Anne Palermo knows that in the food business, appearance matters.
Her new company, Aqua Cultured Foods, makes whole cut seafood analogs through microbial fermentation. The fillets and pieces of fish it creates are said to look and flake in a way that's similar to the real thing. Considering how most people in the U.S. eat seafood — in deliberately cut pieces and not ground or in minced bits — perfecting this whole cut style was vital, she said.
"When you have a product that looks like what you're used to, it's a lot easier to transition somebody towards your product," Palermo, the company's co-founder and CEO, said.
Aqua Cultured Foods, which has been developing its fermented seafood in stealth since last year, is ready to introduce itself to the main stage. While there are not likely to be products available until next year, the company has been working hard to develop its animal-free sea bass, cod, tuna, popcorn shrimp and calamari for eventual distribution to both restaurants and grocery stores. The company's go-to-market strategy is still under development, said co-founder and Chief Growth Officer Brittany Chibe, but she said there is a lot of excitement about its potential.
"When you have a product that looks like what you're used to, it's a lot easier to transition somebody towards your product."
Co-founder and CEO, Aqua Cultured Foods
The company also has been working to build up its intellectual property protection, with three patents pending so far for its methods, cultures and usage, Palermo said. The company is working on its seed funding round, which Palermo said is going to be closing soon and will be oversubscribed. So far, the company has been getting a bit of funding, starting off with a $200,000 pre-seed investment in April from Big Idea Ventures, according to Crunchbase.
Aqua Cultured Foods is ready to play a long-term role in the alternative seafood market. With more consumer awareness and demand for seafood alternatives, Palermo said the company sees opportunity in supplying the types of products they want.
"When we launch our products, we're [going to be] the only ones that have these whole cuts," Palermo said. "They are gorgeous, delicious in multiple different applications, and we have multiple different entry points."
Getting their feet wet
Palermo, who has a background in both food tech and food science, has had her eyes on the alt protein space for years. Her interest has been driven by sustainability concerns and wondering how the existing food industry can feed a growing world population. Fermentation seemed to her to be the best solution to solve these issues, and she started experimenting by growing mycelium in her kitchen.
Since then, Aqua Cultured Foods says it has found a way to ferment an end product that naturally looks and feels like seafood. Products mostly just need to be cut into the proper form, flavored and colored, Palermo said. The process is proprietary, but involves a combination of submerged and surface fermentation, she said. The company worked to create nutritional value for its products as well. Each serving will contain 18 to 20 grams of protein and 10 to 12 grams of fiber, as well as vitamin B12 and omega-3s, the company says.
The fermentation process itself uses inexpensive and common inputs, Palermo said. This means that the finished products can cost close to traditional seafood. However, because it is a premium product, it will cost slightly more — but will be at a price point that most consumers can afford, she said.
"Our goal is to feed the world," Palermo said. "But you can't do it if you can't bring it to market at a price that the world is able to afford."
The end product is also tasteless, which means Aqua Cultured Foods can have a very light touch on flavors to make it palatable. No bitter blockers or heavy flavorings are required, according to the company. Palermo said that the nutrition level and the lack of flavor of the fermented protein work hand in hand.
"A lot of other alternative seafoods right now, they do not have any protein in them at all," Palermo said. "What they do is, it's purely a starch-based product. And so there's just no nutrition, there's no vitamins, minerals, protein, fibers. So then what they do is they'll add different types of protein isolates, whether it's soy or pea or whey. But then they have the problem of that having a bit of a polarizing flavor, so then they have to add chemical masking agents [or] really high levels of sodium in order to cover up that flavor."
The current protein and process are also highly adaptable, Palermo said. By varying pressure levels, humidity and gases during the production process, the same protein can be made into a flaky fish analog, meaty popcorn shrimp or chewy calamari ring, she said.
Scaling up (without scales)
Aqua Cultured Foods is currently in the process of increasing its scale and improving its science, which will have an impact on when products will be available. Palermo said she doesn't want to launch before there can be an adequate supply. She also wants to make sure that Aqua Cultured's products are a good fit for their test markets.
The company is moving into a pilot lab to increase its fermentation output. And it's working to cut the time to create product in half — from 10 to five days. The creation time is a bit longer because the products are whole-cut items, Palermo said.
Aqua Cultured Foods will be testing five items in different types of markets, Palermo and Chibe said. The company is working with celebrity chefs and a culinary adviser who is familiar with different types of restaurant operators.
"One day you could see this on the McDonald's Dollar Menu, or it could be at a five-star hotel's dining venue. It's really versatile."
Co-founder and chief growth officer, Aqua Cultured Foods
"We're in a really desirable position because everyone from retailers to foodservice operators are really excited about what we're doing, so we're going to be super picky about who we go to market with," Chibe said.
The company will likely custom design whole cut products for applications such as sushi and poke bowls, but target products like popcorn shrimp and calamari at QSR-type restaurants. Palermo said that starting out in foodservice will also increase consumers' likelihood of buy-in. Not only do consumers do 65% of their seafood spending in restaurants, but chefs in restaurants can also prepare what may be seen as an unfamiliar product in ways that will get people hooked. Palermo said Impossible Foods showed the success of this approach with the launch of Impossible Burgers — starting out at high-end restaurants and, after consumers discovered the taste and quality of plant-based burgers, finding success at the grocery store.
There's a lot still up in the air, but the company is getting set to grab its share of the alternative seafood space.
"One day you could see this on the McDonald's Dollar Menu, or it could be at a five-star hotel's dining venue," Chibe said. "It's really versatile."