This is the first installment in a five-part series about the challenges food tech companies face in scaling up.
In late March, Finless Foods’ office was mostly empty. The company’s name was no longer on the office’s glass door. Only a couple of the company’s scientists worked in the labs where the company had reached its first breakthroughs in growing cultivated bluefin tuna cells.
“I think you’re the last member of the public to see this office,” CEO and co-founder Michael Selden said as a greeting.
Finless was preparing for a move nearby — still in the town of Emeryville, California, but to a much bigger space to continue to scale up its cultivated seafood capabilities. There were still cell-growing experiments taking place in its lab space, but they were all small-scale — cells growing in flat petri dishes, small flasks gently rocking to coax cell growth. The lab’s largest bioreactor, which could hold up to 50 liters, was about to be shut down to make the move. In an area about the size of a standard home kitchen, refrigerated tanks and incubator cases holding a few flasks, small glass dishes and liquid for experimentation sat on counters and the floor.
In about five years, Finless had outgrown this original lab, as well as its office space.
The new lab is much larger, featuring a 250-liter bioreactor. When fully operational, Selden said it will be able to make enough bluefin tuna to supply the first several restaurants that will serve Finless’s cultivated seafood, as well as provide a crucial opportunity for the company to scale up its science, equipment and processes. But also very important, said Shannon Cosentino-Roush, Finless Foods’s chief strategy officer, the new lab also allows the company to set up the bioreactors and manufacturing safety processes FDA regulators would need to see to approve the company’s bluefin tuna — as well as other eventual seafood products — for sale to consumers.
The new food science lab — which has room for about a dozen people to work — also has an actual tasting kitchen for investors. Selden said they used to bring investors samples in the midst of employees and other work going on.
“Investors seemed to kind of dig it,” Selden said. “They’d say, ‘I feel like it’s a real startup,’ and we’d say, ‘It is.’”
Over the last six months, Finless has settled into its new 11,000-square-foot space, which is about 10 blocks away. And with a bigger space is a bigger company — the company’s food science team has tripled in size, and its bioprocess team has quadrupled. There’s also bigger prototypes that are more like what the company hopes to bring to market after receiving the green light from the FDA.
“I think we've made some big breakthroughs, basically, in terms of how to be a real company, and transition away from being a scrappy little startup,” Selden said in August.
Finless Foods isn’t the only food tech company that’s getting bigger. As science progresses and funds pour into companies that are perfecting the technology that could feed future generations, something is happening to food tech startups. They’re making the move from being small R&D organizations with a handful of scientists in a lab, searching for scientific processes that work, to actually becoming food companies.
Cultivated meat companies including Eat Just, Upside Foods, Future Meat Technologies, Aleph Farms, Steakholder Foods and SuperMeat are planning their first industrial-scale facilities now. Precision fermentation dairy company Perfect Day moved into a bigger R&D lab and office building in Berkeley, California, establishing itself in Salt Lake City and India hubs, and branching out into an enterprise-biotech-as-a-service business called nth Bio. Earlier this year, cultivated fat producer Mission Barns moved into a 32,000-square-foot San Francisco office and lab space that once belonged to former vaping powerhouse Juul Labs.
Mark Warner, a former consultant for food tech companies and current CEO of Liberation Labs, is an expert in helping companies transition from researchers to manufacturers. In the last seven years, he said he’s probably worked with at least half of the companies making cellular products or novel proteins. And he’s seen how scaling up works, as well as helped companies ranging from TerraVia (formerly Solazyme) to Impossible Foods advance to the next level.
There’s a lot that needs to be done in order for a company to scale up. It needs facilities. It needs to make sure its science and processes are sound. The product produced at a large scale needs to be workable, consistent and safe. But, Warner said, one of the most difficult transitions an organization undergoes when moving from R&D to commercial production often has nothing to do with the technological side.
“It's to some degree organizational and psychological,” he said. “If all you've ever done is R&D, shifting to the manufacturing environment can be hard for these organizations.”
More, more, more
Every food product starts with an idea. And if that idea comes from someone who isn’t already working with a major food company, it can take years to fully develop it and get it to market.
When that idea requires advanced science to come to fruition, the path to the market is much longer — especially if it’s something that hasn’t been done before. The process starts with scientists trying to create the food or ingredient in a laboratory at a small scale. And if that works and the product is a good idea, the company — and the R&D — starts to slowly grow.
More scientists come in. Experiments to make the product are repeated, seeing if it can be replicated. Then the experiments get a bit bigger. Can the process make the product at a larger scale? And when it can, the cycle continues. More science, more experts, more experimenting, more product. More scale. With that comes the need for more facilities and more money.
Laine Clark has worked with the Good Food Institute, an international nonprofit that supports and promotes alternative proteins commonly abbreviated as GFI, for more than a year. She’s the group’s innovation and entrepreneurship manager, and serves as a consultant and resource to help companies get through the process of scaling up.
As many food tech projects are transitioning into companies, Clark said many of them face the problem of finding larger facilities. For example, growing less than a pound of cultivated meat in a lab — known as bench scale — is a good start. But to further establish the company and prove it could eventually grow millions of pounds of meat in a dedicated facility someday, it needs to get to a facility where it can grow hundreds of pounds of meat. This is known as pilot scale, and getting there is a significant speed bump Clark said she sees often. These facilities are pricey to build, and it’s difficult to find one available.
“There are bottlenecks right now for a lot of companies who need to get to a pilot plant, even. Just getting from bench to scale,” she said. “That first step, that pilot plant step, which is critically important so that they can have the time to get their product sampled, make sure the taste profiles are correct, work on pricing, all of that.”
“It's a different thought process than many have coming out of science. And again, I'm not either maligning it or defending it. I'm the pragmatist saying, ‘If you're gonna make food, you need to understand it.’”
Former consultant and CEO, Liberation Labs
Company building is also a challenge that Clark talks to a lot of companies about. It’s one thing to be able to do the science to make something brand new, like animal proteins through fermentation. But once the technology is proven, money is raised to help the company grow and the food community is buzzing about what a company is doing, it actually has to function as a company. All of the sudden, it’s not just science. The company needs to have sales and distribution staff, an HR department and a marketing team.
“Many of these solutions, obviously, are highly technical solutions,” Clark said. “And the teams that came up with the concepts have backgrounds where they’re Ph.D.s and so forth, but then they find themselves having to think about a go-to-market strategy, and they don't really know what's valuable in that situation, so they pull somebody in who can help.”
Warner, the former consultant, said that because food is the end product, there is another twist to scaling up. USDA and FDA have stringent rules governing food safety at manufacturing facilities. Many food companies hire specialists to ensure they are following those rules, and manufacturing facilities are subject to inspection to make sure there are no violations. But these rules are unique to food manufacturing, and are quite different from standard lab procedures, or even the way similar types of products are manufactured for the pharmaceutical and medical industries.
“It's a different thought process than many have coming out of science,” Warner said. “And again, I'm not either maligning it or defending it. I'm the pragmatist saying, ‘If you're gonna make food, you need to understand it.’”
You’re not shooting hoops by yourself in the gym
Josh Tetrick started Eat Just, then Hampton Creek, in 2011. Since then, the company has scaled several product lines. First, it made plant-based mayonnaise and condiments. Then it brought plant-based eggs to the market.
Now, it is the only company in the world that can make cultivated meat for the general consumer. In late 2020, Singapore granted regulatory approval for Eat Just’s cell-based chicken bites, produced under the Good Meat brand.
The long-term goal for Eat Just’s Good Meat cell-based meat line is to make tens of millions of pounds of cultivated chicken, beef and pork at a cost at or below that of traditional meat before the end of 2030, Tetrick said. But it’s not just about making the meat — it has to be approved by regulators and sought by consumers, he said. So anything the company produces has to be scalable, stable, safe and desired.
Eat Just is on its way to building that large scale for its cultivated meat lines. In May, the company announced an exclusive partnership with biotech process engineering company ABEC to build 10 250,000-liter bioreactors for meat cultivation. Those bioreactors will be the largest ever built for bird or mammal cell culture, and will be at a facility able to make up to 30 million pounds of meat a year, the company has said. The company is currently looking for a site for this facility, which Tetrick said will be somewhere in the U.S.
Tetrick said being able to sell cultivated Good Meat chicken in Singapore has shifted consumer perception of meat grown from bioreactors from something that sounded like science fiction to something that is being served for lunch.
“However — and it's a big however — that's not the same thing as scaling. They’re two different things,” Tetrick said. “I think sometimes it's easy to conflate those things. But selling is not scaling.”
Tetrick defines scaling as being able to make millions of pounds of cultivated meat that it can sell to consumers at or below the cost of meat, which he said is Eat Just’s central focus right now.
The company’s condiments line was phased out as Just Egg production ramped up. Just Egg, made from mung bean protein, is far and away the leader in the egg alternative category in the United States. Just Egg products are also sold in Canada, Singapore, South Korea, South Africa, Hong Kong and China, and will be sold in Europe by the end of this year. As of August, Eat Just has sold the equivalent of 300 million eggs.
In North America alone, Just Egg is in more than 48,000 retail stores and more than 2,200 restaurants. From December 2021 until May, Just Egg was the country’s second fastest growing egg brand, according to Nielsen statistics from the company.
Tetrick, whose company is one of the oldest players in the food tech space, said he learned difficult lessons early on. The biggest one: Even though something works at lab scale, it is not guaranteed to work at a larger scale.
He shared an analogy shared by one of Eat Just’s engineers. If you’re shooting hoops by yourself in a gym, you may be able to hit three-pointers effortlessly. But when you’re playing a game, the simple act of shooting baskets is the same, but the situation around you is completely different. The gym is likely crowded with other players, who are changing the air temperature and pressure by moving around. You may have people trying to block your shot. And you may be working your own body harder, trying to keep up with the rigors of playing a competitive sport. The upshot: It’s literally a different ball game.
“Just because you can hit three-pointers with your tongue out on your own doesn't mean you can do it in an NBA game,” Tetrick said. “And just because you can make an egg in the lab doesn't mean you can make it at scale.”
What a company needs, he said, is the ability to understand the differences that crop up as the equipment to create products gets bigger, as well as how to control the end product and make it consistent. The right sort of engineers can look at this and know how to make the necessary changes.
“Just because you can hit three-pointers with your tongue out on your own doesn't mean you can do it in an NBA game. And just because you can make an egg in the lab doesn't mean you can make it at scale.”
Founder and CEO, Eat Just
Tetrick said as he worked to scale up Just Egg, it was disappointing to run into setbacks as the company increased its capacity. It took some time and teamwork for the company to figure out how to make its proprietary protein removal process work well as the company moved into bigger manufacturing facilities.
Now, Tetrick said, he looks at what is scalable, not necessarily focusing on what a promising technology for the space might be.
Tetrick said the biggest mistake he made in the early days of Eat Just was not asking people with more experience in scaling tech companies what they thought he was missing. With his experience now, Tetrick said he knows he should have been more focused on performing at scale, and if someone would have told him that eight years ago as the company was getting off the ground, they would be further along.
But, Tetrick said, going through a bumpier scale-up of plant-based eggs has had its benefits. All the experiential lessons from Just Egg have immediately been applied to building up Good Meat.
“I often think if I would have started meat first, or I would have started meat at the same time … without the experience of egg, we'd be two, three years behind where we are now,” Tetrick said. “We wouldn't be selling in Singapore. We wouldn't have a partnership with ABEC. We would be celebrating the last thing that we made in the lab.”