Ep. 162 - Turning Air into Butter: Savor’s Revolutionary Approach to Alternative Fats
SHOW NOTES
What if the fat in your butter, cheese, or even burger could be made without animals, without plants, without fermentation, and without agriculture at all? That’s exactly what Savor is doing. Using a groundbreaking process that transforms compounds like CO₂ and elements like hydrogen into rich, animal-free fats that can mimic what animal fat does, this California-based startup is rethinking how we produce and consume one of the most essential ingredients in food.
In this episode, I sit down with Kathleen Alexander, cofounder and CEO of Savor, to dive into the science behind their innovative fat production, why alternative fats could be the next big breakthrough in food tech, and how their approach could help fight climate change while making all types of foods, including plant-based meats and dairy, taste even better.
So far the company has raised more than $30 million in venture capital, including from Bill Gates, and is now gearing up to start selling its new fat in restaurants and bakeries within 2025.
Will humanity be able to divorce food production from agriculture? If Savor succeeds, that just might be the case.
DISCUSSED IN THIS EPISODE
Katheeen co-authored the paper Food Without Agriculture.
Savor was incubated by Orca Sciences.
Our past episode with Pivot Bio president Lisa Nunez Safarian.
Kathleen and Paul both recommend Alchemy of Air and Not the End of the World.
Kathleen recommends Long Life, Honey in the Heart.
Smithsonian story on Savor’s technology.
MORE ABOUT Kathleen alexander
Kathleen Alexander has a strong background in materials science and engineering. She has worked in various roles, including as a CTO and CEO at Savor, a Project Director at Orca Sciences, and a Climate Solutions Consultant at KCA Research, Inc. Kathleen has a proven track record of designing and implementing innovative projects for climate solutions, with a focus on greenhouse gas reduction technologies. She has also conducted extensive research and modeling in the field of materials science, particularly in areas related to electrochemistry and battery performance. Kathleen's academic background includes a PhD in Materials Science & Engineering from Massachusetts Institute of Technology, further showcasing her expertise in the field.
TRANSCRIPT
Paul Shapiro: Kathleen, welcome to the Business for Good podcast.
Kathleen Alexander: Hi, Paul. It's great to be here.
Paul Shapiro: It is awesome to be talking with you. Let me ask you, when you were a little kid, Kathleen, did you think you were going to grow up to make fat? Was that on your mind ever thinking, my profession is going to be making fat?
Kathleen Alexander: You know, the answer is absolutely no. It never once crossed my mind.
Paul Shapiro: Did you grow up loving science, though? Like you have a very prestigious scientific background, a PhD from MIT. Did you grow up thinking, I love the environment and I want to do something to help the environment, or were you more thinking I love science and then you later thought I want to use science to actually help the planet?
Kathleen Alexander: Oh, that is a great question. It's actually I grew up loving the environment and actually was not, not so drawn into science as a kid. I did a lot of theater, a lot of other things, and it really was later in life that I just fell in love with science.
Paul Shapiro: What happened? Was there somebody, did you see Bill Nye, the science guy?
Or were [00:01:00] you like, was there something that happened that made you fall in love with science? I think there's a lot of people who care about the animals or they care about the environment. But they don't think, Hey, I'm going to become a material scientist, right? They're like, Oh, I'm going to go work at a nonprofit organization or I'm going to go lobby for climate legislation or something.
But you're like, no, I'm going to go get a PhD in material science. Like what was the inspiration for you for that?
Kathleen Alexander: Yeah, absolutely. So I, I actually went to went to college a couple of different times to kind of take, take a running start at getting through that process. And the first time that I, that I went to college, it, what it was, I went to the University of San Francisco is about 16 years old.
And I I knew that I really wanted to work on sustainability and kind of finding new ways for us to live sustainably on this planet, but I had assumed it was going to be from the perspective of of kind of policy and advocacy that. The high school that I had gone to didn't have didn't [00:02:00] have much of a science and math program.
So I, when I finished college, I had the kind of furthest I'd gotten in math was actually to study like trigonometry. I hadn't really heard of physics. I thought maybe that was like something related to, you know, to your body. And But I started, so I, you know, I went to college and it was kind of this, this more arts college and and started learning more about, about science and math and realized that actually the way that I wanted to have impact was really on driving technology forward and about really marrying technology and sustainability and figuring out how we could use the technical advances that we have, you know, that we have made over the last hundred and certainly 50 and 10 years to, it.
To, to move ourselves into a more sustainable way of existing on this planet. And the only problem was that I didn't have the background to be able to get that kind of degree. So most of the time, right, if you're going to get a college degree in something technical, you really have to have [00:03:00] started on that work.
Like, you know, in middle school, maybe high school. And so actually I dropped out of college that first time and went back to community college and kind of started over with a lot of the stuff that you might, that, you know, all of the, all of the people at the best kind of science schools learned in high school and, and started kind of clawing my way through that material and learning.
And In the process, actually, that's sort of, again, it was sort of this kind of mission orientation that brought me to doing that, but in, in the process, like, as I started learning about all of the, you know, hundreds and hundreds and really thousands of years of human investigation of this little planet that we're on, that I really just became kind of more and more enamored of the Of what science is like at its core, right?
The, the, this tool that lets us really explore our curiosity as a species. Sorry, that was a wrong answer.
Paul Shapiro: [00:04:00] Yeah, I, I, I think about this a lot in terms of what we used to not know and what we think we now know as an example. And so for example, like a hundred years ago, we thought the Milky Way was the entirety of the universe, right?
And now, obviously, we know that Milky Way is an infinitesimally small part of the universe, and I wonder what other things that we believe today that 100 years from now they will laugh at us for having believed, right? Like, what did we think was just common knowledge that turned out to be, like, dramatically wrong?
But let's talk about why you're doing what you're doing, then, because you had this passion for sustainability. You wanted to investigate what's happening that we could actually use technology as a force for good in the world. Why did you think butter, right? Like a lot of people are going to think, Oh, I want to do something that can reduce our reliance on fossil fuels.
Maybe they want to do direct air capture or they want to do geothermal or nuclear. But you thought butter. Why? What, what, what's wrong with butter that you need to do something about it?
Kathleen Alexander: That is a great question as well. And it is, I would say, I [00:05:00] definitely started from the same place that you, that same arc that you that you just described there.
So after I, Kind of left community college and transferred to MIT and was pursuing a degree in material science. It was really from the perspective of they kind of teach, you know, sort of taught us or pitched us early on that if you care about sustainability all the hardest problems in sustainability are fundamentally materials problems.
And so I decided to study material science in order to figure out, you know, in order to, to work on. Pushing the materials we have available forward so that, you know, to, in order to meet our sustainability challenges and what that really Translates to in a lot of cases are like materials that can operate at higher temperatures or materials that are corrosion resistant And so I actually really worked all across this sort of climate and materials interfaces I worked on alternative fuels and alternative cements and alternative steels and new ways of making energy and new ways of storing energy And our food system was just not one of the things that was crossing my path [00:06:00] in, in the physical sciences.
And at this point, that's kind of the world I was fully steeped in. The closest that you really get to the food system, or at least that, that I felt like I did was in looking at. sustainable ways of making fertilizer. Because that's sort of right, like a big industrial chemical process. And that kind of is the closest is one of the closest ways that, that the food system gets to the physical sciences.
And a number of years ago, after kind of arcing through all of these kind of different corners of technology and sustainability, I was I had been working on a project for a number of years that. One of the, was one of these kind of technologies that Is is more of like a science question, like something that has a very low cha, very low probability of working.
But but if it works, you're gonna change the world with it. And so I had kind of worked in this like very deep tech kind of hail Mary space for a couple of years and was ready to step back from that. We had really proven out that that technology was not gonna work and not save the world. And at that point I [00:07:00] really wanted to find.
Something that I wanted the next thing that I worked on to be very high leverage to and to have a very high chance of actually working. And so I did just kind of a top down search across all of these different areas I'd worked on before. I looked really deeply at hydrogen and batteries and fuels and cements and And actually in this process for the first time with one of my co founders, Ian McKay started taking a look at the food system, both from the perspective of impact and from the perspective, so that kind of the, the leverage of the size of the opportunity from an impact perspective, and from the perspective of technology and technology.
From both of those things, really found the food system to be this very compelling space that I just had not explored at all before. And so what I mean by that when I was saying what I mean by saying having very high leverage what I'm talking about there, what we can do. Poop. What we were kind of digging through and [00:08:00] uncovering was really this kind of full accounting of what is the impact of global agriculture on, on climate and our environmental footprint on this planet.
And if you look at kind of how we're using the Earth's resources. It's about half of the habitable land on the planet right now that we have converted for use in agriculture. And it's, you know, about, you know, 20 to 30 percent of all of our emissions can be attributed to agriculture, over 70 percent of our freshwater withdrawals and obviously also huge impact on things like biodiversity.
And so the opportunity space for Agriculture as a lever and in how we're, how we can make progress and climate and sustainability actually really came, you know, landed with me at this point. This is in 2020 or so and prior to that, I would say most of my kind of interfacing with thinking about agriculture and sustainability with less interfacing with sustainability and more [00:09:00] Topics like animal cruelty and, and, and kind of the, how the human race, you know, exists ethically on this planet.
And so, so we felt like we identified agriculture as this huge climate opportunity. And in parallel to that also, I think for the first time started looking at agriculture as a huge technology opportunity. And so what I'm, what I'm thinking of there is like. If we look at how transportation has transformed over the last hundred years, right, from, you know, things like walking in bicycles to, to, to cars and planes and rocket ships now, if we look at how communication has transformed where, you know, a hundred years ago, We are, you know, still writing letters and, and, and communicating and, and telegraphs.
And now, now we have GP GPS and and telecommunications. And similarly, you know, with healthcare, just all across the [00:10:00] economy, we have seen. these incredible transformations. And if you look at agriculture you actually just see, for me, that is kind of the truest manifestation of us making a faster horse of like essentially giving a horse more and more steroids over the years.
And that, that really. That kind of combined technical opportunity and sustainability load like really just blew open agriculture for me as a space that I could, that I potentially would want to pursue professionally. And so again, not having worked in this space previously, besides taking a hard look at things like the Haber Brosch process and fertilizers.
I, my again, my, my co founder Ian McKay and I actually. Started again from this kind of premise of, okay, well, what if What if you wanted to feed our species? We have quite a few people on the planet these days that, that we need to produce food for. What if you wanted to feed that [00:11:00] population in a, on a much smaller footprint, how could you do it?
And so we started by just kind of really looking at the, the building blocks of, of what is food, what is food made of. you know, at the at the molecular level, like food, food is molecules, food is carbohydrates, it's proteins, it's fats. And those are, you know, mostly made up of carbon, hydrogen and oxygen.
I've done a lot of different chemistries with carbon and hydrogen and oxygen before. What if you could, you know, how, how could you take what we know about? You know, building up molecules for all of the other things that we make and use on the planet. And what if we looked at food through that same lens?
And so that actually took us to kind of drawing this big map of, of, you know, all the different ways that we could build up those molecules. We actually wrote a paper that's in like an academic paper with some partners. It's in nature sustainability. It's called food without agriculture. And we really kind of mapped out.
All of the ways that we could [00:12:00] imagine building up those molecules without requiring photosynthesis as one of the steps, either in the feed, so no, no photosynthesis in the feedstocks and no photosynthesis on the, on the way to the, the products and and in, on that journey one of the things that, that sort of emerged was that there was a particular route that we could draw out where for building up fat molecules that actually just had incredibly high technical readiness and high potential for impact because, you know, at this point we had done this kind of whole analysis of what is the impact of fat production versus, you know, protein production versus carbohydrate production.
And, Yeah. That kind of realization. Again, I had been specifically looking for opportunities that had both high potential for impact and high possibility, high opportunity for actually working. And that through that kind of whole journey, this. Concept that now is this company saver. It had kind of [00:13:00] emerged.
So it was very Yeah, kind of empirically Developed process.
Paul Shapiro: So Kathleen a lot of folks who look at this they look at the fact set that you just laid out right that agriculture takes a huge footprint and very large portion of that footprint comes from animal agriculture and if they then take the step that you are So I think you're saying that you want to start your own company to invent a new technology here.
They're thinking about replacing meat, right? There's hundreds of these meat replacement companies that are out there and they don't necessarily come to think, Oh, I want to replace fat. Right. That's just not on the agenda for most people. So. Just briefly explain why is fat important? And then let's get into what your technology is.
Kathleen Alexander: That sounds great. I would say I. I am like from that same camp as well, I too, I would say when we were first looking at this was not inherently like, of course, fat is the [00:14:00] thing that we're going to replace and at the actually in at the time when we were kind of first doing this analysis and in 2020 or so, we really were at kind of an inflection point in terms of the number of people that and companies that were emerging that were looking at new ways of making protein and especially decarbonizing animal agriculture.
And one of the things that actually That emerged in the course of our, our, our analysis of the space is that for specifically for fats if you amortize the carbon footprint associated with the cow, the fat calories that we produce in our food system across the, the different sources of those, so you've got palm oil, you've got soy oil, and then you've got, you know, fat from beef fat from other ruminants from chickens and pigs. And if you amortize that, you find that actually it's it's not quite half of the, the carbon footprint associated with fat production that you [00:15:00] can attribute to specifically to animal agriculture. So it's, it's a little bit nuanced, but actually, but this was something that was really important to us in looking at this Yeah.
Paul Shapiro: Yeah. So I guess what I'm really getting at is Not what the impact of fat environmentally is, but what's the impact from a sensory perspective, right? So if you're thinking about if you know, you have all these companies that have made plant based meats, right? It's Gardein and possible foods beyond meat Morningstar farms, etc Right and they're selling these products designed to try to reduce humanity's agricultural footprint on the planet your argument I'm guessing is that the missing key factor for them is that they need a better fat, right?
And so what's wrong with the fat that they use and why do you need something better?
Kathleen Alexander: Yeah, it is both that we think that those products could perform better if they have a better fat and that just decarbonizing animal agriculture [00:16:00] does not fully move the needle. So right now, a lot of the, the The majority of the fats and oils that are used in these alternative meat products that are on the shelves today are tropical oils.
And so those have this kind of combined issue of. Both not meeting the sensory performance that you would want, that is going to give you the mouthfeel and the kind of flavor carrying that you normally would experience from an animal product. Fat is a really key part of that, as I know you know well, is a really key part of that experience of eating animal meats.
And so A new approach that can meet the sensory behavior of animal fats is key to those products meeting the performance requirements that we think that they need to hit in order for adoption to, you know, to, to increase and yeah, go for it.
Paul Shapiro: So what are those performance metrics, right? So if you think about why does a company like [00:17:00] impossible foods use coconut oil in their burger?
The reason is. Beef has a lot of saturated fat and they want to make it taste like beef. So they want a saturated fat and that's why they use a coconut oil, right? As you mentioned, these tropical oils there's not enough coconut trees on the planet though, in order to supply that much coconut oil. If they were to make a meaningful dent in the supply of beef right now, of course, plant based meat is less than 1 percent of the total volume of animal based meat.
But if you were to see it rise to, you know, 50 or 75 or a hundred percent displacement. There's not enough coconut trees on the planet to satiate that demand for coconut oil, right? And Absolutely. You could switch to oils like palm oil, which are far more productive than coconut oil. There's other problems associated with palm.
But why are those saturated fats not good enough? Is the fat that you're making saturated? And is it something somehow categorically different from the saturated fats that you can get from plant oils today?
Kathleen Alexander: Yes. So. Beef tallow is a mixture of saturated and unsaturated fatty [00:18:00] acids, and, but that have a kind of distribution of chain length, so the thing, so one of the things that's key to the sensory performance, so often for sensory performance for fats, we're really talking about mouth feel and melting behavior, is that this concept that's called the fatty acid profile and so a fat or it's fundamentally a molecule called a triglyceride That has that is made up of a glycerol molecule and with three different fatty acids on it These are fatty acids are can take different lengths and have kind of a different number of carbon, carbon atoms in them, and then also have, as you already alluded to, different amounts of saturation in them, or unsaturation really.
So in the case of coconut oil, you have this fat that is fully saturated, but the typical chain length in coconut oil is about 12 carbons long. Whereas with beef tallow, even though you have about You know, half of the, the fatty acids and beef tallow are unsaturated. The saturated ones tend to be about 18 carbons long.
So [00:19:00] these like heavier chain lengths is give you a melting profile that is shifted to higher temperatures. And so the melting behavior of these fats kind of lasts longer in your mouth. It, it is kind of this more complex melting profile where it, it melts both at higher temperature and over this longer range, where something like coconut oil melts.
kind of very rapidly. And so the fats that we can make actually can span that whole melting profile that you would get from a beef tallow. And we actually, we can talk a little bit about the technology specifically that, that we're scaling, but one of the key value adds that what we're doing brings to the table is that we have incredible tunability over that performance.
of the fats and oils that we're making. So I can make you a beef, a, a beef tallow equivalent that will melt like a the tallow from a cow that has been fed corn. Or I can even make you one that melts like [00:20:00] the tallow from a cow that has been fed, that has been grass fed. So like, just really tiny differentiations in that fatty acid profile can give you sensory performance differences.
Paul Shapiro: So just so I understand, as a layperson here, you're saying the number of carbon atoms in that chain controls the melting point and basically the mouthfeel and that I could tell a difference if I blind taste tested 18 carbons in a row and 12 carbons in a row, meaning beef tallow versus coconut oil here.
That's your that's your claim, right?
Kathleen Alexander: Exactly. And it's more than, and it's, it's the combination of, so coconut oil is a little bit unique and then it has, it's very homogeneous. It has almost just pretty much just one chain length of carbon sitting in there as the majority. Beef tallow is much more complex.
There is a lot of C18, there's some C12, some C14, there's some odd chains. So that complexity combined with it being weighted more heavily is what is really what you're experiencing. If we just gave you a fatty, a fat made of, of stearic acid, that, [00:21:00] that fatty acid with 18 carbons in it that would not be a very pleasurable experience for you.
It'd be kind of like very hard,
Paul Shapiro: waxy. And, and is it the case, out of curiosity, you're saying that you can tell the difference between fat from a grass fed versus a corn fed cow? Is that a matter of how many carbon atoms there are in that chain, or is it some other factor?
Kathleen Alexander: Exactly. So a cow that is fed grass it's the, like, microbial content in its stomach is a little bit different.
And then the set of fatty acids that it then produces and stores as fat have a slightly different profile. And those actually typically wind up with, there's a couple of different differences, but one of them from a textural perspective is it tends to give you a slightly waxier Longer melting what in this case wax you're in a good way.
Kind of longer melting profile
Paul Shapiro: Yeah, I don't know if waxy is what I'm going for most of the time, but I do appreciate it So, but let me food scientist
Kathleen Alexander: words
Paul Shapiro: so Let me describe your process to you in the way that I would try to describe it to a lay person like myself [00:22:00] And tell me when I get this wrong.
Okay, so you're using A fat that is made from a thermochemical process. Right? So you're not using precision fermentation, you're not growing animal cells, you're running a chemistry process, right? Not a biological process. You're running a chemical process that involves extracting CO2 from the air and hydrogen and then heating them to form fatty acids, which are then processed into fats.
Is that an accurate way of describing it?
Kathleen Alexander: That is accurate. Okay. I would, yeah, there are. CO2 and hydrogen are some of the sources of carbon, hydrogen, and oxygen that you could use in our process. We're actually somewhat agnostic to where those come from, so there's certainly like more, more layers we could put on that description, but if you just want to totally distill it down, I think that was a, that was definitely a fair description.
Paul Shapiro: Okay, so this is pretty revolutionary though, because if you think about these other There are other types of ways that companies are trying to [00:23:00] produce fat, right? So, either they're trying to modify you know, plant oils, or they're trying to grow animal cells, like animal fat cells in bioreactors. They have a feedstock, right?
They have agricultural inputs. You don't have agricultural inputs, right? You're essentially making fat from thin air, essentially, right? So, what is the cost for you? Just the energy to run the process? If you don't have to purchase your carbon source, like they have to buy, you know, corn, corn glucose or something like that.
What is your actual, is it, is it merely energy? Is that the cost that goes into your product?
Kathleen Alexander: You can think of it like that. It is still, you, you still have to accumulate your, your feedstock. So if you're going to take CO2 as the feedstock, right, if you, CO2 has a price right. It's actually, you know, it's sold right now, used for a bunch of, in a bunch of different industries.
Hydrogen again, also has a price. Both of those are very closely mapped to the price of energy. So at the, for us in kind of our purest, distillation of our, our process, [00:24:00] often what we like to think about is that we are kind of in the most efficient way that we know how, taking energy, so electrons or heat or, you know, any source of energy and turning it into bioavailable energy.
So energy your body can use. And so that's, yeah, I think the cost of energy is a, is a way to think of the feedstock for our process.
Paul Shapiro: Okay. Cool. Yeah. And so you, you mentioned the Haber Bosch process earlier for those not familiar, it's, it's basically taking nitrogen that is in the air, which is very abundant, but not usable by plants or by our bodies and making it into available, like fixed nitrogen that we can actually use to grow things.
And there's a stellar book on the topic called the alchemy of air, which I highly recommend if you haven't read it it doesn't sound interesting, like a book about the history of nitrogen fixation, but I can tell you it is absolutely riveting and you will love it if you read it. Have you read Alchemy of Air, by the way?
Kathleen Alexander: I was just, riveting was the word I would have used as well. We actually read it in our, in our book club at work. So it is, [00:25:00] it was one of our favorites.
Paul Shapiro: Yeah, I would, I would go so far as to say it was one of the best books on any topic that I've ever read. Like that's how far I would go about that book, despite it sounding so boring.
It sounds like, oh yeah, it's about how we fix nitrogen, but I'll tell you it's, it's excellent. So we'll include show notes for that in the, for the, we'll include a link to that in the show notes of this episode of Business for Good. Podcast. com. Let's get more on to the company though, because you guys have raised over 30 million.
Obviously there are a lot of investors who are backing you guys and believe in what you're doing. It's not just a science experiment. You've got everybody from Bill Gates to synthesis capital who are all betting on your success. So you're making this fat. Almost out of thin air, right? You're buying CO2 and hydrogen and converting it into the fat.
I've tried your butter. It was quite good. I really enjoyed it. But you don't have regulatory approval, right? This is still a novel ingredient. So what will it take for you guys to get this actually approved? And once you do get it approved, how much could you actually produce? Is this still at lab scale?
Do you have like [00:26:00] a demonstration scale facility? Where are you at in terms of your scaling process?
Kathleen Alexander: Those are great questions and maybe some fun updates for you about where we are at on that in that process. We, we actually achieved our first regulatory milestone in November of 2024. We achieved what is called self affirmed grass status.
And so with that, we actually do have the regulatory approval to sell our products within the US.
Paul Shapiro: Sorry to interrupt you. I just want to make sure for those who aren't initiated. So grass stands generally recognized as safe, which is an FDA term. And the FDA does not require its own stamp of approval.
You, as you said, it can be self affirmed grass. Like you've done the studies that you have proved that it is safe to consume. There is an extra step you can go through to get the FDA to also agree with your assessment. But to legally be able to sell, you have to self affirm as grass. So you guys can legally sell your product now.
But I presume you don't have enough of it to [00:27:00] sell. So what's, what's going on in that step?
Kathleen Alexander: Exactly. And we, we are also intending to, to notify the FDA. We have, we met with them multiple times throughout working towards our self affirmed grass status and, and, and completing our dossier with our expert panel.
So we we are absolutely going to be notifying the FDA as well. We. You're absolutely correct that the next kind of big hurdle for us is all about production. In June of last year, so June of 2024, we actually acquired a I like to call it a historic fats and oils processing facility. So it's not, not shiny and new, maybe like a lot of a lot of facilities that you see from some of these new food companies.
But this, this facility was operated by some partners of ours and we were. Kind of had the opportunity to, to purchase the facility and wind up, wound up acquiring it. We, over the kind of back half of 2024 were commissioning that process, that, that facility from [00:28:00] being so it had been a, like I said, fats and oils processing facility, so this is where you kind of, one of the things that they actually had, had majorly done was kind of processing of fish oils.
And so we needed to take that capability and add on the capability to first produce the fats. So make the fats and then process them, right? That's kind of this very novel thing that we need to, we need to make them totally from scratch. And so, yeah.
Paul Shapiro: And what's the equipment that you need? So, you know, most people who, who might be familiar with this space would say, Oh, you know, I know these companies need.
bioreactors, or they need some, you know, separation technology to separate the protein out of a bean. But you don't need that stuff. So what do you need? Like, what is the actual equipment that is needed for the SABR process?
Kathleen Alexander: Yeah, the equipment actually is not so different maybe than what you would see for a bioprocessor for really any industrial process.
You have some steps that, you know, where you're heating and stirring things. So you need some tanks. In our case, we wind up loading them with a slightly higher kind of capacity factor than you would for [00:29:00] like a fermentation process because we don't, it's not an aqueous, it's not a water based process. And so for those of you that are kind of familiar with fermentation, you sometimes need like a really big tank to make.
A small amount of material, whereas in our case, the size of the tank is about the amount of material that you're working with. And so, that facility already had a lot of large tanks in it, as well as some big equipment that is called, like, fractional distillation equipment. That's what we use to, again, that's kind of like key for processing fats and oils.
Fats and oils are a little bit sensitive, you don't want them to oxidize, you don't want them to break down, and so you need to operate, you need to process them, kind of under special high vacuum conditions. And so that facility was kind of a great opportunity for us because it had a lot of that equipment already.
And so we have had been, we had to retrofit some of those big tanks to be able to, you know, put in the right amount of air, have the right storing conditions for our process. So that's a lot of what we were doing over last year. And then we were yeah, [00:30:00] and then So we are just now kind of getting up to the first phase of production from that facility.
So we with the equipment that kind of was already there, we were able to get up to a capacity that's about like one ton per year of production, which is, which is not very much. It's tiny. And then, you know, We had to bring in some additional equipment to that will in the second phase, get us to about five times a year of capacity there.
Paul Shapiro: And then is this, is this a pure fat or finished product, like one ton of pure fat or one ton of finished product?
Kathleen Alexander: So of fats. For us, a lot of what we're making right now is butter. And we talked a little bit about, about that and can go into more detail about like why we're, why butter is the thing we're talking about the most right now, given that we can make tallow and we can make a palm oil and we can make all these other things.
Butter is about 80 percent fat though. So so if I make, you know 800 tons of you know, or 800 kilograms or whatever it is of a, of a triglyceride or of a fat, then I get [00:31:00] about one ton of butter from that. And so that was on the fat basis.
Paul Shapiro: And is your goal to have a Savor branded CPG butter brand, or is your goal to sell your Savor fat to like a a plant based brand that is making, you know, using plant based oils today, but could use Savor oils?
Kathleen Alexander: In the long run. We believe that the fastest path to the highest impact on scale is through business to business partnerships. So being a fat ingredient supplier to the large CPG companies and brands that already have You know, well recognized and loved products and enormous distribution net networks on the way.
So we have been building relationships with companies, you know, all across the, the existing kind of large brand space for years. And those are core to our commercial strategy. But we also think it's really important for us to share what we're doing, share the. [00:32:00] opportunity, both in terms of just the actual kind of deliciousness and performance of the products with people directly as part knowing that integration into a large brand is just a very long journey.
And for a startup you need to have kind of other, other milestones along, along your commercial path. And so the butter that we're bringing to market this spring actually is Is likely not going to, you're not going to see it like on shelves at the store but will be, you know, is a saver specific finished product and butter where we're bringing that to, you know, bakeries and high end restaurants and a number of places like that, where you, you can try our finished product.
Paul Shapiro: Cool. And just to be clear, we're recording this in, in mid March of 2025. So when you say it's coming this spring, you mean within weeks or months, this will be in some restaurants and bakeries.
Kathleen Alexander: Exactly.
Paul Shapiro: Yeah, cool. How exciting. I can't wait to try it myself. That sounds really cool So what's the economics looking like for you Kathleen like compared to regular [00:33:00] butter?
Are you the same price twice as expensive three times as expensive half the price? Where are you coming in? I know you're only going to have a pilot plant. You're not going to be scaled But the bakery that's going to buy your butter could buy conventional butter, but instead they're going to buy yours So what are they paying?
Kathleen Alexander: We are actually pricing our butter at about the same price as the butter that those those customers are currently buying at the pilot scale. We don't produce it cost competitively, but we think it's important for those business partnerships for these small volumes that we're making to be able to to compete in the market.
You know, when we talk about why it is that we're making that we're, you know, are scaling this approach, that we're making food in this way. We talked about sustainability as the motivator for kind of looking for new ways of making food. The reason that we specifically came to this approach, it wasn't that we were like, you know, shouldn't, shouldn't food be made with, you know, with this, a chemical process like this.
It [00:34:00] was. The, the real question that was guiding us was, is there any way that with a small footprint again without without needing kind of the, the levels of consumption that kind of resource consumption that you need for agriculture, that we could. Build a technology that could compete on price with 1 per kilogram palm oil at world scale.
So that was the guiding question, and that is what is true about this technology, that at that, that at world scale, this is the only approach that we know of that can compete on cost with those commodity fats and oils. Butter happens to be a little bit more expensive than palm oil and soy. Its commodity price is closer to 5 per kilogram.
So our first commercial facility, which we've been in design on, for some time and as part of kind of our next fundraise to work towards that first commercial facility That facility is designed around competing directly on price with butter
Paul Shapiro: Okay, so you'll be selling at a loss at first or once you have a commercial scale [00:35:00] facility You'll be competing on cost with butter.
What will it cost to make that facility? We know that there are astronomical capex costs associated with the cultivated meat companies, right? Like these companies are looking to raise somehow hundreds of millions, if not billions of dollars to build their commercial scale factories. I'm presuming it's a lot less for you, but what will it take?
You're going to go out and fundraise. What's the pitch? How much do you need to do it?
Kathleen Alexander: Yeah. So for a first commercial facility, it is, again, this is kind of a technology that is most powerful at scale. And so the sort of smallest capital build where you could potentially hit positive gross margins. Is on the order of kind of 100 million or a little bit less.
Now it's kind of 50 to 100 million because we can actually leverage our facility in Illinois for doing some of the steps. You don't necessarily for that first project have to build everything, but that actually that price point that 50 to 100 million is actually a little bit uncomfortable [00:36:00] for existing, just kind of existing economic Environment.
It's not a great size for project finance, and it's not a great size for venture capital. And so we're actually targeting a larger first commercial facility that is higher capital because that fits better with the project financing ecosystem. So we still are sort of targeting this sort of couple hundred million dollar first commercial facility.
We just aren't trying to build that with equity dollars. And so our equity fundraise is really about it. Getting all of the partnerships that we need across the line to, to fully finance that that commercial
Paul Shapiro: facility. So, perhaps a combination of equity and debt and maybe some non dilutive grants grants or perhaps something.
Okay. Cool. Exactly. Great. Well, I'm wishing you luck in that. Fundraise Kathleen it's a terrible time to be fundraising and food tech. VC capital was down across the board, but it's especially down for food tech and alternative alternatives to animal products are especially taking a beating right now in the VC [00:37:00] market.
Some people project that 2025 will be a better year for this. I hope that's true. But we know what's happened to plant based meat, right? So beyond meat has lost over 95 percent of its share values from its high, the plant based meat companies are. doing layoffs, consolidating doing like pseudo mergers where there's not really any money traded hands.
But there's bankruptcies, company closures. Like it's pretty weak time in plant based meat in plant based milk. Oatly has also lost a tremendous amount of its share value. We're seeing some of the plant based dairy companies struggling to what's it like for fat? Right. Are you seeing some renewed interest from VCs or are you in the same boat as the other animal product alternative categories?
Kathleen Alexander: We do sit in a slightly adjacent spot, I would say, to the folks that are kind of squarely in the alternative meat sector and in, and strictly in food. And there are a couple of reasons for that. One is that we do have this kind of [00:38:00] interesting integration. With the energy sector and with the folks that have invested in CO2 capture and green hydrogen and some of these other some of these other technologies that are going to be really important for overall kind of for meeting our broader economic climate goals.
And so as a, as a result of us being a player in that ecosystem, we actually just have a different set of potential capital partners than, than companies that are strictly in the food space. Now that, that said, we still play in those same markets, but it is a, it's a slightly different proposition from just a fundraising perspective.
And then additionally, on the downstream side it is certainly true that we have, we have already made and are excited about the, for example, beef tallow alternatives and other animal fats that we can make We are not seeing those markets as being kind of our most important near term markets because of the, the speed in which the kind of penetration in those [00:39:00] markets has progressed over the last few years.
So us being able to focus on some, both You know, both the tropical oils like cocoa butter and and of course, kind of the special, there's some very kind of high end and specialty cuts of palm oil that we happen to kind of be well positioned to be able to make. And then additionally, you know, all of Oleo chemicals is enormous space.
And so really making sure that we're capturing the value across. All of the different parts of the, this kind of very heterogeneous fatty acid distribution that we produce is part is a really important part of the strategy over the next few years. And that is something that we, that we have just in real time, you know, been shifting, I would say, you know, in 2022, when we were spinning out of our, out of an incubator and really founding saver The, you know, tallow alternative was our assumed go to market at the time.
And that's just something that has, has had to evolve. Even though we still from a mission perspective, think that we play an incredibly important role in that ecosystem and would [00:40:00] like to be part of helping make those products better.
Paul Shapiro: Nice. What was the incubator that you all started out in 2022?
Kathleen Alexander: Yeah, it's it's called Orca Sciences it's a, it's kind of a smaller incubator that lives, it it lives with inside Gates Ventures.
Paul Shapiro: Oh, cool. Well, the, yeah, the reason I ask is because I want to make sure that people who are thinking, Hey, I really love what Kathleen is doing, and I want to do something that might also be in the same vein. Check out Orca Sciences. It might be a way to to kickstart your own company. So we'll include a link in the show notes for this episode at businessforgoodpodcast.
com to Orca Sciences as well. But let me ask you, Kathleen, if somebody is thinking about something that they want to do and they're thinking, wow, I'm so impressed that this person has what she's done with her life. I want to do something that'll help the world also, but I don't know what I should do.
What's the problem that you hope they'll take on? I presume you don't encourage them to go make a new butter company, but what do you hope that somebody listening might do to start their own company that could do some [00:41:00] good in the world?
Kathleen Alexander: The, the The specific answer that I have to that is I am still obsessed with the idea of of nanobots.
I can't wait until we have, like, little robots flying around doing all kinds of work for us. Nobody cares about this idea but me. But that's my, like, pet thing whenever I'm talking to somebody that I'm like, Why don't you, can't you just make some nanobots for us to, you know, to go do a bunch of work?
But the The actual answer is
Paul Shapiro: that sorry, before the actual answer, what are the nanobots? What work? I mean, they're not folding your laundry, right? There'd be like, you know, curing your cancer, like what is a nanobot going to do for work for you?
Kathleen Alexander: This goes back to actually one of my kind of first passions and something I still care deeply about actually is is Is that, is about like landfills and, and overall like material cycles.
And so I, early on, I wanted I wanted us to have kind of little ant, [00:42:00] ant like bots that were going into, you know, our landfills and mining them for all kinds of things. I think my thinking on that like from a, you know, from a scientific perspective has evolved a lot since I, you know, first conceived of this when I was 12, but I still like the vision that I love.
Paul Shapiro: So by nanobot, you mean like small robots, but not literally nano? No, yeah, totally
Kathleen Alexander: lazy. Yeah, lazy reflection of
Paul Shapiro: them. Yeah, I think there are like little Fly like drones that you can that like the military uses for spying missions. Yeah, it's like a fly, but it's a video camera Yeah, I think in practice
Kathleen Alexander: it's horrifying and like maybe not the world we want to live in But
Paul Shapiro: I guess I guess it depends on whose hands it's in but what's the real answer So if it's not if it's not, robotic ants, what is what's the company that somebody should be doing Kathleen?
Kathleen Alexander: And I mean, the real answer I was going to say is actually just that you have to find something that you're passionate about, like this thing, whatever it is that you're going to build is going [00:43:00] to keep you up at night, it's going to take all of your spare cycles, all of your, you know, all of your time that you were going to spend with your family and friends and used to take care of your health.
So it better be something that you just can't stop thinking about. But I, yeah, it's kind of a totally useless answer
Paul Shapiro: as well. Yeah. I mean, it's at least a good warning. It reminds me of the line from from Ben Horowitz from Andreessen Horowitz, the venture capital fund, where he says that when you start your own company, you will sleep like a baby because you're going to wake up every two hours and cry.
And I always, I always think, yeah, yeah, that's probably pretty accurate. Okay. So what resources Kathleen have been useful for you, either in your scientific journey or your entrepreneurial journey that you would recommend for somebody else to check out? The,
Kathleen Alexander: when I was thinking about this actually the book alchemy of air was something that came to mind. It's just, and I think of that as being in just this category of Of, of books that are just so inspiring in terms [00:44:00] of human innovation and our ability to, you know, really solve problems on timescales that often, you know, where we, we just don't have that many examples, but we have done it again and again.
And, and so I think of Alchemy of Errors being one of the books that lands for me in that category. Another one, actually, that we read for our book club that I like to point people to, especially if they're thinking about developing a mental framework from which they want to, right, like, figure out what they're gonna do, what they want to do next, or how to, how to have an impact, actually, is Hannah Ritchie's book, Not the End of the World.
I just, she takes such a It's such a pragmatic view that, you know, that cuts through all of the kind of politicized and cultural priors about what is, you know, what, where, what moves the needle and what doesn't, and I think that is If you're going to, if you're somebody that [00:45:00] cares about impact, really setting your prior straight about where you're going to, you know, what is going to move the needle is so important.
And then the one other one that is not going to resonate with everyone. But that I'm going to say anyway is there's a, there's a book called long life, honey in the heart. And it's by a guy named Martin Pretzel. And it's a, and who, you know, spent years like as a, in a Mayan community in Guatemala in the mountains.
And it kind of goes through a lot of like, what does it mean? To what does it mean to live on the, to be a human and to live on this planet and in ways that that I found very powerful and that, so those are various, very varied things that I would recommend.
Paul Shapiro: Cool. As, as somebody who actually was recently in Guatemala, I look forward to reading that.
It sounds it sounds up my alley, but I can also endorse Hannah Richie's book, Now at the End of the World, which was a smash hit. Stellar stellar book. I especially liked it because it affirmed my beliefs and you know It's always [00:46:00] good to like read something that makes you feel stronger in the beliefs that you have but if you if you think that that buying organic agriculture is better for the planet just know that it is not and that you should read this book among others to figure to figure that out.
So I look forward to checking that out. And more importantly, Kathleen, I look forward to getting to buy it at a restaurant or at a bakery, something that's going to have the savor butter on it. It'll be a fun experience. I can't wait. And I wish you the best of success, raising money to build that commercial scale factory as well.
Kathleen Alexander: Well, thank you so much. This was super fun.