[Disclosure: AgFunder, parent company to AgFunderNews, is an investor in Juicy Marbles]
If you’re entering new markets with plant-based meat in 2023, you’d better come to the table with a highly-differentiated product and a brand that stands out from the crowd, or you might as well pack up and go home, says Juicy Marbles cofounder and CEO Tilen Travnik.
Slovenian startup Juicy Marbles, he claims, has both, although he’s under no illusions about the challenges ahead.
As for the differentiated product, Juicy Marbles’ products, billed as the “world’s first” plant-based filet mignon steaks, whole cut loins, and ribs, come with a hefty price tag. But they deliver an experience unparalleled in the category, claims Travnik.
As for the company’s edgy brand personality, you can love it or hate it, but it’s fun, memorable, and above all “authentic,” with a name that stands out, he observes. “In the US our official company name is ‘Formidable Foods Inc,’ but Vlad [chief brand officer and cofounder Vladimir Mićković] basically said, I’m not working for an ‘Adjective Foods Inc’ company, so we came up with Juicy Marbles.”
AgFunderNews (AFN) caught up with Travnik (TT) to discuss the highs and lows of running a plant-based meat company and the challenges of finding a work-life balance as an early-stage founder: “I think in general, the founder ecosystem and the startup ecosystem is not talking enough about that. How do you run as close to your limit as possible without breaking yourself?”
AFN: Give me the 60-second origins story…
TT: In my past career [at tech advisory firm d.labs], I was involved with a lot of startups and I’ve done a bit of angel investing. As a result I was very involved in the local startup ecosystem and a few years ago I attended a hackathon where two University of Ljubljana students Luka Sinček (microbiology) and Maj Hrovat (biotechnology) showed up with a kind of Nutella jar with a bioreactor built into it where you’d ferment your own products. It was a bit wacky, but I decided immediately to start helping them as a mentor.
Pretty soon the mentorship evolved into a friendship and then a friendship evolved into us cofounding the Slovenian predecessor of Juicy Marbles.
I’ve known Vlad [the fourth cofounder Vladimir Mićković], the guy behind our communication and brand, from my previous career; his design agency helped set up the brand of my previous company, and a bit later, we asked him to help us, and then join us as a cofounder.
When we started looking at meat alternatives, we looked at the recipes and patents out there and tried to create products that we thought we could get to market pretty quickly. Luka and Maj actually got invited onto a TV show connected to one of the retailers here that wanted our plant-based patty.
Just before we were about to launch, we got dropped by our copacker, who basically stopped returning our calls. We scrambled to get another one and managed to get the product on shelf in under four months. And then the week we launched, Beyond Meat arrived in Slovenia and two other retailers came out with private label patties and we couldn’t compete on price.
AFN: What was distinctive about your first alt meat product?
TT: It was unusual in that we were using ingredients that were premium at the time like potato protein, which made our product really good. But being so small, none of the vendors of these ingredients took us seriously, and so for example the [available supply of] potato protein was snapped up away from us in totality by one of the big guys.
AFN: When did you come up with the tech to make whole cuts?
TT: When we used to do tastings, people would say plant-based mince and burgers are great, but when can I get a steak? So we started tinkering around with various texturization technologies and soon realized that available technologies such as extrusion were not going to cut it.
Our base ingredients are soy protein concentrate and sunflower oil and we use an extrusion-like process in-house to texturize the protein. But the interesting parts happen afterwards, where we get the fibers, inject the fat and then color it and form it.
AFN: What was the experience like at Y-Combinator?
TT: To be completely honest, I’ve seen my fair share of accelerators and worked with many early-stage companies, so I wasn’t sure what I was going to get out of it, but when we got in [to the winter 2021 cohort] it really blew my mind.
AFN: What’s your manufacturing set up?
TT: We’re doing everything in-house and we have a pilot facility here in Slovenia, which right now puts out on average, a ton of product a day. If demand goes up say, 2-10x, we can scale this up with a bit of capex, not multiple millions. I would say ramping up to accommodate five more major retailers in European countries won’t be a big technical problem.
AFN: You originally launched with a chilled product direct to consumer. That sounds expensive?
TT: The logistics made it prohibitively expensive, but we learned a lot about our early adopters that helped us plan our next products, inform our communications and brand strategy, and pick up retail accounts.
We were monitoring repeat purchase rates, which were in the lower 30s, and retailers started reaching out. We could convince them [to stock Juicy Marbles] by showing them a heat map of purchases in the country where they operate.
So we picked up Waitrose in the UK, BILLA in Austria, and Migros in Switzerland, who all started around the same time earlier this year. It’s early days but we are getting positive feedback on velocities.
AFN: How are investors looking at alt proteins these days?
TT: It’s a really, really difficult time, and when we were at a point where we wanted to raise more money, we had two options. One was to basically take an extension and try to become profitable. Another one was brute force fundraising in bad conditions. We decided to take the first route and take a little bit of money and really double down on becoming a profitable business. And I’m happy to say that in the last five months, pretty close, we were already in the green.
It’s partly that we have a high-value product, but also due to how lean we are as an organization. We are now 38 people and 22 of those are in production. From the outset it was a case of how can we make sure that we are putting products into channels that are costing us less and burning less money to get revenues going?
With the first $4.5 million seed investment, we created a factory, finalized the product, created a brand, and created initial demand. The problematic period [for fund-raising] hit us just at the point where we could still adapt. Since then, we’ve raised another $2.5-ish million from existing and new investors.
What happens next all depends on the speed of scaling. If we want to, we can go along until the climate changes. The question now is, is this the wiser thing to do, or is it wiser to try and raise a more significant amount of money and scale as fast as we can?
AFN: How are retailers thinking about the alt meat category now?
TT: At this point we’re still one of the only plant-based whole cut products that’s retail ready, and retailers are seeking novelty. So even though our product is premium, they are happy.
AFN: Are your products still in need of improvement?
TT: Yes of course, and in our pipeline we already have a bunch of a bunch of improvements. I do believe we’ll see a hybrid future where companies are using more ingredients from precision [microbial] fermentation or [animal] cell culture.
We are actually in talks with companies producing these kinds of new ingredients and there are one or two companies where we will basically be the prototyping platform for their ingredients.
AFN: What’s your approach to marketing plant-based meat?
TT: In the beginning, marketing was just Vlad, but even today we’re super-frugal, so we only have three people in the marketing team doing all the email campaigns and social media postings, so we try to compensate [for the lack of resources] with good PR. And a lot of that comes from just being super sincere and authentic, which really resonates with our consumers.
The brand name is also important. In the US our official company name is ‘Formidable Foods Inc,’ and Vlad basically said, I’m not working for an ‘Adjective Foods Inc’ company, so we came up with Juicy Marbles.”
When it comes to messaging, people don’t like being told what to do, they don’t want you pushing a lot of environmental and ethical claims at them when they’re trying to just enjoy food.
So I agree with the sentiment that [Impossible Foods CEO] Peter [McGuinness] was sharing the other day. I strongly believe that being involved in culture wars is not good because it’s polarizing. We want you to buy our products because they deliver an incredible experience.
AFN: Who is the Juicy Marbles consumer?
TT: The first group of consumers that we are still immensely thankful for today and still represent quite a large chunk of our user base, I call vegans who miss meat. They miss the experience, the grilling, the texture, the social settings.
But beyond that, we want to appeal to people who are conscious about their protein intake and want to use different sources of protein. We also make products that inspire passion, like steak or ribs.
AFN: What keeps you awake at night?
TT: Right now I would say execution. We don’t have deep pockets, so everything has to be flawless. The product has to be flawless, the logistics have to be flawless, the planning has to be flawless. We’re running a really tight ship, and if something is not as tight as it should be, it keeps me up at night because it immediately translates into cash flow.
It’s a lot harder than anybody imagined. The basic concepts of running a company still apply, but I’ve actually been surprised by how little operational knowledge you can actually transfer from one industry to another, even if you have run a company before.
The other challenge is that I’m 42, I have three kids and a wife and family is the most important thing to me, so it’s hard to juggle everything. I think in general, the founder ecosystem or the startup ecosystem is not talking enough about that. How do you run as close to your limit as possible without breaking yourself?
Ever since I started this, there was never a vacation where I could just shut off and say we’ll talk to you next week, so it’s not really family friendly! But luckily, I have a super-supportive wife.