S6. E10: Michael Pellman Rowland: The Oatly IPO, The Magic of Mushrooms, and The Future of the Protein Market Place
Today’s episode is the third of a four-part series on the future of food, sponsored by VegFund. VegFund empowers vegan advocates worldwide through grant funding and supporting effective outreach that inspires people to choose and maintain a vegan lifestyle.
“If we fast forward, let's say to 2025, I think you're going to see a lot of companies in the marketplace using mushroom-based products to create alternatives to things like meat and chicken and within food. And then also alternatives within textiles to things like silk, leather, and packaging for things like Styrofoam and plastic and so on.
"So, I’m very much a… what do you call it? Maybe, a fungo fanatic. I don’t know if there’s a phrase for that, but I am totally a believer in all things fungi.”
- Michael Pellman Rowland
Michael Pellman Rowland is a financial advisor. He’s made many appearances on Species Unite - this was his fourth time coming on the show. He and I spoke about the Oatly IPO as well as many other enormous victories in the plant, cell, and mushroom-based worlds.
Swedish vegan company, Oatly went public on May 20th. The company’s initial public offering (IPO) raised $1.4 billion and its share prices (which were initially set at $17 per share) spiked by 30 percent on the first day of trading. This is another huge milestone in the plant-based market boom after Beyond Meat went public a few years ago.
The future of food is already here and fortunately, it’s happening much faster than many predicted.
Michael is our go-to guru when it comes to the big wins for meat and dairy alternatives. He’s a wealth of knowledge and information and he’s a stellar human being. I learned a ton in this conversation, I hope that you do too.
Connect with Michael on Linkedin
Read The Big Money is Going Vegan
Plant-Based Companies Mentioned in the Episode:
Transcript:
Micheal: [00:00:14] If we fast forward, let's say, to twenty twenty five, I think you're going to see a lot of companies in the marketplace using mushroom based products to create alternatives to things like meat and chicken and within food. Then also alternatives within textiles to things like silk and leather and packaging for things like styrofoam and plastic and so on. So I'm very much what you call it, maybe a fungo fanatic or I don't know if there's a phrase for that, but I am totally a believer in all things fungi.
Elizabeth: [00:00:48] Hi, I'm Elizabeth Novogratz, this is Species Unite. Today's episode is part of a four part series sponsored by Veg Fund. Veg Fund empowers vegan advocates worldwide through grant funding and supporting effective outreach that inspires people to choose and maintain a vegan lifestyle. For the months of May, June and July, Species Unite is celebrating plant based eating with vegan nights. All that really means, as we would love for you to cook dinner for your friends or your family or your neighbor and make it vegan. On our website, we have downloadable ghost packs with recipes, tips, information to make your vegan night all the more fun and better. So go to our website SpeciesUnite and download a host pack and you'll be entered to win one of six, two hundred and seventy five dollar vegan gift baskets that are filled with all sorts of incredible plant based products. This conversation is with Michael Pellman Roland. Michael is a financial adviser, and he's made many appearances on Species Unite. This is his fourth time coming on the show today. He's here to talk about the Oatly IPO. On May 20th, Swedish vegan company Oatly went public on Nasdaq. They raised one point four billion dollars and their share prices spiked 30 percent on the first day of trading. Michael is here to talk about what that means for the future of plant based alternatives.
Elizabeth: [00:02:44] Michael it is so good to see you. I think now that it is your fourth appearance on Species Unite, we can call you a regular. Thank you for being here.
Micheal: [00:02:52] Yeah, it's wonderful to see you again and on the back of some exciting news last week, it's kind of perfect timing to reconnect.
Elizabeth: [00:02:58] It's awesome timing. So before we talk about the Oatly IPO, even though you've been on quite a few times, just give us a quick background on who you are and why you're here.
Micheal: [00:03:08] Sure. So I'm an investment adviser focusing on impact investments and have a specific interest and knowledge base around sustainable food. In particular, the alternative protein category, which does a lot around addressing the animal welfare issues and our food system, but also for important things like climate. So I've built up a good reputation of understanding these marketplaces and helping investors figure out where to put capital to both make money and also address important social and environmental concerns like animal welfare and climate change.
Elizabeth: [00:03:42] So Thursday was the Oatly IPO. Will you talk a little about why that is such a huge milestone in this plant based world and what it means?
Micheal: [00:03:53] Yeah, absolutely. Well, I mean, this is really the second big development in the public markets from a plant based perspective. You know, the first one being Beyond meat a couple of years ago, which was really the watershed event for waking a lot of investors and others up to what's really going on in this space. So, you know, the fact that you have now another substantial plant based brand in Oatly that is now publicly traded that now really anybody can put capital into for even very small dollar amounts, it just further kind of democratize access to investing in this theme and also giving investors an additional sort of data point or sort of proof that this is only the beginning of what's likely to be a further cascade of additional companies that are now private that will ultimately go public, which will make it easier for these companies to continue to raise capital and for more companies to have the confidence to start up and tackle something within the alternative protein category, whether it's in dairy or in meat or in seafood, or even in materials like alternatives to leather. It's just an additional sort of proof positive that this is a space that is really only kind of getting off the ground. And the fact that it is such a well-known brand and is off to a good start, I think is just really important for the purposes of keeping people appreciating just how big this movement is becoming.
Elizabeth: [00:05:26] With Beyond Meat, the world seemed really shocked when the IPO happened and how huge it was. Was it the same kind of thing behind Oatly, or is it now becoming more like people are not surprised because of Beyond meat?
Micheal: [00:05:38] Yeah, no. I mean, there's way less surprise now. It's more just like it's exciting when it happens, but it's not like, Whoa, I can't believe this is happening. Like, those days are really over now, which is wonderful. I think you saw that because there wasn't nearly the same degree of fanfare and excitement because, you know, it's like anything else, once you're at the second game in town or whatever, it's just not as big of a deal to investors because nobody's surprised by the fact that this is happening, particularly when you have companies like Impossible that have raised massive amounts of capital and are likely going to be going public themselves before the end of the year and just a number of other companies in this space, like Califia or Just that are also raising substantial sums of money on the way to them, likely going public in the coming year or so. This is now just becoming more, I'd say, accepted from the investment community of what they can expect and it's really now just about, hey, let's get in on it as opposed to Wow, I can't believe this is happening, right?
Elizabeth: [00:06:42] So it's accepted that these plant based companies are the norm or that they're becoming the norm.
Micheal: [00:06:46] Absolutely. You know, particularly with COVID, it really accelerated the demand for plant based and other healthier alternatives. So part of that was, you know, with COVID people being concerned about their health and well-being and understanding the importance of their immune system being strong, you know, to ward off any potential impacts of COVID and also being indoors all the time, but also because the supply chain of a lot of the meat and dairy companies got disrupted for a lot of consumers if they wanted milk or meat, they might not have been able to get it or the pricing might have gotten out of whack and so for some, it actually forced them to try a Beyond Burger or an Oatly milk, because maybe they weren't able to get the things that they were used to. So for a combination of reasons that sales of these companies, whether it's Beyond or Impossible or Oatly or just exploded. So it's only added additional credibility to this thesis that's been playing out, which is that consumers want this and it's not likely to go away any time soon.
Elizabeth: [00:07:49] The New York Times did a piece last week called The Big Money is Going Vegan. I'm sure you saw it. I can't tell you how many people sent it to me. A lot of people are investing in these vegan companies, celebrities, big investors. Will you talk about that a little bit?
Micheal: [00:08:04] I think what's making it really easy for whether it's celebrities or substantial investors or venture capitalists to be investing in this space, is that the growth rates and the revenue that is being generated is just too hard to ignore. So whether you eat plant based or not or buy into everything that these companies are trying to solve, you really can't ignore the hard data, which is that they're growing massively and generally way faster than the counterparts they're looking to replace. And the environmental outcomes that are catalyzed by these companies are just substantial. So if you care about climate change or if you care about the dwindling amount of water supply across the world, if you care about trying to regenerate land and let more of it rewild if you care about biodiversity, investing in food just ticks all of those boxes and you get to make a lot of money doing it if this train keeps rolling, which it looks like it will. So it gets very easy for Leonardo DiCaprio or Katy Perry or an Oprah to say like, Yeah, I want in on that. I want to get on this gravy train and look good doing it because there's only positive PR boost that people are getting to attach their names to these brands.
Elizabeth: [00:09:21] You think Impossible will be next?
Micheal: [00:09:23] It seems likely, I mean, to a lot of folks, it's surprising they haven't gone public yet, but they have continued to raise a boatload of money at valuations that are similar to where Beyond is now. So if I had to guess, I would say that Impossible is likely to be the next major plant based IPO and the possibility of another coming in before that is certainly there. I think candidates would be Just, Califia, I say those are probably the two main ones, at least in the U.S., that could potentially go public before Impossible. But I think if I had to guess, Impossible would be the next and it would be sometime after the summer.
Elizabeth: [00:10:05] It will be a really big year for this world.
Micheal: [00:10:08] Absolutely. Yeah, I mean, it just makes the argument for investing in this category easier to make and easier for investors in the public markets to find pure plays on things that they want to support. Because one of the challenges of investing in the public markets, which are companies like Microsoft and General Electric, is that you can basically buy and sell whenever you want. There aren't a lot of companies that people feel really good about, like quote unquote a Tesla or a clean energy company, something that's kind of a pure play on something sustainability related. Right, so if somebody wants to invest in food right now, they might look at Unilever or Nestlé and say, Well, they're doing some things I really like, but they're also doing a lot of things I really don't like. So it creates this inherent challenge for impact investors to find investments that they really feel good about making and so they tend to have to focus more on the private markets to find those companies. But not everybody can invest in those private markets because they're generally reserved for what are called accredited investors who need to have a minimum amount of income or net worth to do it, or they just don't even know how to get access to them. So to have more companies like these publicly available so that somebody with a thousand or five hundred bucks, they can buy shares of Oatly now and they can buy shares of Beyond Meat. So to give people ownership in these companies that they may be sort of boxed out of in the private markets is just also a really nice win for people who want to get on this train, but don't have a lot of capital to do so.
Elizabeth: [00:11:45] Well and also because the company said, at least from my view, the companies that have done really well, whether it's, you know, in the alternative meat or alternative dairy, it's not the big companies where they have a plant based category. It's these small companies that this is all they do. Is that because people have more faith in them, the food's better or they people trust them more, I'm not talking about the investment side of it, I'm talking about just the fact that that's what people want to eat or drink.
Micheal: [00:12:15] I think as a general rule, there's a growing desire for consumers to buy and consume products that match their values. So it's a way for them to signal who they are and as a result, it's much harder to feel like you're represented in a brand as big as Unilever or Nestlé or Tesco because they're just so large and they're generally thought of as being less connected to the growing movements around sustainability and health and wellness and so forth that the the gen, let's call it Z and Y and X and millennial cohort that's driving much of the consumption of these products are looking more for brands that represent them and that are marketing specifically to them and using language that aligns with what they want to see and are thinking about their supply chains and their workforce and diversity and all the things that matter to these consumers who are the ones who are largely buying these products that are willing to pay more for those products. As a result, our catalyzing growth rates within these companies are just well beyond what these larger companies are achieving at the moment.
Elizabeth: [00:13:36] That way, it gives me a lot more faith in the future, and humanity that the world is shifting and especially younger generations are shifting to better values across the board when it comes to consumerism and when it comes to just life experience. They are a lot more considerate.
Micheal: [00:13:55] Yeah, very much so but the key to really making this a game changer beyond what it has been already is democratizing the access to these products because they're early in their journey, still harder to find and generally more expensive. So for families and consumers who are on a budget or living communities that don't have easy access to these types of products, what's really going to unleash, I'd say an even bigger wave of consumers wanting these products is for brands like Oatly and Beyond to go public, because what that does is it allows them to raise a substantial amount of money to then continue to invest inside their businesses, to continue to drive down costs and to scale the production even more to make it easier for them to get into markets where they aren't currently. Because if you're a family of four on a budget and a Beyond burger costs, I don't know, let's say like two dollars a burger and a factory farm burger costs 50 cents. You're going to make that decision every day because you can't afford the luxury to do something different. But when the Beyond Burger costs forty five cents instead of 50 cents and there's actually an incentive for consumers to buy something because it's cheaper, they're going to make that decision way more often than they would otherwise and then get them comfortable with maybe flexing their protein consumption to plant based options more regularly. That's what's really going to unleash a tidal wave of consumption and that's something that most of these CEOs really understand. So like when I talk to Ethan at Beyond Meat or Pat Brown and Impossible or Tony at Oatly or all of these CEOs, they all understand that, that the ultimate mission is to get the know the product quality up to such an extent that people can't tell that it's not meat or that it's not chicken or it's not fish, or that it's not dairy, but also to get the price points below conventional. Because once they have an economic incentive to buy these things beyond the sustainable incentive or the moral incentive or the health incentive, then it becomes really hard for consumers not to make that choice.
Elizabeth: [00:16:12] Right? And how long? I mean, I know you probably don't know the exact answer to this but how far away are we from, say, a Beyond Meat costing at least the same as a factory farmed burger?
Micheal: [00:16:23] You're right, it is hard to say because there are a couple of factors. One is from a policy standpoint and what governments around the world choose to do, because with increasing pressure on governments to be bold around their climate change commitments and the sort of the time that we're running out of to really address this issue properly. If you see a carbon tax or something that rhymes with that in the coming years, products that have a heavy carbon footprint like meat and dairy are going to inherently become more expensive. So that could be one thing that helps accelerate the pace at which this is happening. The other thing from a policy standpoint is what do governments do to sort of subsidize this industry in the same way that they did for things like solar and wind that really helped these businesses and industries get their costs down and scale more rapidly where they're now at a point where they don't need it anymore and they're actually cheaper than things like coal and natural gas because they've just gotten to the point where they were able to scale and build off those subsidies where they don't need them anymore. So does smart policy from the U.S. and Europe and other governments around the world come in to help make it easier for these products to become cheaper and grow faster through tax subsidies or other grants that these businesses could potentially qualify for and be much greener? Then how much capital can these companies can raise to then just drive the cost down by just producing more and more. If I had to guess, I would say less than 10 years. Most of the products that are, either are or will be in the marketplace will be able to be below conventional and there's the possibility that within certain categories, that might happen sooner, depending on what happens with policy.
Elizabeth: [00:18:06] Is that happening anywhere in the world government subsidizing plant based alternatives? Or is it kind of the same everywhere?
Micheal: [00:18:13] Not that I'm aware of. I know that there are conversations that are active and there are things happening on a peripheral level in Singapore and Japan and Europe, and even in the U.S. to a degree. But generally speaking, no. If anything, unfortunately, a lot of the policy moves that are occurring are actually in the opposite direction, which is where they're banning plant based companies from using terms like meat or cheese or chicken. There was a new bill that was just passed in Texas by their House, banning the usage of sausage and meat and chicken from anything that's not from an animal. So I'd say, if anything, right now governments are digging in their heels more to hold on to the previous industry's dominance to protect them as opposed to embracing the future, if you will. It's not looking great on the policy front at the moment, but I am cautiously optimistic that in the next few years, that's going to start to change.
Elizabeth: [00:19:12] I hope so. What confuses me about the Texas thing is I thought so many of these, like big meat companies, were on board with the plant based alternatives and cell based in the future. So who is it that's fighting this and saying, no, you can't call that meat?
Micheal: [00:19:29] Some of it are the businesses that are one hundred percent reliant on animal proteins. So, for example, like the Cattlemen's Association in the US, is one.0 Other business that are still heavily built off the back of animal protein that might be beginning to diversify into alternatives, but still very much want to protect their interests in that business, at least until they get further diversified, right? So they effectively are probably talking out of both sides of their mouth where they're investing in early stage plant based companies and maybe buying brands and also still attacking them on the other side. Also, it's just politically attractive in some markets to do this because a lot of people see this as a certain political extension of certain parties or a certain extension of how much things are changing in the world that people just aren't that excited by and want things to kind of go back to how they were. So there's a lot of things I would say that can attach to this, that don't necessarily mean that these companies ultimately want them to move in that direction for various reasons, but won't still fight it now.
Elizabeth: [00:20:41] But it also says a lot of good about what's happening. You know, a lot of positives about what's happening in the plant based world in the sense of if people are that threatened, there's something really big to be threatened by, right?
Micheal: [00:20:54] Absolutely. So five years ago, you didn't hear about this because there was no threat. So why did you care to talk about labels when there was no issue? So it's absolutely that this is really just a great sign that this industry is becoming such a concern that they feel like they need to really fight it now and so while it may be successful in certain ways and shapes and forms at slowing things down, I think it will ultimately fail to derail what's occurring. It just might make it manifest a little slower than it would have otherwise.
Elizabeth: [00:21:33] Right. So Beyond, Impossible, Oatly, Califia and just are probably the first five for going public. But beyond that, what should people be paying attention to? Like what's exciting and kind of rumbling under the surface?
Micheal: [00:21:48] There's a few things. So one is the plant based cheese space. That's an area where I'd say you really haven't seen a brand completely dominate the category and the way that it Beyond or Impossible has. I mean, there are definitely some really strong brands that have been out there for a long time, like Daiya or something like that and then ones that have been around for a while that are becoming bigger and bigger like Miyoko, for example. But I think the innovation that I'm seeing in that space and getting plant based cheese to really get closer to mimicking the experience that people expect from cheese is getting much, much closer. So I think one of the things you can expect in the next few years is to start hearing a lot more about plant based cheese companies that are growing to the level that might start warranting conversations around going public. Also just new technologies are going to manifest that allow them to perform even better because I think when you bite into most plant based cheeses for a lot of folks, they wouldn't be confused that it's not cheese, which is harder with something like an Impossible Burger or Beyond Meat or something like that. But they're getting much closer and the technology is coming along faster than it has before. So I think you could see something manifesting in the next few years where there are products in the marketplace that are easy to find where people are like, whoa. In the same way that they were like, Whoa, when they bit into an Impossible Burger or a Beyond burger or had the Just egg or something like that. So I think that's kind of one main thing to look out for and be excited about and if you're an investor to be looking at as a theme is that cheese category and the plant based space and by extension, also in the fermentation space where they're basically brewing dairy proteins that can then be used in mac and cheese products or and baked goods that use dairy. They're basically able to mimic exact dairy proteins through fermentation.
Elizabeth: [00:23:55] Without the cow?
Micheal: [00:23:56] Exactly without the cow, and the same way that you would brew a beer, they're basically brewing dairy proteins. So there's a company called Perfect Day, that's a good example of this that has raised, I think, upwards of three hundred million dollars now and is doing ice cream without actual dairy. So if you did a biological comparison between that dairy and, let's say, cow milk dairy, there would be no difference. But one is using animals and the other isn't.
Elizabeth: [00:24:22] We haven't released it yet, but I had Max from Turtle Tree recently. What's the difference between what they're doing with cell-based dairy and Perfect Day?
Micheal: [00:24:35] Perfect Day is using fermentation, so basically all that simply means is that they're taking cultures or bacteria, some form of yeast and combining that with other inputs to basically grow dairy. The difference with that and cellular, which is like what Turtle Tree is doing, where they're actually taking like on the cellular side, they're taking the cells of dairy where they'll basically take, let's say, a small amount of milk, actual cow milk and then use a process by which they can grow it and replicate it and create additional quantities of it. So one is basically starting with actual milk, but then being able to produce more of it without cows and the other is creating milk from nothing in effect that closely resembles milk in any way, shape or form. So you effectively get to the same place in the end, but they're using entirely different processes to do that.
Elizabeth: [00:25:33] Perfect Day, what they're doing, is that already regulated? Like is that on the market?
Micheal: [00:25:38] It's not on the market yet in massive quantities. I mean, they've done some things already where they had some pop up ice cream trucks and things like that, more for promotional purposes. But they have had some substantial partnerships announced and raised some significant capital in the last 12 months, where I would be surprised if they don't announce some big partnerships before the end of the year, where it's going to be more easily found in the marketplace, where you'll be able to go to a grocery store or something like that and get Perfect Day inspired ice cream. So think of it as like the intel inside. Like, it might be a Haagen-Dazs brand, but it'll be used with Perfect Day ingredients like it'll be something like that as opposed to Perfect Day ice cream. It's going to be more about selling these fermented dairy proteins to ice cream companies or to milk companies, or to cheese companies who can then sell their branded products that consumers already know and love, but be able to tout the sustainability benefits that come along with it.
Elizabeth: [00:26:40] And so there'll be a lot of cheese like this too, eventually.
Micheal: [00:26:44] Absolutely, there'll be cheese, there'll be milk. There's a company called Clara Foods that's fermenting egg whites. So they're getting pretty close to being in the marketplace as well. What they do is they sell that egg white input to confectionary companies that use egg whites when they use baked goods or when they just sell egg whites to a food service company that sells that to a university or a hospital or stadium. So a lot of these companies are taking what's called a B2B approach, where they're basically selling their products to other businesses who can then put it into their products as opposed to Beyond which is selling their products directly to consumers.
Elizabeth: [00:27:25] Let's go back to the cheese for one second, because cheese, even when I went vegan and I'd been vegetarian for decades, at that point, the cheese was a really big step for me and back then the cheese sucked compared to now. But it still feels like if you really think about it, most vegan cheese I mean, I love it. I think it's incredible, but it feels like it's for vegans versus oat milk or Beyond which feels like it's actually for milk drinkers or meat eaters.
Micheal: [00:27:53] I mean, I think in all fairness, there are some cheeses out there that are that good now. I think Miyoko is one, I think Treeline is another. I mean, there are some that are out there. Kite Hill is another that is getting very good. The challenge is, is that again, they're not the easiest to find. They're not everywhere yet. They are so are in many respects more expensive and still for certain breeds, if you will, are harder to replicate. So like there's nothing out there, I'd say that like really would maybe compare like a bris or some like very unique cheese that people really crave. I remember writing an article about this at Forbes, it was my most successful article and it was called This is your brain on cheese. The the reason I use that title, I totally stole it from the Physicians Committee for Responsible Medicine founder Neal Barnard, who wrote a book called The Cheese Trap, and in it, I learned that there are these queso morphemes in cheese that are in effect, identical to the response that it creates in our brains to heroin and other narcotics or amphetamines, or like morphine. So when we eat cheese, it's almost the same experience as getting high. So hence the title of the article this is your brain on cheese. So I think what's really going to be critical to get the the vegetarian who's down to skip eggs but really can't give up the cheese like you were talking about that difficulty that many vegetarians experience, or just non-vegetarians who would love to eat less cheese but really crave it would be to figure out a way to create a similar experience beyond just the mouthfeel, but that just pure ecstasy and warmth and safety. If these products can figure out a way to do that on the plant based side, I think that will really be when they pass the threshold of getting people on board. But the good news is that the fermented and the cellular companies will be able to do that because it will inherently be in the DNA of the dairy or milk that they produce.
Elizabeth: [00:29:52] Sure and for the plant based cheeses that are up and coming or the next generation of them, is it the companies that are already doing cheese going another level up? Are there new cheeses coming in that we should be looking at or paying attention to?
Micheal: [00:30:07] I would say it's both. So I know, for example, that Miyoko’s is working on some new cheeses that I think are going to substantially elevate what they've already been doing because they're going to be using entirely new formulas. So, for example, Miyoko’s has historically used cashews as a base for a lot of their products, whereas going forward, all the new products they create aren't going to include nuts at all. They're going to be using blended recipes, using everything from seeds to legumes to potatoes and beyond. So they're going to be coming up with much more sophisticated blended compounds to use as a base for the milk. That then is used to make the cheese, which I believe based on listening to Miyoko is going to deliver a product that is substantially better and performance, mouthfeel and maybe even sustainability. In addition to alleviating the issue that a lot of people have and eating nuts because there's so many allergies now with nuts. So it just takes that issue off the table for a lot of people who might want to have them, but they just can't eat nut based products. So that's an example of an existing brand that I think is going to be stepping their game up even further because they're raising new capital and they're going to use that largely to be able to build out their ability to produce new products at scale.
Elizabeth: [00:31:34] Is there anyone else we should be looking at or thinking about?
Micheal: [00:31:37] Yeah. So I'd say the two other themes that we haven't touched on yet, and we've touched on a little bit, but I think it sounds funny. But I think fungi or fungus or fungus derived companies are going to become a much bigger deal in the next few years and we've already seen some examples of how that's manifesting. So all that simply means is that companies are using mushroom derived inputs to then create either meat or as an extension of food, leather or alternatives to Styrofoam or packaging. There's just a lot happening in the mushroom business, if you will, that is super exciting. So there's been some companies that have got products in the marketplace now that are using fungus to make meat alternatives. So one example would be called Atlast, they have a bacon product in the marketplace that's really good, and they use mycelium, which is basically the soft sort of white almost like hairy looking under the soil surface that you basically underneath what you would see a mushroom growing out of the soil. Under the soil what you can't see is what's called mycelium, and this is sort of like the internet, if you will, of soil that takes the nutrients from the soil and delivers it all throughout the plant kingdom, to plants, to mushrooms and so on. So you can take this mycelium and you can grow it in a factory and kind of create layers upon layers of it. So what you end up with is sort of these almost think of them almost as like a mattress sized layout with which they can sort of do to different buoyancy and texture and water content and so on to then create the ability to make bacon or chicken or steak or you name it. They're really good at absorbing flavors as well. So when you flavor them properly, it's really hard to tell the difference. Like I tried Atlast bacon over the summer and it blew every other plant based bacon out of the water, like by a factor of ten compared to how good it was. It just didn't have the same sort of fat that you get in bacon, it doesn't have that, but it has the crispiness, it has the the crunchiness, it has the flavor that you come to expect. So for people who like bacon but want a healthier alternative because it has no cholesterol and it has no fat, there's like six ingredients, it's got a very clean label. I think these kinds of products are going to start to show up everywhere.
Elizabeth: [00:34:00] So it's not on the market yet.
Micheal: [00:34:02] It is, but in very small quantities. But that's going to change soon because they just raised $40 million dollars a couple of months ago. Viking, which is one of the largest venture capital funds in the world, put 30 million into that 40 million pound for the sole purposes of helping to scale that business. So there's going to be a lot of that product available soon now that they have the capital to build out their operations and just produce a lot more of it.
Elizabeth: [00:34:29] Can I get it in New York?
Micheal: [00:34:30] I would imagine that New York and L.A. and San Francisco and those types of cities will be the ones that will have it soonest because that's where the demand and the buying power at the moment is greatest. So, yeah, I would be surprised if you won't be able to get your hands on it, maybe even before the end of the year.
Elizabeth: [00:34:45] Yeah, because I keep hearing, you know, in the background about the mushroom revolution that it's happening on so many fronts, but I haven't seen the mushroom products yet.
Micheal: [00:34:56] It's because most of them are still very early and so they're just not as far along or they're there early in their ability to get products to market. So like the company that spun out Atlast is called Ecovative Design. They're more of like a broader mushroom company that's doing lots of cool stuff and like plastic alternatives, styrofoam alternatives, leather alternatives like they're doing lots of different sort of mushroom derived alternatives to climate or carbon intensive things. But because alternative protein and meat has become such a big deal, they decided to spin out Atlast and make it an entirely separate company with an entirely separate brand. So they've been around for like 10 years, but they've been working on this technology for so long that it's only now that they're able to, like, go out and do it because this stuff is complicated. There's only a few companies that have even figured out how to do it well yet. But it's like super early innings and I think similar to where like Beyond and Impossible were, let's say, five plus years ago, I think is where a lot of these mushroom companies are. If we fast forward, let's say, to twenty twenty five, I think you're going to see a lot of companies in the marketplace using mushroom based products to create alternatives to things like meat and chicken and within food, and then also alternatives within textiles to things like silk and leather and packaging for things like styrofoam and plastic and so on. So I'm very much what you call it, maybe a fungo fanatic or I don't know if there's a phrase for that, but I am totally a believer in all things fungi, and I couldn't recommend investors take a look at this enough.
Elizabeth: [00:36:35] Do you think, say, in like 10, 15 years from now that this is what food looks like, much more so than what it looks like right now. Like a mixture of all these things mushrooms, plants, cells.
Micheal: [00:36:47] I certainly do. I mean, you know, I'm definitely biased. So I think I need to just put in that disclaimer for sure because I'm investing so heavily in this space and I'm just so passionate about the implications of that becoming a reality. But I also wouldn't be betting my financial career on this if I didn't think it was going to work, I would just be donating to it and praying. But instead, I'm putting all of my chips in this basket because I truly believe that this is going to fundamentally reshape our food system. So while I don't think animal derived products are going to go away any time soon, I do think that you could anticipate maybe 50 percent of the let's call protein marketplace coming from non animal based products in the next 20 years. Absolutely. Maybe even sooner than that and that the remainder of the animal protein that's in the marketplace would come from more humane, sustainable, regenerative options. Meaning when people find a steak now, they would find it from a cow that was actually raised in a field and done so with regenerative practices and had a much better life than the ones they lead now where they're trapped indoors for their whole life and are treated in ways that nobody would wish on their worst enemy. So I think that it's definitely going to look much different and how that sort of pie gets divided up is way too hard to tell. But I think certainly from an investment standpoint, you can feel confident that it's going to be a combination of plant based fermentation and cellular. So you can sort of feel comfortable placing bets on all three and just to a degree that you do will depend on how much confidence you have in each sort of theme within that alternative protein category and the companies that you think are furthest along or the funds that are going to be smartest at picking the winners.
Elizabeth: [00:38:45] Awesome. For people who have never invested in this world, you know, or never gone near it before, where do you recommend that they start?
Micheal: [00:38:54] Well, for information purposes, I'd say the Good Food Institute is a great resource for learning about the alternative protein category. They're nonprofit, and they spend a ton of time putting out research reports on this category to kind of show how much it's growing, who the companies are, what the partnerships are, and how much capital is being raised. So if you want to really kind of dig deep and get into this, the Good Food Institute's website is a great public resource for information. There's some really great resources on TED I would say, there's some really great talks that have been done there where people can listen to some of the entrepreneurs in this space who are doing this. So you can just sort of Google around for cellular agriculture companies or fermentation companies or plant based companies. There'll be a lot of reports that are even being put out now by companies like UBS and Barclays. So if you have a brokerage account at those banks, like reach out to your banker and say, Hey, send me a report on sustainable food, and chances are they've got one now, which is new. That didn't exist maybe even 18 months ago. Then I'd also say that FAIRR is another great resource for looking into what's happening in the alternative protein space globally. So they're there doing great research as well.
Elizabeth: [00:40:15] Awesome. Michael, you're the best. It is so good to have you here. Thank you. Thank you for today and all the times you're on here.
Micheal: [00:40:23] It's my pleasure, and I look forward to being back on again soon, hopefully after the next big IPO.
Elizabeth: [00:40:27] Hopefully for Impossible.
Micheal: [00:40:29] Wouldn't that be wonderful?
Elizabeth: [00:40:30] So, yeah, thank you.
Micheal: [00:40:32] My pleasure.
Elizabeth: [00:40:42] To learn more about Michael and to learn about all the companies we talked about today, go to our website SpeciesUnite.com. We will have links to everything. We are on Facebook and Instagram, @SpeciesUnite. If you have a spare minute and could do us a favor, please subscribe, rate and review on Apple Podcasts or wherever you listen to podcasts. It really does help people find the show. If you'd like to support Species Unite, we'd greatly appreciate it, go to our website SpeciesUnite.com and click Donate. I would like to thank everyone at Species Unite, including Gary Knutson, Natalie Martin, Caitlin Pierce, Amy Jones, Paul Healey, Santina Polky and Anna Connor, who wrote and performed today's music. Thank you for listening and have a wonderful day.
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