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John: Welcome to another edition of the Impact Podcast. This is a very special edition. This is the “Down Under” edition of the Impact Podcast. We’re so honored to have with us today, from Nourish Ingredients, the two co-founders James Petrie and Ben Leita. Thank you for joining us today. I know you’re both in Australia. So this is a long way away but it’s like we’re together, anyway. Thanks for joining us today at the Impact Podcast.

James Petrie: John, thanks for having us in and I think that this year, everyone’s grown really accustomed to Zoom meetings so this is nothing new for us here in Australia.

John: True. It’s nice. You know, before we get going and talking about all the important things, for our listeners and viewers out there to learn more about James and Ben’s company, you could go to “nourishing.io”. “Nourishing.io”. I’m on your website now. Talk a little bit about though, your backgrounds. How did you even get here? What were both of your backgrounds, both growing up and educationally speaking? And how did you come together to co-found this wonderful new brand?

Ben Leita: Could I jump in and go first, if you like James?

John: Yeah.

Ben: I’m Ben Leita. I actually grew up on a farm in country Victoria in Australia. So my parents were berry farmers and my father was into the whole sustainable farming for the future and growing these berries in a sustainable way. And a lot of that rubbed off on me, growing up and working hard on the farm.

I went to university, interested in chemistry. Pursued my career there as a chemist and did a Ph.D. in chemistry. And that same theme of, you know, using renewable organic materials and converting them into stuff that you can use in the real world whether it be plastics, food, and fuels just rubbed off on me.

So, after my Ph.D., I went and joined CSIRO, which is Australia’s premier research institute. And that’s where I met James. I was working as a chemist doing chemical conversions on renewable biomass materials. So I worked on things like making a bio-based PET bottle, for Pepsi and Coke. And we developed ways to do that from eucalyptus oil, and pine[?] oils, making them over a hundred percent bio-based. And during the journey there and meeting James, he was doing these… He’s a genetic engineer and he’ll introduce himself a little bit further. But I realized, if I was starting with the biomass, that was grown fit for purpose, then the chemical conversions I’ll have to do to turn it into something amazing in a product people could use was very limited. So when the two of us started working together and it was fantastic. We worked together on a number of projects over the years and eventually landed at Nourish. I’ll pass it over to James now.

James: Yeah, thanks. And I think the distinguishing feature like, in terms of how I think about this sort of space, I love to see impact-driven science, right? I love to see when we make something cool in the lab. That’s an achievement in and of itself. It really hits the road when you can get it out there into the marketplace and that’s what’s always driven my research interest. And there’s a very fine line between that sort of translational research and then actually turning it into a commercial product. You can’t really have one without the other in a lot of cases. And when we looked at this whole area of these sort of specialty food lipids for these plant protein alternative protein foods. It’s a bit of a no-brainer, to be honest, John.

John: You know, I haven’t had the opportunity yet. Well, I’ve had the opportunity but I haven’t been smart enough yet to get on a plane and get down to Australia. I’ve traveled the world my whole life. I’m going to make it down there in my lifetime, but talk a little bit about, socially and culturally speaking, has Australia been part of this sustainability revolution from the standpoint of adoption of vegetarianism and veganism early, or is it just now coming to the forefront over there now? Where are you as a culture with regards to clean eating and plant-based eating?

James: I think we’re broadly speaking similar to the states in terms of where we’re at as a nation. I think that there has been for a long time an undercurrent if you want to call it, that of veganism and vegetarianism, but it’s becoming mainstream, right? You’ve got a lot of people really turning to this and trying to make it their own and I think that’s the fundamental shift that has happened in this space over the last probably even only 5 years, right? You’ve got this shift from it being a niche thing to something that everybody knows is important and everybody is trying to start to do, at least at some level.

John: Yeah, and that’s so funny. I love what you just said, “At least at some level”. One thing that people come to me and say, “Well how do I become a vegetarian or vegan?” And I keep telling people, “It’s not a zero-sum game. You don’t have to be one or just the other. You can still eat whatever you want but maybe a portion of your diet will include plant-based eating as part of your day-to-day lifestyle.” And people who just do twenty to thirty percent of their diet change to plant-based eating find a huge pick up in their energy and also their quality of life and I think that’s part of it.

People thought, ideologically speaking, that this was all-or-nothing. “Either I have to just eat what I’m always eating or I have to only eat plant-based,” and I don’t think that’s the way. I don’t think that’s the way forward. And I think that’s why a company like yours has such a huge blue sky in front of it. I’m on your website now. I love your website by the way. And it’s so appealing, visually speaking. And again for our listeners and viewers to go to their website. It’s “nourishing.io”. “Nourishing.io”

Can you explain some of the science behind what you mean when you say “fermented animal-free fats and oils” and why that has an advantage, comparatively speaking, to what’s used currently today, and what’s state of the art today?

James: [laughs] Cut me off when you get bored because I could talk about this forever. The gist of it is if you look at a cow or a chicken or whatever animal you choose, it builds a certain type of fat in its body but that fat is not there because we find it tasty. Primarily, that fat is there because it’s an energy store for that animal, right? And so, the question that we have to ask ourselves is as we’re building all of this new frontier of alternative protein foods, whether it be plant protein, or recombinant protein, or cellular [inaudible], “How do we bring along the fat component into these new types of protein bases?”

And what’s really interesting is that then you start to think, “Do we necessarily need a cow fat for a plant protein bits[?]?” And the answer is, “Not necessarily.” Like the answer is, “Maybe we can even do better.” So we don’t have to be locked by the biology of the animals anymore in terms of what they’re built. We can actually go a step further and really tune the sort of fats that are going into these new plant protein type foods and really make them tailored to that. So what we do is we take microorganisms that make oil naturally in their cells, and we just tweak them a bit so that we are now telling that microorganism to make a slightly different type of oil. And this is now one that’s tuned specifically for these sort of plant protein foods has really good taste, really good flavor, and has some sort of health benefits. Does that make sense?

Yeah. Ben?

Ben: The way I like to describe how we make the fats that we do is, everybody’s familiar with the beer-making process or the wine-making process…

John: Yeah!

Ben: [inaudible] So you feed sugar, the yeast does the fermentation you end up with nice beer or wine. So we’re not doing anything different to that. We’ve got yeast that we programmed to produce the fats that we want. We feed it sugar, and this little yeast factory then spits it. Instead of spitting out a beer or wine, it spits out their fats.

John: So interesting. So you’re creating the ingredients that go inside of these new plant-based products, or in some cases, you are actually producing the end product as well. What is your business model? So our listeners and viewers can understand.

James: Yeah. Specifically in that lipid or fat oil part of the supply chain, right? That’s a really interesting topic, more broadly. Like, if you look at a lot of the plant protein food companies that have emerged in the last few years, a lot of companies are trying to do “A-Z”, I guess.

John: Yeah.

James: And what we’re about is… Well, we understand that our expertise is really around these fats and oils and we know how to make them well, and so that’s what we’re sticking to, at least at the moment. You know, it’s so tempting to try and push a little bit further down that value chain and try and go a little bit closer to a direct-to-customer product, but maybe that’ll be another day.

John: You got to remember something my listeners and viewers know (this is a fifteen-year-old show) that I’ve been a vegetarian, almost forty-three years, forty-four years, and a vegan for about fourteen or fifteen years. So, I have to tell you, I have so much hope when young guys like you come in and create better-tasting vegan products. You can imagine what we were being fed forty years ago as a vegetarian or even ten years ago, twelve years ago, as a vegan. Things have changed so much. I mean, when you see all these amazing companies with egg-based products, and the ice creams made out of soy, coconut milk, almond milk, and cashew milk, and Beyond Meat and Impossible Burgers, and the list goes on. So it’s such a hopeful message that young brilliant people like you are making sure that these products stay on the cutting edge in terms of taste and quality.

Are these your kind of clients or some of the kind of brands that I’m mentioning become some of your clients? Or you are also supplying new brands that are being that are going to emerge in the months and years ahead?

James: We’re talking to everyone. We’re talking to everyone in this space and it’s really interesting when, you know, when we started doing this back in 2019, we went out and we did deep dives with potential customers and tried to figure out exactly where they were herding around this fat and oil part of the chain. And the messages, we started to get back. [laughs] They were the same across the board. Everyone’s using coconut oil, right? And that’s, you know…

John: Right.

James: …. one of the main oils that’s being used. There are others, but that’s one of the main specialty ones. And very few people are happy with it. You know, it’s got, its got a number of problems around taste, around mouthfeel, around flavor, and these are things that we can definitely better in. Not to mention the sustainability angle, and that’s a massive driver for our company where you’ve got products like palm, even coconut that come from rainforest plantations. If plant protein foods are going to scale to reach the sort of massive[?] option that everybody hopes and expects that they will, it’s unlikely to be off the back of that crop. Not unless we want to do a palm oil 2.0. So that’s something that we really have firmly in our mind that this is an area that we can take pre-emptive steps in to really give the growing industry an opportunity to shift to a more sustainable future.

John: So interesting. In terms of brands, are all the brands that I’m mentioning like Impossible Burgers and Beyond Meat and other great vegan products, are they readily available in your stores and your restaurants down in Australia already?

James: Yeah, we got a pretty good range. There’s a mixture of homegrown brands and the Beyonds and so forth, the international brands. It’s fascinating to see how quickly it’s changed, right? You know, even when you walk into the supermarket, just a couple of years ago, it was such a different sort of layout, isn’t it?

John: And a restaurant, dude. I mean, there’s even one of the most famous restaurants in New York that just announced that– I mean, literally one of the most famous restaurants in New York, Eleven Madison Park’ that they’re going all vegan. Not even part-vegan menu, all-vegan menu. All plant-based.

Ben as a business enterprise, are you– although I’m a huge believer in what you’re doing, I don’t know the landscape. Do you have 50 competitors in the space? Or you guys have sort of a quasi-monopoly on this carved out a niche or specialty that you guys have created?

Ben: This whole alternative proteins food movement, and the animal-free meats that have been produced by all these wonderful companies that you’ve just mentioned, they’ve all been so focused on the protein and the complex food formulation and going direct to consumer and they have done a fantastic job, right? In order to get them to compete and get regular meat-eaters to want to eat these products, now that whole eating experience needs to be better. So it’s a combination of a lot of things that’s, you know– Beyond’s just put out their Burger 3.0 and that’s going to continue to roll out and get better and better.

Where we fit into this and where we’ve seen the niche is that they haven’t really focused on the facts[?]. They’ve only used what’s existing and available to them in the real world. They didn’t know that we could produce all these alternative fats by fermentation. The niche that we’re actually filling is, we’re creating a whole new world of fats that will make these products into the foods of the future tomorrow.

John: Well, that’s — And on your website, for our listeners and our viewers again, Ben and James’ website is “nourishing.io”. “Nourishing.io”. It’s really a visual delight. But I mean, the products that you’re creating, your ingredients could go into everything from the next generation of burgers, to ice cream cones, to all types of alternative plant-based proteins, and plant-based products from here on out. Is that correct?

James: Yeah. It’s really cool to sort of — I mean, take that dairy example, that you just mentioned.

John: Yeah.

James: The importance of fats is so readily discernible there. You bite into a low-fat ice cream and you bite into a full-fat ice cream, and, you know the difference. [laughs]

John: Right!

James: It’s not hard to tell.

John: That’s right

James: Fat is not a sexy topic, right? People don’t like fat. I think that’s starting to change a little bit at least. People are understanding there’s more nuance there, but generally speaking, it’s one of these topics that have been a little bit ignored. And you know, brushed under the carpet. There’s so much room for improvement here and that’s the gap that we’re in. We’ve seen this, in my genetic engineering background as a scientist we built a product many years ago which was a fish-oil replacement in the seed oil canola. And that product was I think one of the forerunners of this type of technology where you’ve got the recognition that there’s an animal-type product out there in nature that is good for people that they need to eat but there’s just not enough of it, right? And so coming from the side with these sort of new solutions to build these types of products for these new consumers that are starting to understand how important they are is such a fascinating feel to me.

John: Talk about the advantage and the disadvantage of geography, assuming science is going to win and we’re going to get through this tragic period, that we’re all living through right now, doing what you’re doing as innovators, as inventors, as disruptors, are you at a disadvantage in Australia? Should you be sitting in the middle of California or New York, or Europe somewhere? Or does it not matter when you create and disrupt and make new products and new inventions? It doesn’t matter really where you are anymore, geographically speaking, in the world. The world of innovation has been democratized and geography really doesn’t matter. Explain that from a founder’s perspective and a creator’s perspective. I think a lot of our viewers and listeners would be fascinated by your thoughts on that.

James: Yeah, I mean– what are your thoughts on that Ben?

Ben: So James and I started Nourish Ingredients just before this pandemic.

John: Wow.

Ben: One of the investors, the partners in the investment firm that invested in us, I’ve actually never met in person.

John: Wow!

Ben: Yet through technologies, just like Zoom, like what we’re out here on today, I feel like I’ve [inaudible] for the year and a half that we’ve been in contact. While there are definite advantages if we were set up in Silicon Valley, in and around that ecosystem. There would be definite advantages there. And there are other places around the world with these food hubs in terms of resources and availability of different funding sources. While that would be great, we haven’t seen it as a huge barrier here. And the technology that we’ve been pushing and developing here in Australia, it’s applicable to all different food systems all across the world.

And like I said, using technologies like Zoom, people are happy to jump on these and talk now and it’s a really quick way to speak to lots of different people and it has really lowered that barrier, if you’d like. John.

John: So I think there’s a deeper element as well even than that. Not being in the Valley, it forces you to look at the problem differently, right? Because you may not have the same ready access to either talent or facilities around you. And it makes you look for homegrown solutions that are even more innovative in some cases. And so when we look sideways here in Australia, we see companies in this exact space. V2food is one example here, where they’ve just made massive gains in terms of how they’re pushing plant protein foods forward and they’re looking at it slightly differently in terms of what they’re trying to achieve. And I think, it’s similar for us, where we look and say, “Okay, we are in Australia. We could move to the States, but I think there are advantages to taking just a bit of a lateral approach to the problem.”

John: So interesting. Is the whole organization just the two of you as inventors or is there a greater amount of employees underneath both of you at this point?

James: Yeah, we got about two dozen at the moment and I don’t think we’ll ever stop employing. [laughs] What do they say, the number one problem is funding and the number two problem is people and that’s certainly true in our case.

John: How about the funding? Is the funding coming from him[?] Because your generation is on fire for ESG, circular economy, and impact investments. Are your Investments coming from traditional sources, your investors, or from impact funds and others that are more like-minded based for these new type of disruptive products and circular economy, ESG, impact-related products?

John: We’re talking to them all. Our current investors, Horizons Ventures and Main Sequence Ventures here in Australia, and Horizons in Hong Kong, these two, I think they looked at the — they were very familiar with the plant protein space and they looked at it and they said, “Yeah, this is something that we’re hearing is a problem, in this fat and oil component of the ingredient list.” And so, having a company that can address that not only for their portfolio companies but for the industry as a whole was something that was really appealing to them. And I think that’s just being reflected in, you know, I think we’ve raised eleven million US[?] Dollars[?] now in our seed round.

The goal now is the — [laughs] — let’s just turn all of that into some foods that taste absolutely fantastic. The goal here is not to create a little bit of a better coconut oil. The goal here is to add something to these plants protein foods, recombinant protein foods that just blows the socks off the sort of consumers that Ben and I are. We are meat eaters and we enjoy it and the sort of customers you’re trying to get over the line in terms of the real growing market opportunity is the ones who do want to change and they just want to be wowed by the sort of products that are out there. And I think we can achieve that by addressing the fat problem. So, I think we’re about to just blow socks off the growth potential of the whole sector as it were and it’s just by addressing this real, special part of that ingredient list.

John: What do you both think is the future here? When will I be enjoying your products contained in plant-based products that I would typically enjoy? Are we 6 months away? Or we a year away? Or we eighteen months away? Give me a little bit of vision of the future for Nourish Ingredients.

James: Well you might be a bit ahead of the curve, John. We’ll send you some samples when we got them ready.

John: I’m excited!

James: Okay. In terms of the commercial development where, you know we’re working in a few different sectors in this plant protein space, and some are a little ahead of others but overall, you know, we’ve done this before, we built these types of products before. We understand the challenges, both on the regulatory side and also that commercial entry side, that market entry side. We got our work cut out but I don’t think there’s anything major. I mean, look, the other way to look at it, you know, beyond specific growth sectors, say North America is if you look at the global picture, we’re not that far off ten billion people on this planet, right?

John: Right.

John: And even more important is that the middle class is growing so fast and the middle-class eats differently. The middle-class eats a much more Western-type diet and that’s just not feasible in terms of our current animal-based agriculture. So what are these people going to be eating? And we already know that the answer is not going to be the same sort of animal-based agriculture that we are currently enjoying in a lot of countries. And so how do we address that? Well, the answer has to be via plant-based or recombinant-based and it’s just such an obvious thing that I think this is why there’s so much interest in really trying to fine-tune these products and get them into the market in a form that just blows people away.

John: I agree with you. When Ethan Brown, as I shared with you earlier, when Ethan first came on our podcast ten years ago now, he told me that his first two investors, were Biz Stone, the co-founder of Twitter, and Bill Gates, I said, “Why were they investing?” He said, “John, it solves some of the world’s biggest problems.”

James: Yeah.

John: And so I think that theme as you just laid out, James, it still holds today. That truth holds ten years later you’re really part of a revolution in food consumption and availability that is going to be — that void is going to need to be filled in the months and years ahead.

James: You’re absolutely right. And I think there’s an interesting twist here, right? Which is that, very often, agricultural or food chain developments are done for the benefit of the Big Corporate and the town[?] and that is appropriate in these sort of capitalist economies that we’ve grown up in.

But if you develop these sorts of foods with the consumer in mind and make sure that they have built-in, from day one, benefits to those consumers, in this case, sustainability and health. And our goal is to add taste and flavor to that list, right? And so if you can accomplish that with this new generation of agriculture. It’s fermentation but it’s still agriculture in that sense. Yeah, that’s a whole new world for us.

John: Well, you’re just creating a bigger tent and you’re inviting more people in. Ben, talk a little bit about the partners. Are you two the only co-founders?

Ben: Yeah, James and I are the two co-founders of Nourish Ingredients and we’re essentially the main drivers behind it for the first 12 months. And as James said, yeah, we’ve expanded now to over 20 people and don’t look like slowing down.

John: That’s wonderful. You know. So, you know, a lot of young people come to me about new business opportunities. And how do they start? How do they create? How do they launch? And I keep– My one of my common themes to them is choosing your partners. Something that is as important, if not more important than choosing the idea that you’re going to do.

James: Oh hell yeah.

John: And now that you guys have had eighteen months of baptism together, nineteen months of baptism together. Don’t you find that to be true?

James: It’s longer than that. We tried to– Ben, tell the story about way we, you know?

Ben: Yeah. And so when James, and I first met at the CSIRO and started working together, we were working on different projects that were making beautiful plants that did stuff. I would take them, extract them and turn them into beautiful products.

James: Yeah.

Ben: And, look, we decided to put one of the technologies into an accelerator program, people are familiar with that type of thing for startups. And we went out and talked to a bunch of customers and it was to do with making more plant-based oils but with just a different plant-based production system. And during those interviews, you know, we spoke to people by Perfect Day and a bunch of others. And we started to hear the same thing back up[?] instead of making more of, can you actually make these animal oils with your plants and I still remember the point we’re in a taxi in San Francisco coming back from a customer interview and said to James, “Why aren’t we making these animal fats in a yeast-based platform? We know we can do it,” and that was like the “Aha!” moment where we both thought, “Right. Let’s go back.” When we got back, we worked out how we could do it. And then pitched for the venture funding to kick things off.

John: That’s wonderful. That’s wonderful. So, give me a view of the future. Where are you guys going to be a year from now? Two years from now? Five years from now? Explain to me what the evolution is going to be for your great brand Nourish Ingredients.

James: We’re not gonna give you the technical answer. We’re going to be a pilot-scale team[?]. We’re going to be a small-scale commercial and then we’re going to be a full-scale commercial. The challenge is answering “Who’s going to be the partners to help us do those steps?”

John: Right.

James: You know. That’s a lot of steel in the ground when you get to the sort of scale that we need to reach. So that’s something that where it’s beginning to have those conversations now. I think the irony is that in some senses the technical challenge of doing the synthetic biology of the strain engineering is not the major part of what’s potentially going to slow us down. It’s more of that scale-up side of the equation. So it’s a fascinating journey but not one that we haven’t been on before.

The problem is, in the past, when I’ve done it it’s been with crop plants. One of the things I often think is that it feels like we’re cheating now that we’ve switched to a fermentation platform because it’s so fast. It’s like the iteration and the cycle time on the traits that we’re developing is so much quicker than plant, and that’s really refreshing. It, lets you take a whole different approach to how you solve these types of metabolic engineering challenges in these yeasts. It’s such a fun thing to be doing at this point in time.

John: You have to build your own factories, to support the ingredients that you’re creating, or can you contract that with existing food-based factories?

James: You can definitely contract it. This isn’t rocket science. Fermentation technology is old as the hills and older. You know, this stuff has been around for thousands of years and it’s just a different type of yeast that’s producing a different type of product instead of alcohol. Now we’re producing oil and beyond that, the differences are somewhat superficial, you know. I’m sure that there are Fermentation Engineers who are listening to this pulling their hair out now. My naivety. And I think that is true to some extent when you look at, you know, you can’t necessarily just switch a wine fermentation tank or a beer fermentation tank into this sort of production, but it can be retro. And there are certainly examples out there where it’s been achieved.

John: That’s great. Any final thoughts from either one of you. I mean you’re both fascinating. I love what you’re doing. I want to have you back on impact as you continue your journey and share the products that you’re creating and the progress that you’re making. Well, I’d love you to share any last thoughts before we say goodbye for today.

James: I’d just like to say, John, thanks for the opportunity to come and talk to you and your listeners. I think it’s such an interesting journey for us to be going on but we try and keep right in front of their mind, you know, what’s the goal? What are we trying to achieve? Because if you start trying to achieve — “Are we going to raise capital or we’re going to create a valuable company?” I think that that tends to lead down a dismal road. If you think we’re trying to create the best experience for the consumer. You know, we don’t want people to be biting into these alternative protein foods and getting that alternative experience.

John: Right.

James: We want them to bite into it and say, “Oh, this is fantastic.” And that’s what drives us, you know. How do we turn that corner and make it? So yeah, it’s been really enjoyable talking to you. Thanks for your time.

John: Of course. Ben? Anything from you, Ben before we say goodbye today?

Ben: Oh, look, it’s been a pleasure to be on the show John and hopefully we’ll be speaking to you in the not too distant future after we’ve sent you some amazing samples.

John: I’m excited for that. I am excited one day when I get to meet you in person, whether you’re in the States or in Australia. I’m telling you, we will meet in person and I’m excited for that day. For our listeners and our viewers, to find Ben and James, and their great company, please go to “Nourishing.io”. “Nourishing.io”.

James Petri. Ben Leita. You guys are making the world a better place. You’re making a huge impact. I’m grateful for your time today. I’m grateful for the work that you’re doing. You’re always welcome back on the Impact podcast and continued success in your journey now.

James: Thank you, John. You have a good day.

Ben: Thanks.

John: This edition of the Impact Podcast is brought to you by Trajectory Energy Partners. Trajectory Energy Partners brings together landowners, electricity users, and communities to develop solar energy projects with strong, local support. For more information on how trajectory is leading the solar revolution, please visit “trajectoryenergy.com”.