“The world has seen a global transformation in our food supply where consumers are seeking more sustainable solutions in their diets.”
The latest installment of SALT Talks: Pandemic Venture Investment Series, presented in partnership with OurCrowd, looks at how Agri-FoodTech start-ups are not just reimagining the future of agriculture and food, but also the sustainability of our planet. 2019 saw the sector grow to a $20 billion venture capital sector. Technology has proven to be crucial during this global pandemic and highlighted our dependence on a global functioning food chain. The CEOs of Tevel, BlueNalu and Ripple Food reveal how they are innovating in this crucial space. Moderated by Laly David, Partner, OurCrowd.
With a growing base of environmentally-conscious consumers, we see greater calls for alternative dairy products like Ripple that requires less water to make, resulting in over 200 million gallons of water saved so far. Cell-based meat is one of the latest in the line of alternatives to animal-based products. BlueNalu is a leader in the cell-based seafood market, offering a solution to a traditional seafood industry that has put its ecosystem in peril. “Our global supply chain of seafood is the most vulnerable supply chain on the planet.”
Picking fruit requires a large source of manual labor, often requiring immigrant populations working for low wages. Employing these populations has become even more difficult during the pandemic due to travel restrictions. Tevel has developed drones equipped with AI that can identify ripe fruit and ultimately pick the fruit autonomously. The eliminated overhead produces 30-40% in cost saving for farmers.
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SPEAKERS
Laura Flanagan
Co-Chief Executive Officer
Ripple Foods
Yaniv Maor
Chief Executive Officer
Tevel
Lou Cooperhouse
President & Chief Executive Officer
BlueNalu
EPISODE TRANSCRIPT
John Darsie: (00:12)
Hello everyone, and welcome back to SALT talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of financial, technology, and public policy.
John Darsie: (00:26)
SALT talks are a digital interview series that we launched during the work from home period, with leading investors, creators, and thinkers. And what we're trying to do on these SALT talks is replicate the experience that we provide at our global SALT conferences, which we host twice a year, once in the United States and once internationally, most recently in Abu Dhabi in 2019.
John Darsie: (00:48)
On these SALT talks and at our conferences, what we're trying to do is provide our audience a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're thrilled today to welcome you to the sixth installment of our pandemic venture investment series, where top entrepreneurs, investors, and business leaders dive deep into the challenges and opportunities arising from the pandemic crisis, and discuss breakthrough technologies that address issues, ranging from coronavirus prevention and cure, to social distancing and food supply.
John Darsie: (01:22)
A reminder, this series is presented in partnership with OurCrowd, a leading global venture investment platform based in Israel. Today's episode is the Agri-FoodTech explosion in an era of disruption. And it features Laura Flanagan, the co-chief executive officer of Ripple Foods, and before I went on I was telling Laura how I drink Ripple every morning and I put it every morning in my oatmeal. Has eight grams of plant based protein per serving, one cup, and also is a great source of calcium, 50% more calcium than dairy milk. I'm an unpaid promoter of Ripple and I'm sorry to the rest of our guests, so I don't use your products but I figured I had to show for Ripple because I've tried all kinds of different milk alternatives and Ripple is my go-to for my oatmeal every morning and my drinking during the day. So welcome, Laura.
John Darsie: (02:12)
Our other guests are Lou Cooperhouse, the president and CEO of BlueNalu, and Freddy Raitan, the chief commercial officer of Tevel. In today's talk we're moderated by OurCrowd vice-president of business development, Dan Fishel. Just a reminder, if you have any questions for any of our panelist during today's talk, you can enter... the Q&A box at the bottom of your video screen on zoom, and with that I'll turn it over to Dan for the interview.
Dan Fishel: (02:39)
Thanks John, and I have to start with my own confession, I'm also a big fan of Ripple, especially the chocolate milk one. But anyway, we're here to talk today about Agri-FoodTech. Now, up until about a couple of years ago this used to be two separate terms, Agri-Tech and FoodTech, but what the pandemic has showed us is how interconnected is the food we eat, the environment we live in, and our health. It doesn't show us just how interconnected it is but also how fragile and vulnerable it is. I assume that you would all agree with me that if humanity were to take better measures in terms of food safety and sustainability, better look after the environment, we wouldn't have been facing today the devastating consequences of COVID-19.
Dan Fishel: (03:30)
So after this grand statement, again, my name is Dan Fishel, I'm vice-president of business development at OurCrowd. OurCrowd, we're a global investment platform. We invest in startups and we invite accredited investors from around the world to invest alongside us on the exact same terms. We've been privileged to invest in over 200 portfolio companies, three of which are again here with us.
Dan Fishel: (03:54)
So once again, we have three companies that are on both ends on the Agri-FoodTech equation. On the agri side we have Tevel, they developed a fleet of autonomous drones that pick fruit, and basically address the global problem, the global challenge of hiring workers to pick fruit in the fields. We have BlueNalu, a company that has developed lab-grown seafood, and of course the company that is already commercial out there, Ripple that develops pea-based dairy alternatives.
Dan Fishel: (04:31)
So let's start with you, Laura. You already have a commercial product that's very, very successful in the stores. And I have to tell you, my wife about a year ago she started, every week we have a completely different brand of a meal alternative in the fridge. We started with soy and then she went to almond, and now it's the oat season. But we had the rice and oat, and almond, and cashews. There's so much selection out there, what makes Ripple unique in this very crowded market?
Laura Flanagan: (05:07)
Thank you, Dan. Thanks for having us and I want to thank both you and John for the wonderful endorsements of Ripple products. We're so glad to have you as part of the Ripple family. To answer your question, what makes Ripple unique? So Ripple is a portfolio, of those who aren't familiar with us. Ripple is a portfolio of foods and beverages that are plant-based dairy alternatives. So our largest product line today is the milk which you're both familiar with, and what makes Ripple so unique and special is that, yes today we use yellow peas as our source of protein. And our two co-founders, Neil Renninger and Adam Lowry, both former chemical engineers, developed a unique and proprietary process that is, we have filed patents for. That allows us to create a cleaner tasting plant protein.
Laura Flanagan: (05:58)
So that process and that protein we call Ripptein. It stands for Ripple, protein, put it together, called Ripptein. And we're able to create a cleaner tasting plant protein, which enables us to deliver better tasting products that deliver very high protein levels. So as John mentioned at the beginning, we have eight grams of protein per serving, which is just as much as dairy milk. We have 50% more calcium, and half the sugar of dairy milk. So we're able to deliver this very unique and wonderful combination of delicious tasting products, without any sacrifices. You get the nutrition of dairy milk, you get the taste and texture of dairy milk. And so you're able to get the best of both world in a very sustainable product.
Laura Flanagan: (06:44)
By using yellow peas, we're able to save a significant amount of water, versus dairy alternatives, and even versus other plant-based alternatives like almond milks that you mentioned that you had tried and experimented with. So on our website, ripplefoods.com, one of the first things that a consumer will see is what we call the ripple effect. And it's based on the truth that each of us can take very small actions that have a ripple effect on the world, and have a much bigger impact. So we have a count on our website that shows, every time a consumer purchases one of our products, how much water they've saved for the planet, how much plastic they've saved because we use recyclable plastic, how much carbon we've saved, and all the good things they've done for themselves on how much more protein is in their diet, how much less sugar. So it's a wonderful combination of a proprietary technology, great tasting products, and little decisions every consumer can make to do good for the planet.
Dan Fishel: (07:44)
Can you share some of this data? It's very interesting. So, how much plastic has the world saved? How much carbon emissions?
Laura Flanagan: (07:53)
It's in the millions and hundreds of millions, depending on the statistics. So there's over, I think we're now 200 million gallons of water saved. It's a very large number, so you'll see that on our counter on the ripple effect, and it's in real-time. And so you'll see that the numbers are changing based on how many consumers are becoming part of the Ripple family.
Dan Fishel: (08:14)
So what type of products you already have in stores?
Laura Flanagan: (08:19)
So we have our milk products, refrigerated milk products and those come in several flavors, unsweetened original, original vanilla, chocolate as you mentioned. We also have protein shakes, which have 20 grams of protein and tastes delicious. This past year we launched ice cream, which is a fan favorite, and so we have five different flavors of ice cream. And then we also have some coffee products, like half-and-half and coffee creamers as well.
Dan Fishel: (08:49)
Can you talk about the technology? Because I'm telling you, I've tried many, many milk alternatives, I've been forced by my wife, and Ripple by far is the best tasting milk I had in terms of again, the texture what makes the difference. Can you talk about the technology? How do you make this magic work?
Laura Flanagan: (09:07)
Yes. So as I mentioned, our protein is called Ripptein. So, a protein molecule by itself is tasteless. It's all of the impurities that surround the protein that are on the protein molecule that can give it a planty or beany taste. And what Adam and Neil developed was a proprietary process that's able to remove those impurities off the protein molecule better than anything else commercially available. And so with that process we're able to remove the impurities up to 99%, depending on which specific molecules you're looking at.
Laura Flanagan: (09:44)
We're able to create a much cleaner tasting protein, and that allows us to put it in products like milk. Where there's not much else that you can camouflage a planty or beany taste, which is why if you try some of the other plant-based alternatives, they don't taste the same as milk. And that was part of the inspiration for Adam and Neil in starting and founding the company, is they felt like no one was doing plant-based milks well at the time. And with this technology we were able to launch a milk into the market place that taste great, matches or exceeds the nutritional value of traditional milk, and still has a great creamy texture that everyone has come to know and expect from a milk product.
Dan Fishel: (10:27)
So you've been around for about four years.
Laura Flanagan: (10:30)
Ripple has been around for about four years, mm-hmm (affirmative).
Dan Fishel: (10:34)
Four years. And now in how many points of sale are you being, offering your products around the U.S.?
Laura Flanagan: (10:41)
So we're in about 17,000 traditional grocery stores here in the United States, and we're growing distribution every day. So we were able to get into Walmart this year and doing well there. We've been able to get into a major convenient store here in the United States. We tested it first, it was successful, and so we expanded that. We did a test in a major club chain, that's now being expanded. We just got distribution into Kroger stores in the Midwest here in the United States. So every day we're growing distribution. We actually just got some of our products into certain school systems here in the United States, given the importance of having highly nutritious plant-based alternatives for children that are very accessible and available. So every day we are increasing our [inaudible 00:11:30].
Dan Fishel: (11:32)
So, the sales of plant-based milk is growing. Can you share some data about traditional dairy milk versus plant-based milk?
Laura Flanagan: (11:43)
So the plant-based dairy alternatives category is on track to become over a $2 billion category. And we are continuing to grow every day. And Ripple continues to exceed the growth of the broader plant-based category. So we are growing and gaining share every day. And we expect those trends to continue. In fact, since COVID really hit the United States in March, we've seen an acceleration in the growth of the dairy alternative category, and Ripple has benefited from that as well.
Dan Fishel: (12:17)
Okay, great. So, a quick note to our audience. We have a little icon on the bottom of the screen, it says Q&A, we want to keep this conversation interactive, so please ask questions. We're going to leave enough time to take some questions from the audience, but please I already see two questions here. Please add some more and we're going to address them very, very shortly. So now we'd like to transition from plant-based protein to cell-based proteins, and I'd like to welcome Lou Cooperhouse from BlueNalu. How are you, Lou?
Lou Cooperhouse: (12:58)
No, great. Thank you very much for having us.
Dan Fishel: (13:01)
So, last week in Singapore the regulators for the first time in the world they have allowed the consumption of lab-grown chicken nuggets, and that's a world's first. But you are staying away from the classic chicken or beef scheme and are focusing on seafood, lab-grown seafood, why is that?
Lou Cooperhouse: (13:24)
A great question, Dan. I think maybe just even pick up on a term that Laura mentioned, the ripple effect. What the world has seen is obviously a beginning of global transformation in our food supply. Where consumers are seeking more sustainable solutions in their diets. That began with plant-based milks, and now we're seeing plant-based beef, life beyond an impossible and so many other categories, it's just on fire, Dan.
Lou Cooperhouse: (13:52)
And what happened in 2013 was another technology was really launched as proof of concept the first time. Another alternatives to manufacturing animal products without animals. That being cell-based. So proof of concept in actually beef was first demonstrated. And frankly Dan, I was so excited by this as a total game-changer for the global supply chain. Proteins to actually manufacture real products in vitro if you will, that's the same flavor, texture, mouthfeel, same experience as conventional food products.
Lou Cooperhouse: (14:27)
But frankly, Dan, I was really... I said to myself, the real opportunity of the greatest of them all is seafood. And you used the word in your introduction, you used the word vulnerability. Our global supply chain of seafood is in my opinion the most vulnerable supply chain on our planet. It's a $200 billion sector, where global demand is only increasing every year, it's the highest every, being really eclipsed by what's occurring in Asia as GDP increases. And around the world as consumers are shifting from read meat towards seafood, the problem of course is we have a global supply chain gap as our seafood supply is increasingly diminishing, and some cases disappearing. Due to warming oceans, acidification, and that's a human health side, micro plastics, environmental pollutants, toxins, and mercury. And there's as you know, warnings on fish by the EPA and FDA here in America about for pregnant nursing women to have zero or limited amounts of seafood in their diets.
Lou Cooperhouse: (15:34)
So, we could do something much better. We can actually manufacture a real seafood product a third way, wild farm raise, now cell-based. So what we're doing is really totally disrupting this whole supply chain by manufacturing the same product. It begins in the lab as all products do, whether it be oatmeal or almond milk, or pea-based milk, but it's made in a factory. So this looks a lot like a micro brewery, making a large-scale production of cell-based seafood products. And we're just about one year away from launching our products in commerce. Here in the United States we're under FDA regulatory environment, and we're very excited by what happened by the Singapore Food Agency approving this for cell-based chicken products.
Lou Cooperhouse: (16:21)
We're focused, Dan, on the filet, the higher value fin fish species, like mahi-mahi, red snapper, bluefin tuna, and even in the future Chilean sea bass. So these products will soon be on our plates in just a few years.
Dan Fishel: (16:38)
So I just want to understand the product. Because I think we need to visualize how it actually looks. It is just a filet, does it look like a filet? Does it smell like a filet? Does it taste like a real filet fish?
Lou Cooperhouse: (16:51)
It sure does. We actually have done a demonstration of that internally and for our investors last year. We're the first company globally to actually demonstrate the product perform the same. I think just like Laura was describing how important the sensory attributes are of making a product that replicates what people are used to conventionally. We similarly, when you think about seafood, how do you prepare it? In really three broad ways. I'm a food centric, culinary centric person coming from the food industry. And how do people prepare seafood? Well, either they cook it. What does that mean? They grill, they fry it, they saute it, they might deep fry it, they might steam it, microwave it. You get the idea. It needs to get caramelized, it needs to have all the same reactions as conventional seafood. Or they might put it in a, if you will, an acidified marinade, like in kimchi, or ceviche, or poke, or they might prepare it raw.
Lou Cooperhouse: (17:49)
We demonstrated every possible way, it performed the same, smelled the same, tasted the same, it is the same. The same nutritional composition, the same functional characteristics, and even genetically it is the same species. It actually comes from the same cells that are used in conventional seafood product. And that's what the FDA is looking for. They want us to demonstrate that our product really is the same as conventional products, and we're doing all those comparison works right now.
Dan Fishel: (18:21)
So Lou, I have to admit, the first time guttered you didn't invite me to that tasting last year.
Lou Cooperhouse: (18:26)
Next time. Next time.
Dan Fishel: (18:27)
There's always a second chance. But let's talk about the technology, because this to me or too many sounds like an act of witchery, how do you take... how do you create fish that is not naturally born in the sea in the water? How does it work? How does the technology work here?
Lou Cooperhouse: (18:45)
The food technology is used in every industry. People don't think about it that much, but whether it's candy, sausage, cheese, or plant-based milk, there's all kinds of technology that are used every day in the food industry. No witchery at all, it's just normal procedures that are used to manufacture products.
Lou Cooperhouse: (19:04)
As I described it, it's like a micro brewery. So if you think about that concept, what we're doing is we're... there's a two-step process. First we are doing something which is very critical, we're making what's called a stable cell line. So we're taking from a real fish, mahi-mahi for example, or bluefin tuna, you're isolating the cell types that are found naturally in a seafood that you might have for dinner. So in that seafood you have for dinner, if you think about it, has three... the flavor comes from three types of cell types. There's muscle, fat, and then there's connective tissue.
Lou Cooperhouse: (19:39)
So we have actually literally isolated those three cell types from fish, then we're propagating them and having them double numerous times. They double, and double, and double. So we are feeding them the same nutrients. Picture that micro brewery again, they're in a bath, the bath that these cells are in are nutrients. The nutrients are the same kind of nutrients that you might find in agriculture feed, like salt, sugars, amino acids, lipids, vitamins, minerals, supplemented by other ingredients that we add to really propagate growth and have them to continue double to get these larger, larger volumes. And then these muscle, fat, and connective tissue are then formed into the actually filet of product. It could be a cubed used in poke or it could be a filet.
Lou Cooperhouse: (20:26)
So we are using some again, food industry principles like extrusion to actually have the products layered in the same, or more homogeneous in structure, so we can replicate all the same sensory experiences that you would want. And what's really beautiful about what we're doing Dan, is our product is a 100% yield. We've talked about sustainability footprint. Today's seafood might be shipped from say, Southeast Asia to say, New York City, that's almost 10,000 miles.
Lou Cooperhouse: (20:56)
Along the way that fish that was caught, it might have been accompanied by 30 to 50% by catch, that's typically fish that's caught in nets that's thrown back typically dead. It's a lot of animal suffering, and certainly a lit of inefficiency, and then shipped long distances with huge transportation costs it involves. To then experience maybe a 50 or 60% yield, my food service operator because you have head, tale, bones, and skin. Our product is a fully yielded, just the filet. So we are displacing all that transportation, all that loss of life, all that loss of yield, with a 100% filet, totally sustainable solution with all the wonderful taste of seafood but without any of the negatives, mercury, micro plastics, et cetera.
Dan Fishel: (21:51)
Yeah, so it's safe for pregnant women basically?
Lou Cooperhouse: (21:54)
Absolutely. So as much as [crosstalk 00:21:57].
Dan Fishel: (21:57)
Sushi is now allowed, basically?
Lou Cooperhouse: (21:59)
Yes, and for children too, and older people that might be immunocompromised.
Dan Fishel: (22:04)
So, a quick question for you about market perception, we're looking right now there's finally the COVID vaccine received the FDA approval, but there's so many people that are still saying, I'm not going to get this vaccine, it's going to change my DNA, et cetera, et cetera. Aren't you concerned about what people would think about fish that has been grown in a lab and not in the sea? Would they consume it?
Lou Cooperhouse: (22:32)
Positively. With any new food product there's always early adopters. There was an early adopter to the first person who said, I don't want to go on a... I'm used to a horse drawing carriage, but no, here's a car. So here's a computer, here's an iPhone. So technology always has early adopters who really see the value. In our case human health, animal suffering, global sustainability are your reasons to make a difference and purchase this product.
Lou Cooperhouse: (23:04)
So again, we have no downsides to purchasing our product. Yes it's made differently, but if you really know more about how food is produced, you'll say no, it's actually made the same as a lot of other things that are produced in the food industry, you just don't know that.
Lou Cooperhouse: (23:19)
So yes, there's always early adopters. And we've actually done some consumer research that have already demonstrated at the restaurant level huge interest in our products, because right now their experience with seafood, tremendous losses in yields, inconsistent variables, supply chain. With us they get consistency which is a real game-changer. And for consumers they really have shown that the human health benefits are clearly motivating them to make the purchase. So we are not concerned at all.
Dan Fishel: (23:49)
Okay, thanks Lou. And now I'd like to transition from surf to turf. And welcome Freddy from Tevel Aerobotics. How are you, Freddy?
Freddy Raitan: (23:57)
I'm okay, thank you. Good morning. Thank you for having me.
Dan Fishel: (24:01)
So Freddy, you've developed a fleet of autonomous drones that pick fruit in the fields. So what type of problems are you trying to solve?
Freddy Raitan: (24:11)
Okay. So let me start by saying that food consumption around the world has grown to about 70 million tons, which is double what it used to be 20 years ago. But on the other side unfortunately what we see is that on the agricultural sector we are losing a lot of the workers that do the picking for these goods. Mainly because it's very hard work, it's done under harsh conditions. And the new generation is migrating to the urban jobs which are high paying and not seasonal.
Freddy Raitan: (24:45)
So what is happening is it's exactly the opposite. You have less people picking where you need more fruits to be picked. And then you have a serious shortage around the world. So we came up with this brilliant idea of having drones which are robots in a sense that identify the fruit on the trees. They approach it, pick it, and place it on bins that they don't damage obviously the fruit. And that is done completely autonomously.
Freddy Raitan: (25:19)
So I mean, obviously in the agricultural sector there's a lack of automation. We haven't seen much in the last 50 to 70 years. But because of these shortages that we're going to experience even more dramatically going forward, there's a clear necessity for inventions like ours to take a hold and for farmers to start using. And we're very excited about it, I think that the feedback we're getting from the farmers they cannot wait for us to be in the... I mean, helping them with this problem and looking forward to do so.
Dan Fishel: (25:59)
So there is a video on your website of Tevel Aerobotics, so how the product works. But for those who are... that would try to imagine how it looks. Can you describe how does the product look? What exactly happens in the field?
Freddy Raitan: (26:12)
Sure. What we have done is we have developed a drone. It's different than the drone that you see from DJI. It has four propellors and it has an arm. It's a robotic arm, and on top of that you have a lot of vision equipment. So you're combining three different technologies. Obviously the drone technology which is aerodynamics has a lot to do with flying. That's one technology that is very much done or developed for working inside the farm environment, with a lot of dust, inside leaves, so it has its serious challenges.
Freddy Raitan: (26:54)
The second portion of it is the artificial intelligence which needs to identify the fruit. It has to differentiate from leaves and fruit. And then it has to understand the best angle of attack to come to approach the fruit at the right angle to grab it in a very soft way. And that's where the third portion of it, which is a robotic arm comes into play. So you don't damage the fruit, you grab it, you bring it, you take it. And then the next portion of it is the land base which is also autonomous where you put the fruit in such a... you place the fruit in such a soft way so it's not damaged at all. And obviously this is done, like I said, in an autonomous way where the farm doesn't have to be supervising or watching as all this is done in parallel ways.
Dan Fishel: (27:55)
So how does the drone know whether a fruit is ripe or not?
Freddy Raitan: (28:00)
We have sensor. That's a very good question, because one of the things that the farmers are asking us is to differentiate between precisely when the fruit is ripe to be picked and not. Part of the problem right now is that when you have pickers and they are paid by the weight of the fruit, they just pick everything they have in front of them because that's more efficient. Regardless of whether the fruit is already ripe or not.
Freddy Raitan: (28:28)
In our case, we can determine the... we have sensors around the grippers of the robot that understands the size of the fruit and also the color of the fruit. And depending on the programming that was placed on each particular robot, you can decide to pick it if it's up to that level of size and color, and not pick it if it's not.
Freddy Raitan: (28:55)
The important thing is that if the robot decided not to pick it because it is not ripe yet, he knows exactly the location where all these unripe fruit were not picked, so then it can come back exactly to those locations and pick them at a later time. Which is extremely efficient, because obviously a ripe fruit or the right level of bricks for the farmer has a very different price at the market than one that it's not that will probably most likely end up going to concentrate or juices which pays probably a fraction of the fresh market. So that's a very important distinction that we can help the farmers with.
Dan Fishel: (29:41)
So can you talk a little bit about the expected business model? I assume you are developing a product that still has to make sense in terms of cost to the farmers.
Freddy Raitan: (29:51)
Sure. Sure. If I take for example, right now the base case let's say in apples, around the world on average would be $400 a ton, the cost. We anticipate that given our cost of operation which are significantly lower than the farmers, we could probably save the farmers around 30 to 40% of that cost. And the main reason for that is that there's a lot of overhead cost that farmers have to pay for bringing these pickers. You have to pay them traveling expenses, you have to hold them in hotels or houses that they built for them, you have to transport them, you have to feed them, you have to pay insurance. You have health insurance, you have sickness. All these kind of things are not relevant to us.
Freddy Raitan: (30:54)
As robots obviously you don't have to deal with any of this. And the second part of it is the flexibility to be able to pick. I mean, this is a season business. For example, apples are picked three months out of the year. Then you have citruses, you have stone fruits and so forth. Our drones offer us the flexibility to move. Instead of the farmers buying this equipment and using this as a capital expenditure. What we're going to the market was a model of renting this equipment. That you will lease it as many as you want for as long as you want, and then just you will use it for let's say the three months of the season, we will take them back and then we will move them to the citrus locations where they will be used for another three or four months, and then for stone fruits.
Freddy Raitan: (31:46)
So we have a year-round business where we take care of the usage of the drones, and not the farmer which only uses it for three or four months. So I think it's a win-win from their point of view and ours as well.
Dan Fishel: (31:59)
Great. Thanks, Freddy. So now I'd like to open a question for all three of you. We are in the midst of a global pandemic and I'm just wondering how it's been the implications on your business? We can start with you-
Freddy Raitan: (32:15)
Okay, I can start.
Dan Fishel: (32:17)
... yeah, start with you Freddy.
Freddy Raitan: (32:19)
It was pretty dramatic for our business because I think that what the world learned is that most of the pickers come from different regions of different countries. I'll give you an example, when France and Germany closed their boarders, they realized that there were no pickers for their fruits. So their whole supply of fruits in those two countries and many others was absolutely disrupted to such an extent that they thought that they would bring local employees or local people to, I mean, to pick the fruit. And they realized that either the money wasn't good enough for them to do it, or the conditions were too tough, and there was expertise to know how to do it. So they had no choice but to make the exception and allow having flights, charter flights in these two countries for flying from Eastern Europe these pickers to do the picking as they normally do.
Freddy Raitan: (33:16)
And that happens in the U.S. as well, because a lot of these pickers came from Mexico which has been disrupted by the COVID. In many other countries that we saw is that all this migration that was coming in and out for these jobs disappeared. So it's exacerbating the problem for his fruit farmers, because this supply has vanished in a lot of ways and prices have gone higher. Experts they're trying to teach locals to do it but they're finding it extremely difficult. So COVID has-
Dan Fishel: (33:54)
So I also understand that during COVID times you had a POC, a proof of concept ,in South Africa that has been canceled.
Freddy Raitan: (34:03)
Correct.
Dan Fishel: (34:03)
And you took this time to train the algorithm on additional types of fruits, so now we can pick actually pick not just apple but also peaches.
Freddy Raitan: (34:12)
Peaches. Yeah, peaches, we train on peaches and citrus fruit.
Dan Fishel: (34:15)
Favorite fruit, yeah.
Freddy Raitan: (34:16)
Correct.
Dan Fishel: (34:18)
Okay. Lou or Laura, the impact of COVID.
Laura Flanagan: (34:22)
Well, COVID for the Ripple business has been both headwind but to be honest more of a tail wind for the business. So back in the middle of March is where here in the United States the lockdowns and other more extreme measures started to happen. And we were getting panicked phone calls from our consumers, because Ripple was selling out in grocery stores all across America, and our consumers are very passionate and very loyal to our products and they couldn't find them because we were sold out.
Laura Flanagan: (34:51)
And so, knowing that the next several months were probably going to be a period of volatility, in both consumer demand and supply chain, and a more retailer supply chain. We very quickly and very adaptly developed and launched our own e-commerce direct to consumer website, and I'm so proud of the team effort who developed this. In less than two to three weeks we had our site up and running, so that a consumer no matter where they were and where they lived, they would have access to Ripple products. And so today we sell on our website our refrigerated, our frozen, and all of our shelf-stable products. And it opened up an entirely new channel for us that we really didn't have on our radar screen at the beginning of the year.
Laura Flanagan: (35:35)
So that's been the good news, is that it opened up a whole new channel for us. Our performance in stores has increased. As I've mentioned, COVID actually was a tailwind for he plant-based diary alternative category. So we've seen an increase of momentum there.
Laura Flanagan: (35:51)
The one headwind that we had was that as a growing company with launching new product... we were expecting to get distribution of many of our new products back in the second quarter of this year, and there was no grocery retailer who wanted to reset their shelves in the middle of that pandemic and in the middle of all the panic buying. So it delayed us getting distribution. Some of new distribution and new account, it's a one major retailer we were supposed to get in April, we ended up shipping in September and October. So it's performing really well now and for the long-term health of the business we'll be fine, but we did have some delays in getting some new distribution.
Dan Fishel: (36:33)
Okay. Lou?
Lou Cooperhouse: (36:36)
Hey Dan, I would just add. Maybe as Freddy and Laura mentioned. I think the whole world woke up to just how fragile our supply chain is in all categories through the pandemic. And I think we are very fortunate to continue working as in our company here in Southern California. But we were also frankly saw so much more excitement and enthusiasm from the investor community due to just an increased realization about this fragile vulnerable supply chain. And food security really became even a word that we hear more and more along with sustainability. The world needs to feed itself in the coming decades, and this fragile nature of our supply chain can only possible, God forbid, get worse.
Lou Cooperhouse: (37:30)
But should that happen, we need new solutions as you and I have talked before, Dan. We don't have a choice, we must create a new supply chain solution, particularly for seafood. So we're excited to be part of that equation.
Dan Fishel: (37:44)
Great. So unfortunately we're running out of time. We're into the last five minutes of the session. And I'm just wondering if you can quickly, one or two minutes, tell us about your view about the future of your sector. Where would we be in five years? Again, plant-based proteins, cell-based proteins, INFORM technologies.
Freddy Raitan: (38:11)
I'll give it a shot to start. There's no question that because of the issues I described before, the problems are going to be exacerbated in the next five years. So there's going to be no option but for automation to come into the farms and to help the farmers with all this dramatic shortages that they will be facing, which is only going to get worse.
Freddy Raitan: (38:34)
So we expect that if we do our job from our end in developing this to make it easy enough and autonomous enough for the farmers to use, then the challenge will be to deploy it for... I mean, obviously farmers are very traditional in the way of doing their businesses. So we have to have a simple enough solution so we can really expand it and grow it as fast as they need it, in as many countries as possible.
Dan Fishel: (39:05)
I fully agree with you, by the way. What we see and history suggests that after, that we will see a spike in automation following this crisis. It happened before in 2008, it happened in 2000, it happened in 1991. And what we see is that automation comes in spikes and it's centered around economic crises when the... and employees that are losing their job are simply replaced with a mix of technology and then highly skilled workers. But now of course we have AI which we didn't have in previous recessions. So we're definitely going to expect to see a spike in AI technology in the next five years. Lou or Laura?
Laura Flanagan: (39:49)
Yes. Dan, I think there will absolutely be a continued migration to plant-based or in Lou's case, cellular products. There's heightened awareness now of the climate change issues and with a new administration coming in in January here in the United States, I think there'll be more focus on climate change and sustainability issues. I serve on two boards of public companies, and not question that boards and investors, retailers and consumers are now far more interested and engaged in finding solutions, sustainable solutions for the products that they choose.
Laura Flanagan: (40:27)
So there will be a continued migration. And I think the pace of that will depend on how quickly Lou's company and companies like Ripple close the gap to animal-based products. So how quickly we close the taste gap, how quickly we close availability gaps, how quickly we close cost gaps to animal type products. And every day we are making strives in that area. So I think as we close those gaps and as consumers don't have to make sacrifices, either taste sacrifices, nutrition sacrifices, or financial sacrifices to choose sustainable products, we're going to see an acceleration in plant-based products.
Dan Fishel: (41:09)
Okay. Thanks. And Lou?
Lou Cooperhouse: (41:13)
Hey, Dan. In fact, they're having some projections. The one I'm thinking about is from the [inaudible 00:41:18] Consulting Group that actually has projected that by the year 2040, 60% of our global supply chain of protein will be either plant-based or cell-based, and that conventional meat products will go from roughly a 100% today down to 40, and become unconventional in just two decades. So to answer your question, we will start to see the first large-scale factories within five years. Again, we plan to launch in commerce in a limited capacity late next year, to be followed by factory one, two, and three.
Lou Cooperhouse: (41:50)
So just as plant-based has seen level of excitement in category, cell-based is right behind it with a second solution, giving consumers what they always want, options. And different products will find, or different categories, we'll have different optimal solutions. So we're just seeing again just tremendous choices coming and new sustainable solutions, and again, I think for all three of us, our panelist, we are really the front-end of just a global transformation. So the future is bright.
Dan Fishel: (42:26)
I assume as far as your concern although the cost would go down significantly, because now it's probably quite expensive to eat some lab-grown meat and fish.
Lou Cooperhouse: (42:36)
That's correct, Dan. Right. Now it's all very bench top scale. But what we will see clearly is, economies of scale will enter this space and make an enormous difference. This industry is looking from farmer graze, supply chain, cost modeling, to food grade. Very different, bizarrely different to [inaudible 00:42:58] structure involved. When you go down to food grade, all body of concept of scale. So yeah, as these large factories come into play we will be a price parody, or I believe better at... In the meantime, conventional seafood is only increasing in availability and cost, and our cost will continually decrease. So we actually believe we could be profitable in factory number one. So that's where we think this industry is going.
Dan Fishel: (43:28)
Great. Unfortunately our time is up. Lou, Laura, and Freddy, thank you very, very much for your time. I'm sure we could have continued this conversation for many long hours. But for more information about Ripple, BlueNalu, and Tevel Aerobotics, please go to the SALT website. Thank you very much Laura, Lou, and Freddy. And we look forward to seeing you in additional upcoming webinars. Thank you very much.
Freddy Raitan: (43:58)
Thank you.
Laura Flanagan: (43:59)
Thank you, Dan.
Dan Fishel: (44:00)
Bye-bye.