you've got to have enough anyway.
Tommaso: Thank you so much. I love to be the most ignorant always and asking questions. So what is that? So thanks for sharing that with us. So, thank you for the question.
Let's bottom line this. Viral, Rosie. Okay, so let's start maybe with Rosie, do you want to follow up and keep on the conversation with Darko? Yes or no? Thumbs up or thumbs down? Thumbs up. Okay, awesome. So Rosie, will do an introduction to Darko.
And how about Vly? Vly to the moon with Anton? Two thumbs up. That's awesome and outstanding.
Viral, what are your thoughts? Do you want to continue a conversation with Anton?
Viral: Yeah, definitely. I love pea proteins.
Tommaso: Awesome. Outstanding. And how about getting some honey to the Vly milk? Viral, do you want to have a conversation with Darko? Yes or no?
Viral: Yeah, save the bees.
Tommaso: Outstanding, and my heart always flourishes when we can do this, you know, do quality, vetted, networking, right, stead helps each other. That's kind of the purpose to what we're doing. And well, thank you so much for your time. And Viral, Rosie, Darko, and Anton, congratulations on what you guys are doing.
I’d like to end our podcast always with a quote, which is actually a quote that I learned to craft over the last 20 years myself. It's my quote, which goes like this:
Tommaso: “Never forget where you come from, it keeps you humble. But where you come from, cannot limit you where you want to go.”
Thank you so much, team. Thank you so much Darko, Rosie, Viral and Anton. Thank you so much audience. I'll see you next time. Let's keep on innovating. Let's have a great rest of the year. Bye. Bye.
And this series is brought you by:
Awesm Ventures: A VC that unlike others, invests exclusively with and on behalf of corporations in fragmented industries. http://www.awesm.ventures
SiliconVal.ly: The Innovation institute focused on helping future-proof corporations in traditional industries. http://www.siliconval.ly .
This is a proteinX Series. http://www.proteinX.org
ProteinX and the pX Logo are trademarks of ProteinX Foundation. If you haven’t received permissions, do not use the ProteinX marks as your own or in any manner that implies sponsorship or endorsement by proteinX.
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