A new alternative protein startup New Wave Foods has raised seed funding from alternative foods-focused VC New Crop Capital and Salesforce CEO Marc Benioff’s private investment arm Efficient Capacity.
Venturing into new territory in the growing alternative protein space, New Wave Foods is manufacturing seafood alternatives from algae; the majority of alternative protein startups have focused on replacing livestock products such as meat and milk.
Lynne Benioff, a philanthropist and Benioff’s wife, led the round for Efficient Capacity, according to New Wave Foods. The undisclosed seed round follows a $250k investment from SOSV after New Wave completed IndieBio’s San Francisco accelerator last year.
Why does New Wave Foods see the need to find replacements for traditional seafood and shellfish products?
According to the startup, for every one pound of fish caught from the seas results in five pounds of other marine wildlife caught and discarded. This wildlife can include dolphins, sharks, and turtles.
Shrimp, which are Americans’ favorite sea-dwelling fodder, accounts for one-quarter of the four billion pounds of seafood consumed in the country each year, so New Wave is currently focused on replicating the consumer experience of eating the shellfish.
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“We really are engineering new edible materials to replace seafood, while also delivering the quality, texture, taste, and better nutrition than conventional products,” CEO Dominique Barnes tells AgFunderNews. “The shrimp industry embodies some of the worst practices in our seafood supply chain.”
Launched in 2015 by Barnes along with Michelle Wolf, chief technology officer, the startup’s first prototype product is already being served in Google’s cafeterias. Barnes, who holds a masters in marine biodiversity and conservation from Scripps Institute of Oceanography, hopes to bring the shrimp replacement to the broader market in late 2016 or early 2017. The new round of capital will be used to fuel this endeavor, scale up, build the New Wave Foods team, and to develop the brand’s messaging.
While some companies like Modern Meadows, Beyond Meat, and Impossible Foods are fast at work developing a plant-based or lab-grown alternative to leather, beef, and chicken, New Wave Foods, which sources its algae from third parties, is looking to do the same for seafood.
“I think it’s an exciting time in the ‘future of food,’ and looking at plant-based alternatives to meat and seafood. No one is looking at seafood this way, so we fit nicely with alternative meat,” explains Barnes. She envisions early adopters of New Wave Foods’ faux shrimp as people who traditionally enjoy these products, flexitarians, and consumers with an increasing awareness of the purported benefits of a plant-based diet around the globe.
To create its shrimp alternative, New Wave Foods studies how molecules will behave and form together to constitute a compelling replacement. By understanding seafood on a molecular level and what provides it with certain components like the taste, color, and fibrousness, the company can translate that with algae and other ingredients to configure new products.
“Obviously, you cannot just grab a bunch of algae and put it together. You have to understand whether the molecules will achieve what you want, like the certain level of elasticity you need to mimic the tensile strength of fibers in shrimp tissue,” explains Barnes. “You have to find a plant ingredient that will do that.”
Taste seems to be supreme among consumers. During blind taste tests, Barnes reports that consumers had no clue they were consuming an algae-based replacement. Studying the aspects of shrimp that provide it with its specific and unique taste revealed some startling results. Everything, from the shrimp’s diet to the water it swims through, has an impact on the way it tastes, she says. The company sees this as an opportunity to offer consistent and quality taste that the current conventional shrimp market can’t provide.
Alternative protein challenges
But it’s not all smooth sailing for alternative protein companies. Scale remains a particularly stormy challenge as the costs of cultivating plant-based products with convincing taste and texture remains prohibitively expensive in some instances.
“‘Future of food’ companies face this challenge. For algae, we have a stable supply but as we scale what does that look like?” posits Barnes. “Fortunately for us, there is more and more research, and there are also increasing numbers of companies working on producing algae for food, so we are excited to be part of that community. We certainly have scaling-related challenges coming, but I see us overcoming them.”
There’s also the challenge around a product’s pricing. Plant-based meat alternatives tend to take a bigger bite out of consumers’ wallets, but Barnes isn’t worried about that either.
“We certainly are a premium product compared to conventional shrimp and our price point will reflect that, but not in a way that will deter people. If you go to the local grocery store, you will find wild-caught gulf shrimp for $25 – $30 per pound. We won’t be that expensive.”
From a sustainability standpoint, many people tout the benefits of a plant-based diet. But few people ask whether eschewing meat in favor of increasing the cultivation of high-protein peas or algae is consequence-free for the environment. Based on Barnes’ experience, algae may pass the sustainability test. The footprint of a microalgae farm is much smaller than a conventional shrimp farm, which has serious impacts on water quality, she says.
“Traditional shrimp farms may only last five to seven years before they become so polluted with antibiotics and chemicals that they have to take out another patch of mangrove forest and start again, so they are slowly deforesting the coastline,” explains Barnes.
Efficient Capacity and New Crop Capital share many of Barnes’ sentiments, rendering them perfect partners to help New Wave Foods on its mission.
“New Crop Capital supports a lot of ‘future of food’ companies, while Efficient Capacity has a strong passion for marine conservation,” says Barnes. “We have a shared mission alignment—they are looking for companies that can impact a billion people and change the food system for the better.”
And Barnes hopes to do just that.
“Within the next five years, I see us being a leader in the alternative seafood space creating algae and plant-based alternatives that anyone can enjoy regardless of dietary or health restrictions and sustainability issues.”
What do you think of the growing alternative protein market? Can it really replace animal-based food and is it as sustainable as its proponents say it is? We want to hear from you! Email Media@AgFunderNews.com.