A former ad exec who began to question the ethics of industrialized meat production after doing some strategy work for Burger King, Bond Pet Foods founder and CEO Rich Kelleman is not your average tech bro.
“My background is in advertising, so of course I started a biotech pet food company,” jokes Kelleman, who is forging a distinct path in the alternative protein space by engineering yeast to produce meat proteins for pet food via fermentation.
“Working on the Burger King account was the first time I really started to think about food sourcing and it was kind of an awakening for me. I became a vegetarian and ultimately a vegan.”
Inspired by startups such as Memphis Meats (now UPSIDE Foods), Kelleman initially planned to make cultivated meat for pets using animal cells, but changed tack after determining that the numbers didn’t add up (although he stresses he is not making any judgments about the viability of the technology for human food markets today).
However, the unit economics of engineering yeast cells to produce meat proteins make a lot more sense, given that Bond Pet Foods is harvesting the whole biomass rather than engaging in costly downstream processing to extract and purify the animal proteins, notes Kelleman. “That was our first pivot.”
The second pivot came last year when the Boulder, Colorado-based firm moved away from consumer products to focus exclusively on B2B opportunities after attracting interest from major pet food companies interested in buying more sustainable sources of high-quality animal protein, without slaughtering animals.
AgFunder News (AFN) caught up with Kelleman (RK) to discuss Bond Pet’s origins story, Gen Z ‘pet parents,’ and ‘de-risking’ the alt protein space as stakeholders navigate the current trough of disillusionment.
AFN: What prompted your career move from ad exec to alt protein entrepreneur?
RK: Before Bond I spent years working with some of the biggest brands in the world from Facebook and Chevrolet to Kellogg’s and Procter & Gamble. But the account that brought me to Boulder 13 years ago was Burger King, which was trying to better understand how it could compete with the likes of Chipotle and Panera, who were redefining what quality meant in fast food. So my team was trying to help Burger King imagine its future menu based on a new and emerging consumer sensibility.
Long story short, that whole experience really opened my eyes to the challenges facing conventional agriculture, and I ultimately became a vegan.
And that sensibility stuck with me over the years, so when my wife and I got our first dog together, we wrestled with that tension of giving our dog and our cats meat. Not that I had any designs on making them vegan, it was more a case of asking if there could there be a better way to give them the nutrition they need without the animal welfare and environmental downsides?
Initially, I was looking at putting together a pet food brand that was all about sourcing meat more responsibly and humanely, with traceability and transparency in the supply chain. But when I was in the thick of that exercise, I came across [precision fermentation] companies such as Perfect Day and Clara Foods [now The EVERY Co] and [cultivated meat companies such as] Memphis Meats [now UPSIDE Foods] that were recreating foods we know and love through biotechnology, and I was fascinated.
So I started to get involved with the GFI [alt protein nonprofit The Good Food Institute] that was just coming on to the scene and I quickly realized that if a company could crack the code for pet food by employing some of those same technologies, the path to commercialization could be relatively easier [than it might be for human food].
It’s still challenging, but for dogs and cats, it’s more about nutritional efficacy and performance than it is about the structure and the experience of eating meat. It’s a different kind of bar that you need to clear to get people to embrace it.
AFN: Tell us about pivot #1, from cultivated meat to meat proteins from fermentation…
RK: Even though this wasn’t my trade, I thought that if I could assemble the right team, we could do something special [in the cultivated meat space] in pet food.
But once I was able to get some seasoned advisors who had worked in biotechnology and food tech and find my cofounder Pernilla [CSO Dr. Pernilla Turner Audibert, who has a PhD in biotech engineering and a master’s degree in chemical engineering], I realized that this wasn’t going to work.
I’m a big fan of some of the companies working on cell cultured meat, but it was hard to see how that could scale from a unit economics standpoint in an industry [pet food] that has a different kind of price pressure.
We were not trying to create a structured product [like a steak or a chop] but an ingredient that could be blended into an extruded kibble recipe for pets, or baked into a treat, so we moved from looking at [animal] cell culture to [microbial] fermentation.
AFN: There’s skepticism about the commercial viability of precision fermentation for bulk proteins; how do you make the numbers add up?
RK: Harvesting the whole biomass is what makes the COGS (cost of goods) work. We’re not doing costly downstream processing to extract and purify proteins. We’re just spray drying it and we’re left with this concentrated protein that has the foundational essential amino acids and nutrition that dogs and cats need to thrive.
The downstream processing is essentially taking place in the dog’s gut [after it eats the yeast]. We are producing a whole cell product. It’s Saccharomyces yeast, a microorganism that is increasingly sold in petfood for its protein and nutritional value, but it also expresses animal proteins.
AFN: What animal proteins are your yeast cells expressing and how will they be labeled?
RK: Over the years we’ve learned a lot about the kinds of proteins that have the highest value in the different species that can contribute to animal health, that will express well, that are scalable, and that can work alongside the native yeast to create something valuable.
We’ve also learned a lot on the process development side of things to improve titer and yield and get a more efficient harvest.
I can’t share the specific proteins within the species that we’re expressing, but the first out of the gate will be a chicken meat skeletal muscle protein, as chicken is in the majority of pet food recipes. The second is a specific protein that our partner [petfood giant] Hills Pet Nutrition has identified that I can’t disclose as of yet, but it is something that’s widely used in its international portfolio. Using our meat protein expressed by yeast instead could have a material impact on their carbon footprint.
Labeling is yet to be determined but it’s something we will work closely on with the FDA Center for Veterinary Medicine and AAFCO [a nonprofit that sets standards for animal feed and pet food in the US]. But I don’t think ultimately it’ll just be named ‘dried yeast,’ as it also contains animal protein.
AFN: What level of interest have you seen from the pet food industry?
RK: The reality is, when it comes to receptivity to plant based proteins and vegan diets for pets, by and large, meat is still king and will continue to be king. So when people shop they’re looking for chicken, turkey, beef, or salmon, top of the label, because that connotes quality to them. There’s just a deeply entrenched belief that meat protein is foundational for pet health.
But if you look at Gen Z, the next generation of pet parents is asking a different set of questions about how pet foods are sourced and made, so they’re looking at pet food with a lower carbon footprint. On animal welfare our proposition also knocks [conventional meat-based pet food] out of the park because no animals are harmed in the making of our meat protein.
But beyond that there are other practical things that attract strategics to our kind of product [which offers the promise of a consistent supply] given the volatility of the meat supply chain, whether that’s driven by swine fever or avian flu or covid.
Things have really accelerated as we’ve gone into partnership with Hills to make a craft protein for their portfolio. And then ADM (via its ventures arm ADM Ventures) and Wilbur Ellis (via its venture arm Cavallo Ventures) invested in is last year as part of our $17.5 million series A, so we’ve got access to their brains, their networks and their experience.
Hills is also going to provide counsel on how we can position our products to the veterinary community, which is obviously a very important stakeholder. So before we get to market, we will be doing quite a bit of work with those kind of gatekeepers to give them confidence that this can be a high value foundational component of nutrition for pets.
AFN: Tell us about pivot #2, from consumer brand to B2B ingredients supplier…
RK: After we closed our seed round in 2019, knowing that it might be several years before we could introduce ingredients to the market, we developed what we call bridge [consumer] products [such as pet treats containing yeast, fungi and algae] to get people comfortable with fermentation-based ingredients in petfood.
The idea was that later we’d be able to say we’ve now enhanced that yeast fermentation process to make animal proteins that can even more foundationally provide your pets with what they need to thrive.
But after we signed the joint development agreement with Hills in late 2021, we started having discussions with a number of global players interested in creating a bespoke meat protein for their portfolios. And with all those conversations, we realized we could have a bigger impact if we focused on being meat makers for the pet food industry instead of straddling the line between that and creating our own consumer products, which really weigh on cashflow.
So in April last year, we shed the B2C side of things and decided to focus on our technology platform and nurturing strategic partnerships.
AFN: Tell us about your manufacturing set up and scale up plans
RK: We’ve just moved into our new 15,000sq ft production facility, which is about a third complete, and will have a variety of different scale vessels from bench top to six liters for process development work to a 200-liter vessel that will allow us to produce more significant amounts of material for compositional analysis and provide samples for partners.
We’re also working with two toll manufacturers to produce more significant volume for feeding trials, which will be in play in the back half of the year in service of regulatory approvals.
AFN: What’s the regulatory pathway to get your ingredients to market in the US?
RK: The FDA has specific requirements but one of the main things that they’re looking for is how our protein behaves vs conventional protein in a longitudinal study of dogs and cats over the course of six months, looking at palatability, bioavailability and so on. Once that study is complete, we’ll package up that data into a dossier that we’ll submit for review.
AFN: What kind of IP do you have?
RK: We have a couple of patents that we filed four years ago, but more importantly, there’s a considerable amount of learnings that are just trade secrets that we’re keeping close to the vest.
AFN: When might your ingredients hit the market?
RK: Best case scenario we’re looking at the back half of 2025, although there’s always variability with the regulatory process and anything can happen.
AFN: How challenging is it to raise money as an alt protein startup right now?
RK: We didn’t start with something that was super high risk and a moonshot. It was more about how we can employ something that is challenging, but achievable based on the history of this technology, so there’s some de-risking because of that. We also have people in our team with experience of industrial scale fermentation but also people that really understand the nuances of the pet food market.
The second part is I believe we are the only company in the world right now that has these kinds of intimate relationships with major global players. Our partner Hills Pet Nutrition is one of the top five global players in the pet food industry. And having ADM and Wilbur Ellis on the bench signals that they see the potential in the utility for our protein in the market and believe in its scalability.
We raised a $17.5 million series A round last year so we are in a healthy position with our capitalization right now, but we are super aware of the [challenging] climate [for food tech investment]. I think I sweat through three or four shirts every day because I’m managing most directly the ins and outs of our cash flow.
That said, by the fall I think we will be in a position with clearing some significant achievements where we may open our next round. Not because we’re against the wall, but just recognizing the current venture market and ensuring that we have enough time to bring in the right partners and continue to keep the company healthy and capitalized.