#88 - How Chris Kerr and Chuck Laue Kick-Started Humane Investing and Helped Transform the Food Industry

[Music] I'm Nilsakurais and you're listening to Eat for the Planet. On this show, we try to answer the question, "How can we eat in a way that nourishes us without starving the planet?" The show features conversations with food industry leaders, health and sustainability experts, as well as entrepreneurs and creative minds who are redefining the future of food. This conversation was recorded live at the Plan-Based World Conference and Expo in June 2019. The title of the panel was "The Strategic Plan to Reduce Animals from a Food System" featuring Chris Kerr, Chief Investment Officer at New Crop Capital, and Chuck Laugh, Co-Founder and Chairman of Stray Dog Capital. Let me say this before anything else. This was one of the most enjoyable and impactful conversations I've had since I launched this podcast. That's obviously saying a lot, because I've featured many really passionate and successful individuals in previous episodes. What made this really interesting for me is that Chuck and Chris have the perfect balance of passion and smarts. They lead with their hearts, but it is pretty clear that they are also two of the most insightful and knowledgeable investors focused on the emerging Plan-Based Foods Industry. I love talking to people like Chris and Chuck, because not only do I learn a lot from such discussions, but I also walk away even more passionate and energized to change our food system. So why did I decide to chat for Chris and Chuck in the first place? Unless you've been living under a rock, you probably at least know that Plan-Based Foods are having a bit of a moment right now. Investors have funneled more than $17 billion into U.S. Plan-Based and Cell-Based Meat Companies in the past 10 years. And investments in Plan-Based Dairy and Alternative Proteins represented one-third of overall food investments in the year 2018. What makes Chris and Chuck true pioneers is that they were investing in Plan-Based Foods before anyone was focused on this space. This conversation dives into the early beginnings of human investing nearly 10 years ago and what drove Chris and Chuck's first investment decisions. But by no means is this chat limited to the history of how we got to a point where Plan-Based Foods are now the fastest-throwing sub-sector of the food industry. Chris and Chuck also share their insights on the current state of the industry and provide advice for entrepreneurs looking to raise investment, as well as share their thoughts on the M&A outlook for the near future and predictions for the segment in the decade ahead. Plus a whole lot more. If you are even remotely interested in the food industry or Plan-Based Focus venture capital investing or what's next for Plan-Based and Cell-Based Foods or even learning about how a few passionate individuals can take steps to change the world. Listen in. I'm Neil Zacharias. I run a platform called Eat for the Planet and it's also a podcast and hence this is a live podcast recording. And I'm joined here by Chris Skur from Newcroft Capital and Chuck Lowe from Stradau Capital. Two people who if you don't know, you will know hopefully very well by the end of this conversation. From my standpoint Chuck and Chris and from what I've gathered and I've done a lot of research, you both have been very instrumental in a big shift that has started to happen in how we view using the power of markets and investments and technology and food to bring about a positive change in the world. And perhaps people don't know enough about how you were instrumentally involved in this process. And so my goal today is this is not a typical panel because I'm going to dive a bit into both Chuck and Chris' backgrounds. And then we're going to talk about some of the pressing issues that are happening right now in the world of plant-based food as well as the potential future for cell-based meat and other culture food products. But it all kind of comes out of passion and this is what I've understood about both of you. Whatever you've done so far in the investment world as it connects to food and innovation has been tied into a passion you both have for animals. And hence, this is probably the only session in this whole conference that has the word "animals" on them. It's nothing to hide. There is a plan to reduce animals from my food system and it is a worthy effort. And if it wasn't for people like Chuck and Chris, we wouldn't have made it this far. So I do want to make sure that we, I want you to talk freely and I want you to dive into whatever you care about and why you do what you do. And of course, we'll get into the tactics of investments in the future of the plant-based space which I'm sure many people are interested in. But let's start off with both of you. I know, as I said earlier, both of you got into this world, so to speak, because of a passion for animals, and have been involved in the animal welfare space tangentially or directly for years, even before people heard of plant-based products and even before, beyond meat, IPO, and the whole world changed. And when was the, tell me the moment when both of you, maybe it was the same moment or separately, realize that markets and technology and food and innovation can be a pretty instrumental vehicle to bring about change for the betterment of animals. Where was that idea born? I'll go ahead and start and I want to start first and foremost by saying, we have a huge team at Stradog Capital, a lot of them are here this weekend for this event, and we're very excited about it and this has turned out to be so much more than we anticipated. So kudos for the movement for pulling this together and making this happen. And I know you had a big part of that, so thank you for that. Stradog Capital, in all frankness, would not exist but for Chris Kerr. We, he is the OG of Humane Investing. There's just no doubt about it, and yes. [ Applause ] So Jennifer and I have been vegan for over 13 years and all for, on an ethical basis, but it wasn't until I joined the board of Humane Society of the United States in 2013. I sat on a committee called the Investment and Pension Trust Committee and an apportion of every one of those committee meetings was a presentation from Chris Kerr. And Chris Kerr would bring to HSU S, who literally, because of Chris, was one of the early investors in Humane Investing, and he would bring investments to the committee and we laugh about it now, but as you can imagine, a committee like that is very conservative with its investing because it's investing donor dollars and it wants to be very careful. And the conversation usually ended with me saying, hey Chris, I don't know where we're going to land as a committee, but Jennifer and I will invest in that. And that's how it really got started. We then formed Stradog Capital and the rest, as they say, is history, but ultimately it all came back to Chris making us aware of it and really starting to think about how investing could be not replace our activism, but be a part of the evolution of our activism and a supplement to that activism. So that's really how we got started. That's giving me too much credit, I'll say, but I'll start by saying this. I was on the wrong side of history pretty much across the board, pretty much on everything and it wasn't until my wife came along, my girlfriend at the time, now wife, who started our relationship by asking a lot of questions, or asking me to ask a lot of questions. I grew up on the farm, my very first job was cleaning the udders on cows before they were milked, seven years old. I've had animals in my whole life, but there were two different sides of where animals fit in that. So when Kierstee came around, she had been vegan at that point for 14 years. I'd been vegan for zero and was not all that interested in at the time, but I was very interested in her. So it became like, I'm. I like to be a student of change. I thought, well, if there's questions to be asked, I'm okay to ask him, particularly with such a pretty girl is asking those questions. So when I started looking at, okay, well, how could I approach the world a little bit differently? I don't like animals being hurt. I don't need cruelty. We don't need any more suffering in the world. So if I could play a role in that great, opening up those eyes was, that was a tough time for me. It became, it was harsh. It was a harsh way of, is like being reborn to some degree. And I thought it was very frustrating. What I wanted was to change my own behavior. I wanted to desperately change my own behavior in how I ate. It was very hard to do it. My aspirations and my abilities, there's a big chasm between the two. I very much wanted there to be less suffering in the world and I very much wanted a girl she's sandwiched. And I hate to say it, but that's literally what was happening. My, my, my, my id was taking over. We make decisions around food that are very much driven by that moment. There isn't a big philosophical discussion going on around the world when all I really want it was a girl she's sandwiched. I'll say that if I'd been an artist, I'd be painting artwork about animals. If I'd been a lawyer, I'd be an animal rights activist, lawyer. If I were a lobbyist, I'd be doing animal rights law, but I was a business guy. And so I thought, this is the only tool that I really know, so what can I do with it? What can I, how can I put that to work? And solve what was also a crisis for me, which was I really did. I wanted to eat fun food. I wanted food to continue to be fun. I think about food all the time. I mean, I love food. So how is it that I want to have this long term sustainable behavioral change, not compromise my values and yet still live kind of a happy life? And so I think around 2002, I became vegan. I can't believe she agreed to marry me before I became vegan, but she did. I went vegan while we were engaged. And after that, she and I decided as a team that we were going to take investments that I'd done in the past, and we were going to apply them, apply the trade to this side of the equation. I'll tell you one thing about what I learned in the business world is don't go to anybody with a problem. Go to them with a solution. You go to them with a solution. They'll likely grab onto it. You'll go to them with a problem, and they will fight you on it. And I just thought we've been trying to change hearts and minds in our movement for 50 years. And you can change a heart and a mind for a little while, but it won't stay that way unless you start giving some people some answers. And so literally, day of cheese came about. It wasn't even named yet at the time. Tall Ronin and I flew out there, had this product. We thought, OK, I can have a grilled cheese sandwich, and that started at all in motion. So I went to work for the Humane Society. Luckily, the leadership there at the time was looking for solutions. We had guys like Josh Balk who were actually fighting a really hard fight there trying to go to corporations to get them to try new products. But the things that they were working on weren't all that good. We thought, OK, let's see if we can bring some solutions to the equation. And there was luckily a lot of entrepreneurs out there who had great little ideas and thought, well, maybe we can do something bigger with this. So a wonderful conversation. There's a very true and an important part of our story is we're raising money from Miyoko's kitchen. And I had never met Chuck. Didn't know what he looked like, but there was somebody who had just joined the investment committee. And I said, I really want to go into Miyoko's kitchen. We want to fund this thing. We're going to be the lead. And Chuck said, with everybody else on the phone, it wasn't off to the side. He said, yeah, HSUs can go in and whatever round is left, Jennifer, and I will take the balance. I just thought, who is this man? This is fantastic. I have an ally. So that was really the start of that. And again, it comes back to use the tools that you have and help people with transitioning to behavior change. Sorry, that was monologue. No. So if you want to sum it up, a summary of that is thanks to Chris's love for grilled cheese sandwich. We now have two big and prolific venture funds backing almost every new good food startup that's launching. I can't eat a grilled cheese sandwich every day, so you can try to do other things as well. You're diversified now. Yeah, so it comes like beyond meat came about through that process, Hampton Creek. Miyoko's was in there. These are really fun times. And I have to say, food is fun. It should always be fun, and yet worked out well. So about, say, 10, 12 years ago when all of this was starting to happen, I know, beyond meat. The story seems like it's a startup that came out of nowhere. Now it's a darling on Wall Street. But it's been a 10-year-long overnight success, right? So it's been a while since they started. Back then, there were no impossible foods raising 300 million. I mean, beyond meat was one of the few new companies innovating, I guess, Hampton Creek at the time was another one that came about. So what data was there to support that this was something worth putting money into? Was there any data? So because today, when people are making investment decisions, you can go to any of the other panels over here today. People are talking about, I heard someone say, ultimate roof, 400% in the last year. That's a good data point now. But there weren't any such data points 10 years ago I'm presuming. So as investors, as people looking to use business and impact, it's great if you love grilled cheese sandwiches and you want to support planned-based businesses. But if no one buys the products, and there's no proof of market out there, they're probably going to fail. So did you just make a leap of faith? Did you have a crystal ball? Well, there certainly was no crystal ball. I think, in large part, you hit it. And that is, it was a leap of faith. We believed so strongly in the idea and the concept of using the capital markets as a solution to drive incremental change, if not a revolution in what we were doing, that we made, in large part, or in the early days, emotional investment decisions, not data-driven investment decisions. Whether it was because you liked cheese, or you liked Miyoko, you know, we made a decision to back something that turned out to be great. I mean, Miyoko's kitchen is a great story. The Beyond Meat Stories great. There's dozens of them, and there will be dozens more. And it's, I think, in the early days, there was no data to support it. It was all about, for Jennifer and I just, you know, we'd had some good fortune in our lives, and we, and we were, at some level, blindly investing our money, and it was time to start investing our money in investments that matched our values. And that's really how the evolution took place. It wasn't because we had done some deep dive, analytical analysis, and said, we're not going to get into that. We're going to get into this food thing. It just, it didn't happen that way. It was really very emotional. Yeah, we had one data point, and it was silk. Silk, soy milk, literally set the stage for everything that I tried to convince people of. So we had, at the time, you had a couple of small companies. The natural product space was very hot right up until about 2006. There was a lot of merchants and acquisitions happening. The market's collapsed, but silk, soy milk, which is at that point, almost a 30-year-old company. 20 years in, white wave invented, silk, soy milk. 10 years after that, Dean Foods invested, actually, at the 20-year mark. But it started getting a foothold, and you were looking at an industry that was about 70,000 years old, people drinking milk that had now started to shift. So at that point, you had about maybe 1% of the market had shifted, but how it was being consumed had changed. Where it was placed, what it looked like, what the cartoning was like, how did consumers relate to that brand? Where was it merchandise, where was it positioned? So that was the one best thing that we could point to. And it was just an astronomical success, and it got even more successful at the point where Dan Ohn bought it for $12.5 billion. I was impressed when it was at about $35 million, which is when Dean Foods came in. We used that as the economic marker, saying, look, if we can mess around with just the dairy aisle, just with people who are lactose intolerant, we don't have to rely on just people's love of animals. There's lots of reasons why people might want to change their behavior. Those levers work for everybody. Consumers win if they don't get a bellyache when they drink milk. And so we started looking at how we could take advantage of some of that, looking at what consumers were looking for and try to feed those. Yeah, I mean, it's no easy way to respond to that, except that to some extent, you may not have had any data points besides a small one from silk. And as you said, you were making emotional decisions for investments, but what you probably inadvertently did was set in motion a series of events that has created what we've seen in the last 10 years. And to be fair, you amongst many other people who had similar motivations, inclinations, who started companies around the same time. And here we are now about 10 years later. I don't think anyone could have predicted any of this in the last ten years. I mean, as recently as I was say six to seven years ago, people frankly thought it was, this was a very tiny market and it was going to always stay that way and that anyone, you know, me included, I quit my career in media and technology and turning vegan made me do that, made me because I had no other choice then and everyone told me I was insane to do that and it's in some ways of the, I was telling people earlier today, the Beyond Meat IPO, not that I was directly involved in any way with Beyond Meat but was some retribution because a lot of my old friends from the tech industry who went and got jobs at places like Uber and, you know, were predicting this massive IPO for Uber around the same time instead, Beyond Meat is the darling of everyone now and no one even until a few years ago, most of them didn't know Beyond Meat existed. So, what are you most surprised by? I mean, the first point is you don't even realize you've, you've had this invisible hand behind working that led other people to then start companies, whether it's seeing someone like Miyoko who, I would say, is an emotional investment but also very data-driven one because she succeeds at most things she does, almost everything. But looking back now, now that we're here, June of 2019, month after, Beyond Meat's dominating headlines everywhere and that's just one example. I don't want to make this only about Beyond Meat. There's numerous examples of companies that are doing fascinating things. Many cool people may not even have heard of yet but are going to be the next big thing or, you know, get acquired by someone really big. What surprised you the most about what transpired in the last 10 years? It's hard not to answer that question by using the two words Beyond Meat, again, I apologize because a few years ago when Beyond Meat went to market and you could buy it in the grocery store in a whole food's, the first thing that we did was say, you know, first we tried it. We said, wow, and then we said, now I'm going to get all my meat eating friends to try this and say, hey, look, veganism isn't so weird. Taste this thing, it tastes like a burger and they all went, wow, I didn't, you know, and all of that was started to really vindicate what we were doing and really started us to say, hey, there's, Beyond Meat is just one example. As you said, there are dozens of others, all of which, and this is a gigantic market. It's a multi trillion dollar market that we, and there will be a lot of opportunities. It's not going to be Coke and Pepsi, you know, Beyond and Impossible, although it feels like Coke and Pepsi right now, but it will evolve and there will be significant opportunities for many entrepreneurs. And I think the realization that Beyond Meat manifested in Beyond Meat was that we are not wasting our time. This is real and this will be, we can implement the change we want to see by supporting these companies and giving them the capital to get out of the gate and go beyond their kitchens or their garages and into co-packers and ultimately into their own production and make it happen. Yeah, I think I'm most surprised that the meat industry showed up. Like, you know, we, it was a long time where they were adversaries to our cause and what we were trying to work on. And the fact that they showed up and said, help us was a very unique moment that happened in the last two years. The people who have been fighting this, like my wife for decades, those who had to be incredibly frustrating times, it's arguably perhaps frustrating to some of them that people like me work with those same adversaries, but these are companies that, you know, Nestle is 150 years old, even the, even the youngest really big food companies are in 50, 60, 70 years old, we need them, right? They are the footprint. We put fuel in a car as an investor to try to get it going a little ways, but we need real fuel. And so we need that. The fact that they showed up and showed up in spades is really unique, did not see that one coming. No, that's it. See it coming. Yeah. And so here we are now, right? We're in a new sort of age. We have the very fact that we have this expo is a sign of the times. We didn't plan it this way, but it turned out pretty well. That it, it tells you that the space is big enough where there's new brands being launched every few weeks or months at this rate. There's accelerators, there's incubators, and there's several new traditional venture funds, both from the technology world and beyond, that are now looking at what's happening in the plant-based food space, and also what's happening and going to happen soon in cell-based meat, and we'll get to that in a bit. And thinking, well, we don't want to miss out on the next year on meat now, right? And so, increasingly, I'm hearing about a lot of traditional venture capital money that would typically go to random tech investments, and I say random because 99% of them fail. And now seeing maybe this is a safer bet, better bet, one which can not only make an impact in terms of return and investment, obviously, but also finally can live up to the Silicon Valley mantra of we want to save the world. You can actually save the world by investing in these companies. So, the reason I bring that up is now, does that change your investment thesis a little bit because you've got, you know, straight dog and new crop capital and several other early-stage investors, some of whom I in this room, as part of the Glass Wall syndicate that worked together to invest in mission-aligned companies, plant-based and cell-based. But now you've got all this other money coming in from traditional VCs who would never look at these companies, say, even five years ago, with some exceptions. How does that change your outlook now? I mean, you started off, as you said, emotional-driven investment decisions, one of fund companies that you believe in. Now, many other people want to fund the same companies, perhaps not for the same reasons as you do, but it's still money and it still helps. What's different for you both now as you look ahead as your sort of outlook, investment thesis, your next funds you're going to raise, where is the focus going to be? Why do we still need a Glass Wall syndicate? Well, first of all, Glass Wall Syndicate really got its founding because we wanted to expand the universe of investors in this space. There was a small group of us in the early days that were doing some investing as well, but we wanted to figure out how to broaden. We knew that there were a lot of mission-aligned investors and people that wanted to create an impact with their money, and we wanted to be able to bring them together in an environment that hadn't created yet a sort of limited partnership type arrangement, and Glass Wall really is a large investment club with a mission focus. It's right now Glass Wall is 140 investors, individuals, VCs, foundations and led by a woman named Macy Mariat who has done a great job in really bringing that group together and making it using technology and sharing due diligence and sharing legal services and things like that to really make it easier for folks who maybe can't write giant checks but want to put what they can behind it and do it with others who are like-minded. It's really created and it's now evolved beyond that too. We have working groups that are looking at philanthropy and animal testing and diversity and inclusion and things like that. As a subset of Glass Wall, it's now evolved from investing to this community of investors who are going beyond just the investing side. That all arose out of the early discussions when it was Newcroft and Bruce Friedrich trying to start GFI and running his first presentations by us in a conference room in San Francisco and Josh Balk being brutal with him in the feedback for those early presentations. Bruce deserved it all. I'm only saying that because he was supposed to be sitting here, so I want him to hear the presentation and realize that we abused him during the discussion. We are twin brothers. I'm his older, fat, or dumber brother, but we are twins. Glass Wall has turned out to be a fantastic mechanism in large part because of the great team that makes it happen every day. syndication is actually venture capital term. I'm sure they use it for lots of reasons, but it's what you do when you don't have enough money to take a whole round. So if you're raising $2 million, I can only put in 250,000. I need to get my buddies around. So when we -- when New Crawl Capital has started, literally the very first phone call I made, this is true story, was to Chuck, who hadn't heard from me since I left the HSUS, and he said his exact words were, is this Chris Kerr? Is this the Chris Kerr that has left the universe for the last year? Where have you been? And I said, Chuck, we're putting together a little fund. We're going to need more than what we got. If we're going to change the world, will you do deals with me? Because yeah, I just -- I just hire Lisa Furrier. Let's make sure that we work together. So that's how the syndicate started. I never quite thought it would get much bigger than that. Maybe four or five investors would be interested. But the way a syndicate works is, I like to think of it as an old car. Remember the old car is yet hand cranked to get going? That's what we do. Like we are an old -- No one's as old as you are in the show. Nobody knows that that actually happens. But you -- basically, real big investors don't want to do that hand cranking. They don't want to push the car to get it going. They don't want to push it through the mud. They don't want to twink or mess with the engine to see if it works. That's what we do. And our job is to get it onto the highway so that the rest of the work is just fuel, right? And that's where the big money comes in. But that early stage work is very hard. It takes a village. You can't -- it can't just be what is little Chris Kernos, who's very little, what can we do to bring on people that actually have breath of experience. So some people are good at marketing. Some are merchandising, some are at law. That's how you create the syndicate that creates that value. The money is actually secondary tertiary to the whole thing. I say tertiary because I like to use the word, makes me think I'm smart. But really, money is oftentimes one of the least things that matters. It's actually the talent. Who do you know? Who can you introduce me to, until that's really -- So from a perspective of a food startup, if there are any in this room or someone who's thinking of starting one after coming to this event and thinking, maybe I can do this, I think going to glass walls and approaching the mission line investors that you represent and that are part of this syndicate, you're getting way more than just the money that you would get from any traditional investor. And of course, since you share the mission, assuming the founders and the entrepreneurs behind those startups, share a similar mission, you can obviously work together to grow those companies in a manner that doesn't compromise their values and what they've originally set out to do. So I think that's the part that's kind of important. I know the original question I asked was more like, does this change your focus? Because now you've got more people with maybe more money coming around and trying to get in the game. But I think you've kind of answered the question, which is what you offer is what you offer, which is something different, and it always has been. And for companies that are looking to raise another round, if they approach you with that same approach as they would approach any random, I don't mean to say random in a derogatory sense, but someone maybe who isn't doesn't lead with heart first, they may have a different, a difficult ride down the line. And you've been through the trenches of many companies, including Miocos and Beyond Meat, and all have had their ups and downs, which may seem like success on the surface, but there's a lot that goes on to make that even possible. Am I correct in kind of making that assessment of where your strengths still stand true? And the reason I say that is because I've actually heard, I won't name names. I've heard some entrepreneurs tell me that I'm not even bothering with the vegan mafia of investors. I'm just going after traditional VCs. And I was like, oh, OK, do whatever you need to. Yeah, so first of all, NewCrop Capital, certainly not me. I'm not the one who anoints winning companies. Like I've made plenty of misses. I've called the wrong shots many a times. I literally make decisions around what tastes good for my palate. Are you in the right market? We are not the validator of all deals. For anybody who wants to go out there and start a company, we shouldn't give a shit what I say. You should go out there and do it, first of all. Our secret sauce is that we do come from principle. We've been using this system. We did it with all of the early companies, which is we had a network of people that were strategically placed around the globe. Some of them inside corporations. You had guys like Derek Sarno and Chad Sarno that were whole whole foods. Day and beyond meat got started in there, because I called Derek and Chad and said, hey, can you get this into whole foods? Boom, you've got it launched. We did that because in our world, it's a call to action. We have early adopters that actually say, I like that. I like what you're doing. I'm going to travel in great distance. I'm going to pay more and I'm going to support you and I'm going to talk loudly about your company. That call to action comes with a value system that we can never violate. That's why we have such strict mandates around what our companies are allowed to do. If we're going to ask these early adopters to work for us to help these companies provide and proliferate, we cannot compromise those values on them. Those are the same early adopters will turn on you and you will hear it. And we've seen that happen as well. So our secret sauce is to make sure that we're always kind of following that mantra, right? Stick with the program. Know your brand. Never violate the principles of your early adopters. And with that, you get a proof of concept. A proof of concept that fits inside our early adopter world is a proof of concept that can go global most of the time. That's what the strategic investors are now looking at. So whether that's Maple Leaf and Green Leaf, whether that's a Tyson, whether it's Nestle, they're all looking at that proof of concept. But we need to hold our values straight in order to get that proof of concept off the ground. >> Okay, I'm going to pivot the conversation into more of where do we see things in the next few years. I think we all kind of agree that the investment climate is frothy and I'm using that term to sound smarter than I am because I hear finance people using it. >> It's a great word, isn't it? It's like, yeah, anyway, we won't go further into that. I was trying to make a connection with food when it was starting to get gross. But so everyone's looking ahead and now the next five years are going to be pretty exciting, at least the next five, maybe beyond. A lot of new startups entering the space. Many of you are funded by the Glass Wall Syndicate and many other firms that are now involved in early stage investments. Many companies that are say five, 10 years in, I would say many, quite likely some of them will be acquired or at least get some really good offers from big food companies like Nestle and others who are all looking at this market. What are your general sort of predictions? Let's first start with M&A activity, your best guesses where things are going to go in the next few years and with this excitement. >> I think, first of all, I don't think our space is any different than any other venture capital space in that we have the spectrum of, we have the Grand Slam, we have a small number that will fail and others that will struggle to get our money back and then others that will be singles and doubles and triples. And so we're not any different, even at this early stage. And our job is to continue to try to foster that, to keep that spread of outcomes roughly the same. Obviously, try to push them more towards Grand Slam. But ultimately, the exits now, because Chris said it earlier, the biggest thing that surprised him was how big animal ag entered and entered relatively early and quickly earlier than we anticipated. And the momentum they can create by both big food and big animal ag starting to pick up these entrepreneurial entities that are still at the early stage of their life cycle and use their distribution, use their channel, their shelf space, use their distribution channels, their supply chain to really help these entrepreneurs accelerate. That would be a win for the movement unquestionably. And so I think we'll see that. I think we'll see some consolidation. We've got 40 plus, maybe almost 50 clean meat organizations out there now. Just a few years ago, there were five. There was one just a few years before that. And so some of them will go through that spectrum. Some will be home runs, some will fail, some might consolidate. And so I think the natural order will take a fact here in this segment just like it does every other segment. - Yeah, I think I've been through three market corrections in my life there, ugly every time. And at the end of the day for each of those companies that survived, they have to implement really good business practices. You need to get down to fundamentals. We can't rely on just venture capital funding these things for forever. They have to be prepared to turn in run as a good company to survive those economic downturns. We have a whole generation that hasn't been through that yet. Including this whole Silicon Valley thing that's happened in the last 15 years, 10 years. That'll be a scary moment for me, to be honest. And my fear is that markets change. People decide to go elsewhere, things dry up, and you've got good companies with really tasty [BLANK_AUDIO] that might disappear when they shouldn't. And my hope is that we really look at some of these companies, good principles in place, and make sure they can survive through them. >> Yeah, I think that's a very, very crucial point. You raise that because sometimes people from the outside of the space, or at least bystanders, or supporters, or fans of these companies and their products, don't understand, for good reason, they shouldn't, they don't have to, they just have to enjoy the food. They don't understand the harsh realities of scaling up a food company, like you can build an amazing prototype in a kitchen made out of really obscure ingredients. Great, and I'm sure you can be making the next big plant-based, or cultured, egg, or cheese. But now, when you're taking that, maybe even convince some investors to give you a seed investment of maybe a million or something, and you get going. Now, scaling that, and producing that, and supplying it to retailers across the country, and across the globe, and producing that in an industrial scale, and being able to maintain the integrity of that product as it scales, and get the right ingredients, have the right price, is what I'm guessing a lot of companies, is that the biggest challenge you see besides, of course, market forces that you can't control, is how worried are you about, or do you, I'm sure you think about this, about a lot of these young, very passionate entrepreneurs, with great talent, even, running into some of these challenges and not being able to overcome the hums that Miyoko's and Beyond meet and others have all managed to, and it's been pretty hard at times for them to, do you think that's gonna be a market correction, because some will just fail at production? - I think you'll actually have some supply chain issues. So I don't think about this much, but because my wife is a lot better person than I am, she thinks three or four layers deep, so she handles intersectional policy for our, we're a family company. She handles intersectional policy, so we're gonna invest in a new cheese that happens to use coconut oil, she's the one that makes sure that that doesn't end up creating some human or animal crisis somewhere else in the globe. So I think we're gonna be looking at things like that, so it's not just, is this a great pudding, but are we using childhood slavery to then produce the chocolate for this pudding? Like let's actually think a couple layers deep. We need less suffering in the world, it's not just animals, it's everybody. So I do think that we need to look at these companies that are tiny in the grand scheme of things. Beyond meet is still tiny. If that were to become 20% of the global population or the global meet in the world, we'd have a crisis somewhere because I'm an ingredient in there. And I think that's the type of thing that we need to start thinking about, and how great that we get to think about that, because we've always been such a rounding error that it never really mattered. - And remember, a lot of people think that an IPO is the end game, you work hard, you create a great product, you have innovation, you make a great pitch, and somebody comes in and says, let's take this thing public, and there's a big splash, and everybody says, wow, that's neat, look, these guys all got rich overnight. When in fact, it is actually the beginning of the road, and it is the highest level of transparency and accountability that you will have in your business career. And because markets demand transparency, they demand accountability, and because it trades on a minute to minute basis, one false move, and you can take your business. And so it is the beginning, not the end, and it is the ultimate form of transparency. So I like to tell people going through an IPO is great until you become a public company. And then it's like, oh my gosh, now what do we do? And so it's just, you've got to think of it as, and I think beyond meet now, out in the open, for all the world to see, taking a company that was losing money and continues to lose money, and that's okay, if they're investing in that business, now forecasting a trend to the end of the year to rapidly grow their revenue and become EBITDA, neutral or positive and cash flow self-sufficient, is a huge validation and a huge motivator for all of these entrepreneurs. So it's just the transparency of it is going to be another round of motivation for them. >> Yeah, I mean, you can all already see that, you can listen to the earnings call, and you're talking about why they're going to keep getting better and succeed and why the competition and Nestle doesn't worry them. And I think the fact that you have so many eyes on this industry, it tells us that we're finally at a point where I'm glad we have so many eyes in this industry because it's going to now make the cream rise to the top. And I think there's going to be a lot of companies, and it's just how it is with any industry that are not going to make it through. And it's okay, some will get acquired, some will just shut down. And we've got to hope that enough of them will succeed, and not everyone needs to go public. That's not the right route for every company either. And many I think will intentionally choose to stay private so they can be more impact-focused even in a different way. And you're going to have a good mix of businesses in this space. There's a lot more we can talk about that, but I want to make sure I don't miss out on this one question about cell-based meat, because I know the focus largely in this conference is plant-based, not because cell-based isn't happening. It's just because it is very early right now, and it's still at the research phase early. While plant-based companies are much mature, have a very different set of problems, and challenges that they're facing in the market right now. What is your best outlook for cell-based meat or cell-based products when they will reach scale and price parity? What's the best-case scenario based on the companies you're very intimately involved in? I'm not that smart, but I don't honestly-- Last year. I don't know. What I do believe is that there will be different phases of it where you'll be able to use cell-based meat as a flavoring, so you'll be able to blend it with plants. It'll give you that last mile of flavor that you need last 12 inches from your plate to your mouth. I think that the Achilles heel in the plant-based meat world is the filet, and so we can't seem to get over that hurdle. I think 3D printing can probably get us there. We're working on that with fish with blue nalu. I think it's going to happen faster than I believed it would, because that seems to be how I've been getting it wrong this whole time. I believe that if industry shows up, they will speed this whole thing up. And they showed up, and that's another big surprise. I didn't think anybody would come to the clean meat world and they did. So from Merck to show up, that's a big deal. 80% of what creates plant or cellular meat is the media you feed it, just like an animal. So from Merck to show up and invest in this space, that was pretty unique. We got industry there, so if it's going to happen, it's probably going to happen the next 10 years. Yeah, and I think there's a range of predictions. As you can imagine, the CEOs of the cell-based companies are all very bullish on this. And I think for just-- and it's all justified. I actually think there's a-- I have a vision that I think hopefully will not necessarily be the end game, but will be a very healthy transition path. And that is, by the time clean meat, cell-based meat, whatever you want to call it, can scale, can get to the prosperity or close to it, and can scale, plant-based meat will be so far ahead. And we will see so much innovation on the plant-based side that cell-based meat, frankly, is going to have its work cut off for it. But there is a subset of the 97% of the world that eats meat that says, I'm not going to eat plant-based meat. I'm not going to eat any of this V stuff I want meat. And some of those will even say, I'm not going to eat cell-based meat. And to me, the vision would be we have sort of the pie split into three pieces that both plant-based meat and cell meat are occupying two of those quadrants in that pie. And that the impact on big animal egg is to drive that production, that animal protein production back to small and family farms. And that if we end up in a place where we go back to farming in the '50s, we're with strong animal husbandry and I don't eat meat. I'm not a fan of eating meat, but I'm visioning a world where that pie is split into three pieces. And we've got the opportunity to bring farming of animals back to a very small scale and get rid of factory farming altogether. If that's what clean meat and plant-based meat do, that's a victory for this planet and all of humanity. Yeah. No, I think that's great. I'm just going to make one last comment. And I do want to open it up for a few audience questions if there are any. But I just want to make this comment. And I knew I came into this conversation. very excited to talk to both of you, and I think I shared that with both of you. And lately, with the success of a lot of companies in this space, with the push towards market-based solutions, which is working out pretty okay so far, we forget the importance of the individuals, and the power that individuals can have. And although we are all kind of embracing this idea that meat eaters are embracing plant-based meats, and down the line, those that don't embrace plant-based meats will eat cell-based meat or clean meat, and more people are buying almond milk and oat milk this year than they were last year, and that's all really great and amazing. But most of these things, I wouldn't say none because I'm sure there are some exceptions. Most of these things wouldn't have happened if it wasn't for passionate individuals also happen to be vegan, that we're able to make emotional, passion-driven decisions, you both included, and there's many others, including Ethan Brown from Beyond Meat, I know we keep talking about them, but who got into this for completely the right reasons, these, an animal lover, and cares about the environment, and wanted to make a big impact, and that's the way you start a food company, and that's the way to do it. I think it's important not for us to remember that sometimes we can get so caught up in the numbers, and changing, you know, how do we change the way 7 billion or 8 billion people eat, and we forget that sometimes if you can change one person even, they can go on and become a crisco or a chocolate cloud, and you'll be sitting here today. It's like you teed that up for me, so I refer to my wife as the butterfly. Venerable, you know the chaos theory of butterfly flaps its wings in Africa, and it becomes a tornado or a hurricane on the east coast. Well, that's her, she is the one who focuses one at a time, one conversation at a time she's been doing it for 30 years, on occasion, she's also the tornado or the hurricane I might add. We all are, we all can be the butterfly, we can all be the hurricane, and it is, it's one person at a time, and if you focus on that it allows you to sleep well at night and be a little bit safe. Yeah, and I also think I aspire for the relationship goals that you both have, it's pretty amazing. I want to give some time for questions, we have about 10 minutes, and I say 10 minutes only because at 5 o'clock there's beer and wine in the expo floor from 5 to 6, so I don't want us to be stuck in here if you'd rather be out there. But if people have questions, we'll take some questions from the audience for the next 10 minutes. There's mics on either side, feel free to come up and ask something interesting, or not interesting. I'll tell a joke. Hi guys, thank you so much, this was awesome. My question is, what are some white spaces that you see where you'd like entrepreneurs to move into, that you're not seeing right now? If you could wave a magic wand, what are some spaces that you'd like to direct entrepreneurs to move into for innovation that's disruptive? Well, first of all, I just want to say, that's Liz D. everybody, okay, this is a member of Glasswall Syndicate, and one of the pioneers of this movement, so thank you. And we talk a lot about seafood really trying to accelerate the innovation on the seafood side, 9 billion land, animals a year in the U.S. The numbers are just trillions as far as sea animals in it, and it's all hidden and dark, and we talk about the slaughter of animals being, by the way, Glasswall Syndicate, we have to attribute it because I don't ever want Paul McCartney to sue us. Glasswall came from his quote that said that if slaughterhouses had Glasswalls, we would all be vegetarians, and so that's why we call that Glasswall Syndicate, hopefully he has enough money that he's got other things to do, and he doesn't sue us. Yeah, that pork, turkey, and then ultimately I'd love to see, and we've done some work at Straight Out Capital with PETA and Stella McCartney, as a matter of fact, on wool. We'd like to see a vegan wool solution in which I think would really alleviate a lot of suffering there. I think it's important how you look at white space, first of all. White space isn't just, is a product existing somewhere on the planet, but is it serving me locally, right? So we work on what's called the Food Pack, Price Awareness Convenience and Tastes, and we use chefs to get a really good taste, but lots of chefs, lots of, anybody can make a good tasting product. It doesn't mean it's available everywhere. You need to be aware of it, it needs to be priced right, and for the love of God, make it convenient. And right now, our biggest white space, I'd say, isn't convenience. You got Derek Sarno across the hall over there. He put his wicked kitchen line into Tesco. That was about convenience. It was chef-prepared food, ready to eat, grab it, go, walk out on the street, eat it as you go to work. That wasn't existing, and that entry shifted pretty much the entire UK in about 18 months, 12 to 18 months. That convenience is the trend of the future. So the white space is oftentimes around the convenience side of it in geography. You can have a phenomenal product here in the United States, but if you can't get it in Europe, you can't get it in your little cafe in Paris, you can't get it in Brazil. Those whites to bases are critical. And we'll suffer everywhere. They don't just suffer in the United States and in Whole Foods. So by all means, spread the love, wherever it's needed, and look at white spaces from a demand standpoint. Well, one more thing to pile on there, the impossible, their introduction of the Whopper into St. Louis of all places, St. Louis, I mean, it's like the belly of the beast. We're in Kansas City, St. Louis is not very far away, and literally it is meat country. So they put the impossible burger, put that brand on a Whopper and serve it there. It's so successful that they now are launching a market by market across the country. That to me at a price point above the Whopper, and if we can get that, and that proof point then with a product that is at parity or cheaper, and ultimately it will and must be cheaper than meat, because we don't have all the work that has to go into preparing the meat, we can just take the plants and turn it into food, what a concept. And ultimately that to me proved that this will happen, and whether it's impossible there or beyond somewhere else, or no evil foods, or others that are out there doing the same thing, it to me, it's going to happen. Yeah, another question? Hi. Can you hear me? Yep. Yeah. I was wondering if there are any obstacles or solutions to any obstacles that you're seeing right now are anticipating that are not related to the release of a new product, but instead focused more on food systems and delivery. So there are any obstacles that are not product-based that you would look for solutions for. In terms of the global transformation. Yeah, I mean, you just think about how food moves. The reason that food takes a long, a food company takes a long time to grow because food is slow. There's a lot of moving parts, and if you look at the cost of moving food from literally planting a seed into your mouth, the logistics in there is massive. So clearly there's a lot of ways of making that a more efficient. We actually think that plants is probably a heck of a lot more efficient than going through a cow in a farm and everything else, but I think logistics are going to be a really big issue. Making plant-based meat, you know, good catch, it's actually an ambient product. You can tear it open, eat it on a plane. It's one of the first products that's plant-based meat that you can actually eat on an airplane without cooking it, right? That's part of the eating process. I think if you look at the process of eating from the starting to the ending of eating, of growing to eating, there's lots of inefficiencies in there that definitely need to be looked at. And I think we also need to look at our food desert challenge. This is a movement of white privilege right now, and we need to move it into the communities of color and try to open up food alternatives, protein alternatives, into those communities that aren't getting that food. So that is another challenge, another last mile challenge that we're going to have to figure out. We're going to have time for one last question, because we have two minutes. Thank you for the very thoughtful panel, really appreciate it. Question actually since you touched on the impossible's pipeline, same thing with beyond meat and a lot of the meat alternatives, they are higher than your meat alternative. Part of the reason is the subsidies that go into meat and dairy industry, and that's a big obstacle. So what do you see, what kind of time left frame do you see, that policy changing and what can we do as a community to influence that? Yeah, it's a big question, because those subsidies come in a bunch of different forms from different rules for laborers to farm laborers. that could be 20 to 30 year project to get that to work. I think once you start getting a little bit of a ground swell in this place, you'll actually see the meat industry kind of switching form around that, the seafood industry doing the same. I don't have an answer for it, but there are people that are studying it. Yeah, I mean, it's an incredibly important question. There are significant unfunded negative externalities that the big animal lag enjoys now. That I've heard it described as we now have a runner in the race. So we have our plant-based solutions are now out, and we're trying to drive the adoption of plant-based alternatives. We've got clean meat coming, but the race is not even. There's an unlevel playing field. It's like a dump truck on a downward decline that we're competing against. And we have to level that playing field and make it an even race, and drive and force big animal lag to pay for their own unfunded externalities. And there are people that are worrying about that and trying to figure and solve for that. And I believe it will happen, and I believe having the runner in the race that we have now will be part of that, will be part of that evolution. Thank you, Chuck. Thank you, Chris. One final statement. Yes, sure. I don't want anybody up here thinking that me or Chuck are responsible for the success of these companies. Like, just to be very clear, these entrepreneurs are some of the hardest working people you'll ever meet. They deserve all the credit. We fuel it. We support it. We love that support system, but the truth is, we're like art collectors collecting good, good, good art. They do the work. And I just, when you guys meet a founder out there, show them some love because this is a hard space to be in, and it's really nice to know that these people are working as hard as they are. I thought you were saying that Kirstie was the one to drove all this. That was it. That too. Okay, right. That's not the get back. Well, thank you so much. Thank you, everyone, for the questions. 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