Latest / FoodTech Stories / Can Pet Food Be a Gateway for Cultivated Meat? with Meatly’s Owen Ensor
Transcript
- 261020 foodtech ep42 ensor v1: Welcome to Food Tech Stories. I'm your host, Megan Thomas, a marketing and communications expert who is focused on how emerging technology is adopted in food and agriculture. On each episode, we talk with leaders, innovators, and storytellers who are shaping the future of our food and food system. If you value our content, please consider subscribing. My guest is Owen Ensor, founding CEO of Meatly. Welcome to the podcast, Owen. Great to be here. Thanks for having me. Looking forward to talking about cultivated meat and pet food today. So Owen, how did you start your career? I have a very interesting career background. So I started off I was brought up in Edinburgh. I was dyslexic, which meant I wasn't very good at English, but I was quite good at maths. Growing up in Edinburgh has a big financial industry. So when I left school, I started working in a bank. It was one of the most horrifically boring experiences of my entire life. Who are these shareholders and why should I care about them? That led me down a path of wanting to have impact and wanting to do interesting things with my time. Those include studying international relations, mainly African studies. I lived in Kenya for three years and ran an insect protein business. Interesting. I lived in South Africa and did some political consulting. I worked in Nigeria and Ghana doing management consultancy and then I ended up in Silicon Valley, starting a company with my friend who was doing her MBA at Stanford. Did the whole Silicon Valley VC experience as well, which was very interesting. And after that, this was about twenty nineteen, I came back to the UK. And one of my key learnings was I need to do something that I'm really, really passionate about. Alternative proteins was exploding at the time. I think beyond me and Oatly, it just IPO'd, everyone was scrambling to launch the next plant-based product. By that time I'd probably been vegan five years. And so I was like, this is the moment. And that's what got me into alternative proteins and and what I'm doing now. I was working in the plant-based sector in twenty eighteen, twenty nineteen, and it was the hottest thing going at that time. It's an exciting moment. It was. It it it did not get back there. It did not play out. The story's not finished yet. It is not. It absolutely is not. Europe is very different from the US as well in terms of how things are playing out. When I get the chance to meet listeners to the podcast, they often mention the quality of the production as one of their favorite parts of the show. That praise is due to the team that edits the show, TJ G Media. Their team works with the raw audio files of each interview to enhance the quality of the sound, minimize external noise, and cut out the natural pauses that occur in conversation to create each fast-paced episode. Plus, they create engaging short-form videos to promote each episode on social media. Visit tjgmedia llc.com to find out more. So, what brought you to start Meatly specifically? I tested out a few different ideas and we're looking at a few different areas. I was really interested in cultivated meat, but I have no technical expertise whatsoever. So I was like, seems ridiculous of me to try and start a cultivated meat company. And then I got approached by agronomics and Jim Mellon, the founder of agronomics, has a long history in biotech and is a very successful investor. He also has seven dogs. He kind of wanted to create something in cultivated meat. Agronomics had done a lot of investments in cultivated meat. But saw pet food as an opportunity, not just for him to feed his own dogs cultivated meat, but because the regulatory pathway is different. So there's no normal food regulation, the product format is simpler. And so he saw this as a fast way to proceed. And he approached me and I thought this was a great idea. And working with agronomics would be fantastic. And then I was very fortunate to bring on our chief science officer, Halder Cruz, who is exceptionally experienced. So he has a PhD in biochemistry and an MBA. So it's a very rare Yeah, that is a commercially minded scientist. Then he has twenty years experience running his own cell therapy startups. He was at MOSA Meat for a few years. He's the guy who's been able to put together our team, our lab, and unload the success that we're now building on. Do you have thoughts on why others in the space haven't gone into pet food and have chosen to focus on human food? It is a question that confuses me every day because it seems like such a natural starting point. The downside is that the price point is much lower. So you have to be a very, very confident in your ability to get the cost down. That is off-putting for a lot of people. And they say, let's start with premium sushi cuts or Michelin star restaurant grade products. For us and for the whole industry, like we want to make this mass market. This needs to be a mass market product. We have to get it out there. And so aiming at a price point which is five or ten pounds per kilogram is the price that we need to get to. For us, it's always been, let's say for five pounds per kilogram, we're selling pet food and we need to get there. And that's really driven us to be reducing costs every single day in every area that we can address. And that is the holy grail in food tech, getting your unit economics right and hitting the volumes you need to make a go of it. Very interesting. How are you going to market? So we sell B2B to pet food manufacturers. So we sell chicken to pet food manufacturers and they can formulate that into whatever products they want, treats, wet food. Dry food for cats and or dogs. That's how we'll start. Primarily based in the UK. So we are registered in the UK. We have authorization to sell product here. And then potentially Europe and North America very soon after. And we chose the B2B strategy as very intentional. We saw a lot of cultivated meat companies try to build the tech on one hand and the brand on the other. And those are two entirely different businesses. Both are quite capital intensive, the tech more so, but even building a brand takes a lot of marketing and a lot of expertise. We were founded five years ago, just after the hype cycle. The capital wasn't there and nor was my enthusiasm for doing both of those things. And I thought just focus on the tech and get the cost down and sell product and make it profitable if and when we ever want to get into branding. But also there'll always be companies in the world that are better at selling pet food than we are. Mars and Nestle have been doing this for a hundred years. A lot of the startup companies are really, really good at it. And what we're really, really good at is growing cultivated meat very affordably. And there were a lot of companies who were focusing on a both the tech and the consumer business, right? That was the playbook until it wasn't. So it sounds like you came in right after that. So you would have launched then during COVID, during lockdown. How did that shape how the company grew? I think for us it was kind of the tail end of COVID. So we didn't get caught too badly. We have been very focused on RD. And so we're mainly in the lab. The team is still very small. It's eight people, which is seven incredibly talented, intelligent scientists and myself. So everyone is in the lab just doing RD. So it hasn't constrained us too much in that way. But yeah, we were fortunate to what I describe as a wave two cultivated meat company. So we were able to learn a lot of the lessons. The industry is still very young. We started ten years ago. The questions we've answered in the last ten years are significant. And now there's a lot of Alignment on a lot of these nitty gritty technical questions. Should we be growing in suspensions? Should you be growing with immortal sound lines? Da-da-da-da-da. Now which are just table stakes and and everyone knows how we should be doing this more or less. And it's just getting the cost down and scaling up. There's a lot of clarity in the industry about how we take things forward. Got it. What can you share about the technology you're utilizing? We have developed a lot of it ourselves in-house. The challenge with cultivated meat is that it comes from the biopharmaceutical industry for vaccine production and cellulotherapies, which are very low volume, high margin products. And we need to flip the entire economic bottle into a high volume, exceptionally low margin product. That is no mean feat. But we started with the media, so the nutrients we're feeding the cells, these are amino acids, minerals, vitamins. In biopharma, they can be about 700 pounds per liter, and you get out about a gram of cells. From that 700 pounds. And that is where you get the economics of it's a million pounds for a burger or whatever those first kind of products were. We managed to dramatically reduce the cost of that media. So instead of being 700 pounds, we're currently at 22 pence per liter. So dramatic cost reduction. We're going to continue that journey as well. And then on other pieces of technology, so Helder and I had a now famous meeting where I'd built out the perfect financial model, projected what it was at 22 pence. And I was like, it still doesn't work. Because the equipment is far too expensive. And not only are we going to have to raise a huge amount of capital, which isn't there anymore, but the depreciation is going to kill any true profitable company. If you want to be EBIT positive, it's not there. And so we developed our own low-cost equipment as well. So we have equipment which is 10 times cheaper than traditional equipment used in biopharma. And so really it's just been an iterative process of addressing the biggest cost hurdles that we've seen to just continuing to do that. And what's really exciting about that is not only are we reducing the cost of Cultivated meat, but all of that technology can be used back into biopharma to reduce the cost of vaccines and cellular therapies. That is one of the long-term hopes of what we're doing. So, how would you say that your background in consulting in Silicon Valley has informed how you've taken on the CEO role? Did that point of view inform that in some way? It has given me and us a real relentless focus. It has been very, very clear to me. what the priorities are and where we need to focus. That mixed with Heldra's expertise on the tech and also being commercially minded does mean we've always been 100% aligned. In those first two or three years, we talked a lot about what we were not going to do. We're not doing other sell lines, we're not doing scaffolding, we're not doing brand, we're not doing the and it was just just focus. And we have had many opportunities where it's like someone's interested in licensing our tech or we're interested in licensing on someone else's tech. Maybe we should look at doing fish or someone mentioned they might want fat ingredients. Maybe we should do fat. And we're just like, no, no, no, no, no. So saying no to a lot of things is really critical. The focus has always been release a product and make profit. Then we can get into interesting side projects and interesting side quests. The reason Google can afford to give people 20% of free time is because they're at 80% margin. Once you have a profitable company, happy days and we can go into other stuff. But for now, we describe our strategy as just fast and focused. We found this relentless focus on the media cost, on the equipment and now we're on scale up and it's just Do that as fast as possible because the industry is out of time on interesting side projects. I do think that is one of the classic challenges for a startup founder is that you can be pecked to death by ducks. All of those little opportunities that sound intriguing but can derail you from pursuing your core objective. piece of early advice I got from one of our advisors at Pair VC in Silicon Valley was. Interesting conversations don't make a company. we were having lots of interesting conversations at at that time with that startup and and he was just like, But that's not how you build a company. Yeah. And so just know where your core business is, be relentlessly focused on that. You don't have time to do anything else. And you end up burned out and frazzled and making bad decisions and you can't afford it. Exactly. Focusing on those core fundamentals. Absolutely. It's not easy. So shifting gears over to the consumer side and in in pet food, you've obviously I know you're focused on the B2B supply chain there, but what do you know about what the average person in the UK understands about cultivated meat? Is it something that there is awareness of or in the US it's very low? How could you describe it in the UK and maybe what you've learned to date about the consumer and market side of things. There is interest. I would say there's pretty good awareness. I've learned a few things. Firstly, there's a huge amount of media interest. So we've had coverage in every major TV and news outlet in the UK. And that has helped kind of expand this understanding. And a lot of it is just like trying to fill this void. And one of my concerns has always been when there's a void, people just fill it with whatever they hear and whatever they've heard online and on social media. And so we're filling that void with factual information and science based evidence. Food is a very tricky category. It's very cultural, it's very emotive, and it's one of the most personal experiences. Like you have to put this in your body and digest it and it's an incredibly important part of people's lives. That is not something that we should take lightly. It is not going to be mass adoption tomorrow. That's not what I'm expecting. And it will take time for us to explain what we're creating why we're so excited about this, why I want to feed it to my pets, and kind of going about that explanation. But that's part of the reason we started our PR very early is because we want to kind of take people on that journey. And it's going to take us time to scale up. So as we scale over the next three, four, five years, people's understanding and learning increases as well. For cultivated meat, there's always a challenge of like what is it and how exactly is it made? But once you start answering the questions and you explain how this is made and it's very similar to fermentation and how we make beer and yogurt, but we don't use antibiotics or steroids or hormones and it's free from any contamination. and it's a controlled process, people are actually very enthusiastic about it, particularly in pet food, and particularly for pet food manufacturers who have to deal with challenging supply chains a lot of the time. So as a someone who works in the marketing and communications space, one of the key things I recommend for Early stage startups is to focus on PR because it's so efficient and effective. It's not always easy to get earned coverage. I love that you did that early, but also it isn't just the facts, it's also the story. So that you were probably telling a story that people were interested in. I think that's great and probably gives you a significant advantage, right? As you get ready to enter the market. In the UK, is the cultivated meat and the approach that you're taking, is that related to Vegetarianism, veganism in the UK and the rates there are higher than here. Is that an issue or a factor or or not? It's not an issue. It's not a factor for us. I think our initial market would be vegan vegetarian leaning. But really we are focused on all types of consumers. This is made for anyone. Primarily where we want to end up focusing on is on health and pet health. And if we can make claims around that. So we're doing feeding trials at the moment and planning more feeding trials next year to make Health claims around feeding your pet cultivated meat instead of traditional meat, that would be significant. Pet owners in the UK, they talk about this as the animal lover's dilemma. So you love animals, so you want to get a pet, and then you have to kill a lot of other animals to feed that pet. And a lot of people are uncomfortable about that, whether you're vegan or vegetarian or not. Pet owners in the UK care about the environment, they're disproportionately vegan or vegetarian. They tend to care more about these kind of values driven decisions and they spend a lot of time out in nature because dog walkers are walking their dogs. And so they tend to be more tuned in to to some of those topics. We have a huge amount of interest. We have a very basic website that has a little contact form. And I get daily emails from people saying, When are you releasing product? I'm super excited about it. When can I feed it to my two Jack Russell's or my lovely cat or whatever it is. And so there there's definitely interest, enthusiasm there in the market for us. It's just about getting a commercially viable product then as fast as possible. If I'm tracking what you're saying, you anticipate that your cultivated chicken products will deliver better nutritional characteristics than the meat ingredients that are going into pet food today. That's what we hope for. I mean we'll have to see the outcome of the feeding trials. The aim would be it's at least equivalent. Nutritional performance. But because it's a control process, there's no contamination risk, there's no antibiotics, steroids, or hormones used in our production, that that may lead to health benefits. We can't make claims today. I'm not gonna make claims, but that would be significant benefit for us then. But for your partners who are selling to people, they would be able to potentially make new types of claims around their products based on the inclusion of your ingredient. Okay. But that's the Love to That's the aim, yes. Understood. There's been a lot of talk about the challenges of cultivated meat in the food tech sector. Here in the US, we've had certain states legislate against a development, sale, transport of cultivated meat products. How do you see Meatly creating success where others have failed? I think we've taken a very different approach. We, as is described, are kind of one of these wave two companies. So we've learned a lot from those. We spent a lot of time honing the process at small scale before. Building a large scale facility. And even our large scale facility, other people have spent one hundred and fifty million plus on theirs. We're spending three million on ours. What's the smallest, cheapest, most affordable way that we can prove out this model without spending one hundred and fifty million on something we don't necessarily know how to operate yet? I hope we never have to spend one hundred and fifty million on any facility. I hope we can roll out industrial facilities at twenty million instead. And so that's been our focus. And I think that's where we've had a lot of success. And I think on the political side, you know, there are similar discussions in Europe. Fortunately, in the UK, we still have science based policy making, which is great. And a lot of the political angle seems to be from farming lobbies. And what is concerning is in the UK and in Europe, we have fewer farmers than we've ever had before earning less money. And none of that is to do with alternative proteins or cultivated meat. Cultified mean isn't on sale anywhere in Europe or the UK. It's barely on sale in the US. And so it's just an easy political football because it doesn't exist and no one in the industry has much money. So you can just ban it, say you're supporting farmers and not actually do anything meaningful. If you talk to farmers, we know what they care about. They care about diesel prices, they care about input prices, they care about the weather, they care about inheritance tax. If you wanted to do something significant to support farmers, you could support farmers. But it'd be much easier just to ban something that doesn't exist and say you're supporting farms. And the proof will be in the pudding, right? In terms of having products in the market that are successful that people can actually interact with, it becomes a normal thing. What can you tell us about the production facility that you're building for three million dollars? What else can you tell us about that? This is a big step for us. So we're still a small team of eight people in a small lab in West London in the UK. And we are moving to a large-scale facility. We will have a 20,000 liter. Bioreactor in there. So it will look like a microbrewery for the first time, which is very exciting. And that is the largest scale we will ever need to go to. Beyond that, an industrial facility is just numerous 20,000 liters running simultaneously. This is the inflection point for us. Once we prove this at 20,000 liters, the technical risk reduces dramatically. Getting this right, setting up the facility correctly, getting equipment installed, optimized, running that, and proving we can hit. Commercially viable unit economics in the 20,000 liter bi reactor is a game changer for us, and I would argue the industry. And then we can start rolling it out. There's been a lot of challenges for the industry, there's been a lot of challenges for cultivated meat companies, but there's still a lot of interest and there are still investors who want to invest in cultivated meat, but they just haven't been presented with a viable business plan. And so that's what we're aiming to do. If you could change one thing about the food tech sector, what would you change? More investors would be great. Blue tech is is really, really hard. You have culturally ingrained products with very established players in a very politicized market, which is extremely low margin. It is one of the hardest markets to crack into. But there's not much I would change about it. I love all those things. I think they're wonderful. It means it's something important and meaningful to do. It's not going to be easy, but it's extraordinarily rewarding. I wouldn't change anything. There's inherent challenge in it. And given a changing climate and other factors globally, we need food innovation more than ever. It's coming for all of us. What are you most excited about looking to the future of food tech? I am very excited about cultivated meat, obviously, but also new ways of manufacturing, new ways of creating food. Particularly as you say, with a lot of the challenges that we're gonna start having about climate and people are already talking about the Super El Nino next year. And I think that might be a wake-up call for a lot of people on how volatile our supply chains are and our global food system is. I think looking at things like yeah, a lot of the fermentation technology that's happening, a lot of the cultivated meat technology that we can utilize is really exciting. And to see how these don't replace but work alongside existing foods that we're used to and how we can create entirely new. categories is going to be fascinating to watch. Absolutely. Where can people find out more information about Meatly? LinkedIn is probably the best place. You can use our janky contact form on our website if you want to send an email. And you send you a read I do read them. They come to me. I read every single one. I don't reply because we get quite a lot, but yes I read them all. Yeah you can follow me on LinkedIn, Owen and so I post quite frequently or Meatly on LinkedIn as well is a great place to find out. Wonderful. Well thank you so much for your time. I thought was a great discussion. Really interested to see what's ahead for Meatly as you come into the marketplace. Best of luck. Thanks for having us. Thanks for joining us today in the latest episode of Food Tech Stories. Be sure and subscribe to our podcast on your favorite podcast platform and keep an eye out for our bi-weekly episodes. I'm your host, Megan Thomas, founder of Ladder 17. Food Tech Stories is edited by TJG Media.