Anne Palermo is the CEO & Co-Founder of Aqua Cultured Foods, a leading future food startup in the alt protein space. After recently closing the largest pre-seed round in alt seafood, Anne is focused on using Aqua’s novel fermentation technology to bring to market nutritionally superior, hyper-realistic, whole cuts of seafood alternatives. Anne began her career in finance before transitioning into food tech, food science and culinary innovation with the launch of her first cpg company. While there, she developed proprietary technology pertaining to manufacturing processes and the product formulations used in a high protein snacking platform. She quickly scaled the company to a multimillion dollar run rate.
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John: Welcome to another edition of the Impact Podcast. I’m John Shegerian, and I’m so excited to have with us today, Anne Palermo. She’s the CEO and co-founder of Aqua Cultured Foods. Welcome to the Impact Podcast, Anne.
Anne Palermo: Hi. Hi, John. Great to be here. I am really excited about the opportunity.
John: Hey, it feels like we’re sitting here together. We were chatting offline before we started this show, and you’re sitting in beautiful downtown Chicago, and I’m here in Fresno, and it’s just wonderful to have you on the show. This looks like the sun is shining in Chicago today. So it looks like it’s a great day to be in downtown Chicago, that’s for sure.
Anne: Yeah, it is. It’s gorgeous. It’s really snowy outside right now. So I think a lot of that light is reflecting from the snow on the ground, but it’s pretty out.
John: Hey, this is one of my favorite topics, talking about plant-based alternative food. And especially we’re going to be talking about something that hasn’t been shared a lot right now in the mass media, the issue of plant-based alternative when it comes to seafood. But before we get talking about your great company, that you’ve co-founded and created, here with Aqua Culture Foods, talk a little bit about the Anne Palermo journey. Where’d you grow up? Where’d you go to school? And how do you even get here, Anne?
Anne: Yeah, sure. My story is a little bit non-traditional when you’re talking about people in the alternative protein space. I started my career in finance. So, I’ve got a pretty strong background in finance. I’ve worked at Morgan Stanley, worked at Bank of Montreal. I was very heavy into the finance space. However, I was always very entrepreneurial, very interested in health and wellness, very charitably minded and wanted to find a way to feed the world and end world hunger. And so, I decided to leave finance and go back to school, and learn culinary innovation, and food science, and food tech. After that, I went ahead and started my first CPG company. It was in the food and beverage space. At this time, I developed some proprietary technology around the actual manufacturing process of chocolate. So, that was a really fun experience. But again, it didn’t really touch on near my true purpose, which is in the health and wellness space. And so, I pivoted that to creating a healthy snacking platform. In that platform, I developed more proprietary tech around the manufacturing of a soft center high-protein candy that didn’t use any kind of protein isolates.
And so, with that experience in the product development; of that experience in learning about protein isolates and just food ingredients, and how they work together, it’s when I started to get really interested in the alternative protein space in general. And so, as I was doing that and a lot of research, the alternative protein space in research, and learning more about fermentation science, that’s when I started to get a true love and passion about what the capabilities are within that space. Fermentation is able to create very high-quality proteins, complete proteins, minimally processed proteins. So, they’re really better for you. They’re able to help you retain all naturally occurring proteins, fibers, micronutrients, and they’re all bioavailable. So your body has the ability to digest it and use all the vitamins, minerals, and proteins that are in these kinds of fermentation-based proteins. So, as I started to learn more about them and experiment and test more about them, I was able to develop a really fantastic version of one product. It looked, it touched, it felt exactly like seafood. And most importantly, it didn’t taste like anything. When you think to yourself, how could a product that doesn’t taste like anything be a benefit? Well, that is a key. It’s actually a chef’s dream because you don’t have to mask any off flavors. A lot of products right now have to be highly processed because you have to cover up an off taste. And in order to do that, a lot of extra fats, sugars, and sodium are involved, so you end up with a real long laundry list of ingredients. Some of them are great for you, and some of them aren’t. There’s a lot of pushback about what’s going on and what people are putting into their bodies.
So, by creating a protein that is very nutrient-dense, very readily available, but doesn’t have a flavor, it means that we can add flavor to it with a gentle hand; very natural, very minimally processed, and ultimately better for you. And then, because there are less steps involved, in the long run at scale, our products are going to be able to meet or beat price parity with traditional seafood. So I’m absolutely blown away and excited about what it is that we’re creating. And I just can’t wait for those products to get out there for everyone to try.
John: It’s so exciting. So you were in college, you studied finance before you went into the finance world?
John: Were you, yourself, someone who grew up or as a young adult, involved with the exercise trends or the plant-based eating trends? Were you experimenting yourself in different types of ways of feeling better and being healthier? And this is part of what the journey was for you?
John: Yes, definitely. A hundred percent. I was very involved in the health and wellness space. I can’t say that I was like a bodybuilder bunny chance, but I went to the gym a lot. I was there like 2 to 3 hours every day, for several years. It just became a happy place for me, and that experience really leads you down the path of health and wellness; what to feed your body, what kind of nutrients your body needs, how it works, how everything works together in order to enhance overall wellness, and well-being as well. I think that is where my true interests, passions, and drive for this kind of industry really began.
John: We’ve seen the rise of plant-based alternatives and the massive success of Impossible, of the JUST Egg people, beyond me and others. Why did you choose alt seafood versus protein categories like burgers or chickens to go into?
Anne: Yeah. That’s a great question and one that I have been asked before. There’s a whole lot of reasons. Let’s start, in general, with just ocean health. Right now, 90% of wild fisheries are categorized as being overfished. A hundred and seventy countries are left with unmet demand for seafood. On top of that, expected demand is still expected to increase by 30%. If we keep going down this path, it’s estimated that our oceans will be out of fish by 2046. So, there is a huge need for somebody to intervene and come up with actual true solutions that can benefit our oceans, that can benefit our growing population. On top of everything that we need with ocean health, there’s also a global population expected to increase by 2 billion. We’re approaching 10 billion people on this Earth by 2050, and current methods of agriculture, animal husbandry, aquaculture in general just can’t support this growing demand for our food system. I think that is part of the reason why I felt called to make the change. So I’m focusing on seafood; one, because there’s a real need and there’s not a great substitute out there, yet. And as I was experimenting and testing with products, I came across something that I thought was a really exciting version of one product. We brought on our scientific team, we’re bringing on more help, more scientist, as we speak. And right now, we’ve got a great MVP product that’s out there being tested and tried, but I think seafood, in general, is just a white space. There’s not a lot of people doing it, especially when it comes to those whole cuts. There’s a need, and I just really wanted to develop a product that could fit that need.
John: When you started sharing your vision with potential retail outlets and restauranteurs, what’s the response been? And what do you foresee once you get to go to market in terms of getting your great product into the hands of consumers?
Anne: Thank you for asking that question, too. It’s really fantastic. Honestly, the market response has been overwhelmingly positive. It’s really exciting. We’re speaking with every large multinational corporation you could think of. It seems like, right now, we have a lot of excitement in the US, but where we’re getting the most excitement is internationally. I think part of the reason for that is about 70% of the world’s seafood is consumed in Asia, and seafood is the number one most consumed protein per capita over there. When you start looking into a population that is growing, and its number one protein that is being consumed is dwindling, you’ve got the present need is just more in the light. And so, you see it more, you want to act more. And because of that, when these companies, and these corporations, and these population sees what it is that we have out there, they are reaching out, and they want to talk with us, have a conversation, and they’re trying it. When they try it and taste it, that’s when we really win them over.
John: Got it. When you started the company, where did you go out as a young entrepreneur, and share your vision, and start raising capital from? How did that go? Because that’s always a challenging part of being a young entrepreneur without a huge track record behind you. Now, you came out of finance, so I assumed you knew how to put together a business plan and also put together spreadsheets and forecast, but how did that work in terms of raising capital?
Anne: That’s great. You’re right. I do have that finance background, which I think helped a lot because I could understand what I needed to know and what I needed to have in place prior to beginning the fundraising process. At the same time, I’m a second time founder. And having that experience, knowing what to do, what not to do, knowing and understanding how to put together product roadmap, what we need to do, why we need to focus on food service, why we need to focus on retail, how we’re going to bring the two together in order to have a strong action plan. I think being able to put all that together is significant and impactful when it comes to our sell story. However, I also want to say that when I first first started it, my co-founder, Brittany Chibe, and I, we got accepted into a business accelerator. Big Idea Ventures had a New Protein Fund. So they invested in us and they put us through their accelerator program. And kudos to them because I think it was a really valuable opportunity and experience for us. But as we grew our company, that initial investment really helped us to put the right pieces together in order to create a really strong product, really strong opportunity.
And then, we started to get a little bit of early press and then we started to speak on to more panels. And we’re a part of Future Food-Tech. Alternative protein had like a pitch day, they were really great for us. And then, we spoke and did a pitch slam for Good Food Institute. And my goodness, Good Food Institute what an amazing resource for anybody in the alternative protein space or anybody just interested in learning more; they’re free resource. I think all these, just having access to all these people, and opportunities come together, and really helped us to amplify our message.
John: For listeners and viewers who just joined us. We’ve got Anne Palermo, she’s the co-founder and the CEO of Aqua Cultured Foods. To find Anne, her partner, and all of the great work they’re up to, go to www.aquaculturedfoods.com. And you are right now in the scaling phase. So you’re trying to not only hire food scientists and microbiologist, but you’re also looking for chefs and restauranteurs out there that want to test your product, is that not so?
Anne: That is, that is. Yeah, so we’re excited because we’re trying to bring together a really strong scientific team, a really strong team of culinary scientists and chefs, in general, because we’re doing a lot of really exciting, cool R&D stuff, but at the end of the day, we’re food. And so, we want to develop really fantastically delicious food that’s going to help feed the world sustainably. And the best way to do that is to bring together the best people, that are not only brilliant at what they do, but are really great culture fit. Because we are nice people that like to work with other nice people.
John: But I like that, we’re nice people that want to work with nice people. That’s a great way to build the culture, by the way. I mean, like honestly, gosh, it just says it all. I love your offices in downtown Chicago; the wood, the brick. How many employees do you have currently?
Anne: Right now, we only have four full-time employees. We have some consultants, and we are in the middle of hiring and bringing on a couple of more people as we speak right now. Hopefully, by June we’ll have about 10 hires. So we are very actively searching.
John: You’re very young and you already have success in your past and now you’ve got a big idea, who do you look to for inspiration? Who are some of the entrepreneurs out there that have inspired you, that you hope to follow in their path, and how they’ve not only created a business that works but scaled it, but also been good along the way and kept their reputation in terms of character and integrity on the right side of the street?
Anne: Yeah, well, there are so many people. It’s hard to name any in particular, but let’s see here. Just from reputation only because I’ve never met him, but Ethan Brown seems a really fantastic person. I’m really fortunate enough to know Chuck Muth, who is an incredible man. So he’s definitely an inspiration. He works with Ethan at Beyond. I’m a huge fan of Bruce Friedrich of Good Food Institute. What a guy. Shoutout, hi. But entrepreneurs, there’s so many fantastic, fabulous people, especially when you’re in the alt protein space. It seems like there’s a lot of mission-aligned people that are trying to do well by doing good.
John: Yeah. I sense and I feel, but you tell me if this is a correct statement or not, that it’s not a zero-sum game. They [inaudible] prove to grow, it would be more of a collaborative unity of the alt protein, plant-based entrepreneurs that would sort of want to help push and pull everybody else forward that’s interested in this space, because there’s so much to accomplish out against the other forces that exist. Is that a true statement?
Anne: It is so true. It’s so true. When it comes to, for example, alternative seafood, the oceans is $1.7 trillion opportunity; alternative seafood, in general, is $550 billion opportunity. No one company is going to handle it all. Ten billion people on the Earth are going to eat three times a day. There’s room for everybody, and you know that expression, a rising tide lifts all ships. Well, nowhere is that more true than an alternative seafood.
John: Talk about being a woman entrepreneur in a food tech company, but just as a woman entrepreneur, regardless, what’s the advantages to being a woman in a world that is finally valuing diversity and inclusivity as opposed to 10, 20, 30 years ago?
Anne: Well, you know, that’s a great question. I’ve never been anything other than a female. So I can’t really speak to other side of things. But what I can say is that I’m really excited to be a female entrepreneur because I’m hoping that as I grow my business and as we do more impactful things, hopefully what we’re doing can be an inspiration to other women. And I obviously, at one point, love to mentor young women. I don’t know. I have three kids. I have a soft spot for kids, in general. So I’ll just mentor all the kids, but you know, hopefully to be an inspiration.
John: So you’re a mom and an entrepreneur. You’re straddling[?] two very important jobs.
Anne: Yes, thank you.
John: You were raised and you live in Chicago. I’ve been to your city so many times in my life, I go very often on business. It’s known as a food city. I’m a native New Yorker, another great food city. Talk about the advantages of launching and breaking ground in the old seafood business in a food city, in terms of getting the product both into retail and into restauranteur’s hands. So you can get feedback fast. So you can understand if you’re on the right track. Explain what this means, as opposed to starting this in a more remote area.
Anne: Yeah, well what we love about it is the fact that Chicago has so many chefs that are interested in trying new things. Something that’s new and cool. Everybody wants to be the first to try something and everyone wants to be the first to experiment with it. And when it’s really neat, well, word gets out. Everybody talk with their chef friends, and they talk with their chef friends. So not only is it within the culinary preparation scene and food scene, but also then when you’re talking about individual consumers and end users, as well. It seems like in Chicago, and at New York, and LA, and metropolitan areas are very similar. But I know Chicago best because I live here. But in Chicago, consumers are really excited and interested in trying new things all the time. And to be able to say that you’re among one of the first to try something is really big and exciting, and I think that really resonates with the people that have had the opportunity to try our products.
John: And what’s your vision? Where are you in the journey? When do you believe that our listeners and viewers can start enjoying your great products either in fine retailers like Whole Foods or on Amazon, or in great restaurants in the cities that they live in around the United States and around the world? How long are we away from trying the great products that you’re cooking up for us at Aqua Cultured Foods?
Anne: Yeah. Well, we are going to be starting to do some limited time offerings with selected restaurants this year, but sometime this year. And we’re going to have some sushi products for people to try. We’re going to have some fried calamari for people to try. Some popcorn shrimp for people to try. So, what we’re trying to do is create a range of items, meet the customer where they’re at, provide them with really delicious food that they want to eat. And in order to reach the most people, make the most impactful change, you’re going to have to offer most different types of tasty foods. And so, this type of coming, we can start doing some small world[?] allowed, some small test to different selected food service establishments this year, and can’t wait and have a chance to try it.
John: I can’t wait to have you back on, then talk about the journey and [inaudible] food, Anne. Thank you for joining us on the Impact Podcast. To find Anne Palermo, and her partner, and her colleagues, and all the great work they’re doing, please go to www.aquaculturedfoods.com. Anne Palermo, you’re making a great impact. You’re making the world a better place. Thank you for joining us today on the Impact Podcast.
Anne: It was really a fun time. Thanks for having me. I really appreciate it, thanks.
John: This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and impact partners. Closed Loops platform spans the arc of capital, from venture capital to private equity, bridging gaps, and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.