A company born in 2015 from the vision of a young Chilean entrepreneur has made international news in March. Better said, a non-company. On the same week it started operating in Brazil from two rented rooms in the WeWork’s co-working offices at Avenida Brigadeiro Faria Lima, in Sao Paulo, The Not Company, also known as NotCo, caused a stir for receiving US$ 30 million in investments from names such as Jeff Bezos, currently the richest man in the world, founder of Amazon.
Rising from the insight of Matias Muchnick, a Harvard business school’s student, that the food industry needed reinvention from production inception, the NotCo came to be in partnership with two other Chilean men. The 26-year-old entrepreneur sought out other Chilean scientist studying in the US to embark his effort: the computer scientist Karim Pichara and the biotechnologist Pablo Zamora. The idea was to use artificial intelligence to develop plant-based products without using animal input. NotCo started to sell eggless mayonnaise in Chile in 2017, which should now arrive in Brazil in partnership with Pão de Açúcar. The NotCo is also launching dairy-free ice cream and “milk” this year.
The three South Americans are on the top of the next great disruption that is about to shake the food industry, just as are undergoing the music, entertainment, public transport, and tourism industries. The so-called food techs, especially the ones focused on creating new foods without animal-derived products should turn the industry upside down while putting giants like Unilever, Nestlé, and Kraft Heinz on the spot. Traditional companies are increasingly struggling to keep up with innovations and meet consumers’ growing demands for better, healthier products that cause less environmental impact.
Read below the interview with Muchnick, founder of NotCo and one of the leaders of this revolution that is already reaching major organizations: early April, Nestlé announced the sales of vegetarian burgers in Europe and the US, and fast-food chain Burger King announced trial sales of vegetarian meat-less sandwiches using meat made in lab by US start-up Impossible Foods.
LogicalisNow – How did the idea to create the NotCo come up?
Matías Muchnick – It all started with the intention of understanding why we have the food environment we do. We are eating poorly. We live in an environment that is hurting both humans and nature. The food industry has become responsible for all sorts of environmental problems: deforestation, land use, water consumption, everything. It should not be so. A healthy diet should be sustainable and delicious. Mainly delicious. With NotCo, we have found that the only way to accomplish that is by removing animals from the equation. Consuming animal products results in lots of bad stuff, including for our health. The most common causes of death around the world relate to dietary illnesses. However, we are focusing on the symptoms of bad nutrition instead of how to prevent it.
LN – How could it change?
Muchnick – Our central thesis is that we feed animals with plants to produce meat, milk, cheese, and eggs. However, we could eliminate the intermediary and make these products straight from plants. The greatest challenge is to ensure that plants have the same flavor of the protein-based foods we have been consuming for 10 thousand years. People assume that meat’s molecular composition is meat itself, but it’s not true.
LN – Could plants reproduce the flavor of animal-deriving foods from molecular combinations?
Muchnick – While trying to understand this scenario, I studied the food industry. I have a degree in Finance, it has nothing to do with food, but I noticed that it is a research and development issue. The way the industry does R&D is outdated. It’s an old-fashioned innovation technology. The R&D areas of the sector consist of three people wearing lab coats in a kitchen exploring new products based on trial and error. I have also realized that humanity uses roughly 15 types of plants as food, while the vegetable kingdom has more than 400,000 species, and we don’t have the slightest idea what each one of them has to offer.
LN – Could they even confer meat and milk flavor
Muchnick – We have decided to explore the vegetable kingdom to know whether there is something that could produce the flavor of cheese or milk other than the products themselves. However, to achieve that, we have decided to use artificial intelligence (AI) as a means to combine science and molecular biology. The company’s initial thesis was removing the animal from the equation. The second is using AI. Now, with the old technology, it would be so expensive, and it would take such a long time to explore the plant that it would be unfeasible.
LN – Which indicators you had that it could work
Muchnick – When I first had this idea, in 2015, it sounded insane. However, I was using the pharmaceutical industry’s R&D as a referral. In that sector, there are incredible scientists intensely adopting technology and science. They find molecules that can be synthesized and activate brain proteins, aiding in the cure of specific illnesses. They study how those molecules interact with the body. To do all that, they need a broad scientific basis.
LN – And lots of investment.
Muchnick – Plenty. And not only that. There is a vicious cycle in the food industry. A giant such as Nestlé doesn’t truly invest in research and development because nothing good could come from the way they address the issue. Consequently, the research area runs out of resources and can’t accomplish anything. It explains our current food scenario. When we go to the supermarket, we notice the large gap between what we think we’re eating and what we are indeed consuming. If you read the ingredients list in a product, you can’t understand much. They are more confusing than elucidating. A bunch of chemical elements and weird stuff. In a certain period of history, the industry was justified, but now we’re facing a greater challenge: how to make healthy and savory foods. Mainly because people won’t change their eating habits unless the food tastes very good.
LN – How would you use AI?
Muchnick – Firstly, it’s necessary to feed the computer with the right data. Having the data on which parts of the plant gives us information on flavor and texture, and then input it on a database. Then we go after what would be similar to animal protein. The point of having a software instead of a human being, which can give us molecular combinations, increases the chances of having more products with better quality and flavor, at a lower cost and more profitable.
LN – Were you a vegetarian when you founded the company?
Muchnick – At first, no. However, I’m a vegetarian for two years, now.
LN – How was the beginning of the commercialization
Muchnick – The proof of concept was the eggless mayonnaise, NotMayo. One of the most important things in the industry is to get quality approval, which means that the consumer likes it and recommends it. We introduced the product to the market in March 2017, in Chile, on the supermarket chain Jumbo. In eight months of sales, we got 8% of the market, which was unbelievable, especially in Chile, which is the third largest mayonnaise consumer in the world. We consume mayonnaise like crazy people. And NotCo created a plant-based product that spread mainstream. Nearly 90% of Chilean consumers are not vegetarians and aren’t concerned with the environment, or whether the product contains eggs or not. Still, we managed to introduce a concept through our product that made people take selfies with NotMayo. It became the protagonist of people’s meals, which is insane because it’s mayonnaise. Who takes selfies with mayonnaise?
LN – How’s the investment to grow the business?
Muchnick – We had a round of investments in December 2017 of US$ 3 million, with contributions from Kaszek Ventures. After that, by 2018, we have grown by six times. We built a staff, a structure, a scientific team, and were able to make advances in development. We were ready to launch new products. Then we closed another round this March, which included Jeff Bezos and The Craftory, managed by Elio Leoni Sceti, who is a member of the AB Inbev’s executive committee. Having him on board is incredible because he knows all there is to know about the industry.
LN – What will be the use of the US$ 30 million you received?
Muchnick – We received purchase orders from Brazil, Colombia, and the USA, so now is the time to scale production, to execute. We have many things in the lab. We’ll use this money to launch the mayonnaise, the milk and the ice cream on a large scale. We will ship these products to five countries: Chile, Argentina, Brazil, Mexico, and the USA, which are big and quite competitive markets. We are becoming a Chilean-Brazilian company. Our newest four hires are Brazilian executives, not only to work here but also in Chile. It’s wonderful to work with Brazilians, they are great contributors, very sharp, reliable, and focused. The business has about 70 employees presently.
LN – How will the manufacturing be? Outsourced?
Muchnick – Yes. We hope to be like Uber. We don’t own the cars, rather the factory, in our case. We are not production experts.
LN – You will only develop the products and handle marketing.
Muchnick – Precisely.
LN – What is the plan to enter the US market? Could Whole Foods, specialized in natural products, be a partner?
Muchnick – It makes sense. Jeff Bezos owns both Whole Foods and Amazon, which are two massive distribution channels, and they do need products.
LN – The USA are significantly advancing on producing artificial meat. Is it relevant for your business?
Muchnick – Yes. A lot is happening in the food industry. There will be lab-grown meat and plant-based meat. Scalability is extremely important, and it will distinguish us as we offer different product categories. We are currently studying how to substitute milk and its derivatives, namely yogurt, ice cream, and dulce de leche. Meat will come last. Technology should allow us to solve initially big problems, which should diminish in two years as solutions arise. The traditional industry takes two years to test out products. At first, it took us two years as well, then that time decreased to six months. Currently, we need between two months and one week. From inception to production, it can take only four months.