After watching entrepreneurs flock to California to make meat, milk, eggs and other products indoors without the customary animal, Darko Mandich decided last November to travel 6,000 miles with the hopes of doing the same with one of his favorite ingredients: honey.
Without any connections in the San Francisco area, Mandich and his wife set out on a trip from Serbia for the Golden State on what he called "a calculated risk" to suss out whether people would be willing to invest in his business and get his dream off the ground.
Before long, Mandich found his co-founder, Aaron Schaller who was finishing his Ph.D at UC Berkeley with a degree in biochemistry, connected with potential investors. Instead of heading back to Serbia as he initially planned, the 29-year-old stuck around to start his own business making honey, but without bees.
"I realized that after we make burgers without cows and we make milk without cows that we also should make honey without bees," said Mandich, the CEO of MeliBio. "It’s a very important product that we need to think of alternative ways to produce it in order for it to be sustainable.”
Honey tops sugar
U.S. honey production totaled 37 million pounds in 2019, down from 44.5 million pounds in 2001, according to data from the USDA's Economic Research Service. Despite the decline, the value of production soared 200% to $108 million during the same period. The National Honey Board estimated U.S. per capita consumption of honey is around 1.3 pounds annually.
In 2020, honey passed sugar as the most preferred sweetener in the U.S., the National Honey Board said. Much of this increase likely comes as honey has benefited from its reputation as a natural ingredient and a healthier sugar substitute rich in antioxidants that also can help lower bad cholesterol and blood pressure.
MeliBio so far has raised nearly a quarter of a million dollars since it was formed last December. Mandich and Schaller have put in $40,000 of their own money before the business was incorporated, with the rest coming later in April from Big Idea Ventures, a venture capital fund and startup accelerator in the food space. MeliBio plans to raise additional funds from a seed round in the coming weeks to increase its R&D team and lower its production cost compared to traditional honey from bees.
Much of MeliBio's work is currently being conducted in the lab where researchers are testing out different approaches taken from biology, plant science and other industries to create honey prototypes; the best practices from each will ultimately be combined to make honey. In a recent blind taste test, individuals were unable to distinguish it from the traditional product, Mandich said.
"I realized that after we make burgers without cows and we make milk without cows that we also should make honey without bees. It’s a very important product that we need to think of alternative ways to produce it in order for it to be sustainable.”
The company will focus initially on making honey that mirrors the same taste, texture and nutritional qualities as what bees produce before venturing out into trying to replicate popular varieties such as Manuka honey from New Zealand or Acacia honey in Western Europe. So far, 15 food and beverage companies of various sizes have committed to using MeliBio's honey once it's on the market in the third quarter of 2021.
'Clamoring for another fake product'
Mandich wouldn't go into detail about the process MeliBio is using to create its honey in a lab, but stressed that the startup is making real honey rather than an alternative to the popular sweetener. The young entrepreneur acknowledged his company may draw skepticism from honey producers, many of whom have a long history of beekeeping in their families.
"I assume not all of them will be open to consider that the future of the product that they have been selling for a hundred years will be produced in a different way," he said. “But some people will look at this as an opportunity for innovation, and we will definitely be open to speak to the open-minded players within the industry and exchange opinions on how everyone sees the future of honey.”
Margaret Lombard, CEO of the National Honey Board, expressed doubt that lab-produced honey will ever catch on in the marketplace. She said with food manufacturers cleaning up their ingredients list to prioritize using those that are natural and recognizable by the consumer, there is less of an appetite for another synthetic product.
"I don't think the food world is really clamoring for another fake product," Lombard said. "Scientists I'm sure can do [honey], or something similar, but I don't think that it will replace or even threaten the beauty of what is honey."
Honey fits with the growing interest by consumers in knowing where their food comes from. At the same time, it not only helps beekeepers who collect honey from their hives but thousands of agricultural producers, whose crops ranging from almonds and blueberries to avocados and apples, are pollinated by honeybees, something that cannot be fulfilled in a lab.
"I would beg people to think bigger picture about what is happening out there and ... how that whole story comes into a naturally created product that is actually far superior to anything we're going to create in a test tube in a lab," Lombard said. "There is nothing like honey that is produced by a bee."
Mandich underscored the advantages of making honey indoors rather than the traditional way where bees collect flower nectar, which later gets broken down into simple sugars stored inside the honeycomb.
Lab-grown honey is pure, and there is no chance of adulterants being included (unlike real honey where even if a beekeeper is honest, their honey could accidentally include chemicals if a neighbor sprayed their field.)
It's also more humane, he said, since smoke isn't needed to calm the insects and the wings of the queen aren't clipped to help artificially inseminate the colonies. And finally, traditional honey production and price is largely dependent on the weather, so a reliable supply of honey will mean less volatility in price and an opportunity for more people to consume it around the world.
"We don’t know what the reaction will be, but regardless of that we really believe, this is the future," Mandich said. Production "will probably contain some of the honey produced from beekeeping but at scale, the future of the honey industry, the future of all the food industries will be driven by science and will be coming from the lab rather than from the animal."