Latest / Going Direct Conversations / #42 Alan Perlstein: Reinventing Chocolate Production

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#42 Alan Perlstein: Reinventing Chocolate Production · Going Direct Conversations

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  SPEAKER_00: From one single cocoa bean,
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  SPEAKER_00: we could grow as much as basically the entire Amazon rainforest,
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  SPEAKER_00: all starting with one single bean.
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  Today I'm sitting down with Alan Pearlstein,
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  the co-founder and CEO of California Culture.
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  Many of you have probably heard that our global chocolate
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  supply chain is pretty
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  SPEAKER_01: much a mess between deforestation,
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  SPEAKER_01: child labor, and price instability due to rising demand.
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  Most of the warehouses in the world are almost completely
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  depleted from cocoa today.
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  We need alternative solutions,
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  and this is what Alan and his team are working at.
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  They are making cell-based chocolate by making cocoa inside of
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  bioreactors and
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  SPEAKER_01: skipping the farm entirely.
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  SPEAKER_00: This is what we think is going to be the future of biomanufacturing.
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  SPEAKER_00: Small, quickly deployable systems that could basically produce
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  SPEAKER_00: with the vast majority of ingredients.
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  SPEAKER_01: Now,
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  California culture sits right at the intersection of industrial
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  biomanufacturing,
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  SPEAKER_01: decentralized food production,
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  SPEAKER_01: and domestic supply chains.
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  SPEAKER_01: So it's perfect for the lens of going direct.
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  SPEAKER_00: We've been tricking the cells to get up to 20% of its weight.
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  SPEAKER_00: So over 20X.
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  improvement in concentration alan is a scientist has spent his
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  entire career in
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  cell-based production of food so i think you'll find this an
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  enlightening and
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  interesting conversation i hope you enjoy it and remember to go
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  direct all right we
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  are live and i have alan perlstein with a background of
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  chocolate for those of you
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  SPEAKER_01: just listening how you doing alan
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  SPEAKER_01: I'm doing great, Jordan.
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  SPEAKER_01: How about yourself?
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  SPEAKER_01: I'm doing good, man.
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  SPEAKER_01: I'm doing good.
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  SPEAKER_01: You know, I had a great weekend with my son.
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  SPEAKER_01: I took him on a little boys weekend, so it was really fun.
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  SPEAKER_01: So coming back to this week, nice and energized.
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  So we're here today to talk chocolate and coffee as well,
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  but mainly chocolate and coffee.
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  SPEAKER_01: You know,
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  obviously what you and your team have invented and are working
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  on hits square,
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  like smack dab in the middle of a lot of the themes that we
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  talk about going
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  SPEAKER_01: direct,
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  SPEAKER_01: which is decentralized production,
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  SPEAKER_01: shortening supply chains,
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  SPEAKER_01: decentralizing the real economy,
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  SPEAKER_01: and the heart of that being production,
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  SPEAKER_01: which you guys are all tackling.
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  SPEAKER_01: So I think it's highly relevant conversation.
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  SPEAKER_01: I want to start here, a little chocolate 101 for folks, okay?
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  SPEAKER_01: Just explain how chocolate is made traditionally.
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  Yeah,
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  currently almost all the chocolate in the world is grown in
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  three locations,
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  West Africa,
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  SPEAKER_00: Central America,
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  SPEAKER_00: and over the last couple of years,
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  SPEAKER_00: Southeast Asia has started significantly increasing their production.
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  SPEAKER_00: Chocolate has traditionally been grown in South America,
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  SPEAKER_00: but unfortunately,
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  due to massive amounts of disease and deforestation in the
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  beginning of the 20th
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  SPEAKER_00: century,
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  SPEAKER_00: most of the production,
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  SPEAKER_00: roughly about 70%,
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  SPEAKER_00: is now located between the Ivory Coast and Ghana.
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  SPEAKER_00: Currently,
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  chocolate needs roughly five years to mature if you plant
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  basically a little cocoa
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  SPEAKER_00: bean.
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  After about three to four years,
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  the chocolate plant matures and it starts producing pods.
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  It only fully matures maybe somewhere between five to eight
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  years after that.
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  SPEAKER_00: You have these cocoa pods.
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  SPEAKER_00: They're usually the size of a smaller football.
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  SPEAKER_00: They have about 20 to 30 little cocoa beans inside of them,
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  SPEAKER_00: surrounded by this fruit,
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  SPEAKER_00: cocoa fruit.
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  It's sort of like a sticky,
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  mushy adherent pulp that connects to the beans itself.
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  SPEAKER_00: Usually cocoa farmers would crack open these pods,
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  SPEAKER_00: combine all these beans in basically buckets.
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  They bring them to a fermentation hut or to a location in the
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  jungle which they ferment.
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  SPEAKER_00: They have these big wooden boxes covered with
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  SPEAKER_00: pine leaves,
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  SPEAKER_00: which they then ferment the cocoa anywhere from two to five weeks,
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  SPEAKER_00: depending on the cocoa flavors.
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  SPEAKER_00: They would usually mix the beans every couple of days.
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  SPEAKER_00: And what happens is a mix of bacteria and fungus ferment these beans.
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  and break down these really bitter compounds that are very hard
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  for people to really enjoy.
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  After that,
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  the beans get dried on the forest floor,
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  usually for about a couple of weeks.
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  Then they get packaged and given to different messengers that
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  go from messenger
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  SPEAKER_00: bike to truck,
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  SPEAKER_00: to large truck,
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  SPEAKER_00: then to warehouse.
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  SPEAKER_00: then to port warehouse, then on ships,
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  SPEAKER_00: then it goes through roasting in one part of the world,
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  SPEAKER_00: then it gets shipped to somewhere else,
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  SPEAKER_00: then it gets ground,
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  SPEAKER_00: then it gets shipped somewhere else,
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  SPEAKER_00: then it gets squeezed,
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  SPEAKER_00: and then after the cocoa butter and cocoa solids get separated,
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  SPEAKER_00: it gets recombined into chocolate.
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  And that usually takes the whole process well over a year plus
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  from start to completion.
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  And that's currently how chocolate has been mass produced and
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  consumed for close to 100 years.
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  SPEAKER_01: Wow.
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  SPEAKER_01: So it takes a year from the cocoa bean,
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  SPEAKER_01: the one year from once the cocoa bean has been fermented,
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  then it gets distributed out to go through the process and the
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  chocolate bar ends
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  SPEAKER_01: up basically in someone's home or...
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  SPEAKER_00: Yeah,
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  even longer because many times these bags usually have to sit
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  in warehouses and
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  SPEAKER_00: negotiate it over.
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  And there's incredibly long lags between even growing it and
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  having a final product
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  SPEAKER_00: or even arriving in the warehouse.
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  SPEAKER_00: It could usually be there for half a year plus.
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  SPEAKER_00: But right now, one of the biggest problems is that there's truly no...
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  SPEAKER_00: warehousing of cocoa.
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  Most of the warehouses in the world are almost completely
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  depleted from cocoa today.
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  And obviously a big piece of this has been,
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  I believe Ghana has been pretty devastated and
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  SPEAKER_01: with weather and just the crop and over farming.
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  SPEAKER_01: Is it just a mix of everything coming together?
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  SPEAKER_01: It's a mix of increased demand as well as climate change.
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  SPEAKER_01: Is it just everything coming together?
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  SPEAKER_00: It's not only the regular customers like Americans and Europeans,
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  SPEAKER_00: but right now the demands for chocolate are becoming a lot more
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  SPEAKER_00: large in places like South America,
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  SPEAKER_00: Africa,
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  SPEAKER_00: India,
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  SPEAKER_00: and China,
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  all of these places that are basically moving through the
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  economic food chain.
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  And they're really starting to appreciate different parts of
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  westernized foods and treats.
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  And probably one of the biggest examples of this is Luckin
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  Coffee coming in from China.
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  SPEAKER_00: Their demands for
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  SPEAKER_00: bakery goods,
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  SPEAKER_00: chocolate and coffee are being introduced through these cafes,
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  SPEAKER_00: which have been growing faster than almost any Western.
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  SPEAKER_00: coffee shop.
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  SPEAKER_00: I think from last read,
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  the demands for some of these new foods are getting close to
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  200% above traditional
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  SPEAKER_00: targets.
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  So we see a completely new supply chain needing to exist just
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  to even fulfill these
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  SPEAKER_00: large demands coming in from all over the world.
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  SPEAKER_01: Yeah, it's interesting.
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  SPEAKER_01: I mean, obviously we've spoken over the past few years a lot about this.
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  But it's fascinating to me when you think about how do you
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  utilize biology and
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  technology to produce things in critical areas where it's
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  clearly not going to be
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  SPEAKER_01: sustainable.
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  Not even in the long term,
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  but I think it's quicker than most people even think.
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  SPEAKER_01: I think chocolate and cocoa...
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  is like on the top of the list from kind of my research and the
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  conversations that we've had.
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  So I think let's move over to obviously kind of what California
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  cultured is doing a
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  SPEAKER_01: little bit,
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  but just I think the concept of cell cultured chocolate and
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  skipping the farms and
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  SPEAKER_01: growing them in tanks.
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  And so kind of let's break that down to what you guys are
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  actually doing and what
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  SPEAKER_01: actually plant cell culture is.
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  SPEAKER_00: Yeah,
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  so plant cell culture is basically the process of taking a tiny
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  little cutting from
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  any single plant and basically tricking those plant cells to
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  thinking they could
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  SPEAKER_00: grow roots or leaves or whatever our target is.
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  SPEAKER_00: our target end goal is.
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  SPEAKER_00: For instance,
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  what we're doing is we're tricking cocoa beans to grow infinite
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  amounts of cocoa
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  SPEAKER_00: bean tissue.
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  SPEAKER_00: And that means from one single cocoa bean,
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  we could grow as much as basically the entire Amazon rainforest
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  and the entire
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  SPEAKER_00: forest cover of Africa combined
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  SPEAKER_00: all starting with one single bean.
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  SPEAKER_00: So that's in essence its potential.
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  And so I think most folks probably that haven't been in the
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  world of cell-cultured
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  production and industrial biotech may have heard kind of the
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  concept lab-grown meat
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  SPEAKER_01: or cell-based meat.
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  SPEAKER_01: And so how would you describe,
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  SPEAKER_01: is it a very similar process,
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  SPEAKER_01: but you're obviously using plant cells instead of animal cells?
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  SPEAKER_01: Just kind of break that down.
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  SPEAKER_00: Yeah.
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  SPEAKER_00: This is more close to what we would think of a brewery.
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  You're basically taking lots of sugar,
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  you're feeding it to different living things.
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  They usually consume the sugar and either grow and divide or
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  produce alcohol.
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  SPEAKER_00: And for us,
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  we're getting the cocoa cells basically just to grow and divide
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  and produce all
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  these delicious cocoa compounds that are natively found from
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  the cocoa beans.
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  SPEAKER_00: We like to call it our own cocoa brewery, if you will.
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  SPEAKER_01: So let's kind of walk through the production process a little bit more.
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  SPEAKER_01: So obviously, you just mentioned the process of fermentation.
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  SPEAKER_01: You're feeding the compounds a bunch of sugar.
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  SPEAKER_01: You're making them grow.
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  SPEAKER_01: But then from there,
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  SPEAKER_01: just talk about how that goes to actually making cocoa and chocolate,
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  SPEAKER_00: I guess.
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  SPEAKER_00: Yeah.
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  SPEAKER_00: So we basically have to spend about two years
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  tricking the initial cells to produce these flavors and cocoa
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  butters,
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  as well as bioactives.
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  Once we're basically confident that these changes are permanent
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  inside of the cell,
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  SPEAKER_00: and we're able to do this without genetically modifying the cell line,
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  SPEAKER_00: basically by using traditional agricultural technologies,
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  SPEAKER_00: but in a,
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  SPEAKER_00: in a newer way.
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  SPEAKER_00: And once we put these changes into the cell,
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  SPEAKER_00: we could basically put them in these large tanks filled with sugar,
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  SPEAKER_00: water,
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  SPEAKER_00: and we mix it with air and different gases also found in the air.
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  SPEAKER_00: And after a couple of days,
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  SPEAKER_00: the cells start growing,
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  SPEAKER_00: dividing,
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  SPEAKER_00: and the whole tank fills with these cocoa cells.
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  SPEAKER_00: We remove them into another tank where we have a whole bunch of other
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  microbes and yeasts,
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  which then degrade the cocoa cells into more chocolatey tasting
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  products.
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  SPEAKER_00: And from there,
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  SPEAKER_00: we rinse,
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  SPEAKER_00: roast,
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  SPEAKER_00: and are able to grind it into the chocolate that we know and love.
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  And we can do that for multiple different applications,
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  as well as figure out how to make
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  SPEAKER_00: different unique aromas and fat profiles of cocoa,
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  which we're finding it could create different mouthfeels and
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  textures and flavors,
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  SPEAKER_00: which are impossible to produce today.
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  Can you just dig into it a little bit when you're using the
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  term trick the cell?
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  So the trick,
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  the cocoa cell,
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  let's dig into that so folks can better understand that.
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  SPEAKER_00: Sure.
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  SPEAKER_00: So usually how many different plant cells are grown,
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  SPEAKER_00: like if you were starting with a seed,
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  SPEAKER_00: there are these small plant hormones inside of that seed.
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  And they basically tell the seed of what to grow into or
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  different parts of the
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  SPEAKER_00: seed to grow into.
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  So we basically learned to decipher this language of how the
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  plant basically
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  SPEAKER_00: communicates to itself.
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  So we basically take these plant signals and see where else in
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  nature they're basically found.
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  SPEAKER_00: For instance,
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  one of the big plant signals we use is a compound called zeotin
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  that is found in
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  SPEAKER_00: very high levels in tomatoes,
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  SPEAKER_00: in rice,
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  SPEAKER_00: in
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  SPEAKER_00: in coconut water.
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  So we basically take specific amounts and concentrations and
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  mix it with other
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  SPEAKER_00: compounds found in other fruits from pineapples,
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  SPEAKER_00: yams,
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  SPEAKER_00: rice,
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  SPEAKER_00: soybeans,
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  and mix it all together and feed it within very specific
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  concentrations and at
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  SPEAKER_00: specific times to the cells.
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  SPEAKER_00: And that basically
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  tricks the cell into thinking it's still growing and dividing
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  in its natural habitat.
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  SPEAKER_00: And this now allows us to control how it grows,
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  what types of the cell mass could grow like cocoa butter versus
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  fiber or protein.
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  SPEAKER_00: And from there, that gives us a basic infinite toolbox to control
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  how the plants are going to grow in these large tanks filled
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  with sugar and what
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  SPEAKER_00: they're going to taste like.
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  SPEAKER_01: Great.
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  SPEAKER_01: Thank you for that.
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  SPEAKER_01: So this is like a whole reorientation of production, right?
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  So just to kind of summarize for folks that aren't familiar
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  with the process,
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  SPEAKER_01: I mean,
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  SPEAKER_01: you're essentially,
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  that entire supply chain and everything you were mentioning at
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  the beginning of the
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  SPEAKER_01: pod,
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  SPEAKER_01: I mean,
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  you're bypassing all that and you're essentially just doing
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  that right now in a
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  SPEAKER_01: facility right outside Sacramento,
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  SPEAKER_01: correct?
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  Yeah.
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  Yeah,
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  we have a 12,000 square foot facility that we've been building
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  in West Sacramento.
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  SPEAKER_00: Right now, we've just started producing a couple of
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  SPEAKER_00: 100-pound production,
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  SPEAKER_00: and soon we're going to be in multi-ton production,
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  SPEAKER_00: which is very exciting.
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  This can allow us to start actually supplying our first
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  partners by the beginning of next year.
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  SPEAKER_00: Great.
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  SPEAKER_01: All right,
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  SPEAKER_01: so let's talk about distribution,
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  SPEAKER_01: because I think this is where most industrial biotech companies...
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  have a difficult time,
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  they don't think through,
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  and they end up getting stuck.
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  SPEAKER_01: And unfortunately,
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  SPEAKER_01: as we all know,
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  I think many of the promises of industrial biotech really
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  haven't come to fruition
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  SPEAKER_01: at the scale that many people would have hoped.
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  SPEAKER_01: And a lot of times it's because of this supply chain piece.
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  SPEAKER_01: And many of these supply chains are dominated by some very large players.
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  SPEAKER_01: And I know,
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  SPEAKER_01: so California culture is making,
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  SPEAKER_01: correct me if I'm wrong,
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  but you're making ingredients and you're selling to large
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  chocolate makers.
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  SPEAKER_01: Is that correct?
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  SPEAKER_00: Yes, we are.
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  SPEAKER_00: Yeah,
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  SPEAKER_01: so talk to me just about kind of how you,
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  at the beginning when you were thinking about distribution and
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  why you chose the
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  SPEAKER_01: route that you chose.
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  SPEAKER_00: Well,
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  the biggest reason is I sort of saw firsthand that it's not
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  only incredibly
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  challenging to create a new bio process and make it taste good
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  and then scale it up
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  SPEAKER_00: that you could actually do it at a much larger amount.
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  SPEAKER_00: One of the big problems is you have to show it to people.
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  SPEAKER_00: You have to teach them about it.
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  SPEAKER_00: You have to
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  SPEAKER_00: get it in front of their grocery cart in the supermarket.
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  SPEAKER_00: And that is a completely different animal than pushing technology.
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  That requires tons of contacts,
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  crazy large Rolodexes,
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  as well as huge amounts of capital.
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  SPEAKER_00: Because guess what?
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  SPEAKER_00: If you're coming in with a product and want to sell it in the store,
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  SPEAKER_00: many groceries are going to require you to have stocking fees and
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  SPEAKER_00: and labeling fees and every single type of fee that's imaginable.
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  SPEAKER_00: And for any type of startup, that's just so incredibly difficult to do.
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  So our focus is let's focus on what we're experts on in the
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  world and what we could
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  do better than anyone else is figuring out how to make this
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  amazing type of
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  SPEAKER_00: chocolate using this new technology.
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  SPEAKER_00: And the thought process is let's find
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  some of these big partners who want to already use this type of
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  ingredient or to
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  basically make sure that the prices that they're going to
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  charge consumers isn't
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  SPEAKER_00: going to skyrocket.
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  So we figured out a partnering with a couple of very large
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  chocolate companies,
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  as well as some ingredient companies and companies that are
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  focused on distributing
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  SPEAKER_00: ingredients at scale.
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  And that was sort of a little bit of our tactics of how we
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  thought that we could
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  SPEAKER_00: sort of tackle that,
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  even though that wasn't going to be relevant for us for a
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  couple of years.
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  But finding the investors that could basically not only give
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  you capital to push
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  SPEAKER_00: your R&D,
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  but also have these incredibly well-built out supply chains is
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  really one of the
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  SPEAKER_00: best options for many biotechs today.
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  SPEAKER_01: One of the big knocks of industrial biotech is being able,
• 19:19
  SPEAKER_01: especially in the commodity space,
• 19:22
  SPEAKER_01: to be able to deliver it at obviously a reasonable or competitive cost.
• 19:26
  SPEAKER_01: So just talk to us about kind of,
• 19:29
  SPEAKER_01: for you,
• 19:30
  the roadmap to cost parity and what you're seeing from a cost
• 19:35
  standpoint versus
• 19:38
  SPEAKER_01: your traditional cocoa.
• 19:40
  SPEAKER_00: Yeah, traditionally...
• 19:43
  Biomanufacturing was seen as one of the answers of how could
• 19:48
  you make the things we
• 19:49
  SPEAKER_00: like without destroying the environment,
• 19:52
  SPEAKER_00: killing many animals,
• 19:53
  SPEAKER_00: and especially having it at a more competitive price.
• 19:58
  SPEAKER_00: Just to sort of set the stage,
• 20:01
  literally in 2025 is the hundred year anniversary of one of the
• 20:06
  first bioprocesses
• 20:08
  SPEAKER_00: that ever occurred.
• 20:09
  Actually producing citric acid at scale was basically a very
• 20:16
  big problem around
• 20:18
  SPEAKER_00: World War I.
• 20:19
  SPEAKER_00: And they figured out how to basically make these little yeasts
• 20:23
  produce citric acid for a price competitive amount compared to
• 20:29
  the lemons they had
• 20:30
  SPEAKER_00: to get from all over the world prior to World War I.
• 20:34
  SPEAKER_00: But by 1925,
• 20:36
  they figured out how to massively produce enough citric acid
• 20:42
  that it became cheaper
• 20:43
  SPEAKER_00: than traditional amounts of
• 20:46
  SPEAKER_00: ways of producing it.
• 20:47
  SPEAKER_00: And that was sort of our North Star.
• 20:49
  SPEAKER_00: How could we actually get to a price point lower?
• 20:54
  SPEAKER_00: But we thought people don't want to wait,
• 20:57
  SPEAKER_00: customers don't want to wait,
• 20:58
  SPEAKER_00: investors don't want to wait a couple of years for that to happen.
• 21:02
  SPEAKER_00: So we were looking, okay, if we could control
• 21:06
  cocoa how could we actually produce a product that could bring
• 21:10
  in really great
• 21:11
  margin that we could produce for competitive price
• 21:15
  manufacturing costs today so we
• 21:17
  focused on the healthy part of cocoa cocoa flavanol that we
• 21:22
  could actually start
• 21:23
  selling at a premium that is technically even lower than what
• 21:29
  you could find on
• 21:30
  SPEAKER_00: today's market and the idea is to use
• 21:34
  SPEAKER_00: our technology to scale up this more premium product to showcase that the
• 21:39
  SPEAKER_00: technology could work,
• 21:41
  showcase that the scale up could work and showcase that it
• 21:44
  could be sold repeatedly
• 21:47
  SPEAKER_00: to our customers at below the current prices.
• 21:51
  SPEAKER_00: And once we have that sort of locked in, the vision is to then
• 21:57
  SPEAKER_00: have these other ingredients that we could produce from cocoa.
• 22:01
  SPEAKER_00: And as our scale increases,
• 22:03
  SPEAKER_00: our costs for manufacturing decrease,
• 22:06
  and that can allow us to enter eventually more competitive
• 22:12
  products like cocoa
• 22:14
  SPEAKER_00: powder and traditional chocolate.
• 22:17
  SPEAKER_00: So over the next couple of years,
• 22:19
  SPEAKER_00: as we're going to be launching products,
• 22:21
  we're going to be able to get lower and lower in price as our
• 22:26
  scale increases.
• 22:30
  Can you explain the flavonoid market a little bit more or just
• 22:32
  most people probably
• 22:33
  SPEAKER_01: don't even know what a flavonoid is?
• 22:35
  SPEAKER_00: Sure.
• 22:36
  SPEAKER_00: So I'm sure most people have heard
• 22:40
  SPEAKER_00: Dark chocolate's healthier than milk chocolate.
• 22:43
  SPEAKER_00: And the reason is these flavanols.
• 22:46
  SPEAKER_00: Flavanols are basically found in lots of different plants,
• 22:50
  but they're especially high in cocoa because they're used to
• 22:56
  fend off different
• 22:57
  SPEAKER_00: viruses and bacteria
• 22:59
  SPEAKER_00: that the cocoa usually faces in its native environment.
• 23:03
  But when humans consume these flavanols and cocoa,
• 23:07
  they have a profound benefit.
• 23:10
  They basically get digested by your gut microbiomes and they
• 23:14
  produce these
• 23:14
  SPEAKER_00: compounds called minus epicatechin.
• 23:18
  And that basically interacts with different mitochondria in the
• 23:23
  heart,
• 23:24
  joints,
• 23:24
  and brain.
• 23:25
  SPEAKER_00: And what that does, it seems to act
• 23:28
  as this anti-inflammatory,
• 23:31
  as mitochondria consume energy that feeds our cells.
• 23:37
  SPEAKER_00: they unfortunately get damaged.
• 23:39
  SPEAKER_00: And it seems cocoflavanols and specifically this compound,
• 23:43
  SPEAKER_00: minus epicatechin,
• 23:45
  sort of lessens the damage that the mitochondria undergoes just
• 23:52
  through normal
• 23:52
  SPEAKER_00: functionality.
• 23:54
  SPEAKER_00: And that seems to have an anti-inflammatory effect
• 23:59
  SPEAKER_00: on cardiac tissue,
• 24:00
  SPEAKER_00: joint tissue,
• 24:01
  and even improve short-term memory as some studies that the
• 24:08
  chocolate company Meji
• 24:10
  SPEAKER_00: has performed.
• 24:11
  SPEAKER_00: So we've been seeing a lot of scientific evidence coming from UC Davis,
• 24:18
  SPEAKER_00: Columbia University,
• 24:19
  SPEAKER_00: universities all over Europe,
• 24:22
  SPEAKER_00: showcasing how it can actually be beneficial for human health.
• 24:26
  SPEAKER_00: So
• 24:27
  SPEAKER_00: About a year and a half ago,
• 24:29
  the FDA just allowed the first claims to be used for these
• 24:34
  cocoa flavanols.
• 24:36
  And we've also been seeing a huge spike in these other
• 24:40
  companies also trying to sell.
• 24:42
  SPEAKER_00: cocoflavanols for longevity, for memory, for even skin health.
• 24:48
  SPEAKER_00: So we see all these benefits for cocoflavanols,
• 24:52
  SPEAKER_00: and we're very proud to actually bring to market a cleaner version of the
• 24:58
  SPEAKER_00: cocoflavanols,
• 24:59
  as well as having it more competitively priced than probably
• 25:04
  anyone in the world.
• 25:08
  You talk about,
• 25:08
  I'm going,
• 25:09
  I'm going to shift back over to distribution for a minute.
• 25:11
  SPEAKER_01: I think it's an important point.
• 25:13
  SPEAKER_01: Obviously you mentioned kind of
• 25:16
  SPEAKER_01: taking the route of working with some of the largest,
• 25:18
  SPEAKER_01: Meiji is one of them you mentioned,
• 25:20
  SPEAKER_01: some of the largest chocolate producers in the world,
• 25:22
  SPEAKER_01: and is the best way to get your product to market.
• 25:28
  SPEAKER_01: Many folks in the industrial biotech space and biomanufacturing space,
• 25:33
  SPEAKER_01: it's a really big challenge,
• 25:34
  SPEAKER_01: as you mentioned,
• 25:35
  SPEAKER_01: as you're starting up,
• 25:36
  because how do you protect yourself and your IP and the
• 25:41
  approach you need to take
• 25:44
  to where you're actually not controlled by these very large
• 25:47
  companies when you're
• 25:48
  SPEAKER_01: at such an early stage?
• 25:51
  SPEAKER_00: Yeah, that is always a very difficult challenge.
• 25:55
  SPEAKER_00: A,
• 25:55
  SPEAKER_00: IP takes a long time to develop,
• 25:58
  and then IP in itself is more used as an offensive weapon than
• 26:03
  a defensive weapon.
• 26:05
  SPEAKER_00: So in order to utilize that IP to whack over another company's head,
• 26:09
  SPEAKER_00: you need hundreds of thousands of dollars for that.
• 26:13
  SPEAKER_00: Just I'm not saying the IP is not important.
• 26:16
  It definitely is,
• 26:17
  especially when you're negotiating with these large
• 26:20
  corporations.
• 26:21
  SPEAKER_00: The idea is in order to work with them,
• 26:24
  you have to constantly work on developing IP as well as most
• 26:29
  likely work with a
• 26:30
  SPEAKER_00: couple of different companies.
• 26:32
  SPEAKER_00: potential competitors to make sure that no one has enough control.
• 26:36
  SPEAKER_00: Then on top of that, you also have to move incredibly fast.
• 26:41
  SPEAKER_00: The world is shifting so quickly and speed is probably the best
• 26:48
  SPEAKER_00: advantage that small startups have.
• 26:51
  SPEAKER_00: So it's creating technology quickly,
• 26:53
  figuring out how the best way to protect them through IP or
• 26:58
  trade secrets,
• 27:00
  figuring out how you could leverage those pieces of IP with
• 27:04
  bigger partnerships and
• 27:06
  maybe utilize some of these partnerships for offensive
• 27:10
  litigation if you need to.
• 27:12
  or trying to understand how you can have these big long-term
• 27:16
  partnerships also
• 27:18
  SPEAKER_00: built in,
• 27:19
  SPEAKER_00: but in a way that it doesn't limit your mobility.
• 27:24
  SPEAKER_00: In essence,
• 27:25
  SPEAKER_00: many companies have to just move very quickly,
• 27:28
  grab as many large partnerships as you possibly can in order to
• 27:33
  make sure that
• 27:34
  SPEAKER_00: you're not tied down
• 27:37
  to any negative stipulations which might just sink your company
• 27:43
  or sort of sabotage
• 27:45
  SPEAKER_00: your company.
• 27:46
  SPEAKER_00: You have to be very agile.
• 27:49
  SPEAKER_00: And honestly, make sure that your partners can commit to you as well.
• 27:55
  SPEAKER_00: And that's another important thing.
• 27:57
  SPEAKER_00: Trying to get the LOIs done as quick as possible,
• 28:00
  translating that into offtake agreements or partnership
• 28:04
  agreements as fast as
• 28:06
  SPEAKER_00: possible,
• 28:07
  SPEAKER_00: and making sure that they're not too onerous or difficult to execute.
• 28:13
  and making sure potentially that you could also have some
• 28:16
  seriousness fees as well.
• 28:19
  SPEAKER_00: Because many companies just like spinning your wheels,
• 28:22
  SPEAKER_00: wasting time,
• 28:24
  SPEAKER_00: going on a fishing expedition.
• 28:26
  SPEAKER_00: So the only ways to make sure that doesn't happen is to then enforce,
• 28:32
  SPEAKER_00: okay,
• 28:32
  SPEAKER_00: if you want to talk with us,
• 28:34
  we're going to need at least a minimum amount of revenue coming
• 28:37
  in from every
• 28:38
  SPEAKER_00: single month to make this real.
• 28:40
  SPEAKER_00: or for payment to happen.
• 28:42
  SPEAKER_00: So I think a mix of these different tactics and strategies,
• 28:47
  SPEAKER_00: I think,
• 28:47
  is probably one of the best ways that these biotech companies
• 28:51
  can really perform
• 28:52
  SPEAKER_00: well without shooting themselves in the foot in the process.
• 28:58
  SPEAKER_01: What have you found is the main, well, let me step back.
• 29:01
  SPEAKER_01: Usually when a large corporation,
• 29:03
  SPEAKER_01: the way that they make decisions and they have shareholders and maximize
• 29:08
  SPEAKER_01: shareholder value and go on and on and on,
• 29:12
  they're typically going to look to change their supply chain or
• 29:15
  change the way that
• 29:16
  SPEAKER_01: they do things if it makes sense,
• 29:18
  SPEAKER_01: if the numbers make sense.
• 29:20
  SPEAKER_01: And so if you were to step back and say the different,
• 29:23
  SPEAKER_01: the large companies that you're working with,
• 29:25
  SPEAKER_01: what is the main reason why they want to work with you?
• 29:29
  So we thought about this and talked with lots of people within
• 29:34
  the industry,
• 29:34
  SPEAKER_00: and we sort of nailed this down to five reasons why.
• 29:39
  SPEAKER_00: Number one is, can your technology help the company grow?
• 29:48
  SPEAKER_00: look better to their shareholders and to the public in general?
• 29:52
  SPEAKER_00: That's usually a big one.
• 29:54
  Is the company actually investing in the right R&D internally
• 29:58
  and externally to
• 30:00
  SPEAKER_00: make sure that their stock market,
• 30:02
  SPEAKER_00: their stock price goes up to the right?
• 30:05
  SPEAKER_00: That's usually a very good one to have.
• 30:09
  Number two is if the technology you're developing is so
• 30:14
  critical to their ways of making money
• 30:18
  SPEAKER_00: that if they're not talking to you, it would be seen as a risk.
• 30:23
  SPEAKER_00: So that is another very important goal.
• 30:26
  SPEAKER_00: So talk to the companies that are doing your thing.
• 30:30
  Third of all,
• 30:31
  what types of potential personal relationships,
• 30:36
  you know,
• 30:37
  or...
• 30:39
  deeper motivations does the people you're talking to have with
• 30:44
  your company?
• 30:45
  Do they think it could potentially help their career or make
• 30:49
  them look better or
• 30:49
  SPEAKER_00: help their department grow?
• 30:51
  SPEAKER_00: Or is it something that they need to see or do?
• 30:55
  SPEAKER_00: There are all these hidden motivations that are very hard to take out.
• 31:01
  SPEAKER_00: Another part is potentially fear.
• 31:04
  SPEAKER_00: Many companies are also, sometimes they're projecting or seeing
• 31:10
  one of our prices of our products is going to be so high in the
• 31:16
  future that it's
• 31:17
  SPEAKER_00: going to really destroy these SKUs.
• 31:19
  SPEAKER_00: How could we plant the seeds today to prevent that from happening?
• 31:26
  SPEAKER_00: And number five is if we could basically showcase
• 31:32
  a really innovative technology that that they would really want
• 31:37
  or sometimes many
• 31:37
  companies have big ideas of what they want to achieve in the
• 31:42
  future and they they
• 31:43
  might not they might look outside you might have this great
• 31:47
  technology that we
• 31:48
  could integrate and then that could allow us to launch these
• 31:52
  other products or
• 31:53
  SPEAKER_00: other ingredients like uh imagine how long some companies had to wait
• 31:59
  SPEAKER_00: for the right battery technology to allow some,
• 32:03
  SPEAKER_00: some technologies to work or some sensors to work.
• 32:07
  SPEAKER_00: So what we're trying to do is unlock these types of technologies,
• 32:12
  SPEAKER_00: which can,
• 32:13
  SPEAKER_00: what we think open up eventually hundreds of new skews and products,
• 32:19
  SPEAKER_00: which were impossible to produce before.
• 32:25
  SPEAKER_01: When you look at your process,
• 32:27
  SPEAKER_01: you go back to kind of the underlying technology and what that enables.
• 32:30
  SPEAKER_01: And if you think about what California culture is doing,
• 32:34
  SPEAKER_01: if you pull this off at scale,
• 32:36
  SPEAKER_01: it's going to be pretty remarkable on many levels.
• 32:41
  And what you're doing is really,
• 32:42
  really difficult from a technical standpoint.
• 32:44
  SPEAKER_01: So how I think about it is you kind of have...
• 32:46
  The biology component,
• 32:47
  you have the flavor chemistry,
• 32:49
  which you talked a little bit about.
• 32:50
  SPEAKER_01: And then you have the entire scale up and production.
• 32:53
  So that includes bioreactor design and being able to get these
• 32:56
  cells to behave and
• 32:59
  SPEAKER_01: perform in larger quantities,
• 33:02
  SPEAKER_01: which is a whole other animal.
• 33:03
  So when you think about kind of those three pillars,
• 33:06
  like what's the most difficult situation?
• 33:08
  SPEAKER_01: to crack?
• 33:09
  SPEAKER_01: Or are they all kind of pretty much equally difficult in their own way?
• 33:14
  Probably one of the biggest ones that is potentially even
• 33:19
  affecting the greater
• 33:20
  biomanufacturing industry is about the cost of production and
• 33:24
  how you could get
• 33:25
  SPEAKER_00: your unit economics basically to beat in commodity prices.
• 33:30
  SPEAKER_00: And unfortunately,
• 33:33
  There is no significant capacity for many companies to actually
• 33:38
  achieve these goals
• 33:40
  SPEAKER_00: because usually these bioreactors are made out of steel.
• 33:44
  SPEAKER_00: They require extensive engineering and significant amounts of power.
• 33:50
  SPEAKER_00: We're talking about heavy industrial power.
• 33:55
  SPEAKER_00: And that's very difficult, especially today.
• 33:58
  SPEAKER_00: to basically build out.
• 34:00
  SPEAKER_00: And we honestly see that the price of steel, guess what?
• 34:05
  It's going up to the right because of all these data centers
• 34:09
  that are in demand for
• 34:11
  SPEAKER_00: all over the world.
• 34:12
  SPEAKER_00: The price of power, guess what?
• 34:14
  SPEAKER_00: It's also exploding and there's just not enough capacity being out there.
• 34:18
  And even the price for the regular consumers that you're going
• 34:21
  to pay to just light
• 34:23
  SPEAKER_00: your home is going up.
• 34:25
  So we saw that some of these issues are just so I think not
• 34:30
  only locked in,
• 34:32
  SPEAKER_00: but there's very few ways to maneuver.
• 34:35
  SPEAKER_00: So we sort of saw that happening in 2020.
• 34:39
  SPEAKER_00: And our intent was basically,
• 34:41
  how could we actually scale up in a way that doesn't block us
• 34:47
  from hitting our
• 34:48
  SPEAKER_00: goals?
• 34:49
  SPEAKER_00: So we sort of were inspired from the original beer and wine industry,
• 34:54
  just like the original biomanufacturing was inspired from them
• 34:58
  in the beginning of
• 34:59
  SPEAKER_00: the 1900s.
• 35:01
  SPEAKER_00: So we saw, what are they doing?
• 35:03
  SPEAKER_00: And we saw that there's a whole ton of micro breweries, home breweries,
• 35:09
  a whole bunch of new fermentation technology that's basically
• 35:13
  been built over the
• 35:15
  SPEAKER_00: last four years,
• 35:16
  but no one has really taken that to any other sector except for
• 35:21
  beer and wine.
• 35:22
  So we saw,
• 35:24
  why can't we just grow cocoa cells if people are just growing
• 35:27
  alcohol with it?
• 35:29
  So we worked over the last five years of playing around with
• 35:33
  off-the-shelf fermenters,
• 35:35
  reactors.
• 35:37
  and other types of newer technologies and processes that were
• 35:41
  just coming to
• 35:43
  SPEAKER_00: basically consumer level.
• 35:45
  SPEAKER_00: And we saw that they can actually perform as good,
• 35:49
  SPEAKER_00: if not better,
• 35:50
  SPEAKER_00: than these multimillion dollar reactors that are that have
• 35:58
  thousands of ports and electronics built in and take years to
• 36:03
  basically get built.
• 36:05
  And we could replace that with a very simple polymer tank with
• 36:12
  very simple controls
• 36:14
  SPEAKER_00: that are basically consumer grade.
• 36:17
  SPEAKER_00: And with that, you can have something that's
• 36:21
  a fraction,
• 36:22
  really a hundredth of the price of a traditional reactor
• 36:26
  outperform that.
• 36:28
  SPEAKER_00: So if you could have it cheaper,
• 36:30
  SPEAKER_00: you could have it faster,
• 36:31
  SPEAKER_00: you could have a lot more energy efficient,
• 36:34
  and you could actually have it deployable basically all over
• 36:38
  the world with better
• 36:40
  SPEAKER_00: outputs than the state of the art.
• 36:42
  SPEAKER_00: We think we've, I stumbled into something really powerful.
• 36:47
  SPEAKER_00: groundbreaking that you can actually grow things.
• 36:52
  SPEAKER_00: with biomanufacturing for cheaper than what you could do in the farm.
• 36:57
  SPEAKER_00: And you could do this with probably a couple thousand tanks.
• 37:01
  SPEAKER_00: You don't need millions or billions of dollars to make this realistic.
• 37:06
  SPEAKER_00: And this is what we think is going to be the future of biomanufacturing.
• 37:12
  SPEAKER_00: Small,
• 37:13
  quickly deployable systems that could basically produce the
• 37:17
  vast majority of
• 37:18
  SPEAKER_00: ingredients without it being
• 37:22
  SPEAKER_00: undesirable or too expensive.
• 37:24
  SPEAKER_01: So in your mind,
• 37:25
  SPEAKER_01: like if you project out in your,
• 37:27
  SPEAKER_01: in your,
• 37:27
  SPEAKER_01: in your vision,
• 37:29
  SPEAKER_01: balancing,
• 37:29
  obviously knowing how like the realities of cost and the best
• 37:32
  way to keep costs
• 37:33
  SPEAKER_01: under control.
• 37:35
  SPEAKER_01: So,
• 37:35
  SPEAKER_01: so is the idea that,
• 37:37
  SPEAKER_01: um,
• 37:38
  you imagine California cultured would have like regional hubs
• 37:43
  of manufacturing
• 37:44
  SPEAKER_01: facilities,
• 37:44
  SPEAKER_01: or is it still actually pretty centralized
• 37:48
  SPEAKER_01: in modular in the sense of,
• 37:50
  SPEAKER_01: okay,
• 37:50
  SPEAKER_01: you have one site,
• 37:51
  SPEAKER_01: then just continue to build out and build out and build out.
• 37:53
  SPEAKER_00: Yeah.
• 37:54
  So our,
• 37:54
  our goal is to produce the highest quality,
• 37:58
  most competitive chocolate in the world.
• 38:00
  And that's most likely going to require us to produce in
• 38:04
  multiple locations.
• 38:06
  Right now we're starting in West Sacramento because it is
• 38:09
  probably the highest
• 38:10
  SPEAKER_00: concentration of the best plant scientists,
• 38:13
  SPEAKER_00: food scientists in the world.
• 38:15
  SPEAKER_00: But sort of after this,
• 38:17
  SPEAKER_00: we're going to be building other facilities,
• 38:20
  SPEAKER_00: most likely something in the Midwest.
• 38:23
  SPEAKER_00: probably is our next big push.
• 38:25
  And most likely the facility after that would be co-located
• 38:30
  with some partners.
• 38:31
  We're basically looking for these large chocolate and coffee
• 38:37
  manufacturers who
• 38:38
  don't want to have these complex supply chains spread out all
• 38:42
  over the world.
• 38:42
  And if there's a storm here,
• 38:44
  a port strike there,
• 38:46
  workers don't show up,
• 38:48
  just causes...
• 38:49
  delays and we think as well as what we've been hearing the
• 38:54
  future of a lot of this
• 38:56
  production is going to be happening as close as physically
• 39:00
  possible to these
• 39:01
  production lines and that's going to require somewhat of a
• 39:05
  distributed production
• 39:07
  SPEAKER_00: and this is what this type of biomanufacturing is really perfect for
• 39:13
  mass producing it anywhere in the world and setting up these
• 39:17
  production areas to
• 39:19
  SPEAKER_00: feed into these mass production lines of products.
• 39:26
  SPEAKER_01: Yeah.
• 39:26
  SPEAKER_01: It's interesting.
• 39:26
  SPEAKER_01: The co-location model just makes sense, right?
• 39:28
  Like logical sense if you're selling an ingredient and if
• 39:31
  you're able to bypass the
• 39:34
  SPEAKER_01: Basically,
• 39:35
  you're able to just do from the beginning to end in a tank
• 39:39
  right next to where
• 39:39
  SPEAKER_01: they're actually making the finished product.
• 39:42
  SPEAKER_01: It's a pretty easy sell.
• 39:46
  SPEAKER_01: Much harder said than done, but pretty easy.
• 39:52
  SPEAKER_01: So you said you didn't answer my question, so I got to come back to it.
• 39:56
  SPEAKER_01: What is the most difficult part?
• 39:58
  SPEAKER_01: Like I said, they all have their own challenges.
• 40:01
  SPEAKER_01: I know they're all very different.
• 40:01
  SPEAKER_00: They all have their own challenges,
• 40:03
  but it's honestly just showing people and getting people to
• 40:06
  believe that there is a
• 40:08
  much better way of biomanufacturing compared to potentially
• 40:12
  even what was out there
• 40:14
  SPEAKER_00: in this state of the art.
• 40:17
  SPEAKER_00: And that is one of our big challenges,
• 40:19
  SPEAKER_00: showing that we could do it for the right price,
• 40:22
  SPEAKER_00: the right flavor,
• 40:23
  SPEAKER_00: and to do it at scale.
• 40:25
  SPEAKER_00: And that's probably going to be our next big challenge.
• 40:28
  SPEAKER_01: Yeah, it's interesting.
• 40:31
  Most of the companies I've spoken to and looked at even on the
• 40:33
  investing side in
• 40:34
  SPEAKER_01: the biomanufacturing world,
• 40:37
  I was always challenged by that where it was like there was
• 40:41
  often not a very novel
• 40:43
  approach to the tools that they were using that would actually
• 40:47
  affect the unit
• 40:47
  SPEAKER_01: economics and the unit cost.
• 40:49
  and we still haven't seen it i think there's a couple of the
• 40:53
  very there's some new
• 40:53
  interesting tools coming out now around like lower cost lab
• 40:56
  automation and
• 40:57
  obviously with ai and a variety of biology focused llms a lot
• 41:04
  of interesting
• 41:04
  SPEAKER_01: stuff's coming that's going to help speed up the
• 41:07
  SPEAKER_01: the strain engineering and the R&D.
• 41:10
  SPEAKER_01: But I just was always been very challenged.
• 41:13
  SPEAKER_01: Most folks don't take a kind of first principles approach to saying,
• 41:17
  SPEAKER_01: how do we,
• 41:19
  SPEAKER_01: it hasn't worked to date,
• 41:22
  SPEAKER_01: generally speaking,
• 41:24
  the way that people have been approached trying to bring a more
• 41:26
  commodity style
• 41:27
  SPEAKER_01: ingredient to market.
• 41:27
  SPEAKER_01: So you're going to have to figure out an alternative way.
• 41:30
  So I'm glad to hear you guys are taking that kind of low cost
• 41:35
  first principles
• 41:35
  SPEAKER_01: approach to like saying,
• 41:36
  SPEAKER_01: what is even possible?
• 41:38
  SPEAKER_01: with what is existing today.
• 41:40
  So what generation chocolate are you on when you made your
• 41:48
  first chocolate?
• 41:49
  SPEAKER_00: Currently, we're in our sixth generation of chocolate.
• 41:56
  SPEAKER_00: But this was a very big, profound one.
• 42:00
  SPEAKER_00: We've sort of figured out a new way of creating cell lines.
• 42:09
  SPEAKER_00: We call it our special edition chocolates.
• 42:14
  SPEAKER_00: Basically,
• 42:14
  this allows us to produce high amounts of fats of real cocoa
• 42:19
  butters in ourselves,
• 42:20
  SPEAKER_00: which is a very big breakthrough in this technology.
• 42:26
  SPEAKER_00: There hasn't really been that many reported...
• 42:29
  scientific papers that anyone has been able to produce this
• 42:32
  high level and this is
• 42:34
  a big far cry from when we began our chocolate all the way in
• 42:38
  the beginning maybe
• 42:39
  tasted like snot and maybe that was like our V1 and then we got
• 42:45
  it better and
• 42:46
  better and better if you think about like a whole bunch of
• 42:49
  plant cells all loosely
• 42:52
  SPEAKER_00: connected together and that's basically what it was but now that we've
• 42:59
  SPEAKER_00: advance very far.
• 43:01
  SPEAKER_00: The cells look amazing.
• 43:03
  SPEAKER_00: They look basically identical to all cocoa cells under a microscope.
• 43:08
  They have everything that you would usually find in a cocoa
• 43:10
  cell,
• 43:11
  which is really great.
• 43:13
  SPEAKER_00: The only difference is we can actually control the caffeine levels.
• 43:18
  SPEAKER_00: So you could actually have like a chocolate that doesn't
• 43:22
  SPEAKER_00: you know,
• 43:23
  SPEAKER_00: produce any of these alkaloids,
• 43:25
  which can actually make it better for people who want to have
• 43:28
  chocolate at night
• 43:29
  SPEAKER_00: who are sensitive to it,
• 43:31
  SPEAKER_00: or for kids who get hyper after eating chocolate,
• 43:34
  SPEAKER_00: or for even pregnant women who are trying to avoid caffeine.
• 43:37
  SPEAKER_00: And this is technically one of the first...
• 43:40
  what we think safest chocolates for any dog family whose dogs
• 43:47
  tend to usually jump
• 43:49
  SPEAKER_00: for chocolates since this has zero theobromine in it too.
• 43:53
  SPEAKER_00: So there's been a lot of advances that we've been able to have.
• 43:58
  SPEAKER_00: And what we're also excited is making...
• 44:02
  SPEAKER_00: the ability to control these flavors.
• 44:04
  SPEAKER_00: So you could have a really high-end floral flavor,
• 44:09
  but also mixing that with more of a traditional milk flavor at
• 44:13
  the same time,
• 44:15
  SPEAKER_00: which usually has not been done.
• 44:17
  SPEAKER_00: So we want to basically showcase the amazing premium flavors,
• 44:22
  SPEAKER_00: but in a more commonly tasted product.
• 44:29
  SPEAKER_01: Yeah,
• 44:30
  my mind goes to this future where you can kind of design your
• 44:34
  own flavor profile of
• 44:35
  SPEAKER_01: chocolate or what.
• 44:39
  SPEAKER_00: How big is the team now?
• 44:41
  SPEAKER_00: Right now, we have about 18 people.
• 44:44
  SPEAKER_00: We're mostly pretty heavily science-backed.
• 44:49
  SPEAKER_00: Most of the team is scientists.
• 44:51
  SPEAKER_00: A couple of people are within the biz dev.
• 44:55
  SPEAKER_00: And how it sort of works is the scientists work incredibly hard,
• 45:00
  SPEAKER_00: making the cells,
• 45:01
  SPEAKER_00: making them work great.
• 45:02
  SPEAKER_00: But when it comes with biz dev, it's we all have like six different hats.
• 45:08
  SPEAKER_00: One day, you know, you have to pitch to raise some money.
• 45:11
  SPEAKER_00: Other day, you have to figure out
• 45:14
  SPEAKER_00: you know,
• 45:14
  how you can move faster in science or development or working
• 45:19
  out business deals or
• 45:20
  SPEAKER_00: then figuring out chemistry of flavors.
• 45:24
  SPEAKER_00: So there's a lot of different parts.
• 45:27
  SPEAKER_00: that basically get thrown at us?
• 45:29
  SPEAKER_00: Or how could we scale faster?
• 45:31
  How could we make sure that we bring in more amazing talent to
• 45:36
  tackle these
• 45:37
  SPEAKER_00: challenges that no one else has cracked before?
• 45:39
  So we've seen that for our science team is more focused on a
• 45:46
  couple of things,
• 45:47
  SPEAKER_00: whereas our biz dev team basically has like five to six things each.
• 45:53
  And that's sort of the only way that some of these small
• 45:57
  companies can really
• 45:58
  SPEAKER_00: achieve these goals without spending tons of money.
• 46:03
  SPEAKER_01: Yeah, I think I was, I was out at, I was out at your lab in 2023.
• 46:06
  SPEAKER_01: Yeah, that's right.
• 46:08
  SPEAKER_01: And I was,
• 46:09
  SPEAKER_01: I was honestly,
• 46:09
  SPEAKER_01: I don't know what generation chocolate that was,
• 46:11
  SPEAKER_01: but I'm a big chocolate guy.
• 46:12
  SPEAKER_01: Like I eat a fair amount of dark chocolate and I was,
• 46:15
  SPEAKER_01: I was,
• 46:15
  SPEAKER_01: I was impressed with the,
• 46:16
  SPEAKER_01: with the flavor profile back then.
• 46:18
  SPEAKER_01: So I'm excited to get the next generation.
• 46:21
  SPEAKER_00: Yeah, it's what we think it stands head over heels on top of it.
• 46:27
  And we think it's probably a couple of months away from
• 46:31
  starting to compete in some
• 46:33
  SPEAKER_00: of the competitions that we basically are looking at.
• 46:37
  SPEAKER_00: And we think that's probably going to be one of the big...
• 46:41
  wins of trying to rank at least maybe aiming for a bronze at
• 46:46
  least in one of these
• 46:47
  competitions that we're going to submit our chocolate blindly
• 46:50
  with that's great how
• 46:53
  did you get into this let's give a little bit of the background
• 46:55
  the um your
• 46:57
  SPEAKER_01: technical oh yeah yeah so i've been folks a little background
• 47:04
  I've been working sort of in the cell culture space for
• 47:09
  basically my entire career.
• 47:11
  SPEAKER_00: I started basically all the way in undergrad.
• 47:13
  I found myself working in one of the first cell culture meat
• 47:18
  labs in the world.
• 47:18
  It was in a tiny lab in Bayshore,
• 47:21
  Long Island,
• 47:22
  working on cell cultured fish.
• 47:24
  And the only ones at that time that were brave enough to give
• 47:28
  us money was NASA.
• 47:30
  SPEAKER_00: for the vision of,
• 47:31
  SPEAKER_00: you know,
• 47:31
  you're not going to have giant fish tanks on the space station
• 47:34
  or on Mars.
• 47:36
  SPEAKER_00: So how are you going to be able to grow,
• 47:37
  SPEAKER_00: you know,
• 47:38
  SPEAKER_00: your favorite tuna or salmon or whatever,
• 47:42
  SPEAKER_00: wherever you go?
• 47:43
  SPEAKER_00: So the idea was to just grow it in these...
• 47:47
  SPEAKER_00: bioreactors.
• 47:47
  SPEAKER_00: And that's sort of how I got into it.
• 47:50
  SPEAKER_00: We wanted to start a company at this time.
• 47:53
  And you can't imagine of how many investors basically laughed
• 47:57
  us out of the room
• 47:58
  SPEAKER_00: because the science was still so young.
• 48:01
  SPEAKER_00: It had tons of potential, but lots of things had to be figured out.
• 48:06
  After that,
• 48:07
  I sort of went to different labs,
• 48:09
  studied biology,
• 48:11
  chemistry,
• 48:11
  worked on the
• 48:12
  in the lab in columbia university designing different chelation
• 48:16
  biologics for
• 48:16
  kidney disease and that inspired me to start my first food tech
• 48:21
  company originally
• 48:22
  called miraculix in the basement in harlem now it's called
• 48:26
  oobly foods which
• 48:27
  focused on pioneering sweeteners that could be produced from
• 48:32
  proteins so i during
• 48:36
  SPEAKER_00: my work,
• 48:37
  I heard upon this super rare plant growing in middle of the
• 48:42
  jungle in Africa that
• 48:44
  SPEAKER_00: sort of can trick human,
• 48:47
  SPEAKER_00: that could trick primates taste to thinking it's sweet while in reality,
• 48:54
  SPEAKER_00: it's a protein.
• 48:55
  So we worked really hard over about seven years to develop this
• 48:59
  technology.
• 49:01
  which became these protein sweetener platforms that allow us to
• 49:05
  produce these
• 49:06
  SPEAKER_00: proteins using precision fermentation.
• 49:09
  that can allow us to make all these new types of sweeteners
• 49:14
  that are what we think
• 49:15
  SPEAKER_00: more powerful than the sweeteners that are used to,
• 49:19
  SPEAKER_00: healthier than what exists,
• 49:22
  SPEAKER_00: and could be a lot more price competitive.
• 49:25
  SPEAKER_00: So cleaner, better, and domestically produced.
• 49:29
  And this is a really exciting technology that can allow lots of
• 49:33
  people to enjoy the
• 49:34
  SPEAKER_00: foods they want,
• 49:36
  without the caloric impact,
• 49:38
  without worrying about if it could induce diabetes.
• 49:42
  SPEAKER_00: And we were very excited about launching that.
• 49:45
  SPEAKER_00: And now they have a couple of products and big partnerships out there.
• 49:50
  I left that in 2020 to pursue California culture because I just
• 49:55
  saw the demands for
• 49:56
  SPEAKER_00: chocolate and coffee were just so large and completely unmet.
• 50:03
  SPEAKER_00: And we saw that we could sort of take a lot of this technology,
• 50:08
  SPEAKER_00: ironically,
• 50:09
  SPEAKER_00: that was built around COVID and COVID testing,
• 50:14
  SPEAKER_00: and actually make this work to actually start screening plant cells.
• 50:19
  SPEAKER_00: for the compounds that we want.
• 50:22
  So we basically took all these different technologies that were
• 50:25
  developing,
• 50:27
  and we saw this was the perfect time to basically build a
• 50:30
  company and commercialize
• 50:33
  SPEAKER_00: these type of ingredients.
• 50:36
  SPEAKER_00: And we were very...
• 50:38
  SPEAKER_00: Very lucky, came in the right time and then the right place.
• 50:42
  SPEAKER_00: And our sort of work saw that over the next couple of years,
• 50:47
  SPEAKER_00: we were going to see massive price increases in chocolate and coffee.
• 50:52
  SPEAKER_00: And they're just starting to happen right now.
• 50:56
  SPEAKER_01: When you said the technologies were coming together,
• 50:58
  SPEAKER_01: they got you excited,
• 50:59
  SPEAKER_01: I guess,
• 50:59
  SPEAKER_01: more like put it with your scientist hat on,
• 51:02
  SPEAKER_01: right?
• 51:03
  SPEAKER_01: Just dig into that a little bit more.
• 51:04
  SPEAKER_01: I think it's important for people to understand versus the broad idea of
• 51:07
  SPEAKER_01: technologies coming together for screening compounds.
• 51:10
  SPEAKER_00: Sure.
• 51:11
  SPEAKER_00: Sure.
• 51:12
  One of the big things that unfortunately has slowed down so
• 51:17
  many scientists is analytics.
• 51:19
  SPEAKER_00: You could spend so much time making something,
• 51:22
  SPEAKER_00: but you could be completely lost because you don't know what's in it,
• 51:26
  SPEAKER_00: except if you smell it or you taste it or you do some basic stuff to it.
• 51:30
  SPEAKER_00: You need some really high-end tools to sort of unlock this.
• 51:35
  SPEAKER_00: And over the last...
• 51:37
  SPEAKER_00: Basically,
• 51:38
  SPEAKER_00: a couple of years,
• 51:40
  all these tools that allow scientists to sort of look like
• 51:44
  what's in here,
• 51:44
  what compounds or flavors or other things that exist have come
• 51:49
  down a lot in price.
• 51:51
  SPEAKER_00: And even the analytics, for instance, to see if we have...
• 51:58
  SPEAKER_00: this type of compound would be very expensive to produce.
• 52:03
  SPEAKER_00: But ironically,
• 52:04
  SPEAKER_00: UC Davis,
• 52:05
  SPEAKER_00: as well as different universities,
• 52:07
  developed all these very inexpensive assays to basically look
• 52:13
  for disease and other
• 52:14
  SPEAKER_00: things.
• 52:15
  But the same type of initial technology can also allow
• 52:19
  companies like us to look
• 52:21
  for other types of compounds or other different signals in what
• 52:26
  we're looking for.
• 52:27
  And we could do this at a much,
• 52:29
  much larger and faster pace than ever been done before.
• 52:34
  This basically sort of allows us to have like 100 scientists
• 52:39
  for the price of one
• 52:40
  SPEAKER_00: doing the specific thing.
• 52:42
  SPEAKER_00: And this massive technology unlock,
• 52:45
  SPEAKER_00: I think,
• 52:46
  allows this type of technology as well as others to finally
• 52:50
  become feasible as a
• 52:54
  SPEAKER_00: target to do.
• 52:57
  SPEAKER_01: The concept of cell-based anything for most people,
• 53:00
  SPEAKER_01: whether it's cell-based meat,
• 53:01
  SPEAKER_01: cell-based chocolate,
• 53:02
  SPEAKER_01: cell-based whatever,
• 53:05
  SPEAKER_01: it sounds very futuristic and not natural.
• 53:12
  SPEAKER_01: So how do we normalize this or educate the consumer,
• 53:19
  SPEAKER_01: especially when the vast majority,
• 53:22
  SPEAKER_01: 54% of Americans,
• 53:23
  SPEAKER_01: I believe,
• 53:24
  SPEAKER_01: read it below a sixth grade level?
• 53:27
  SPEAKER_00: Yeah, that is a great question.
• 53:29
  SPEAKER_00: We basically think the best way to showcase this is to literally bring in
• 53:35
  SPEAKER_00: reporters,
• 53:35
  SPEAKER_00: bring in consumers,
• 53:37
  SPEAKER_00: seeing every single step of this process,
• 53:40
  SPEAKER_00: having them ask questions,
• 53:42
  SPEAKER_00: showing them the data of how clean it is,
• 53:45
  SPEAKER_00: of all the compounds.
• 53:47
  SPEAKER_00: We believe that unfortunately many companies have been hiding
• 53:53
  like to hide things because obviously it's for IP and it makes
• 53:57
  them more competitive.
• 53:58
  SPEAKER_00: But unfortunately,
• 54:00
  SPEAKER_00: Doing that, you lose almost all the trust of the consumers out there.
• 54:07
  And we think the only way to gain trust is to literally show
• 54:12
  every single step of
• 54:13
  SPEAKER_00: this process that they could see it,
• 54:16
  SPEAKER_00: they could understand it,
• 54:18
  SPEAKER_00: and they can basically see it's relatively straightforward.
• 54:22
  SPEAKER_00: And like our sort of ideas of how we explain the technology.
• 54:27
  SPEAKER_00: It's sort of a mix between growing a potted plant and fermenting beer.
• 54:33
  So we basically have to do both of these things together to
• 54:37
  grow chocolate.
• 54:39
  So we have to go from basically one bucket to a larger bucket
• 54:43
  to a larger bucket
• 54:44
  SPEAKER_00: instead of months to years.
• 54:47
  SPEAKER_00: This takes a couple of days.
• 54:48
  SPEAKER_00: And then when it comes with fermentation,
• 54:50
  SPEAKER_00: people know you feed sugar,
• 54:52
  SPEAKER_00: you have to monitor like air,
• 54:54
  SPEAKER_00: gas,
• 54:55
  SPEAKER_00: the cells grow,
• 54:55
  SPEAKER_00: they eat the sugar.
• 54:57
  SPEAKER_00: But they grow and divide, and then you have your product.
• 54:59
  And that's sort of the same parable that we like to use for how
• 55:05
  we're growing it.
• 55:06
  SPEAKER_00: So as you said,
• 55:09
  SPEAKER_00: Jordan,
• 55:09
  SPEAKER_00: you have to make it very simple,
• 55:12
  SPEAKER_00: very understandable,
• 55:13
  SPEAKER_00: very relatable to people.
• 55:15
  And we think the only way for consumers to really have trust is
• 55:19
  to basically
• 55:20
  SPEAKER_00: literally kick the tire,
• 55:21
  SPEAKER_00: see what's there,
• 55:22
  ask questions and to feel like and to see and to understand how
• 55:28
  straightforward it
• 55:30
  SPEAKER_00: is.
• 55:30
  SPEAKER_00: And this is what this technology can allow.
• 55:34
  What actually is the production timeline from when you start
• 55:38
  with a cell and then
• 55:39
  SPEAKER_01: when you're actually growing it in a tank?
• 55:41
  SPEAKER_01: And I know you're just starting to scale up some production,
• 55:44
  SPEAKER_01: but what is that production timeline?
• 55:48
  So if you want to think about it as it takes about a couple of
• 55:54
  days to go from one
• 55:56
  SPEAKER_00: tank to another tank.
• 55:57
  SPEAKER_00: So right now we basically have
• 56:01
  SPEAKER_00: a couple of very, very small tanks, just always running.
• 56:05
  SPEAKER_00: And anytime we wanna grow,
• 56:06
  SPEAKER_00: we take that,
• 56:07
  SPEAKER_00: then we put that into something about two to three times as big,
• 56:11
  SPEAKER_00: we wait a week,
• 56:13
  SPEAKER_00: then we put that also into two to three times as big,
• 56:15
  SPEAKER_00: wait a week,
• 56:16
  SPEAKER_00: And we could do that forever.
• 56:18
  So right now,
• 56:19
  we basically are growing,
• 56:22
  going maybe about five to six jumps up in size.
• 56:26
  And we have a couple thousand liter tank,
• 56:29
  which is about a couple hundred gallons.
• 56:33
  SPEAKER_00: that is operational.
• 56:35
  SPEAKER_00: And that's sort of our production tank.
• 56:37
  So if you think about going from like a small pot to a big pot
• 56:41
  to a bigger pot,
• 56:42
  SPEAKER_00: we can basically do that transition every week.
• 56:46
  SPEAKER_00: And the cocoa gets bigger and bigger and bigger during that time.
• 56:50
  So roughly it can take us about a week to go from some of our
• 56:55
  small tanks to a large tank.
• 56:58
  SPEAKER_00: And then it takes a week to go from a large tank
• 57:01
  SPEAKER_00: uh, to basically a finished product.
• 57:03
  SPEAKER_01: Okay.
• 57:03
  SPEAKER_01: So the downstream is pretty, pretty quick.
• 57:06
  SPEAKER_01: And so just give folks a sense of,
• 57:08
  SPEAKER_01: from a projection standpoint,
• 57:09
  SPEAKER_01: from a production standpoint,
• 57:10
  SPEAKER_01: so you're starting with the flavanol.
• 57:12
  SPEAKER_01: I think I called it, I've called it flabinoid earlier, flavanols.
• 57:17
  SPEAKER_01: And so is it,
• 57:19
  SPEAKER_01: you know,
• 57:19
  SPEAKER_01: kind of,
• 57:19
  SPEAKER_01: as you think about the end of this year,
• 57:20
  SPEAKER_01: then going into next year,
• 57:21
  SPEAKER_01: like how does production scale up based upon your projections?
• 57:25
  SPEAKER_00: Yeah,
• 57:26
  so our goal for the end of this year is to have a couple of our
• 57:31
  large tanks
• 57:32
  operational just to validate the technology and to showcase it
• 57:37
  can produce the
• 57:37
  SPEAKER_00: tonnage necessary.
• 57:39
  SPEAKER_00: By mid-2026, we're looking to have about 12 of our tanks operational.
• 57:47
  SPEAKER_00: Towards the end of 2026, about 24.
• 57:51
  SPEAKER_00: So we're looking to almost double our capacity
• 57:55
  every six to eight months um and starting to produce
• 58:00
  significant tonnage by next
• 58:03
  year and by probably 2028 we're going to be in the hundreds of
• 58:09
  tons and probably
• 58:12
  close to 2030 we'll be in the tens of thousands of tons so
• 58:17
  that's a little bit of
• 58:18
  SPEAKER_00: of our of our trajectory of where we think we're going to be able to grow
• 58:22
  SPEAKER_01: And the flavanols,
• 58:24
  SPEAKER_01: do you sell it like,
• 58:25
  is it like a liquid or how do you get it to your customers in
• 58:30
  what format?
• 58:30
  SPEAKER_00: Yeah.
• 58:31
  SPEAKER_00: So it is in a cocoa powder.
• 58:34
  SPEAKER_00: Since we're able to grow the cocoa cells in different quantities,
• 58:39
  we figure out how to trick the cocoa cell where it usually
• 58:42
  would produce about
• 58:44
  1% of its weight in flavanols,
• 58:46
  we've been tricking the cells to get up to 20% of its weight.
• 58:51
  SPEAKER_00: So over 20x improvement in concentration.
• 58:56
  And that means you don't have to crack it open or use any
• 59:01
  dangerous or expensive
• 59:02
  SPEAKER_00: chemical process to separate it.
• 59:05
  SPEAKER_00: We're able to basically grow it in the cell,
• 59:08
  SPEAKER_00: rinse it,
• 59:08
  SPEAKER_00: and basically add it to cocoa powders,
• 59:11
  SPEAKER_00: to chocolates,
• 59:12
  SPEAKER_00: to your
• 59:14
  SPEAKER_00: protein smoothies that you might have in the morning or,
• 59:17
  SPEAKER_00: or other applications somewhat like that.
• 59:19
  So it's most likely going to come in a powderized or in a
• 59:23
  chocolate or in a semi
• 59:26
  SPEAKER_00: finished application.
• 59:27
  SPEAKER_00: So you're going to have it, but it could come in many different formats.
• 59:31
  SPEAKER_01: Great.
• 59:32
  SPEAKER_01: Are you ready to do a little rapid fire as you wrap up?
• 59:34
  SPEAKER_01: Sure.
• 59:34
  SPEAKER_01: All right.
• 59:38
  SPEAKER_01: Chocolate or cocoa, which words should survive?
• 59:42
  SPEAKER_01: Yeah.
• 59:47
  SPEAKER_00: Chocolate.
• 59:48
  SPEAKER_01: The biggest myth about lab-grown anything or cell-based agriculture.
• 59:56
  SPEAKER_00: It's a lot more cleaner than what you could get on the farm.
• 1:00:01
  SPEAKER_01: Hardest problem in scaling food biotech in one word.
• 1:00:07
  SPEAKER_00: Getting people to buy it again.
• 1:00:16
  SPEAKER_01: The future of food, centralized or decentralized production?
• 1:00:20
  SPEAKER_00: Very decentralized.
• 1:00:23
  SPEAKER_01: Finish this sentence.
• 1:00:24
  SPEAKER_01: Chocolate will one day be made in?
• 1:00:27
  SPEAKER_01: Your home.
• 1:00:29
  SPEAKER_01: Great.
• 1:00:29
  SPEAKER_01: Thanks, Alan.
• 1:00:30
  SPEAKER_01: I appreciate the time, my man.
• 1:00:32
  SPEAKER_00: All right.
• 1:00:32
  SPEAKER_00: Thanks, Jordan.
• 1:00:33
  SPEAKER_01: Take care.
• 1:00:34
  SPEAKER_00: Take care.
• 1:00:35
  SPEAKER_00: Bye.