Cell-based seafood isn't available to consumers anywhere just yet, but with $60 million in debt financing announced this week, BlueNalu CEO Lou Cooperhouse said the table is set for that to change by the end of the year.
The funds, which represent the biggest financing so far in the cell-based seafood segment, will be used to open a 40,000-square-foot headquarters and pilot production facility in San Diego, California. That facility — and the ramp up of staff and equipment that will come with it — will enable BlueNalu to produce enough cell-based mahi-mahi to appear on some foodservice menus close to the same time that it gains regulatory approval for its products from the U.S. Food and Drug Administration.
"Our goal is to launch into commerce by the end of this year, and everything we're doing is to accomplish that objective," Cooperhouse said.
This financing round was led by Rage Capital. Other significant participants include Agronomics, Lewis & Clark AgriFood, McWin, Siddhi Capital, Syngenta's Radicle Growth, Rich Products Corp. and Thai Union. AiiM Partners, Clear Current Capital, CPT Capital, Flat World Partners, KBW Ventures, Losa Group, OurCrowd, Silicon Valley Community Foundation and Stray Dog Capital also participated.
The company's last big infusion of funding was a $20 million investment round last February, which helped pave the way for its new pilot plant.
BlueNalu took possession of the new headquarters building a few months ago, Cooperhouse said. The design was recently finished, and the company just received the necessary permits. He said the build out will begin very soon, and it is likely to be completed in the next six to nine months — the same time period in which Cooperhouse expects to receive regulatory approval from FDA.
The new headquarters is almost seven times larger than BlueNalu's current space, Cooperhouse said. There will be room to expand staff, as well as R&D and quality assurance space. The facility will have a product development demonstration kitchen to work with culinary advisors and host demonstrations. About 40% of it will be a manufacturing area with a Good Manufacturing Practices certification. Cooperhouse expects the facility will be able to produce about 500 pounds of seafood each week.
Members of the public will be able to see and tour the facility, Cooperhouse said. Because it will be one of only a handful in the world producing meat from culturing animal cells, this will provide some transparency about the new technique to consumers.
"It kind of mimics the logic behind a microbrewery-restaurant, where you can actually see the tanks and so forth and get a feel for part of the process," Cooperhouse said.
While there is no defined regulatory framework for cell-based meat in the United States at this point, Cooperhouse said BlueNalu has been working closely with FDA for about a year and a half. The company has been providing the agency with documentation on its processes and products as part of a relationship Cooperhouse said was built on "extraordinary transparency." He said FDA has been incredibly responsive since the process started.
Cooperhouse expects that everything will be in place for regulatory approval in about six months, but said it's ultimately in the hands of the federal government. He does not expect that the transition to the Biden administration will affect the process. Considering President-elect Joe Biden's policy positions, things should continue to move smoothly, he said.
"There's much more focus in the new administration on the important aspects of climate change and sustainability and food security and human health, and everything else," Cooperhouse said. "BlueNalu clearly is offering a solution that meets all those objectives."
Through its funding, BlueNalu has also forged strategic partnerships to help attain its goals of production and distribution across the world. Cooperhouse said BlueNalu has long-range plans of being a global producer of cell-based seafood, but it is concentrating to launch in the United States right now. There have been discussions with regulatory agencies in Asia and Europe, Cooperhouse said, but they are in early stages. The company is looking for new joint venture partnerships to help navigate local regulatory pathways, lower the cost of goods, introduce new seafood species and products, and inform global market strategies.
Many of these strategic partnerships were in place before Tuesday's announcement. BlueNalu has had a strategic partnership with Nutreco, a Dutch producer of animal feed and aquanutrition, for its supply chain and feed expertise. Other partners include Griffith Foods, an Illinois-based company known for its expertise in food science and sensory optimization, which Cooperhouse said can help BlueNalu's products better look and behave like conventional fish. Asian companies Pulmuone — based in South Korea — and Sumitomo Corp. — based in Japan — are ideally positioned to help BlueNalu get regulatory approval and distribution for its products in Asia, which consumes four times the seafood as the U.S., Cooperhouse said. Rich Products Corp., which has several bakery and frozen brands and a growing presence in value-added seafood, also funded the company last year.
The new round of funding brings commercial seafood giant Thai Union — owner of several seafood brands worldwide including Chicken of the Sea, and part owner of Red Lobster — to the mix of companies working with BlueNalu. Cooperhouse said having a well-known innovator in the incumbent industry involved is extremely helpful to BlueNalu. The fact that Thai Union has large distribution networks across the world is also valuable, he said.
BlueNalu's relationship with the traditional seafood industry has always been strong, Cooperhouse said. Seafood is extraordinarily diverse, with a large variety of species and dishes. BlueNalu doesn't want to displace any local fishing industry, and has started out by focusing on the species that aren't commonly caught in an area, Cooperhouse said. BlueNalu's first product will be mahi-mahi because it can't be farm-raised and it's mostly imported into the United States from Ecuador and Taiwan. The company is also concentrating on bluefin tuna, a prized species that is limited, tends to have high levels of mercury and is often overfished. There's a large unfulfilled market for this fish, Cooperhouse said.
"We're creating an oxymoron of a year-round, sustainable, mercury-free bluefin tuna democratized for all," he said. "We're kind of in that paradigm-shift business when it comes to seafood species, and some of the benefits that they can provide."
