The Future of Cheese

David Yocom: I Select Fund is not soliciting investment or providing investment advice in any way whatsoever. This presentation is general industry research based on publicly available information. I select is an early stage venture capital firm in St. Louis, focused on early stage companies in food, agriculture, and health.

I select invest at the forefront of innovation, seeking emerging problems, solutions and technologies. Isec uses these deep dive presentations not only as a way to better engage with and understand new science and technology, but also engage with the experts in entrepreneurs who drive and change innovation in their respective fields.

Good morning everyone, and welcome to IS Select’s Deep Dive series. My name’s David Yocum, I’m an associate here on the is Select Fund Ventures team, I’m excited to welcome, you to our discussion today. One theme that we’ve been researching is the Future of Cheese. This has been a personal favorite to research.

Cheese is an ancient part of human culinary history and certainly one of the world’s most beloved foods. However, as consumers have become more environmentally, nutritionally and ethically conscious in their buying decisions, non-dairy alternatives have emerged that look to match or even challenge this beloved food category.

In today’s deep dive, we will explore the innovators who are one building the future of non-dairy cheese, and two, improving on its beloved history by offsetting its impacts. So with that, I’d love to start off with some speaker introductions. If we could kick things off with Irena Gary. Kyleen, Kai Keenan, Richard Clothier, and Steve Snyder.

That would be fantastic. All right, I

Kyleen Keenan: guess I’ll start. So my name is Irena Gary. I’m currently a Chief marketing officer at a food tech startup called Change Foods. I come from a over a decade of experience in consumer goods, including business strategy at Del, at Deloitte marketing, consumer marketing at Proctor and Gamble and Danone, and now onto Change Foods, which is a precision fermentation company.

And we’ll speak to that more as we go. Thanks,

David Yocom: Rena. Kai.

Kyleen Keenan: Hi everybody. My name is Kyleen Keenan. I am the founder of Happiest Plant-Based Foods. Happiest Plant. Plant-based foods. I’m a plant-based chef, holistic nutritionist, and I’ve been in the consumer product good arena for about 11 years. I started out with Superfood Raw Chocolate and a plant-based cafe on Martha’s Vineyard and have evolved to create artisan indulgent plant-based foods.

David Yocom:Thanks, Kathleen. Richard?

Richard Clothier: Hi, my name’s Rich Co. I’m the managing Director of family business in Somerset in the uk called Bike Farms. We’re a farmhouse family cheese making business that’s been making cheese for several hundred years. We’re the largest independent cheese maker in the uk and we’re the largest independent processor of milk and one of the largest independent producers of renewable energy in the uk, both electricity and gas.

And we have recently made my grandmother’s IVs vintage shed carbon neutral, and we export trees to about hundred 60 countries around the world, including into the us.

David Yocom: Wonderful. Thanks, rich And Steve. Hi,

Steve Snyder: I’m Steve Schneider. I’m President, CEO O of A of White House Specialties and the founder of the New Fields plant-based cheese division of, White House Specialties.

Had about 30 years of experience in food, nutrition, pharma, and and biotech in a number of different companies and industries. And currently leading this privately private equity owned company that recently sold to a large Irish firm. And we’ll talk more about. The definition of new fields and, what we’re up to now.

David Yocom: Wonderful. Thanks Steve. Thank you to all our speakers. Really excited to hear your perspectives today. So just to set the stage for today’s conversation, I want to cover three main points. I wanna talk about how cheese has made, why we love cheese so much, and then talk through some of the rise of these alternatives and then some challenges that are facing both traditional dairy as well as some of these plant-based alternatives.

To start with, Traditional cheese. I wanna talk about what cheese making really is. And cheese has been a part of human history and human culinary experience for thousands of years, and is as old as our relationship with the domestication of milk producing animals. Cheese was likely accidentally discovered either via the coagulation of proteins from the enzyme renit which is found in the stomachs of ruminant animals.

Though there are some alternative theories for how cheese was originally originally discovered. Regardless, cheese has been with us for a long time and is now a part of an enormous industry. Now, the main steps of cheese making, the cheese making process are shown here. I tread lightly with with Rich in the room because I know he knows so much about this process.

But the main components that I’ve identified that make cheese so special, we’ll talk about why those components play a role and why we like cheese so much is this process of coag the coagulation of proteins, which is essentially taking those proteins that are in, that are naturally occurring in milk and contributing fermenting microorganisms and enzymes that cause kling.

There’s also a component in the breaking up of those kds as they become solidified that essentially releases the whey protein and removes water in the process. And that removal of whey and removal of water has a large impact on the softness of the end product and some of the textural components you would expect to see from a cheese and the end.

And then finally, the aging process which is also known as aina, is where a lot of the skill and the knowledge of cheese making is brought to bear. And this is where a lot of the flavor and the complexity of cheese can come from. Now obviously there’s more steps in this process and this image on the right as much as show the numerous steps in complexities that go into cheese making.

It’s obviously different across different types of cheese. But these are some of the main components to give cheese it’s texture and it’s flavor and it’s nutritional components that, that we commonly see across this wide variety of cheeses. And this ties a little bit into why we love cheese so much in the process of cheese making.

A product is produced that has some very unique proc properties that are almost unlike any other food product in our personal in our current arsenal of food products. First Cheese has unique flavors, anything from extremely complex and stinky cheese to the very mild string cheese you might expect to send your kid to school with.

And then secondly, and perhaps more importantly, in my opinion, cheese has very unique textural characteristics, typically defined by its stretchability and its melt ability. Finally, because of its longstanding history in human civilization, and its wonderful properties, cheese plays an important role in cultural dishes around the world.

Almost every culture, whether or not there’s a large group of people who are lactose intolerant or not, has some sort of cheese component or a like a liking of cheese that plays a role in some sort of cultural dish. Though I do wish that American cheese left more to write home about. So with this in mind, setting the stage that we know how, cheese is made, we know that we really like cheese.

Cause that’s these unique characteristics. The market for cheese is extremely significant and expected to grow at 157 billion globally by 2023 across processed cheese and fresh cheeses. This is really interesting to think about in the context of dairy given, particularly given that in the US per capita milk sales have dropped 40% between 1975 and 2018, while cheese sales rose 269%.

And so with that, I have a question for Rich. Rich as someone who’s, run, who runs a long-standing significant family business in milk production and cheese production, can you speak a little bit to how White Farms has experienced this rise in demand for cheese while the world has perhaps moved away from general milk

Richard Clothier: consumption?

Certainly in the UK market. They used to serve milk in schools, which was stopped in the eighties. And that hit consumption of milk products. I think people have gotten more innovative in the way they use cheese across the board. Cheese is the ultimate convenience food essentially.

You can just open the fridge and eat it. But as people have been cooking more in the home, they’ve been more adventurous in their culinary experiences. They’ve been using more recipes and and we’ve seen some strong growth in France, for example, where people have been using our Vince really strong vintage chair instead of a Parmesan, for example, to flavor dishes.

But the cheddar gives it something textually that you don’t get from Parmesan. So there’s a whole host of ways. And when I first started to. Getting involved in selling cheese. People were fairly one-dimensional in the UK about how they enjoyed it. It was cheese sandwich, cheese on toast. Whereas now cheese can be the centerpiece of any meal and whether it’s breakfast or lunch or dinner it’s proved its versatility in a number of. Recipes and actually we’re seeing people really enjoying strong vintage cheddar in the Asian markets, modifying dishes they would enjoy and adding cheddar. I don’t think there’s anything you can add cheddar to that. It doesn’t improve

David Yocom: yeah I, think, and I, think it speaks a little bit to anybody who’s gone through the retail experience of buying milk versus buying cheese. Cheese still very milk. Milk has very much been mixed in with a lot of the other plant-based alternatives that are out and available today. If you’re shopping for milk, it’s very much in your face.

The, opportunity to buy an alternative in so many different kinds of alternatives, however, you go to a store, most commonly cheese in and of itself is it’s still in its own category, and the plant-based cheese is oftentimes in a different section that’s catered more towards vegans.

And so you can see how there’s been in this lag between the transition toward, traditional dairy to plant-based dairy versus into cheese, where cheese really still. Has this sort of hold as its own category.

So while we love cheese, is not without its flaws, which typically fall into the categories of environmental impacts, animal welfare, and in some cases, human health impacts. The, last point is more in, up for debate, in my opinion, really depends on a person to person basis, the type of product you’re serving and, how it’s produced.

But the environmental impacts of cheese are significant and, should be addressed. Now, we’ll cover these more in, more depth in the next slide, but because of some of these impacts in, this consumer awareness around some of these challenges around cheese and around the food system in general. In the last five, 10 years in particular non-Dairy Alternatives for Cheese have emerged to challenge the world of traditional cheese with products that are suitable for lactose intolerant and vegan consumers.

Today there are over 130 companies that are working on non-dairy cheese alternatives across large companies through startups. Probably more than this is this, from an article I read earlier this year, there might be closer to 200 now, and 10% of cheese launches in 2020 were non-dairy alternatives, which is a significant uptick from what you would’ve expected to see a decade ago.

Now the approaches. To, to non-dairy cheese fall into these sort of three broad categories here. And, there is nuance between them that I haven’t attempted to capture here, so I don’t wanna oversimplify plant-based cheese production, but I just wanna give people a scope who may be new to this on the different ways in which this might be done.

Now, the basic premises are one, to use traditional food science, low cost ingredients like plant oils, gels, gums, starches from more of a com components perspective to make these types of cheese products. The second is to, apply more traditional cheese making practices like we discussed earlier, to simply to plant-based milks or to do so in a larger fermentation capacity.

So either in sort of an artisan capacity and more of a larger fermentation capacity. And then there’s a fourth principle and and we’ll have touch on this in her section today. But this opportunity to use synthetic biology and, precision fermentation to essentially, Create organisms that can produce the components of cheese that really matter.

And most commonly it’s casing protein. And we’ll talk a little bit about, why that is now, to speak a little bit on the plant-based side. Kathleen I have a, question for you. Plant-based cheese is a, totally new innovation in the grand scheme of things. And in fact, you and I spent a good amount of time talking about how many good plant-based products there are.

Gen generally for quite some time. However, the plant-based category has grown substantially in the last, five to 10 years in particular. And the product quality has come a long way too. Why, do you think that is and why has there been such a surge in this category? And what do you think the greatest driver is for people striving to find a really delicious plant-based cheese?

That might have been a traditional turnoff for traditional cheese eaters.

Kyleen Keenan: Absolutely. I think the demand has increased, obviously for the reasons that you mentioned en environmental health. And I feel like everybody loves cheese because of the depth of flavor. And I think with the ones that were on the market five or 10 years ago, it really lacked that, that depth of flavor.

So I think foodie’s alike we’ve been seeking artisan techniques made out of real quality ingredients. Just not unlike how the cheese industry unfolded. Like you said it’s, one of the oldest industries in the world of, modern food. And no one dairy process is alike cuz every single culture has a different milk, has a different fermentation process.

And I think the same is for is for plant-based cheese is now we’re starting to grow RHS and things like that. And I think that we’re looking to replace that in our diet as, a standalone food like Rich was saying. You can go into the, open the door in the fridge and, cut a piece of cheese and you’ve got high high protein, high fat and, an interesting flavor.

And I think that all of us that are leaning more towards plant-based are, looking for that depth of flavor.

David Yocom: Oh, thanks Kai. Yeah. Steve, I wanna bring your perspective to bear here cuz you have a unique experience across plant-based cheese products that basically anything shown here, you’ve had pretty much some exposure to.

Can you talk a little bit about how the technology suite for plant-based cheese production and development has improved and, how we’ve come up how, many varieties there really are now with improving levels of functionality? Yeah, no, it’s a

Steve Snyder: great point. I think. For all the reasons that you’ve mentioned already.

And Kylie mentioned that consumers and advocates of cheese broadly are looking for alternatives. And they need a way to make ’em in quantity and and make them in ways that are sustainable and, yield a product if they’re that they want to go eat. So I think the, challenge from a technology standpoint is staying broad enough so that you can accommodate all of the innovation that’s occurring.

I, I think all the panelists here and in the world of plant-based cheese, you’re gonna continue to see innovation and whether it’s in the categories you’ve shown here or other ways that you might slice and dice the the potential realm of innovation, the key is can you take those, innovations, put ’em into a, modern.

Manufacturing scenario and produce a consumer product that can find a place on the shelves. And this, includes shelf life considerations. It con it considers convenient packaging, Ziploc bags, so forth, attractive packaging, all the things that you’re seeing the winning brands doing.

And so from where we sit at new fields, it’s really about how do we provide that muscle behind these innovative purpose driven brands so that all this innovation can continue. I don’t think anyone even on this call would say that we’re there yet. And the question is how do how do you stay flexible and how do you adopt and stay nimble to accommodate all the innovation?

David Yocom: Thanks, Steve. Irene I thought I saw you unmute there for a second. I don’t know if you wanted to add something, cause I know you have. Yeah I, would just

Kyleen Keenan: think perspective here. Couple of thoughts. So I did work on, plant-based cheese for some time actually, while at Den. I worked on so delicious cheese, so very familiar with, plant-based category as well as I worked on silk, which is a leading brand of plant-based milks.

And I would say the biggest difference is plant-based milks have reached 40% household penetration and cheese is, stuck in low single digits. And yes, it has grown and 2020 grew, 42%. And, that’s largely driven by a much better option. Kind of what Kylie mentioned.

We were used to be stuck with, a really old and not really acceptable analog. And it’s come a long way. Players like wildlife have really taken the market by the storm and, grown triple digits over the last couple of years. That’s driven largely by improved performance.

We have sig made strides in how we combine the fats and the starches and plant-based cheese, where now you can have a fairly decent kind of cold slice of cheese in a case. And artisan cheeses have also come a long way. If you look at players like mickos with fermented cheeses, you can have a pretty great cream cheese or a cheese wheel that delivers on consumer expectations.

Where we see the big gap right now, and the reason what’s kinda holding plant-based cheese as a category is the stretchy. Warm application, be it in a pizza or in a sauce or a lasagna. And what we see is a lot of consumers expectations are not met. And what we’re hearing from them is that they say, look, I totally go vegan, right?

And, I’ve gone there with milk, I just can’t do it with cheese. And, that performance is what’s drive, is holding it back. So lots, of progress. Not there yet. As, Steve said, and I think that’s serving this up is fermentation. Is an entirely different solution in my mind because it is not a non-dairy product.

We are making dairy components, right? We’re fermenting caine molecules that are identical to what you get from a cow, just maybe without a cow. So when I think of that technology coming to market, and it’s not in market quite yet, but when I think of it in my mind, it’s really creating a new category of cheese.

And in the industry we’re, calling it animal free rather than non-ai to draw a distinction in what the product is, which is actual dairy versus you just made without the animal. That’s

David Yocom: a, yeah. I think there’s, one point you made there. That just talks about the way people just aren’t willing to compromise.

Cause I think that poses a challenge for alternatives, but it also really speaks to the opportunity. There’s, very few product categories where you can be so sure that if you got it right, that people would buy it and want to have it. Cuz it’s just it’s, pretty incredible.

And maybe this is a good time to actually, to transition to some of the, challenges between dairy and plant-based. That I just wanna highlight is that it it, and I, don’t, I’m surprised that I didn’t know this before, but we had been speaking with a company that was working on precision fermentation in this space, and they were talking through some of the stats of how many people are lactose intolerant in the world.

And it’s, like almost everybody, I mean it’s 65% of people in, in large portion of those living in Asia and Africa, but also globally Do not have either the enzymes or the microbiome to be able to consume lactose in a compelling way. Now, I will say, after having read through it, she’s does have a lot less lactose than what you would expect to see from a, from milk or from from yogurt.

So it’s not always as big of an issue. And lactose intolerance has very different levels of severity across people. But it’s, a big group of people across the world where their consumption of this product that most of the world really, loves is totally limited. So clearly a big, opportunity, a big white space there for a product that is performs and delivers nutritionally in a way that matters.

I want to cover a few points on some of the challenges that I think all of the speakers here today are gonna be able to speak to in a really compelling way. Dairy, cheese I wanna highlight some of the, environmental footprint data. Cause I think it is compelling. Cheese on average, top five g h g emitter across all food products per kilogram.

Top three land user and number one in water consumption for across all food products. So it’s really, it really sits only ever sits really behind red meat in terms of, impact from a land consumption water consumption in g h G emission perspective, and though it varies significantly and, I know Rich can speak to this across different types of operations, the industrial nature of milk production is something that consumers are becoming more aware of.

As we talked about previously. And we’ve already covered the lactose intolerance piece here on the plant-based side arena alluded to this. And I would encourage any listeners here who haven’t tried plant-based cheeses every time you go to the store just buy a new one and just see what the experience is like.

Because what you’re gonna find is that the experience is extremely variable, which is exciting cuz you just never really know what you’re gonna get. But I’ve, in the last six weeks, tried some plant-based cheeses where I was like, wow, I would a hundred percent serve that at a dinner party and nobody would know the difference.

And I’ve had some experiences like I would never serve that at a dinner party cuz everyone would want to go home. And so I think there’s just a, there’s a huge breadth of, quality right now that hasn’t settled out largely due to the points that arena made around, flavor, function, texture, and melt ability.

And then finally, I think the one thing, one point we haven’t covered yet today is around price. Prices is important. And I think there’s an important point to be made here because, plant-based cheese is still catching up to functionality of of dairy-based cheese. And then precision fermentation approaches haven’t quite scaled to the point where they’re producing at a cost competitive point.

The value prop for their general broad consumer is a pretty tough value prop cuz if you’re getting a product that you perceive to be less functional and also more expensive that’s a big that’s a tough hurdle for most consumers to want to get over, especially if cheese is one of the few products that they’re, unwilling to compromise on.

So for the plant-based alternatives there’s a hurdle they have to get over with the quality piece, obviously first, which we saw in the the, in the same thing with the Impossible Foods and the Beyond meats and, the end of the V2 s of those products. And we’re also gonna see plant-based cheese and, alternative cheeses need to get, over that.

Irene I, have, I do have one, one more question for you. And I, I, hesitate to ask it now cause I want to. I am, I wanna touch on it more in your specific section, but I think you and I talked a little about the importance of scale for non-dairy cheeses to have a big impact. There’s a difference between an artist and cheese, which does have an impact and is an important part of this story.

And like buying like a massive bag of mozzarella that you use to make pizzas. There’s just a huge difference in the amount of cheese that can be made at that functionality, where at a low price. And how does precision fermentation sort of bridge, potentially bridge that gap between this opportunity for quality and scale to come together?

Yeah

Kyleen Keenan: As you started cheese is a massive global industry. It’s 150 billion today. And the environment impact is absolutely astounding, right? If we’re looking at second to red meat it’s, a lot of environmental impact. And the reason for that is, As problematic as dairy production is, it takes about 10 liters of milk to one kilo of cheese.

So you’re essentially amplifying the animal farming and industrial agriculture impact of dairy by 10. And cheese consumption continues to grow. So what it does is creates this issue where maybe the dairy consumption globally is, reducing liquid, milk consumption is going down. Cheese is more than making up for the delta.

And so overall animal agriculture continues to increase. And I think that’s, a big issue. And, it speaks to scale of kind of the problem that we have on our hands in terms of people love cheese, they wanna continue to consume it. And yet we have bursted out of our planetary boundaries in terms of how many animals can be farmed sustainably.

And so when we look at new technologies, plant-based cheese is limited by definition, given its structural and physical properties of, the plant-based ingredients that you have, precision fermentation does offer that interesting solution because it does have the same chemical properties of the molecules.

Scale is the issue, right? And, you’ve hit the nail on the head is how do we get precision fermentation to scale? And I would say that, It’s not dissimilar to any other kind of revolutionary process where right now we’re early stages. It is intensive. It is expensive. The yields are not where we need them to be in order to be commercially viable.

But the objective is absolutely to get to those large commercial scale fermentors of 300,000 liters and up in order to produce those compounds. Because that literally would be the only way that we at least a change foods, achieve our objective of delivering an environmentally sustainable product.

It’s gal. Yep.

David Yocom: Yep. That’s a really, great point. We’ll come back to some of that and some of the, key components about what you guys are making and why they matter. David

Steve Snyder: Can I add just one quick point and course Steve, please, of what Irena was saying? I just wanted to mention for the audience that there are there’s a history here of successful scaling of recombinant technology or synthetic biology across pharmaceutical food ingredients, et cetera.

I’ve personally been involved in a number of those various ingredients that are made at that 40,000 liter and up scale. So I’m, very bulled Sean. This is is a future outcome. And I just want to give credibility behind what arena and the team is doing because that, that really is the future.

And there is there is a track

David Yocom: record of that being viable. So it’s not just a, a. Actually

Kyleen Keenan: more,

more, importantly, even what Steve mentioned is recombinant or fermentation. Precision fermentation technology exists in cheese today, right at that 90% of cheese worldwide is made with non-animal rennet, which is produced through precision fermentation.

So in some ways it is evolutionary technology where we’ve taken the calf out of cheese, so to speak, where we don’t no longer need to slaughter calves to get rented, and now we’re taking the cow out of cheese. But, It is no more novel and, different than what is in our food supply today already at incredible scale.

David Yocom: Yeah very, good point. This, is a good transition point, so we’re gonna, we’re gonna jump into highlighting a few of our speakers here. One of the things I love about working in food system innovation is just the role, the different roles that are relevant to this story. And I’m really excited to have Rich Tuck touch on the story of We Farms and some of the really interesting work that they’re doing that sort of paints a compelling story around the, role in which farming can be a part of this solution.

And I think they’re doing some really, innovating work. Rich, first if you could just maybe just a little refresher on the background of farms, the history of the business and then touch on the. The story with the carbon neutral cheese. Tell us what that actually means, and how you made the decision to take your company in that direction, because that’s, not a small feat to wanna roll out to a network of 150 farms.

Yeah.

Richard Clothier: As I explained before, we’ve been making cheese for hundreds of years. My grandparents used to say, if you look after nature, will look after you. And we’ve experimented with. Whole. We’ve tried to make cheese with all sorts of analogs. We’ve made soy cheeses, we’ve made veggie cheeses, and until you get the milk right, it’s very difficult to make a really good cheese.

You, it’s only ever gonna be as good as the milk. So I’m quite excited about trying some of the precision fermented milk when it’s when it’s made. Because I think I could make a decent cheese if the milk, I could make a fantastic cheese outta it. The in terms of the environmental impact, I’m a passionate for, my family’s still farm, although I’m a cheese maker and we run a food business.

My family’s still farm. We, have got our own dairy farms. We’ve got about 150 farms that supply us in the region. I’m passionate about. Farming and cheese making. And I know that if we’re gonna be making cheese in another hundred years time, we have to do it in a way that has a minimal impact on the environment.

And I get slightly frustrated when I see the progress that’s being made in other areas of industry. We, as far as I’m concerned in, industry, we have to be practical environmentalists. We have to make the things that we want to make, but we have to make them in a way that’s not gonna enact the environment and ruin the planet.

And in the same way that it was never practical, probably to say to everyone, get your cars and go and ride a bicycle every day when you travel to London three hours away. It’s not practical. People have. Developed transport systems that are kind to the environment and making huge progress.

And, I would argue we haven’t made enough progress in agriculture. A lot of progress in the UK has been made in transport energy generation or we’ve done a load of work ourselves, but actually in the farming systems we’ve only really scratched the surface. And so one of the sort of things that I’ve been doing in my business is to challenge ourselves at every single thing that we do in every part of the chain, to do it in a way that’s as environmentally responsible as possible.

But then if it isn’t, start to look at other ways of doing it. And. We’ve done, we’ve made a huge amount of progress without getting into any just through good management things. We’ve made a huge amount of progress, but we’ve also adopted some really good technologies and, science, and we’re looking at some really good innovations in feeding on farms of enzymes that help reduce methane emissions from cows and those sorts of things.

But I think the thing that surprised me the most when we first really started digging into this project, the difference in emissions between different farmers. And if you take for example, our lowest farmer that supplies us with running about half a kilo of CO2 equivalent per liter of milk, and then the highest is over three kilos.

So there’s a massive range of production. So there’s so much more. We found that we could do by just working closer with farmers and, we’ve done a load of other work with soil sampling increasing organic matter within the soil, secre in more carbon and those sorts of things. So I’m actually really excited about the potential within farming to change and actually adapt and save the world because although cheese’s, sales might be growing quite strongly in the global market, actually, if there’s a potential to reduce our, collectively, to reduce our emissions by 80%, It’s really quite exciting.

But what, I find really unexciting is our, politician’s attitude put to this in, particularly in the uk there’s no real interests from government at the moment in actually reducing the impact of farming. And people talk a lot about alternatives to meat products and cheese products, but in my experience of trying to change consumer behavior, it can be pretty difficult.

And the practical environmentalists in recess that we have to farm and make these things in a way that is gonna taste exactly the same, but not do damage to the environment. And that’s what the whole project’s been about. And. So we’ve got this low carbon group of farmers that we’re using to make this cheese, which we’ve named after.

My grandmother Ivy was passionate about the countryside and the environment and, that’s the first carbon neutral chair to, be launched in the UK market. So I’m really pleased about

David Yocom: that. The in in, terms of, how you’ve rolled this out with some of your farmers, can you just give everybody a little bit of the, I think one of the things that’s great about what you’re doing is there’s you’ve, deployed a lot of technology in a lot of different ways that I think a, that I think a lot of traditional.

Farming would view as high risk in terms of initial adoption and like really deploying these. Can you just briefly give us some, scope of the types of tech that’s being deployed on farms that you’re working that, you, that are in your network to help essentially reduce that carbon footprint?

Cause it’s a lot of different ways that you guys are doing that.

Richard Clothier: Yeah, we’re do the, best thing we can do is manage the farming businesses as efficiently as possible because a cow is producing methane. So there’s a lot we can do with the feeding. There’s a lot of innovations on the feeding.

There’s some really interesting enzymes, et cetera coming through. We do a load of stuff with renewables solar on farm roofs collecting the manure and the farm waste and putting it all through anaerobic digestion for generating methane and which is then cleaned up and goes back into the grid.

We work collaboratively with farmers on on land management and growing tree and hedge planting, taking out the marginal land. It tends what, my, my experience with dairy farming has been that the it tends to be the marginal. Land and the marginal animals that actually drive the environment.

A lot of the environmental emissions, so if they’ve got areas of the farm are shaded or poorly drained or whatever, quite often they’re better off set aside the. Areas where they get poorer outputs. So those, all those sort of marginal things on the farm can be farmed in different ways and, help to lower the emissions and, actually encouraged biodiversity because dairy farms quite often get, get accused of being deserts of biodiversity.

And what we’ve tried to do is create farms with pockets of biodiversity all around the productive areas. We’re encouraging farmers to have much, much wider hedge rows and and areas of farm. So we’ve got so we’ve got the so, the nature’s integrated within the productive areas of the farm.

So you’ve got highly efficient dairy farms, but at the same time you’ve got really, strong biodiversity as well, which it, I always find really interesting, helps control insects and pests and other things as well.

Steve Snyder: Wonderful.

David Yocom: Rich, thank you for giving us some insight into some of the really important work that Mike’s doing in terms of In terms of bringing together the world of cheese making and delicious products and also responding to some of the environmental climate challenges posed by the dairy industry at the end.

I think that most, of the audience will wanna know where they can get, where they can find Ivy’s reserves. So we can touch on that at the at the end when we wrap, things up here. Next I wanna talk about one of our innovators in plant-based cheese Colleen Keenan Kyleen.

The work you’re doing at Happiest really exciting. And the product looks awesome. I dunno if anybody can see the picture on the bottom. But if you were to again, serve that at a party I was at, I wouldn’t bat an eye. It looks like a great looking cheese. Can you tell us a little bit about the story of founding Happiest and, just give us a sense of really what is artisan cheese making?

How does it work? Where is it similar to traditional cheese making, perhaps? Where is it

Kyleen Keenan: different? Absolutely. So the story of Happiest actually began 11 years ago when I started a company called Not Your Sugar Mamas on the island of Martha’s Vineyard. It’s a organic, raw chocolate company. And I actually transitioned that company into Happiest.

So we make plant-based cheese and we make super food, raw chocolate. And it really started I was just outta college and I was living abroad, and I came back and I wanted to be part of a, something that, made an impact on the environment. I’ve always been I’ve always been a proponent of healing our environment and seeing like the time running out to really make change in that.

And so I started in I met my business partner, she was making raw chocolate, got into the plant got into the chocolate category, eventually opened up a plant-based cafe where we made chocolate. And so I had these artisan dips and cheeses again, using all whole foods, nuts, seeds everything organic, plant-based and gluten-free.

And the cheese evolved cuz I was making simple cheeses. So like blends of almond, blanched almonds and lemon juice and olive oil and salt. And that was my almond ricotta. And then I had cashew cheese sauces and things that you can make at home, you just blend it up. And I was making, I had a organic flatbread, paleo vegan, fla flatbread truck.

And so we, we served that. But then I went to, Rome, actually, I teach a retreat there and I found somebody who was using Traditional cheese making practices to make these artisan cheeses and ab. At the time, there wasn’t really anything like it on the market. Everything here in the US at that time had been with the thickening agents and the oils and the starches, which are great for A replacement and to give the texture of cheese, but I think really lack the depth of flavor that real foodies are, looking.

So I started playing around with the making the, this cheese at home and eventually I started with a rope fur actually, which actually takes longer to age. And I, cause I love blue cheese, I love like the, depths, I love stinky cheeses. And so when I went vegan and plant-based, I really couldn’t find anything that, mimicked that.

So long story short, I started making these on a small scale. There was a, friend of mine, she. She’s been in the artisan cheese industry for quite some time and she had worked at a local farm on Martha’s Vineyard making their cheeses and I asked her to help me with this vegan cheese. And ironically, she couldn’t eat dairy at the time cuz Ed was making her so sick.

So she was like, sure, I’ll do it. And at first she was always a, little bit against the idea of vegan, cuz obviously dairy was her category. She helped me scale this and so we now are at a point where we just outgrew those cheese caves and we’re building out cheese caves and a whole production facility here in Rhode Island.

Cuz like many of you has said it’s, not an easy product to co-pack. Manufacturing is not set up. We have had to figure it all out. I use meat grinding machines to make my vegan dairy cheese and And so the second part of that question was

David Yocom: just the, just helping, the audience just understand the nuances between a traditional cheesemaking process and yeah, and an artisan plant-based cheesemaking process.

Cause there’s some similarities in terms of how you go about this, and it’s the beauty of that process. But obviously some differences in that. Is it just the materials that are different, the starting materials, or are there some other components in terms of processing, flavoring, aging, those

Kyleen Keenan: different?

Yeah, absolutely. So there’s a lot of similarities. I think that the biggest difference, so artisan plant-based cheese versus obviously like one with starches and that’s a completely different product, totally process. But the artisan plant-based cheese is the one you know that you’re. Typically seeing with a cheddar or a brie or things like that in the dairy industry, will they start with a liquid phase?

So they, have the the, milk whatever, milk it is. I’ve made the artisan plant-based cheese a couple different ways. Essentially nut milk is just nuts and water. So we don’t necessarily have to like, make nut milk and then make cheese. We can just use less water to get a thicker consistency.

So I think that, from what I’ve heard, I’ve never made traditional cheese, but from what I’ve heard, the big difference is the liquid phase versus you don’t, you can make it with a liquid phase, but you can also just make it by grinding nuts or, blending to get the consistency that you’re looking for.

Yeah. I think fermentation times are a little bit different. Aging is a little bit different. What we wrap it in, so this is like I. We wrap it in traditional cheese paper. Finding the cheese paper that’s appropriate for artisan plant-based cheese is quite different because some, they’ve been created for, dairy cheeses.

And so ours have some different issues. Ours could be come oily and there’s a cheese for that, but then it doesn’t have the breathability of this one for a white mold. So reinventing the wheel with how we package. And then so, that’s a little bit different. But other than that we use penicillin, candida, we use microbes, we use fermentation and artisan techniques to, really achieve the same, a similar quality.

And I think the big difference, like we’ve all been saying is it’s not exactly the same in the way that it’s gonna get that stretchiness Again, that’s not like our philosophy at Haas is to use really nutrient dense whole ingredients. So I wouldn’t put anything synthetic in the cheese to, to make it that way.

If I can find a plant-based way to do that in something out of nature, I would. But in the meantime, I think it’s, different in the gooey milkiness. Yeah. But flavor I think is pretty

David Yocom: comparable. Maybe that’s, so I wanna ask you a question. I also want Steve to comment on the same question.

And I think it’s gonna, it’s gonna relate, it’s gonna relate to some of what arena’s gonna talk about and just some of the, that the importance of work that will happen probably in the next 10 years of, doing plant-based products or are alternative products in this category. So I think one of the largest criticisms I’ve heard of plant-based cheeses is that their functionality Is just limited.

Like you mentioned, the flavors there and the, functionality is limited. But I think one of the things that we talk a lot about internally is how much is it limited? Really where, is the ceiling and how close can it really get? Because I’ve heard some claims that plant-based cheese will really never get super close to to dairy-based cheeses.

And then I see an article about innovations that Nobel Foods has made or others where they’ve, in deploying pramin technology to essentially get better, melty better, cheese type of performance. Kai and then Steve, can you give us some perspective on really where you see the ceiling for, plant-based cheese products?

Kyleen Keenan: Yeah, absolutely. I think that’s a hard. It’s a hard question to answer because I think that we can achieve certain things through technology, but I also think that there’s, a philosophy of food that’s so whole that it’s if we’re using technology, then we’re just creating in some aspects something more processed.

And so there’s, I think the school of thought with cheese it’s, so artisan and it’s ancient in that way that it’s, not necessarily using technology but, technique and, high quality ingredients to get there. So I think that it will, I think that there’ll be, it’ll segment in two ways.

Yeah. One is that it, it’ll go more technology based and you’ll have those innovations like the Diya Foods and the VE Lifes and stuff like that. And then I think it will go in the way of the meos and the happiest and yeah. That kind of direction where it’ll be maybe more whole food ingredients and it, and we’ll just have to get used to a little bit of those nuances.

Yeah. So I, think it, it will go in two ways, just not, dissimilar to the dairy industry itself, where it’s the processed cheese and then it’s more of those natural organic artists and cheeses.

David Yocom: Sure. Yeah. Steve, do you have a any, quick thoughts there?

Steve Snyder: Yeah, I was gonna say so much to say and subtle the time you gotta think about the world of cheese.

That’s really, I think when you start at that range and you say look, I I think Rich’s comments were dead on. We’ve been making this for hundreds and hundreds of years. The world of cheese is so broad that you have to answer kyleen’s question in, segments. So for instance, if we look at hard cheese, if we look at up harm or a feta, I would say we’re gonna get really darn close, even with starch and oil technology today.

To have something that you would look at and say, boy this is very similar. If you look at very high-end artisan cheese kalene is making, boy that, that’s gonna be very hard. In many cases, it may be impossible to get there. And so when we think about the future of cheese those hard cheeses that, that can be done I think that innovation’s occurring when you go to mozzarella, you look at plant pizza, cheese and so forth, and some things that Irena is talking about you’re gonna need to think about just from a chemistry and biochemistry standpoint, what the, amazing protein that casing really is.

This was put on the planet Ky Eileen, just through nature, and it, evolved for a reason. And

David Yocom: Gosh,

Steve Snyder: to say that we’re gonna just throw some starch at something and have it be as stretchy and chewy and, have the same mouth feel as casings gonna be tough. So some, the innovations might be very relevant and absolutely critical for, those types of, Jesus.

What we’ve done what we’re trying to do here from a manufacturing standpoint is innovate across all those different cheese types. Knowing that, I think, and Lene mentioned that taste is something that we can get to, it’s just that the mountability mouth feel and yeah,

David Yocom: and texture

Steve Snyder: is,

a challenge.

The one other thing I’ll bring up, and we haven’t talked about it, but I know we’re short on time, is nutrition. And I, have to say that as a community we, have to think about how to get plant-based cheese similar on the nutrition profile. And I know Irena, by her background’s gonna be thinking about this.

Consumers today are pretty okay with. Whether it be because a lactose intolerance or, other factors, sustainability, et cetera, they’re willing to accept maybe less than great on nutrition. But if you look at natural cheese, you’re talking 23 to 24%, and rich you’re, making that just automatically, that’s how cheese kind of comes out from a protein profile.

Today’s plant-based cheeses that many of ’em are very low on protein. And I think one of the, big wishes I would have for innovation and, manufacturing is how do we get the protein, not just for functionality, not just stretch, but just so that you could give your kid a plant-based stick of cheese and feel good about it.

I’m not handing ’em, I’m not handing my daughter or son a starch and oily something that tastes good. They can stuff in their mouths. But I’m actually handing him something that helps ’em nutritionally. Gosh I’ll stop there, but there’s a ton to say

iSelect Deep Dive_ The Future Of Cheese: across

David Yocom: all of I think you summarized it exceptionally well.

I think those are all the really, important points. I think it helps give some perspective and also is, highly relevant to what arena’s working on. So I really appreciate the, helpful transition. Irene, I think, so I, want you to talk a little bit about just the, so what you guys are making at change foods and why Caine matters and why these other components matter.

So not, it’s not just, casing obviously is an incredibly core component to the production of cheese because these other components you guys are looking at. I’d love to hear you talk a little bit about that, particularly in the context of having been atone and making this change to go to change food, making this change to go to change foods.

There’s a reason why you saw an opportunity there. And so real is not a totally coherent question. Can you tie those pieces together for us to understand why this is why this key component is so important and why maybe that ties into your story. Yeah.

Kyleen Keenan: I think just piggybacking up what, Steve said, there will be multiple components to the chief story, right?

There’s room for the artisan, sustainable cheese makers from, dairy cars. There, there’s room for artisan, cashew based amazing wheels that, that kyleen’s doing. But if you look at the consumption globally in, in the US the two biggest categories of cheese are mozzarella and cheddar. That’s where the majority of consumption sits.

And so for, me working on plant-based cheese, that’s the most rate limiting step is. You need casing. Casing is an amazing molecule that has certain functionality and obviously that’s the protein content of cheese that we’re talking about because as, rich mentioned, when you coagulate milk whe falls out and waterfall out, right?

So that’s your 90% waste factor, and then you are left with casing and, fats. So having worked on plant-based cheese and seeing the limitation and obviously seeing the, that being as a limiting factor to broad scale adoption is you need to get cheese that taste, smell stretches and has good nutrition.

And because I’m the same way I sustainably minded as I am, nutrition matters, right? Composition and quality of ingredients matters and seeing that. Was the impetus to say what’s next? What other solutions can we bring to, the table? And precision fermentation technology is incredibly promising because again, we are making the exact same KC molecule that you get from a cow at 90 plus rates of efficiency in terms of water consumption, greenhouse gas emissions feed stock inputs, et cetera.

And, the promise to deliver on that consumer experience is tremendous. Both from functionality and nutrition. It will take us a little bit of time, right? We’re, early stage. So think of where some of rennet, casing, or sorry, rennet came about 30 years ago and it was scaled through mostly, I think of it as a farmer.

Great technology similar to how we make vaccines and other ingredients in food. What we need to do now is take some of these principles, but flip them into what I call food manufacturing technology, which has very different. Operating principles parameters and cost structure. And so what we at change are doing is looking to really take this technology, right?

There’s, a IP component and biotech component of how you get microorganisms to produce casing, but then the second step, very immediately scaling that within food grade environment and then making cheese and manufacturing cheese. And this is where, again, thinking of ourselves not as a ingredient company or a biotech company, but thinking of ourselves as a food manufacturing company and structuring it as such is absolutely critical because at the end of the day, we don’t make much of a difference in the world unless we are shipping pallets and pallets of mozzarella and cheddar that is sold in, retail environment and put on Pizza Hut Pizza at the cost that consumers are willing to accept.

There is still some work to be done. I we are early stage, so there’s work to be done, both in progressing the biotech and increasing our yields and making sure we get the right grams per pound of or per liter of fermentation. But then there’s also just pure scale of production and manufacturing and line efficiency and distribution that enables proper pricing at shelf.

And we have a glide path. There was a question in q and a. We certainly have a glide path in terms of getting there. It’s based on a number of assumptions and thresholds and, benchmarks we have to hit. But the idea is in the next five to 10 years is that this technology will be not only commercially viable, but competitive.

And when we look at projections for specifically protein production to be Even potentially below cost of dairy, again, because you’re spending a lot of the cost of dairy, cheese manufacturing is raising the CFI decal and then taking 90% of your product and chucking it out the door as you coagulated in the cheese.

So it’s highly inefficient process and by focusing downstream and creating just the molecules we need, we are able to save a lot on all of these processes. The second point I’ll make is a as you mentioned, David, Protein is one component of cheese. There are also other things in it and, fat just being the main component and lipids and particularly aromatic components of cheese are absolutely critical.

What differentiates the aroma and the mouth feel of a cheddar from a Parmesan is driven by both the, lipids as well as the cultures you use to ferment. So a second pillar of our technology development is the fermentation, the secondary step of fermentation and creating those microbial lipids that come with the aromatic profile of traditional cheese.

Which we believe is again further downstream because now we’re talking product rather than ingredient. But in order to deliver the product that delivers on consumer expectations, fats are absolutely

David Yocom: critical to this. Excellent. Irena, thank you for summarizing. I think a lot of the really key points here around why you guys are focusing on what you’re focusing on, how much work there has yet to be done, but also the fact that you’re targeting, we’re potentially by a by a volume perspective, you could have a really, significant impact on the industry.

Seeing where we are from a time perspective, I do wanna make sure we have a chance to get it to at least one or two questions from the audience. The first that I’d like to ask is I’m curious to hear people’s perspectives on the feasibility of truly carbon neutral or carbon negative.

And just to clarify, that’s CO2 equivalent cheese for both dairy and alternatives. And please include cheese making and storage processes a part of the equation. Anybody wanna take a stab at that?

Kyleen Keenan: I can speak a little bit to it. I, think Rich probably is the, better expert. But what I am seeing so far from, the industry is there is desire to improve on the environmental footprint.

But I think the equation is incredibly complex because we need to look at the entire lifecycle analysis. So not just putting solar panels on a cheese manufacturing plant or recycling water within the plant, but looking at the entire chain from the birth of the cow, feeding of the cow and the water, et cetera.

So a complete lifecycle analysis, I think is critical for the industry to, to take an honest look at what the footprint is. The second piece to it, the complexity, is that it’s not just about co2, it is about methane. It is about water waste pollution. It is about pesticide views in corn and soy that gets fed to the said cows.

It, is about land use and deforestation. So it’s a multi-pronged sustainability question and equation that needs to be solved. And at the moment, I think I’m seeing a lot of. Desire and big picture goals. I think there are very few players, if any, that have truly solved it end to end across the board in, the dairy space.

That at least that’s my perspective. And again rich, is much closer to it than I am, but I think there’s, a big hurdle in, a true sustainability picture.

Richard Clothier: Yeah, I would agree with that. I think that if you look at the carbon neutral brands in the uk, there’s a lot of self-certification going on.

Personally we’ve worked with the Carbon Trust in the uk, which is one of the high, most respected bodies. We’re doing four cradles to gray footprinting. It’s a lot easier to achieve in your. On our own scope one and two type of emissions on the farm. Obviously it is, it’s more of a challenge where some of the record keeping maybe isn’t quite as good, but the, tools being developed in the UK for carbon footprinting on farm and we’re ev everyone in the UK is now reporting CO2 equivalent.

So we’re, counting all the greenhouse gases, methane, nitrous, oxides and everything else. I think the, methodology is robust in the UK now, and I think that there’s a lot of progress being made and the tools are certainly there. If you go onto most dairy farms in the uk now we can identify.

Most of the sort of key emission areas and there’s a huge amount of progress being made. I think that there’s still an awful lot of work to do and the farmers are learning all the time. But I think one thing that focusing on The greenhouse gas emissions on farm and, true carbon footprints and can do is make the farmers better environmentalists.

So they know, they understand the impact of the decisions they’re making and, they are reducing their emissions year on year, which is, which has to be progressed. We don’t live in a perfect world, but if we live in a world where we’re trying to make it more perfect, it’s it’s not gonna be, it’s not gonna be achieved in six months or a year, but it’s it’s about making in incremental progress.

David Yocom: Yep. I think that’s a really good point. Rich and Rena, thank you for your comments here as well. Unfortunately, given what we are from a timing perspective we’re gonna have to hold off on additional questions at this time, but I do want to give our speakers an opportunity. We’ll first perhaps Rich and Kai, where can people find your products?

Richard Clothier: Yes. Our products in the US we’re, dealing with Publix and in Florida we’re doing quite a bit of Costco. So if you live in the Los Angeles region, I think our IBS vintage is on promotion in the in the Los Angeles region at the moment. Quite a lot of independent retailers as well.

Yeah, we’re, we’ve just started in the US so hopefully, if I achieve nothing else today, I might sell a bit more Ched.

David Yocom: Thanks Rick.

Kyleen Keenan: Hi. Awesome. So you can find my chocolate products through Happiest plan-based across the country. We’re in the N C G Channel through Unify, KeHE.

We’re in North Atlantic Whole Foods and we just launched our cheese in no Northern California Whole Foods. So we’re a Northern Cal for the cheese product. You can get us online. We are in a transition phase. We’re we’re building our fac, our cheese caves out, so we’re about three weeks away from shipping product.

But we are in Northern California Whole Foods and we’re all throughout Ohio, which is where we had our last cheese facility. And then we’re gonna be launching at in Khe in the N C G Channel by April of this year. So you’ll start to see it a little bit more, but in about three, four weeks we’ll be shipping online if anybody wants to go to eat happiest.com.

David Yocom: Wonderful. Thanks Kai. And then Steve Irena, any asks of the audience from, yourselves? No

Steve Snyder: I,

just, I would just say I’m, pro all of plant-based cheese we make for a number of the leading brands today. And so we don’t disclose who our partners are. We try to be food safe, we try to do all of the right things to support those purpose-driven brands.

Reach out to me personally through LinkedIn or through the new Fields or White Hall website. And I’ll try to do whatever I can to help support the cause. And been a pleasure being on this webinar with such a great

David Yocom: Great, cast. Thanks, Steve Arina. All right.

Kyleen Keenan: I nothing, more, nothing specific for me and no product in market yet.

We’re targeting still probably a year or two out from, being able to enter the market, but certainly if you follow me on LinkedIn, I’m fairly easy, to reach there.

David Yocom: Wonderful Rich Kai Arena, Steve, wonderful to have you all on today. This was a really fascinating discussion.

I really, appreciate your time and your thoughtful perspectives here. Thank you to our audience as well for your active participation and for joining us today. Without you, our deep dives are not possible and we don’t get to learn so much from interesting people like our speakers today.

And thank you for joining us in our continued journey to understand food and health and we look forward to seeing you next month. Thanks everyone.