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    28 min read

    [S2:Ep #2] Two worlds in next gen foods

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    Next gen proteins have gone mainstream, but how can they fit in our diet? Check the answer watching this delicious conversation hosted by Tommaso Di Bartolo, founding partner of Awesm Ventures, panelists Paul Shapiro, four-time TEDx speaker, best-seller, entrepreneur and CEO of The Better Meat Co., Christopher Kong, co-founder, head of business development of Better Nature, Ltd., and serial entrepreneur Dror Tamir, Co-Founder & CEO at Hargol.

    Virtual Coffee: A Curated panel of industry fellows to discuss how to future-proof traditional markets

     

    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. 

    With Special participation of

     

     

    [Industry Fellows] Virtual Coffee: S2:E2 

    Paul 

    Christopher 

    Dror Tamir 

    ERon Shigeta, PhD
    Christopher Kong
    Dror Tamir
    CEO: The Better Meat Co. -- Author: Clean Meat -- Host: Business for Good Podcast
    Co-Founder & Head of Business Development at Better Nature
    Co-Founder & CEO at Hargol™ FoodTech Serial entrepreneur for food and healthy eating
     

     

    Host

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

     

    Key points: 

    • Protein that is good for people and the environment
    • Grasshoppers on the horizon
    • The future of blend protein
    •  How Covid has affected the alternative protein market
    •  Thinking footprints

     

     

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    Episode's 🔖 Transcription

     

    Future of proteins 

     

    Tommaso: Alternative protein is not just a trend but it's a demand from the market. Things are moving kind of slowly from two directions we see on one hand, a bunch of startups that are creating really innovation in alternative protein. On the other hand, we have corporations that are diving and jumping into this new demand that has been created from the market really and we don't see only here functional replacement for meat and diary, but we also see here, the innovation and labs around taste, texture and aroma, which basically is really reshaping what we understand under traditional foods. 

     

    I would like to pick up things, Paul, and picking your brain and carry some thoughts on the following here, a perspective that you have on: what is the future, what holds the future in terms of innovation and benefits when we talk about alternative proteins?

     

    Paul: If you think about the protein market right now, for a lot of people here, the word protein, they think about a hunk of flesh that came out of a once living animal's body. But to answer your question directly in the future, I think people are going to have a far more diverse definition of protein, they're going to think about proteins, sure from animals, but also they're going to think about proteins coming from plants. Proteins coming from microbes. 

     

    There'll be protein coming from insects of burrow has his way here as well. But we're also going to have blends and hybridization of proteins so that you'll see some proteins that are plant proteins combined with animal proteins to make hybrid products that are better than the original animal product was. That's what we focus on at the Better Meat Co., we make plant protein ingredients that we sell to meat companies for them to blend directly into their animal protein so they can have better proteins than if they're only coming from animals. 

     

    I think that many of the traditional foods that have been protein for people in other parts of the world, for example, in parts of Asia, like tofu and tempeh are also going to become more popular. We've seen an explosion in plant based meat, like meats that are designed to taste like plants that are designed like meat but I think there will also be a popularity in products that people have eaten for thousands of years in either like tempeh or in China, like tofu. I think those will become more popular in the West as well.

     

    Clean protein for us

    Tommaso: Chris, Beyond Meat and Impossible Burger with no doubt are one of the key players at least from a brand new perspective, from a marketing perspective, there is a lot of buzz around that. What do you see in terms of opportunities and challenges ahead of time, regarding the plant based alternative proteins?

     

    Christopher:  I think there's no doubt that impossible and beyond have done a fantastic job in really making plant based food industry super sexy. But there are still considerable challenges in terms of getting the market to truly adopt these foods as a staple into your diet. If we look at Beyond, you know, they're very proud of saying that 90% of their consumers also add meat products to their basket. But why is that the case, you know? Why do 90% of the Army's customers also eat meat, how do we move the needle towards that point, such that the people that eat beyond don't necessarily eat more animal based products. You know, for the betterment of not only our personal health also the environment and animal welfare. So I think that's a considerable challenge and you know what we do have Better Nature is that we create clean label based meat alternatives made using tempeh fermentation. 

     

    My hypothesis is that the way in which we will get people to adopt these foods as a staple is to make them as clean, and as simple as possible. I don't mean to sort of poopoo on Impossible Beyond I think they've done a fantastic job, but in trying to emulate the sensory profile of me as closely as they have, they've had to make compromises and perhaps the number of ingredients that they use and what types of ingredients they use as well. What we're doing is trying to create clean label meat free products that can be consumed as a staple because they contain ingredients that are just you know that anyone would recognize and not just a food scientist. That same experience in a way that is super clean, in a way that consumers can adopt as a staple and eat day in day out without feeling guilty because let's not forget that the number one motivator for the adoption of these foods is health. It's not animal welfare. It's not, you know, it's been tough. So, we need to definitely tackle that first.

     

    Tommaso: I think it's interesting you were saying you know clean versus, you're not saying not clean but more complex, is this a measure of the demand? How you mentioned the demand of one or more clean ones just to extend on this thought process.

     

    Christopher: It's very difficult for us to get key data from our customers. But if we look at, for example, the Mentales Report, lentils the alternative protein report that he published in 2017, and that report they said that 41% of consumers who were consuming plant based meat alternatives, were looking for cleaner alternatives for our tensors that were free from artificial ultra processed ingredients. And I think that demand is also reflected in the suit you know and the relative growth and a relative you know rate of growth in, you know? I guess tempeh and tofu and sort of more clean the alternative categories. 

     

    Grasshopping into the market 

    Tommaso: Dror, first of all, you're betting on alternative protein as insect as alternative protein? Why the grasshoppers?

     

    Dror Tamir: Well, I don't think we'd have enough time to explain why grasshoppers. I’ll try to give in the shortest possible. Let's start with the fact that 2.5 billion people across the world today, mainly in Africa, Asia and Central America are eating insects as part of the diet so that's about a third of the world's population. The most widely eaten insect in the world are grasshoppers. In many countries they are considered a delicacy. They enjoy very high demand and very high prices. Just to give you a number in Saudi Arabia, the grasshopper price called geog is $30 per kilogram. It is a bit higher than beef. So, there is an existing market and the only problem today is supply, because supply is based on one, a collection in the wild, which is limited to about four weeks a year. So we have an existing market, high demand, high prices and 11 months a year of no competition, so that's a good enough reason to start a business.

     

    Beside that, grasshoppers have provided a few more advantages, one is superior nutritional content the grasshopper is the animal as you see it contains over 70% protein, all essential amino acids and other nutrients that are essential for us. 

     

    Second thing, you asked about taste, grasshoppers are almost neutral tastes and flavors so we've made them the perfect ingredients. Following up with what Paul said, we believe in hybrid products, a crossover protein to a sausage or a hamburger, replace a portion of the meat inside and you get a healthier, more sustainable product and you did not change anything in the texture, in the flavors and consumers could just love it, and we have amazing sausages, made of grasshoppers protein. So on I can continue, I will have 10 distinct advantages, I can even tell you that growing grasshoppers is more humane than any plant that you grow and eat, because to grow the plants you have to use pesticides to kill the insects that come to it to the plant, meaning you kill these six in a nasty way, they're just being wasted in the fields, and they contaminate the soil, and the water sources. 

     

    The way we grow the grasshoppers we do not use any pesticides and fertilizers, we use all the animals that we grow 100% of them becomes a product, and even the way we harvest them is done in a humane way, we are following the recommendation of the EU minimal harm done to animals, cold blooded creatures who just drop the temperature they fall asleep. And then we freeze them.

     

    Blend protein

    Tommaso: Paul, I would like to pick your brain here, in terms of, you know, your perspective as an author, speaker and entrepreneur you brought the book, clean meat.. And what is your outlook for the next decade or something like that?

     

    Paul: If you look at the alternative protein market, you have what has been on the market for decades, so it should be first of all products like tofu and tempeh, which have really been on the market for centuries. Then you've got products that have been on the market for decades. So these are some of the first generation plant based meats like companies like tofurkey and so on, which are making products that at first were largely targeted toward vegetarians. That didn't necessarily taste exactly like meat but they were kind of meaty, and as a result you had vegetarians who could eat something that tasted somewhat like meat. Then you've got companies like Beyond Meat and Impossible Foods have really taken it to a next level and have tried very hard to mimic in all areas the taste and texture of meat. And this is what is currently exploding in the marketplace. But between those two companies that are leading the way but also other companies that are smaller and newer, and even in comments the morning star farms which have been in existence for decades now come up with Meteor. So to speak, products to get in on this market, not of vegetarians, but of meat consumers who simply want to have something that is better for them and better for the planet, and they're happy to not necessarily become vegetarians themselves, but every once in a while enjoy more plant based meat and less animal based meat. 

     

    Now, we are also seeing the rise of hybrid products, products that combine animal and plant proteins and so the plant based meat market is still a tiny little fraction of the total meat market.

     

    So if you think about, for example, plant based milk, it's 13% of all fluid milk and soared in the United States today is coming from plant based sources, but when it comes to meat, it's less than 1%, less than 1%. Whereas over 99% of meat that's being produced is still coming from animals. And so, if you want to expand the plant based space, let's say you want to expand it double or triple. That's a great goal to have for over the coming years, but you're still going to be at well over 95% of meat coming from animals. 

     

    There's a new trend to blend plant proteins directly into animal proteins that are the default products that most people buy. So as an example Perdue Farms, just one of the largest poultry producers in the country, makes a product called Purdue Chicken Plus, it's 50% Chicken 50% plant based. It's chicken nuggets, chicken tenders, chicken patties. These are sold in 7100 grocery stores, they utilize plant protein for me all from my company, the Better Meiko, and the Food Network, just named the best getting frozen chicken nugget in America, so food networks as the best tasting frozen chicken nuggets only 50% chicken and 50% plant based. That's a pretty strong endorsement of this idea of blending in that you're giving consumers something that is actually better. Yes, it's going to be there for the planet and better for animals and better for their health, but it's also just better, it's a better product from a sensory perspective as well. 

     

    In the future, we're also going to have cultivated meat, meat has grown from animal cells and does not in animal farms, and those products are also going to be blended. They're too going to be blended with plant proteins for a whole host of reasons including cost reduction. So, I see the coming together of many of these areas, plant protein, animal protein, animal cell protein and so on, all coming together to create a more diverse portfolio of protein in the future.

    Tommaso: Paul, to extend on this question are you seeing.. because we talk about the future, did you see the movement more coming from a startup perspective or do you see existing large improvements that are basically repackaging and strategizing again around this topic?

     

    Paul: I think it's both right now. So you do have an explosion of startups, like the three of us that are on this call today, but you also have the Tyson's in hormones and other and swift fields and other major meat companies that are releasing their own plant based meats that are investing in cultivated meat startups. Companies like Clara foods which are making egg proteins without chickens have investors like Ingredient, which is one of the biggest ingredient companies in the world. I know that their CTO Oban shigeta is on the call right now, he's a hero of mine and somebody who I really look up to as someone who's been a pioneer in space. 

     

    So you see lots of companies in the space that are either partnering with or and being invested in, or they're just having the big guys they've convinced as you say, who are participating in this field. But in the future I think that you'll see a lot of the larger companies probably buying up some of the smaller companies who have some that go all the way like Beyond Meat that go and create their own brand and go public. But even if you look at for example a company like before the butcher, which is a cool company in Southern California, and a large meat company they're only two, I think they're only two years old and a large meat company already bought a majority interest in their company. So I really think you're going to see more consolidation players.

    Tommaso: Chris, a question for you related also to the time that we are in, which is the crisis COVID-19. What will change coming out of the pandemic? What are your thoughts on this?

     

    Christopher: I feel like if I knew exactly what was going to happen on the COVID, I wouldn't be here I'd be sitting on the yacht sort of suntanning in the Mediterranean. But my personal tastes, and based on what we see, we've seen, we were seeing tremendous growth in the plant based protein on alternative segment in the US, as well here in the UK. You know, in terms of how the whole category is grown relative to other categories and supermarket chains, it's looking really really positive. I think if anything, what COVID-19 has done has really highlighted the negatives that have already existed, and widely about the meat industry, and has only just made that far more visible. Consumers are starting to take notice. So I think in the short term what COVID has done is boosted plant based meat sales and boosted I guess the profile upon these new alternatives. Having it from a long term perspective in viable or is already happening even before COVID. I think all the COVID has done is accelerate the adoption of companies beyond sensors. 

    Tommaso: Acceleration is happening that's awesome we see and also in other inner innovative segments or two iteration is definitely happening because of the crisis and it's a bit of a mentality of the entrepreneur also you know the markets but now intrapreneurs come up and then basically see this unique opportunity right and so to draw on, I was really curious to pick your brain on the following, I'm most confident and one of the most frequently asked question in your business is you know that yep factor you know I you know grasshoppers right. So how do you respond to that right and what's basically your... what do you tell consumers when they say “hum, I don't know”? Right.

     

     

    Dror: Of course the act factor is supposed to be the largest challenge we have in our business. And let's say we overcome the challenge to raise money from investors who grow grasshoppers, but I think that's actually your advantage. 

     

    Because when you approach a consumer, and you show these grasshoppers and you tell them that's good, that's the future of your protein, the emotion and reaction is so strong. I really don't care if they like it or if they hate it. They will never forget. So that's a huge advantage in terms of marketing. I'm just citing Guy Kawasaki from Apple saying polarization is what you need in order. So we got plenty of lightning in grasshoppers. However, personally I believe that in order to overcome the X Factor. What we need is to embed the grasshoppers into delicious tasty food products beverage and nutritional supplements emphasize on the health benefits and the impact or the minimal impact on the environment. 

     

    Besides that, we need to focus on niches in the markets where we can identify early adopters, that would be willing to try the products, and even pay very high prices, enjoying all the benefits that they provide for example, athletes. And those niche markets eventually can develop into mass market products. And I can tell you that something that is really surprising for us, we did not serve the whole grasshoppers we serve a wide range of food products to consumers over the past six years and every time they tasted the falafel or the sausages, or energy bars or protein shakes, they said “well, we can feel the grasshoppers inside, I want to try to read Russell for now”. So they were up for the challenge of drying the mold insect after they realize that it's not that scary.

     

    When you look at niche markets you try to offer consumers something that will actually make them want to try the product. And then what we are doing here we are actually using the theological story of the grasshoppers because they first appeared in the Bible, mentioned this notion. John the Baptist used to eat locusts with honey and local salt grasshoppers. And what we are offering is a biblical experience, enjoy the nutrition of John the Baptist, eat an energy bar with Israeli locusts, grasshoppers army and other biblical ingredients. You won't believe how high the demand is for such a product. As I mentioned, this follows with the demand for the old grasshoppers as well. We have many more products following.

     

    Questions from the audience 

    Tommaso: First question coming from Alex for Paul. How can sustainable food production scale to feed the world?

     

    Paul: Humanity's footprint on the planet is getting bigger and one of the principal ways that we leave that footprint is to our food prints primarily in the amount of meat that we eat. So we cannot continue scaling up the current methods of producing protein for people because we don't have any more planets. We're not going to start farming the moon or Mars or anything else anytime soon, so we don't have anywhere else to go right now. 

     

    In my view, is not necessarily how can the conventional protein market today sustainably scale up because the only way they're going to scale up is through deforesting more, cutting down the remainder of the Amazon rainforest, for example, and we don't have the capacity to do that. 

     

    "The real way to feed humanity sustainably into the future is to shift away from raising billions and billions and billions of animals for food and going to these far far less resource intensive types of protein production"

     

    Admittedly that's not going to happen overnight. Tempeh as an example, with Chris's product which I've tasted and is fantastic. I'm a huge tempeh consumer myself. I'm part of that tiny little fraction of people who eat, way more than they do plant based meat. The point is you know that's not going to scale up overnight, you're not going to go from less than a 0,1% of protein today to being, you know 5% protein tomorrow. But you are going to see increases in this and all gradually continue to cannibalize that protein market so that it's not just growing billions of animals for food anymore. And so it is a challenge to figure out how to scale these small scale technologies and to make them incumbent, but that's one of the reasons why I'm so excited that companies like Clara foods are partnering with ingredient, or perfect day is partnering with EDF and other types of partnerships between the startups and large companies, because who better to scale up the sustainable proteins, and the folks who are already huge today. 

     

    I'm in favor of that type of a collaboration between the big players and the smaller players to help the big players do better and help them shift from a model. For example, like Canon, which used to be all about film and now as a major digital camera manufacturer, they're still producing memories for us, they're still getting photographs for us, but it's just a very different way of producing memories. No longer are we relying on film and instead we're using digital. And these printing companies can continue being protein companies, they just don't have to rely on the same outdated and archaic methods of animal protein production that they've been relying on for the last decades.

    Tommaso: Christopher, do you want to add anything to that?

     

    Christopher: I think what Paul said is absolutely correct. The big question is how do you scale up, meaning it's not only a challenge how to grow a grasshopper, you have to think how you can scale up and actually be able to feed the world. So that's part of the challenges that startups face, and I also agree that collaboration with large companies will help us get to the point that we can serve more than 0.1% of the global protein consumption.

    Tommaso: Anything you'd like to add to Chris? Any thoughts? 

     

    Paul: My thoughts that have already been expressed, but if we were to think about it in terms of the like if we were to look at how inefficient meat production is compared to how efficient insect cultivation or self cultivation or plant based meat production is in relation. That is the only way we would be able to feed our growing. I guess food footprint.

    Tommaso: Let me switch gears here to John. If we aren't to live up to customer expectations concerning nutritional benefits to play we'll need to look into protein. So the question is, have a protein plan to plant based proteins from our mandate to provide a complete nutrition profile. Chris, that's pretty impressive, what are your thoughts about that?

     

    Tommaso: Let me switch gears here to John. If we aren't to live up to customer expectations concerning nutritional benefits to play we'll need to look into protein. So the question is, have a protein plan to plant based proteins from our mandate to provide a complete nutrition profile. Chris, that's pretty impressive, what are your thoughts about that?

     

    Christopher: In terms of a nutritional standpoint. If we look at tempeh specifically, as part of what we leverage the political process that we leverage and that nature. Tempeh is itself a complete source of nutrition and as about 20 grams our tempeh is about 20 grams of protein per hundred, which puts it on par with smoked mackerel.

     

    So from a nutritional standpoint it's no problem. And I think if you were to speak to any of the other speakers here to tell you that you can get, you know, the same if not better nutritional profiles by leveraging plant based or insect based, specifically because you can engineer the product in a far deeper far more technical way. And you can do with the live animal, you know, there's only so much you can do in terms of breeding right or selective breeding. Whereas with the technologies that rolled over 18 year old speakers here and leveraging, we can specifically engineer because specifically highlight, or reduce certain nutritional compounds that we want in our own products.

     

    Paul: Yeah, they're particularly an entirely complete amino acid profile plant based food. It's kind of like soy itself. Most people are fiber deficient. Most people are not protein deficient in the developed world. So, meat has no fiber in it, plant based foods generally do have fiber in them. So, yes, protein is very important, but neither you nor anybody you know is protein deficient, we're probably, you and nearly everybody you know, is fiber deficient. Because in the developed world, you have rates of fiber deficiency that are often over 90%. So it's important to think about things like protein, but I think we should focus on where the bigger problem is, which is a lack of fiber in people's diets, especially in the United States. And one of the easiest ways to get more fiber which is associated with much lower rates of all types of diseases of affluence is simply to eat a more plant based diet.

    Tommaso: I'm curious also to hear your perspective, Dror. The question was about blending nutrition to get more nutritional profiles and what are your thoughts of blending with insects. Is this something you guys are thinking of? What's your perspective on that?

     

    Dror Tamir: I think Christopher mentioned it exactly as we see it. It doesn't matter how much you can improve the beast. It will never get to a level that you are nutrient content as the alternative proteins we are discussing. For example, you know, grasshoppers have three times more protein than existing in the animals today, even four times more. So it doesn't, you can't get to that level. It's so much more efficient to produce it. It is being better absorbed by our bodies, so these new alternative protein sources provide us an amazing opportunity to improve the health of the population.

     

    Finding inspiration

    Tommaso: Where do you get your information and inspiration? Could be a blog, podcast and a book that is around innovation insights. If you would like to share with the audience, a really quick answer, maybe you know the name of the podcast or the book that you would like to share, maybe we’ll start with Dror. Dror?

     

    Dror Tamir: Actually we have a podcast in Israel, “Following History”, and you won't believe how much startups and innovation is coming out of that podcast. 

    Tommaso: Chris, what's the source of information regarding innovation for you?

     

    Christopher: I listen to “The Plant Based Business” podcast. It's published by a company called Evolution. They are based here in London, and they interview some of the leading vegan startups. It's great to hear their stories about how they've overcome adversity and how they've continued constantly innovating throughout the years. 

    Tommaso: And Paul, what's your source of inspiration?

     

    Paul: Two things to master. So first, I am very privileged to be part of the "Business for Good" podcast in which I interview startups and businesses about their stories and how they have overcome obstacles, built resilience and created successful companies. In addition to that podcast, I also have benefited immensely from just talking to the community of entrepreneurs in the alternative protein space, which really in my experience, so many of the people in that space don't view themselves as competitors with one another but really as a community of collaborators trying to do the same thing. So in my own journey with the Better Meat Co. in the last two years, since co founding it, we have been helped by so many other startups in the space who have been so generous with their time and their insights to help us figure out just the basics of running a business, let alone, actually trying to succeed, so I'm grateful to so many of the startups in the space that have offered their, their wisdom to us. 

     

    Tommaso: With that, I would like to thank you so much, Dror and Chris for joining us on this Virtual Coffee, it was really a pleasure. And I always like to round up and wrap up the episode with my quote that I learned to craft over the last 20 years for startups, which is:

     

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

     

    So let's innovate together. Thank you so much guys, see you next time. Bye bye. Ciao.

    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   

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