Starting with any relevant education, walk me through the twists and turns of your career to date? How did one opportunity lead to the next + what was the key takeaway/ experience in each role + how did this lead you to where you are now
I was born in a Kibbutz, Kibbutz Maanit in Israel. This is where the journey starts for me. My grandfather was the chairman of that Kibbutz and established two food companies. One is called Galam, which today is the largest corn processor in Israel. The second company is called Ambar, which is the largest feed producer in Israel. He was the first CEO of both of these companies, so the agriculture and food industries run in my veins. However, I give most of the credit for my passion in this field to my grandmother, because she was the cook of the kibbutz. As a very young boy, she used to wake me up very early in the morning, drag me to the kitchen to cook for hundreds of people. So that's my real passion.
One of the stories that I remember from my childhood was about the 1950s in Israel. During this period, Israel suffered from food insecurity and also from locust swarms flying in from Africa and destroying the crops. The kibbutz members used to sound the alarm, run to the fields, trying to scare the grasshoppers away to save the crops. At the same time they saw other Jews coming to the same fields with sacks, collecting tons of grasshoppers and eating them. So from that story, as a very young boy, I learned that grasshoppers are food for many people around the world and that they’re also kosher.
...grasshoppers are nature's most efficient protein source
What was the pivotal moment that put you on your current founder path?
Fast forwarding 40 years into the future, I'm a serial entrepreneur in food and nutrition based on that passion. About eight years ago, I’m part of a startup called Plate My Meal that deals with obesity prevention. I'm learning about the protein challenge around the world and starting to think about solutions for this huge problem. I remember that story from my childhood, but since I'm an accountant by profession, I know nothing about insects. Through some web research I realize that this is an amazing solution because grasshoppers are nature's most efficient protein source and the most widely eaten insect in the world by humans and also by other animals and no one is able to grow them on a commercial scale. So I said, okay, I have a huge problem, but I can also see a great solution that no one can actually provide, so I'm going to establish a grasshopper farm. That started eight years ago.
Can you provide a summary of the technology/ area of innovation and its potential application? Have there been any pivot points in the company’s lifetime and what triggered these?
Because I knew nothing about grasshoppers I added two team members. One is an expert in insects and knows how to cultivate and grow them on commercial scale. The other is an expert in operations and in food regulation. Over the first six years, we focused on two key areas - how to cultivate and develop commercial scale production of grasshoppers and I'm happy to say right now that we are the first and only one in the world that reached that milestone.
The second focus is to convince investors that this is the future and they should invest in the company. We raised some money that supported the business and took us to this point in time, but I can count seven or eight points during that journey that we ran out of money and it was make or break for the company.
We spent a lot of time and money developing the technology and two years ago it became crunch time to start selling. When your product is grasshoppers, this is the greatest challenge of the journey and we tried a lot of angles to tackle it.
We started with animal feed because it makes sense. The animals don't care about the perception of the product. So if we can feed chickens or pigs or fish, that's a huge market. But this is a commodity market, you have to be able to compete with soy or fish mill. And that's almost impossible. We are a small startup that’s just started producing so we are still working on the efficiencies that will produce scale and allow us to be competitive with our pricing. This requires a lot of funding, it requires automation and additional work on the biology of the animal. We’ve just started cultivating grasshoppers vs chicken’s where we we’ve been farming for 10,000 years.
the scale needed to enter the feed market has been a key factor in us deciding not to start our commercial journey here
In terms of efficiencies the poultry industry made a huge leap forward in terms of costs when they moved from fresh feed to dry feed, because the cost gap is amazing. We developed a new genetic line of grasshoppers that can be fed with dry feed formulation and have already reached 95% of our feed coming from this formulation. The cost is 97% cheaper than the fresh grass that we provide to the grasshoppers naturally. So that’s a major milestone.
Clinical trials are also required to show the feed is actually supporting the growth and health of the animal but we’d need about 25 tons of material for these trials vs the one ton per year we had at that time to produce. So the scale needed to enter the feed market has been a key factor in us deciding not to start our commercial journey here.
The market price of feed today doesn’t take into account the environmental costs of producing that feed but if/ when that changes in the future, that could become a major USP for our product, but we’re not there yet.
So then we started looking for the low hanging fruit and we realized that grasshoppers are the most widely eaten insect in the world, so why shouldn't we go to Africa or Asia or Central America where consumers are buying grasshoppers and paying very high prices? For example, in Saudi Arabia, grasshopper prices in the market can reach $400 per kilogram. That's a little bit better than $1.5 per kilogram for fish meal in the feed market. Then we realized that the consumers in those markets are looking for fresh grasshoppers which have a shelf life of 24 hours. You collect it, you throw it in the pan, that's it. So we scrapped that plan as well.
Then we looked at other categories like sports nutrition or supplements, because the grasshoppers are super rich with protein and many other essential nutrients. But again we need clinical trials to prove all the health benefits. Without that you don't have any marketing claims to back the product. Right now, we have a product that is ready for market, a chocolate protein shake for athletes, but have no real marketing claim beside the great story that it’s made of grasshoppers, which is not enough.
The next category we looked at was meat and the demand from consumers for alternatives to reduce animal-based protein. But, if you look at the trends of plant-based meats, you can see a decline in the last two and a half years in that category. That's because consumers are disappointed. The texture and flavour of the products have not been as good as meat and they cost more, plus are frequently ultra-processed products, so it's not really healthy for them.
When we started down that functional food road, we actually realized that there is another category that is open for us, and that's pet food, specifically for cats and dogs
Instead of just talking about the protein alternative, we actually looked at the grasshoppers as a functional ingredient. When you add it to processed meat products or to processed meat alternative products, meat analogs made of plants, they enhance the meaty flavor. They improve the beef flavor of the product, it binds very well with water and oil, which makes the product juicier, so it improves the texture and also provides reddish purple color, so it looks, tastes and feels like a great beef burger. Since it is binding very well with water and oil, it enables you to reduce the meat content by 35% - reducing animal protein consumption. Even for plant based products, you’re also reducing the environmental footprint of growing those plants.
We are using grasshoppers that can swarm. So intensive farming is actually something that they are built for genetically. There is no stress in the growth/ life cycle. The way we harvest them is done according to the European Union directive of ‘minimal harm done to animals’. We drop the temperature, they fall asleep, and then we freeze them. So it's more humane than raising cows or chickens and a smaller footprint than growing soy or pea protein.
When we started down that functional food road, we actually realized that there is another category that is open for us, and that's pet food, specifically for cats and dogs. So we can actually offer a product that is more sustainable, more humane and improves the health of cats and dogs. We already have preliminary results showing that the grasshoppers can support the growth of the animals, improving their metabolism by reducing sugar and cholesterol levels. With the diabetes and obesity epidemic among pets, grasshoppers can also reduce body fat. They improve a strengthened immune system, skincare and sleep.
We are working with strategic pet nutrition partners that have their own R&D in-house that can conduct those clinical trials
What stage are you at?
In terms of the pet food route, we need clinical trials to back all the marketing claims because it's a premium product at this point of time. We are working with strategic pet nutrition partners that have their own R&D in-house that can conduct those clinical trials. It's a long process, but that's the best way to move forward.
In terms of the route to market with human food, it's a functional ingredient. So we can just deliver the powder, they blend it into their formulations and come up with a finished product. We don't need the clinical trials because it’s about the functionality of the ingredient, not the health benefits at this point of time. So, it's mainly about the experience of the consumer in the bite.
We've been commercial for two years. We tried a lot of options along the way and a few more, including some good sales based on its religious heritage, referenced as a food in both the Bible and Koran. We have sales of our athletes’ supplements and a few more products and over the last six months we started focusing on the meat and pet food and we already have an order from one of the largest pet food producers in North America.
Discuss the biggest challenges of getting to this point? With the benefit of hindsight, what would you have done differently if anything?
I would say three things. First, R&D always has so much trial and error and it’s impossible to get to the result you want without the learning along the way. So, we could have done it a little bit more efficiently, but the best learning is from the mistakes, not from the successes. Secondly would be the sales side of things. I was so focused on developing the technology and product that we didn’t spend as much time as we should have focused on the commercialization. The last part is investors. We raised money, it financed the company for eight years, but we were not focused enough on strategic investors/ partners and they could have added a lot of value to the company, especially in terms of the perception of the market towards insects. If you have a leading player in the industry backing you up, that sends a clear message for the market. They would have helped us open doors that we spent a lot of time and energy trying to open. But that wasn't a real option until one or two years ago because that’s when we looked into the functionality of the ingredients when those types of partners would have been key. Plus, if we had searched for those partnerships 3 or 4 years ago, everyone was already making plant-based investments and weren’t yet confronted with the reality of consumer response. It’s only now that our value proposition really starts to make sense to people.
How have you approached funding?
Right now we are raising funds. It's a bridge round. We are working hard on business development and sales and believe that over the next 12 months we’ll reach significant milestones in sales, and that will lead to the next large funding round. So right now we are raising a smaller amount just around one and a half million dollars to fund the next 12 to 18 months. We also hope that these new partners will join as strategic investors. That’s the plan.
The right partners will not only collaborate with you, but also need to hold a mirror in front of your face and tell you what you're doing wrong.
What has been the greatest source of help/ guidance along the way?
This is a journey that you take alone. You lead the company, you have employees, you have partners, you have investors, you have suppliers, you have customers, all of them on a daily basis come and approach you with demands and complaints and you have no one to complain to. You have to find as many people as you can to support you mentally, physically and professionally. It’s a blend of finding the right people that will be positive, not only in the good times, but also at bad times. The right partners will not only collaborate with you, but also need to hold a mirror in front of your face and tell you what you're doing wrong. So, I think one of the most important tasks of a founder is to build a team that will be supportive, that will be part of the journey and that will add value to the founder and to the company.
Best advice you’d pass on to other founders?
This is something that is common among founders in Israel. Usually when we start a business, we are focused on developing the technology. We spend a lot of time and money and when we get to the commercialization part, we don't have money and we don't have time. So my advice is from day one, start working on commercialization of the product. Build those partnerships, start selling the product, prove to yourself and to the investors that there is a business behind what you're doing. It'll make your life easier.
Whilst the journey can be a lonely one, always remember you're not alone. What you are experiencing is actually the same route or journey that every entrepreneur is going through. It's the same pain, the same problems. It’s comforting for an entrepreneur to know that it's not only him or her that suffer from that problem. I would suggest talking to other entrepreneurs, not just directly about how to improve your business, but just share some of the journey with them, it helps.
What do you think are broadly the biggest needs and opportunities in the Animal Health and Petcare markets?
The industry doesn’t yet really understand what an amazing protein source we have in hands, how it could solve some of their problems, how it could be one of their future sectors or fields of activity. And I'm inviting them to reach out, learn more about the grasshoppers, the advantages they provide, and we are always happy to collaborate.
What’s going to have the single biggest impact on change in your area of the market?
The greatest challenge of what we do is perception. In the developed world, in Europe, in North America, we're not used to eating insects as much as they do across Asia, Africa, and Central America. If we can establish ourselves in one of the sectors or categories that I’ve talked about, that not only is the product is good, healthy, and tasty, but consumers are so interested in it, they're willing to buy it, this will have the highest impact. Our job will be done. Well, the only thing we need to do then is scale up and we know how to do that.
We expect by the end of 2023 to sign the first major agreement.
What do the next two years have in store for you?
Our first milestone will be penetration in the market. We expect by the end of 2023 to sign the first major agreement. A global joint venture with one of the leading pet food producers that we are running pilots with. Next year, same thing in human food.
In terms of R&D, reaching 100% dry feed formulation for the grasshoppers will be the most important milestone because it will enable us to develop fully automated facilities and produce the grasshoppers at a lower cost than chicken. So it'll make us the most efficient animal-based protein source out there, even cheaper than many plant-based alternatives and with a better product.
