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    28 min read

    [S2:Ep #5] Leading-edge animal feed and startling plant-based food

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    One thing is knowing where the meat comes from, another is what animals are fed of. Tommaso Di Bartolo, founding partner of Awesm Ventures, along with industry fellows, Hon Mun Yip, Senior Advisor to Chairman & Family Office | Plant-based Protein | AgriTech | Food Tech, Adelmo Monsalve-Gonzalez, PhD, Associates & Partner at CJB and Associates, LLC, hosts two passionate game changers in alt-protein: Martin Zorrilla, CTO of Nutrition Technologies, and Smith Taweelerdniti, co-founder and CEO of Let’s Plant Meat.

    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:E5 

    avatar-26

    avatar-28

    Hon Mun Yip
    Adelmo Monsalve-Gonzalez, PhD
    Private Investor in a US Plant-based Meat Company. Investing gut microbiome and sustainable packaging pioneer
    Associates & Partner at CJB and Associates, LLC
     
     

    [Startup Entrepreneurs] Topfloor: S2:E5 

     

    Martin

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    Martin Zorrilla
    Smith Taweelerdniti
    Director of Research & Development at Nutrition Technologies
    Innovator & Entrepreneur in Food Processing Industry
     

    Host

    TOMMASO-AVATAR
     
    Serial entrepreneur w/ 2 exits, author, advisor, faculty, investor.
     
    http:///tommasodibartolo.com 
    Tommaso Di Bartolo
     
     

     

     

    Key points:

    • Crickets: a great horizon of opportunities in a growing market worldwide
    • Standing out in the shelves as “clean protein” is the way to go
    • Innovation and automation are key to promote next gen proteins growth

     

     

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    I want to listen 🎧 to the episode's podcast

     

    Episode's 🔖 Transcription

    Tommaso: Hello! Good morning for those here from San Francisco, and obviously, good evening, or good afternoon, depending on where you're tuning in from. We already have our participants, our jury and our entrepreneurs with us. Thank you for joining Martin, Smith, Hon Mun and Adelmo for joining us. Awesome...

     

    I would like to kick off things by introducing from left to right, our amazing participants, our great entrepreneurs and startup founders that we have here, let me kick off things with Martin Zorrilla, CTO of Nutrition Technologies, and Smith Taweelerdniti, co-founder and CEO of Let’s Plant Meat; our jury, with Hon Mun Yip, Senior Advisor to Chairman & Family Office | Plant-based Protein | AgriTech | Food Tech, Adelmo Monsalve-Gonzalez, PhD, Associates & Partner at CJB and Associates, LLC. Thanks so much!

    Tommaso: Martin, are you ready to rock this stage virtually? Let's do this. 

     

    Martin: So, the company I represent is Nutrition Technologies. I am the Chief Technology Officer there. I joined as the fourth employee, very early on in 2014 when the company was starting. We have grown exponentially since then, to become one of Southeast Asia's top insect protein producers, which is a relatively niche field, but a very exciting one to work in. I'm going to share with you some of our details about our company and our challenges. And what we see as the opportunities in this sector. 

     

    The basic premise here is that we are working on issues of food security, right, the greater context is that by 2050, the world will need to produce 56% more food measured by prep kilocalories, and we need to do that without the style of agriculture and livestock production that has led to us, using more than half of arable land or agriculture, right, which is the current situation. And we need to do this to feed a population of nearly 10 billion people by 2050, the context that nutrition technologies works within is animal feed, and it's an interesting topic, especially when we're going to speak more directly about human food consumption of protein alternatives, because I think animal feed is this behemoth, it's this massive underlying industry that supports the food supply chain, but is a factor that very few consumers actually think very much about in their day to day life. So for context, 40% of arable land is dedicated to feeding animals, the animal feed industry has enormous consequences on the use of land on Earth, on the environmental impacts of our activities as humans, the greenhouse gas emissions, and it has enormous economic repercussions very small changes within animal feed can have enormous political and societal changes, but it's something that we often don't speak about very much when we talk about sustainability or agriculture, or food or protein. 

     

    The part of animal feed that our company focuses on is protein. And the reason is that there is a enormous need for additional sources of protein and animal protein gap is what is called is about 150 million tons per year, meaning that the animal feed industry is short on protein, and in particular the animal feed industry is short on high quality animal products like soybean meal are viable for certain species but are not viable for an enormous section of the market, which includes a lot of agriculture. So agriculture species require higher value proteins, more nutrient dense, particular amino acid profiles and the predominant source currently is fish meal for that aquaculture protein. Now, fish meal has an enormous problem, right, fish meal production is going down over time. And it's also a kind of maddening inefficient use of resources to go out and fish wild fish in order to produce a protein product to feed the farm fish. Studies have shown that the majority of the fish that we use for fish meal is fit for human consumption, so it is an enormously inefficient use of resources, however, aquaculture itself is one of the most efficient ways to get animal protein for humans. 

     

    The goal of nutrition technologies is to close the protein gap by supplying an efficient, high quality protein source that is sustainable, both economically and environmentally. In the animal feed sector. The aquaculture industry is particularly reliant on fishmeal as I mentioned, and Asia is really the center of this problem. Asia produces more than 80% of the world's aquaculture, but imports almost all of their ingredients so countries like Vietnam and Cambodia, have huge aquaculture production, but they have some of the highest cost aquaculture feeds in the world, and for smallholder farms and for production areas. This is devastating for farmers, and also creates a lot of inefficiencies because they're importing soybean meal from the Americas and fishmeal from the Americas. What we hope to do is to create a local source of insect protein. We believe insect protein can cover at least half of the protein gap. It's a high quality product that can be produced from. In our case, from industrial food waste, meaning pre consumer factory grade food waste. It has a huge market potential to replace fish meal. It's one of the only ingredients that is able to replace fish meal and species like salmon to 100%. There's practically no other ingredient that can do that. So it presents a viable solution for the aquaculture industry and for the animal industry moving forward. 

     

    The environmental impacts of switching to insect protein are huge, we as a company, produce black soldier fly protein. Black soldier fly is a remarkable species of fly. That is non pathogenic doesn't transmit diseases, and it can eat a huge range of organic wastes. So we're solving two problems in one: we're reducing the burden on agricultural land, we're reducing the burden on fisheries, and we are disposing of organic waste in a way that then creates further value. This reduces the burden on landfills improves ocean health and decreases greenhouse gas emissions, compared to traditional proteins, and the ocean health one is I think a really important one, especially in Southeast Asia where you do have a very serious problem in the misuse of Fisheries or fishing. In particular, in countries like Thailand, you have a huge problem with the use of trash fish for fish meal that supports the local agriculture industries. So we see the use of insect protein as a, as a major way to change. And fundamentally shifting the supply chain behind animal feed the efficiency that insect protein offers is one of the major benefits. So if you compare it to soybean production in our factory in Johor Bahru in Malaysia where our company has its facilities, we prove we can produce more protein in one square meter of factory space than the entire Hector of soybean field in a year. So you imagine if you scale this industry up, how much it can change the food supply chain. 

     

    Our company started as a concept in 2013 in Sierra Leone. The company was founded officially in 2014 in 2015 in Vietnam. We did an r&d stage and in Vietnam then scaled up to Malaysia, where we built our first pilot facility, a scale up facility, and now we are on our third, and finally commercial stage production facility in Johor Bahru at this moment we are installing machinery in this facility. So it's a very exciting time. And we hope to have that fully operational at full capacity by the end of this year, early next year. The model that we operate under is that we collect organic byproducts from farms and factories. So these are the byproducts of processing food processing centers for agricultural products. We then breed and produce our own flies larvae, which can grow and consume these organic byproducts. The Fly species we work with is remarkably efficient. You can take a newly hatched very small larvae and grow it to a full sized harvestable insect in seven days right so you imagine you had a swine poultry that you could grow to full size market value in, in seven days, the efficiency that insects represent is a huge part of their appeal here, we grow the fly larvae, and produce our protein product to 50% protein product we produce a frass product which is our mechanics oil amendment and the oil, which can be used for a range of things but the primary market.

    Tommaso: Fascinating. Thank you, Martin! Adelmo, what is your question for Martin?

     

    Adelmo Monsalve: How do you approach challenges in allergenicity between insects and shellfish?

     

    Martin: An intriguing topic is the cross allergenicity between insects and shellfish. So, essentially people who have an allergic reaction to shrimp, or crabs will have an allergic reaction. Although the science indicates it's a lot less intense to insects. And the reason is because the composition of the insect cuticle contains as you mentioned, compounds that are synonymous with or the same compounds with crustaceans, it is important to take this into consideration and insect production and to ensure that the processing facilities are aware of this, allergic potential, and that we track this throughout the supply chain, however within animal feed, it has not presented itself as a problem, so far as far as worker safety. In general, people with these kinds of reactions, it's a reaction that presents itself upon ingestion, right. So if you eat insects. We have not had the industry in general have not reported any issues with kind of airborne reactions, or anything along that scale, but we are very careful in particular with the processing steps, where the insecure girl, you know, has any potential to come into contact with people. And we're also in close communication with our clients about these potential allergic reactions.

     

    Hon Mun: I have a few cases where I just want to focus on the choice of black soldier for Friday right. Why did you choose that and then how much study is actually done before you decide on commercializing using black soldier fly?

     

    Martin: Yeah, so it's interesting because there are a lot of options right there close to a million described species of insects and diptera flies alone have nearly 3000 species, but most of the insect industry has actually coalesced around this one species, the black soldier fly. The primary reason is that, if you look at the fundamentals of the insect. There are three things that really helped it become the insect of choice so far. One is that it can eat a huge range of organic matter. Right. But this ranges from manure to awful to, you know, the byproducts of biscuit making it is not picky right which is very helpful if you're looking for low cost inputs. The other one is that they are an insect species that thrive in groups, which isn't true of most insects, black soldier flies are a little bit like herd animals they will not eat and will grow very slowly if you isolate one and put it into a large area with plenty of food, it won't actually be happy it needs to have a very large group of conspecifics so that they can process and eat the food together. There is a lot of complex interaction that happens within black soldier fly feeding that the industry doesn't understand quite yet, but that's very helpful if you're trying to produce large quantities of the insect. You don't want them to get diseases you want them to thrive in high densities, it makes it an ideal insect and the other one is they develop quickly so compared to another insect that is chosen by other companies he is the to neighbor a molecule or a beetle species but the development rates are just slower and every day that you gain in development time makes a big difference on the bottom line of the company. 

     

    Hon Mun: I just want to follow up with that quick question on the study done on black soldier fly. So, we're talking about Malaysia, Southeast Asia and so on. Is there a thorough study done on the effect of black soldier flies on the ecosystem, in case one of them escapes or the escape, you know, that kind of environmental study...

     

    Martin: Yeah, it's a very important topic, the benefit of the bike soldier fly is that it is naturalized to countries like Malaysia and Singapore, so it is found in large populations naturally within the ecosystem, you're not bringing anything in, when we developed our Malaysian colony, we used Malaysian black soldier flies from the local area, so it's important, it is important to manage the genetic and the genetic diversity of black soldier flies and be very conscious that escaped black soldier flies could potentially shift that genetic pool so we are very careful of that. And as the larger group companies in Southeast Asia are trying to cooperate more on sharing genetic information to make sure we're tracking where black soldier flies are coming from and if they're leaving our facilities. But in general, you know, one of the benefits of this species is that it's ubiquitous across the tropics and much of the rest of the world. 

    Tommaso: Thank you. Martin, as a startup guide, you have to always balance multiple plates at the same time. And then it's all about taking the right decision at the right time, it could be crucial right. On one hand, the guys are concentrating on the generating IP, and our unique selling proposition on the product side, but customer centric perspective. Once your product hits the shelf, and you're planning to go to market, I guess the question here there is, how are you unique in your go to market, what what are you thoughts on doubling down on at scale because next gen protein is a wave there are many many players on the market and take in alternative protein, and variety of methods right how you guys you need, what is use in your motherboard?

     

    Martin:  Yeah, so, I think some companies that have moved to tech production because the r&d phase is so intensive, they will stay in r&d production for several years before they go to market. We actually have gone to market already with our product. So, at our pilot facility that we started in 2018, we actually produced enough product to sell to small feed companies in not only in Malaysia, but we've also exported to Japan and Taiwan, and South Korea, so we have the experience of actually you know going through the full process of taking our product to clients, and getting feedback from them, putting this into the aquaculture American sub three in particular, so we we've gained a lot of experience early on, which I think is massively helpful for us as we then use that feedback to tweak our production system, as we move forward to more commercial scale quantity etc We are looking at you know obviously expanding that marketing strategy and supply chain, and as far as what what makes us stand out as we really target the commodity products, right, being in in Asia means that you're, you have to be price conscious and the majority of other insect producers are based in countries in Europe and North America, and they are able to, and I think need to produce products that are priced well above products like fish meal, and you know this this may change over time but for the moment, our competitors place their products within niche markets like sustainable pet food, which is a you know very lucrative segment of the animal feed market or, you know, very specific uses in aquaculture being in Asia means that we don't necessarily have the luxury of doing that but it's also not our strategy, we want to create a viable solution for the fish we have problems that we have in the animal feed industry. So we price our product to be competitive with fish meal, and we go to market to major feed companies and major centers of aquaculture that use that fish meal. 

    Tommaso: Awesome. Thank you so much Martin thanks for allowing us to pick your brain. Now, Smith, are you ready to rock the virtual stage?

     

    Smith: I sure am. Thank you. My name is Smith Taweelerdniti, co-founder and CEO of Let’s Plant Meat, a startup company from Chiang Mai, Thailand that focuses on research, manufacture & build rapid growth of plant-based meat. We had a very fast entry to the market in Thailand, getting our first product to local market shelves in our first year.

     

    Traditional farming stimulates pollution and leads us to climate change and environmental problems. If we were to continue eating meat by the levels we consume today, breathing this level of pollution, we’ll soon face serious health issues in addition to climate change and resource scarcity. We can change this perspective by promoting the employment of lasting solutions in the food system.

     

    Two years ago, I became vegetarian, just to learn about the industry. I found very limited offers in terms of viable alternatives that mimicked the flavor, looks and texture of meat from traditional sources of protein. When quality and pricing are adequate, we create a new perspective for adoption of next gen proteins everywhere. Alternative protein startups need to work in their appeal to consumers. Recently, I’ve seen high priced plant-based burgers (from Beyond Meat and Impossible Burger) in supermarkets here in Thailand. We must make a bold movement in order to bring prices down and stimulate people to eat lower in the food chain. This is necessary, actually. Our planet claims for it. So, we are focused to make affordable plant-based food, make it suitable and then more likeable to the taste of Asian consumers. This is where I see the big opportunity here. It is unfortunate that Asian companies go through such pain to offer their products in potential regional countries around Asia. Today (2020) we are present in nearly 100 market chains and handpicked independent stores throughout Thailand. We are working on a cool manufacturing facility in central Thailand to produce burgers and aim for exports.

     

    What if we can ship or send the culture or the heritage of Asia, in the, in the meat recipe to the world. This is something where we can also offer and then people can choose it because it's better for the environment to create and also that uniqueness they want to drive and see more from a sustainability point of view, we want to create that message that resonates with the people who are parents concerned with their kids nutrition and health. A more sustainable food system.

     

    Now I don't live for myself, I live for the world that my son needs to live in. So, whatever action I can do, like recycling, bringing the fabric back to shopping, this is the thing I want to do now we offer meat that could help sustain the world. This is something where we want to tackle and create a message that could be accepted by law consumers and mainstream. 

     

    Hon Mun: Please, quick, quick question... Impossible Foods is well-known for having something called soy leghemoglobin, found in the root of soy plants, which is essential “artificial blood”, made from genetically modified soy. So, they have something that. Yeah, they have some strong tech behind them. Everybody knows that. So, what kind of tech or IP does Let’s Plant Meat have?

     

    Smith: I think we're scratching the surface, from the outsider to become an insider. And we see that we need to put our stake to some certain vertical on tech as we want to add some proteins extrusion processes where we can create and manipulate the protein texture and structures to create the mouthfeel, or the toughness to mimic meat from traditional sources. We are looking at how we can extrude and manipulate raw materials to create something that looks, smells, tastes and feels like meat, fat or skin from animals. In general, Asian cuisines use a lot of different parts of ingredients to prepare many different things in their kitchens. So, we are going deep into the level where we manipulate protein This is something that we are starting to do. This is where we want to create a solution tailored specific to the Asian, and grow it from there. It's where we want to create the texture. The appearance and looking, and then the taste... So, we are on track to create and develop tech / IP in this key area.

     

    Hon Mun: Let me ask one more question... What does success look like for your company? Is it getting acquired or an IPO? What is a key problem that you are working on to solve?

     

    Smith: So, I think an acquisition could be more reasonable to project. I want to lift a Thailand-based company that could create an impact in health, nutrition and the environment. I hope that we can be an inspiration for a lot of people to do the same thing. In environment and sustainability, it doesn't matter who will win in the market. If you create the market, that is better for everybody. We want to be a part of such a movement, hopefully being able to provide some experience similar to the yummy, but at a lower price. 

     

    Adelmo: Smith, you mentioned that your company is about innovation. So, in terms of innovation and you're doing some study or looking at different sources of protein besides soybean, or a deep dive in terms of functionalities and properties you might be able to use in order to mimic texture, very important as well as flavor and the whole experience... Also sustainability, which is a key factor of growing importance for the industry and among consumers worldwide… So, again, in terms of innovation, what is your company focusing on, and where you want to be 5-10 years from now? 

     

    Smith: So, looking at the source of protein is one thing but the way to manipulate proteins to create a better structure the translucency or the toughness, or even maybe to create something that I think we want to pursue something on like the effects layer, where is not now we have my data like coconut oil or sunflower oil rice bread how to do that but it's in the liquid form... How can we encapsulate that in depth texture that similar to the fabric, or the lot of the adipose tissue from the animal is something where it could be interesting to create, and then one of the things that could differentiate something that I don't want to be perceived as a “me too” company. That is a key to start, but we want to create integration on the Asian based recipes that determinate attention and ratio that we could do from no nothing to a burger to commercialize which is super like get ready in a year, and we are leveraging the experience of the food industry that we have, and then we want to create recipe manual that could be love, a light and create the impact for the Asian market, and 10 years from now, we want to be the food that can be purchased in Asian markets and abroad as a viable option from the perspective of nutrition, health and sustainability. 

    Tommaso: Awesome. Before we move to the questions from the audience, Smith, what are the biggest challenges you have?

     

    Smith: So, the challenge right now is I think the market on the weekend alone is too small to cross the aisles, to the mainstream. I think is either to use a new strategy like the health benefits, or like maybe the performance benefits or the sustainability benefits so I think the communication must be done at some point, and the London obstacle come through the sticker price, wherever you go to shopping, people shoes and during the COVID-19 letting the spending is the key issue, maybe the forego that trying to deal with even though it's good for them, but maybe the price there maybe like twice as high. I will say that even though we are cheaper than we are made by a half but there is still more expensive than the option they could buy from them, it means pork or minced chicken. This is a lot of steep hill to climb on to make it more affordable logistically on the production point of view, and the team you're restarting with the three people and we want to grow by using the Navy legs, the connection that we have. 

    Tommaso: Today (2020) you’re a team of three. How many Scientists?

     

    Smith: Yeah. I mean, you know, food scientists are focused on food. We have three co-founders, being two Scientists and one Engineer dedicated to the business part of the company.

    Tommaso: Well, thank you so much! And now we'll switch to the questions from the audience. I’ll go chronologically... Rebecca started early on and asked what scale up so low cost flight in India, Africa and South America, in reference to world's food security in 2020?

     

    Tommaso: I don't know who wants to take it... Martin or Smith? any thoughts on that?

     

    Martin: Yeah, I think it's an interesting year to talk about insects protein, because we have the locust plagues in much of Africans of America, and there's definitely an opportunity there that I think some people are very focused on, and both using a huge amount of high quality protein that these locusts represent. Even though they're a huge threat to agricultural land, reinterpreting locust as a source of free protein is potentially a very viable strategy. So, Kenya has a center of research on entomology and a leading research center for black soldier flies as well. And they've come out recently with a series of recommendations and approaches to using locusts as a food source for both species like ducks but also for human consumption, they're producing these kind of neat like backpack vacuums where farmers can use them to vacuum up the locusts, and then sell them in local markets for protein. I think the more the world recognizes the value of insect protein, the more we can support this kind of shift in thinking where we take a threat like locusts and manage it to reduce the effect on cropland but also use it in a positive way.

    Tommaso: South America is the center of diversity of the genders right and on the other hand, here we have kind of a risk concern... What are the precautions?

     

    Martin: Black soldier flies are not an exotic species in the traditional sense in any of the places where they're produced industrially. So, particularly in Brazil, the black soldier species itself is widespread and very common. If you're a farmer in Brazil, you may not have seen it because they're not like houseflies. They're difficult to see in the adult form, but they're a dominant part of the insect ecology in South America. So, you know, obviously, there's no risk of being introduced to exotic species by farming black soldier flies themselves, because they're also in the rest of the world. They're not native but they're naturalized, which means they've been in those ecosystems for hundreds of years. There's actually evidence that black soldier flies crossed over to Europe. In one of Columbus's first joy voyages back from the Americas, and the term naturalized essentially means that they're non invasive species. So, they have adjusted to the local ecosystem. And it's important to keep in mind that these are beneficial insects, right... So, these are not predators, they're not parasites, they don't transmit diseases, they actually help us to break down organic matter. Their role in the ecosystem is not negative. Even in places like Malaysia, they've been around for hundreds of years. They're ubiquitous in the environment, they're not considered an exotic invasive species. 

    Tommaso:  Awesome. Thank you, so much! And without further ado, Hon Mun and Adelmo, what are your thoughts on meeting, Martin. Is there any curiosity to have an extra conversation yes or no?

     

    Hon Mun: Yes, definitely.

     

    Adelmo: Sure.

    Tommaso: Last, but not least, what are your thoughts on Smith? Do you want to follow up and meet up again?

     

    Hon Mun: Yes.

     

    Adelmo: Yes.

     

    Tommaso: And this is beautiful to hear because you know and our mission is really to connect the solution, and industry fellows and, you know, we have achieved that. It was such a pleasure to have the possibility to learn with you, and from you, our intent to create connection with TopFloor. I think we managed that today. I would like to wrap up with my usual quote: 

    Tommaso: “Never forget where you come from, it keeps you humble. But where you come from, cannot limit you where you want to go.”

     

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    And this series is brought you by:

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    SiliconVal.ly: The Innovation institute focused on helping future-proof corporations in traditional industries. http://www.siliconval.ly .

     

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