business for good podcast episode 57 - irina gerry

From Corporate Giant to Pre-Revenue Startup: Irina Gerry’s Journey to Alt-Dairy Newcomer Change Foods

Irina Gerry: [00:00:00] Instead of growing, whether it's animals to produce certain proteins or creating products that resemble their analogs through plant-based, now you actually have the ability to. Instruct microorganisms to produce the compounds that you want to create products that are bioidentical to their traditionally farmed animal product.

Paul Shapiro: Welcome to The Business for Good podcast to show where we spotlight companies making money by making the world a better place. I'm your host, Paul Shapiro, and if you share a passion for using commerce to solve many of the world's most pressing problems, then this is the show for you. Hello friends, and welcome to episode 57 of The Business for Good Podcast, and what an interesting story it is.

I always love stories about people's lives taking major and totally unpredicted turns. It's a good reminder that no matter how in control we think we are, fate typically [00:01:00] has different plans for us than we've charted for ourselves. Or to quote the old adage, humans, And God laughs. Irena Jerry fits that bill.

She has led a pretty remarkable life, starting out being raised in communist Russia, but with fate helping to defy the odds leading Irena to come to the United States and attend Harvard Business School. Eventually bringing her to work at some of the biggest symbols of capitalism on the planet like Proctor and Gamble.

But soon, Irena was in the dairy industry working at Milk, behemoth, Danon, or sometimes noon as danon in the United States managing their plant-based brands, silk and so delicious. But after years spending time advancing alt dairy within the walls of one of the biggest dairy companies on earth. Fate struck again in Irena's life and after a chance virtual meeting on LinkedIn, during the pandemic with the c e O of a brand new pre-revenue, animal free dairy startup, Irena decided to leave the comfort and safety of a good job at a major company to try her hand at entrepreneurship.

So she left NM to become the Chief marketing [00:02:00] Officer at Change Foods. A company started by Australian plant-based entrepreneur, David Buka, that's using microbes to brew real dairy proteins without the use of a single cow. So far, they've raised nearly a million dollars and are seeking an additional 5 million in 2021.

Change Foods is already brought on other heavy hitters from major food brands, and their first product they claim will be a cheese that melts and performs just like conventional cheese. In this episode, we discuss Irena's journey from corporate Goliath to startup. Just what makes change foods different from other precision fermentation startups and what Irena thinks are some examples of great in frankly not so great marketing in the plant-based space.

We also get into why plant-based milk has become so much more successful than plant-based meat, or at least so far. And that vex in question is real dairy brewed from microbes, vegan or not? After all, it's real dairy protein, so if you're allergic to cow's milk, you'll be allergic to this, but no animals were used.

So how should marketers describe this kind of food? I had a great time [00:03:00] talking with Irena, and I'm sure you'll enjoy hearing her thoughts too. And no matter what, after listening to her, you'll likely start looking at LinkedIn a little more too. Irena, welcome to the Business for Good Podcast. Thank you.

Glad to be here. It is great to talk with you. You know, you have led a life Irina that is way more interesting than what most people will read cuz you have led a life that is at least seeming to me from the outside to be full of contrast, right? Like you start out growing up in the Soviet Union in a communist country, and then somehow you wind up at Harvard Business School working and then later working at big companies like Proctor and Gamble,

Uh, now, now you know, you're going from a major dairy company to a relatively tiny pre-revenue alternative dairy startup. So why do you have this life of contrast?

Irina Gerry: I do. I do. You know, I think part of it is that, I view life as an adventure. And, and for me, you know, a lot of the times, especially, you know, in job interviews, people ask you what's your tenure plan?

And my view has always been, I don't have one, [00:04:00] nor do I want to have one, because to me that's boring. Um, I think life takes you places that you couldn't have imagined. And, you know, my life certainly is an example of that. And imagine if I'd plotted my whole life when I, you know, back, back in high school when I still was in Russia.

Uh, it would've been a, a very, you know, different story from what I've lived now. And I think my willingness to consider the possibilities and just having the guts. Take a jump sometimes into the unknown, I think has led me to amazing adventures.

Paul Shapiro: Well, what did lead you to take that jump? So, you know, most of your high school classmates growing up in a communist country, probably never dreamt of, you know, coming to the US to go to business school.

So why did you do it right?

Irina Gerry: Well, so right out of high school, I, you know, I, as you said, I, I grew up in this, um, science town actually in about two hours north of Moscow. And most of my classmates were applying to colleges and universities in Moscow. And, and so [00:05:00] was I, but the conversation, um, my mother had this conversation with a friend of hers and, um, found out about this series of, uh, schools called United World Colleges.

There's probably a 10, 10 to 12 of them in the world. They're spread out globally, and the idea of them is, is they collect, um, you know, kids from essentially all over the world, all these different countries, and put them inside of these. United World Colleges where you do an international baccalaureate degree, but you also kind of have a big community service program.

And the bigger focus is bringing this international education awareness and experience to all these, uh, you know, teenagers essentially from, from all over the world. And then they go on to different paths in life and carry with some those experiences. And so when I heard about that, I just had to apply.

I thought, oh my God, what a possibility to open up your horizons and to discover cultures and, you know, [00:06:00] people from, from all over the world. So, you know, when I went there, I, I had four roommates and it was me. There was a girl from Japan, a girl from Sweden, and a girl from South Africa, um, sharing a room.

And you can imagine the amount of just cultural experience that that brought and how it broadened my horizons and honestly just blew my whole world open to the possibility. So that kind of got my bug going. Um, so I spent two years in Wales, and then from there, again, it just changes your perspective of what's possible.

Um, and so then I, I, I looked at colleges and universities kind of globally and, and landed, um, in the US at McAllister College, which is a small liberal arts school in Minneapolis, uh, Minnesota. So I've kinda hit cold places. Um, and then from there, you know, just the story kind of went on. I, I worked at a consulting company, uh, Deloitte Consulting Global Global Consultancy.

Um, had a very classic management consulting training, traveled around the United States, got [00:07:00] to see lots of different companies from very kinda high level strategic view. Um, and then that led me to want to continue on the general management career path. And that's what led me to Harvard Business School.

Um, and again, it's, to me it's all about open-mindedness and, and being willing to, Step outta your comfort zone and just to see what's out

Paul Shapiro: there. So speaking of stepping out of your comfort zone, Irena, I want to ask you about your time, uh, working at Danone. Obviously this is one of the biggest dairy companies, but you were managing brands for them that were plant-based, like Silk and WhiteWave.

And first of all, let me just offer you my personal thanks, since I have done more than my fair share to keep silk in business under Oh, that's fantastic. under numerous ownership, actually. Cause I've been drinking silk for, for decades. I remember back in the nineties when I first saw the first silk truck, like a truck that has uhhuh, the Uhhuh, the, the ads on the side of it.

And I know it wasn't owned by Danon back then, but, um, it was a, you know, to me it was remarkable to [00:08:00] see that there would be a , an a, an actual plant-based milk truck going around. That was really, really, yes. Yeah. Go on. I'm sorry.

Irina Gerry: No, I'm saying it, it was actually started by Steve DEOs outta Boulder, Colorado.

I had the pleasure of meeting him about a year and a half ago, two years ago. And, uh, what a hoot. I mean, the guy is a legend and it's so amazing to meet the founder of this now, you know, nearly billion dollar brand. Yeah. Um, and it just happened in, you know, one person's lifetime, which is fascinating. Yeah.

Paul Shapiro: Well, I, I still drink it on a near daily basis and my smoothies, so I am doing, uh, my fair share to, to . Well, thank you. Thank you. Yeah. Um, but yeah, so I do wanna ask you about just what it was like working at a dairy company, working on a plant-based brand, because as you can imagine, . If you think about Netflix as an example, when Netflix came out, it was just male DVDs, right?

Mm-hmm. . And then when streaming started becoming more and more [00:09:00] possible, they knew that streaming was going to completely cannibalize their business and really end their core business model of male DVDs, and they moved all to streaming. Was that the view within Denin? Did they think, well, this might cannibalize our dairy sales, but we should do it anyway in the way that Netflix embraced streaming over mail-in DVDs?

Or is it just viewed as something that is supplemental and not really cannibalizing its core business?

Irina Gerry: I, I think it's, it's the, it's the former. Um, and the reason for that is if you look at plant-based milk sales, right? Plant-based milk has been around a while. You know, silk is one of the pioneers obviously, off that movement.

And I would say, my opinion is before my time is that a lot of the dairy companies, when, when alternative milks first came around, were kind of ignoring. It's a trend, right? That are kind of looking at it, thinking it's, it's fringe. It's this thing for, you know, vegans and boulder and it will never be as big.

And by the time it became big, I think you would see right, that silk was purchased by foods, which was a big dairy company later spun [00:10:00] off and then, you know, later purchased by Danone. But I'd say that that's been not an uncommon trend, right? Almond Breeze, um, is also owned by a big, a dairy company as well, where they've jumped in on the, on board of the train, but perhaps a little later than, than they should have, right?

And you see the similar trend evolving with alternative meats right now, where, you know, a couple of years ago it wasn't really as big of a thing. And now just about every major CPG and every major. Producer had jumped on board with meat alternatives because I think they have seen what happened with, with dairy companies where they were, you know, perhaps a little too late to the game.

And Danone did buy WhiteWave Foods, which owned Silk and so Delicious at the time in 2017 for a very healthy, uh, market premium. Um, and they did that in order to get into the plant-based game because they were seeing the, you know, tremendous growth and growth potential both [00:11:00] in obviously North American market, but also in Europe, where, um, Al Ppro and Provo Mill are the two kind of sister brands that that came along with with WhiteWave acquisition.

So it was most certainly a conscious move, uh, by Danon to get into the plant-based game because it is very much a growth driver for the company right now. Um, and, and again, you see a lot of other big CPGs getting into. Plant-based space.

Paul Shapiro: Mm-hmm. Mm-hmm. , you know, Irena, if you look at many of the categories that you're talking about, right?

So take plant-based meat as an example. Um, it has certainly grown a lot in popularity, but it's still far less than 1% of the volume of meat that is sold within the United States and elsewhere. And, and the same is, uh, is true for, you know, all, all different for whether it's seafood or, uh, nearly every category of animal products, with the exception of plant-based milk, which is, you know, taken over a commanding 13% of the fluid milk market, at least in the United States.

Why? Right. [00:12:00] Why do you think, why do you think that this is the one standout that is really taken over of dramatic share of the mm-hmm. market for this particular.

Irina Gerry: Well, you know, number one reason why people are in the category, or number one, barriers, well, as taste. And I do think that plant-based milk has come quite a long way, right?

It's still not a perfect dairy analog, but the taste is quite great. And there's so many options, right? You can get soy milk, you can get almond milk, you can get cashew milk. Anything that that could have been milked, I think has been, has been milked at this point. . Um,

Paul Shapiro: and, and you get things except for microbes, which we'll talk about short, right?

Irina Gerry: We'll get there. Um, but, you know, but the taste is, is pretty great, right? And if you drink it out of a glass or you put it on a cereal or put it in your smoothie, the performance is also very good. Meaning it hits kind of these key attributes, product performance attributes that consumers are looking for.

Plant-based meat is, is different in that yes, [00:13:00] you had your, you know, bean burgers or maybe your corn, um, options, but they were never. Quite that close, right? Uh, it, it didn't taste the same, it didn't have the same texture if you opted for a bean burger. It was a very different consumer experience. And I do think that that's what was holding the plant-based meat back to.

And it was kind of more in that niche, kind of a vegan, you know, every now and again occasion, what really blew the doors open was the, you know, beyond and impossible, right? Where they really created a massive step change, uh, to product performance and product attributes. And I think that's just the beginning, right?

It, it created this tremendous growth. and I expect to see so much more, um,

Paul Shapiro: growth become why? I mean, if, if, let me ask you how much of it is taste, which clearly I agree with everything that you just said. Um, but you know, there were other factors like, you know, when beyond got into [00:14:00] the meat eye also that meat consumers actually would see it as opposed to, you know, having to go to some special aisle.

It seemed to me like when, uh, silk br what Silk did was to help bring plant-based milk into the dairy aisle. It wasn't just like this shelf stable carton that you got in some interior aisle of the supermarket, but rather it went directly to where milk consumers were. And it seems to me that it started competing on cost as well, unlike Beyond and Impossible, which are great on taste and they're now conveniently located, but they're still selling it and multiples over what the cost of commodity meat is.

Is that your, your, um, your experience

Irina Gerry: too? It's, it's a multitude, right? So it's, it's all of those things that you were saying, right? It's taste, it's availability. So it's placement. But also, can I even buy it, right? Like, um, few years ago, there was no options for you to go get impossible or beyond anywhere really.

So it's taste, it's placement, it's price. You don't have to necessarily be price parity, but it's within, you know, [00:15:00] a certain price premium, right? Mm-hmm. and, and, and the sensitivities kind of go down. If you look at plant-based milk, it's started maybe two, three x the dairy milk equivalent. Now it's come down significantly, I expect, and we've already seen even beyond had launched their, you know, next generation that is now getting closer and closer and closer to prosperity.

So it's, it's taste, it's placement, it's performance, it's pricing, it's all of those things. And I would layer on the fifth one is growing awareness of, um, sustainability. and, and climate change and the role that food plays in climate. I think with Covid, especially this year, it's catapulted so many people's awareness, um, into what food does, how it plays a role, and how can an individual make a significant impact by what they eat, right?

Mm-hmm. . Um, I think that's just such a new, um, level of awareness that [00:16:00] you are seeing. At the same time in multiple markets. It's happening in North America. It's most certainly happening in Europe, and it's now happening in Asia, uh, Pacific as well, which is fascinating

Paul Shapiro: to me. Yeah. I increasingly, people are, I, I think, very aware of and concerned about the, uh, footprint or maybe the food print of what they're eating.

Mm-hmm. . Um, and my own experience though, I, I have, I, I still do think that the other factors that you named come first, that if you're not competitive on taste, that everything else doesn't really matter.

Irina Gerry: Exactly. I a hundred percent agree. That's why, you know, vegans, you know, vegans have been around for very long time and people come into plant-based space from different angles.

Right. It was, you know, animal welfare. There's the health angle there, there's the sustainability angle, and then there's price and availability, and all of them matter to different degrees, to different people. There's not one. You know, kind of one reason where everybody's coming in from the same perspective, but I do think both health [00:17:00] and sustainability are now starting to reach mass awareness, which, which is a fascinating development, and it's happening rather quickly.

Yeah,

Paul Shapiro: I agree with that. And, and I'll tell you from my own experience, I, I became vegan in 1993 and the only soy milk I could find back then was the shelf stable Eden soy, um, that had two ingredients, uh, water and soybeans, . Mm-hmm. . And, you know, I remember telling my mom when I first tried it that I think I would rather put orange juice on my cereal than put that on there and, and, and amusingly that product still exist and I actually drank it occasionally know, um, because, because it's basically water and soybeans, it, it has a lot of protein in it,

Uh, so I do like it, but it, it's definitely a hel a taste sacrifice. You know, it's nowhere near the, uh, the taste of right of thing, of products like silk, even unsweetened silk, actually. And that's, that's

Irina Gerry: to me the difference, right? And the fundamentals of food marketing and, and what makes it unique from any other product, whether it's technology, clothing, cars, et cetera, is because food is so emotional, right?

It's, [00:18:00] it's wrapped in culture, in tradition, in nourishing, you know, feeding our families and connecting with our friends in personal, just moments of pleasure where all these things come crashing, so to speak, onto your plate every time you eat. So it's, it's really hard for people to approach food rationally,

So when you talk to them about health, right? I mean, gosh, if we were all rational human beings and were listening to doctors, we would all be eating, you know, whole food, plant-based diet and, and eating our veggies, but that's not how humans behave. Right? Or if we all read, you know, You know, United Nations sustainability reports, we would all make such massive changes in our food, and yet we don't.

And it is because all these other factors oftentimes come ahead of. The rational selves, right? Like our rational knowledge. And, and to me, that's what makes food marketing both fascinating but also incredibly powerful. [00:19:00] Because when you do put these pieces in the right way, people will make, um, incredible choices and they will make big changes if you can do it right.

Paul Shapiro: Yeah, I totally agree with you. Uh, you know, humans are great at many things. Acting rationally is not one of them. Not one, no . And, um, but all the more reason why we have to align what is in our self-interest with, uh, what is also in the world's interest. And that's why making these more sustainable foods and more ethical foods, um, tastes better and competing on, on price and convenience and other things.

But that needs a good story. You have to tell a good story. Mm-hmm. . And as somebody who has, uh, an enormity of marketing experience and expertise in storytelling, obviously, I presume you've been following the alternative protein world, even from Danone for some time. So are there any examples of companies that you thought were telling a particularly good story in marketing their products?

Irina Gerry: Well, I, I would say there's a couple of companies that, you know, that I admire a great deal, and I'm, I'm sure you do as well, you know, impossible, famous story, [00:20:00] right? But they have done so much for the bigger alternative. Food space, like plant-based food space because of the way they went to market.

Because A, they had the right, you know, product with performance. That really was a step change to what existed before. The fact that they went after, and, and again, I'm talking when they reached kind of a mass awareness, right? I know they've been around a while, but when they went after that Burger King burger, right?

And they went right at the heart of what does the burger mean to consumers, right? That moment of enjoyment, that connection, that culture, you know, all those things wrapped in it, I thought that was so brilliant where they didn't come at it from the technical perspective and tried explaining, you know, what is the exact point of difference and in technical specs of their burger versus somebody else's, and they went after the experience.

And I thought that that was such a brilliant move. Um, I know we in the food space tend to geek out. The tech. Um, but from a consumer perspective, I, I, I [00:21:00] guarantee you even now you go and you ask a hundred people and you know, at Burger King or at, at the grocery store, they would not articulate to you why they're buying the product.

They will just say, Hey, it, it tastes great. And I love the experience and, and, and I just relate to, to this product. Hmm. Um, and I think that's what they've really captured incredibly well. And, and I wish more brands would, would take a page from that, um, and really think about what is the experience that I'm creating with my product, not just.

What are the specs, you know, the grams of protein and the fat and the sugar and whatever. Um, the other one I tell you, um, that I admire a great deal is Miko, um, for a different reason. Um, that one has this tremendous brand storytelling that I love so much, right? From, from their founder, um, and kind of her mission and her passion to, um, really build a kinder world, right?

And building kinder food system with amazing products, right? [00:22:00] And so it's a combination of yes, having a product that performs really well and tastes good and it is, you know, available to people, but also what the brand stands for. And I think that is when you look at the younger generation of, of consumers today, that is what they expect.

They don't just wanna. You know, a good product at the right price, kind of more, more of what our parents' generation, uh, would've expected. They wanna know the company, they want to know the founders. They want to know what does this company do in addition to making product and, and they wanna support that business.

So I think Miko has done, you know, a tremendous job in bringing that to life and creating such a fan base with a

Paul Shapiro: product. Interesting. Yeah. Well, those are, uh, both two great companies of course. And, um, that's nice that those are two ones that you think are doing a good job, uh, at the risk of, uh, offending diplomacy.

Are there any that you thought were doing is a, a, let's just say suboptimal job, ?

Irina Gerry: You know, I am, [00:23:00] I've recently did critique, um, one of the companies, it was, um, Lightlife Burgers. Hmm. They, uh, posted. An op-ed, and I forget in which paper, but in one of the papers where it was in a couple papers actually, in a couple of papers, yeah.

They posted an op-ed basically saying, look, plant-based meat, um, your ingredient labels are not very clean and, you know, we're making a stand and we're our, is is a better, cleaner, pure ingredient statement. And I just felt, um, that it was so wrong for a couple of reasons. Um, one is we are all really on a shared mission.

I think all the plant-based companies and, and by plant-based, I'm kind of wrapping everybody, cell-based, fermentation based, pure vegans, everybody. Impossible. We're all on a mission to feed the world in a more sustainable way. Right? It, we have more people, we have a [00:24:00] climate crisis and we need to give people options.

And there's so many consumers that are coming at it from different angles. For some. You know, pure play, organic bean burger is the thing. And for others it's impossible. Right? And for some, and not everybody cares about, you know, whether it's specific ingredients or whether it's vegan or whatever. Right there, there's room to play.

And I feel like this kind of a vegan on vegan crime has been taking place, um, occasionally where you see brands or people within the industry critiquing each other and throwing rocks in your neighbor's yard, so to speak. And I just feel like that's, we need to focus on the bigger issue, right? We need to help each other and lift each other up because we have such a job to do.

And it's such a big tent that. We could have many players building thriving businesses, and we want them to, um, to where we don't [00:25:00] need to, to win at the expense of each other. We should be winning at the expense of, you know, industrial animal agriculture.

Paul Shapiro: Um, yeah, it certainly created, uh, an enormity of ill will toward them within the alternative protein space.

And I guess, I guess time will tell whether it also creates good or ill will or no will whatsoever among actual consumers. So, you know, ti time will tell, but we'll say, yeah. Yeah. Well, I, I, Irena, I appreciate your insights there. O obviously you must have been taken though by the story of change foods, uh, because you decided to weave a, presumably a secure and comfortable career at a.

Goth of a food company to join this little David of a pre-revenue startup, . Yes, I did. So what's the story behind that? Like, how did it come to be that you made this, uh, switch after meeting, uh, David, the CEOs, uh, aerospace, there's an aerospace engineer, you guys meet up, what happens , right.

Irina Gerry: Uh, well, so the story has a long beginning, right?

There's, there's a long tail to it. You know, I personally have been on a, on a journey of [00:26:00] discovery. Uh, both, you know, plant-based food kind of started for me about 10 years ago when I watched, you know, forks overnights, right? Like, that's, that's the movie that, that catapulted so many people into this learning about health, nutrition, you know, what does food do to our bodies?

And in parallel with that, you know, I was also learning about, you know, climate change and all the sustainability issues that we're tackling today. And, you know, as you learn and you know more. The more you start to connect the dots. So I've been on this journey for some time, and even as you mentioned, as I was working, I started with WhiteWave Foods, was acquired by Danone.

I firmly planted my feet already professionally in a plant-based space. In fact, you know, even working at Denon, I, you know, essentially refused to rotate into a dairy business. I said, Hey, I'll, I'll, I, I feel very strongly and very passionately that I want to spend my time and talent and energy in what I believe in, right?

So I already kind of had that and, um, wanted to [00:27:00] reinforce that even more. And I would say David was on a similar journey, also dating a year, some years back, where he left Aerospace and joined the Food Frontier, which is a think tank type of an organization in a, in Australia. As well as he was, um, involved with Hungry Planet, a plant-based, uh, brand as well, to bringing that into the Asia Pacific region as well.

So he was on a similar journey, and I think both of us were kinda in our own ways, learning and understanding, Hey, where is this going? Right? How can we push on the even more, what's the next breakthrough in in food? And I think, you know, he, he obviously came to the precision fermentation space through everything that he's learned.

And, and he, he found a co-founder, um, in Australia as well, junior Tale, who's a, uh, associate professor in, um, at Q U T where they've paired up to bring this tech to market and. You know, LinkedIn has been a [00:28:00] fantastic resource during the pandemic where I feel like it just took a very different shape. It transformed itself from kind of a resume gathering, um, job board to a truly a professional communication platform.

Um, and so I was very active on LinkedIn and, you know, meeting amazing people and really finding folks that, you know, connected with my mission and we were on a shared mission to, to really change the world. And now it's easier than ever right? To, to dial someone up and, and connect with them and have a chat.

And, uh, it's, it's a global community that's truly remarkable. And so, David and I met, uh, you know, through LinkedIn and we were so value aligned. We were so aligned on the mission and. You know, David was already kind of thinking about how do you build a food company first that is supported by technology rather than a technology company that maybe happens to launch food at some point.

Hmm. And [00:29:00] so he was on the hunt for, um, you know, a founding team who would really bring different skills to the table. So, you know, I came in as a C M O and I bring this, you know, food marketing background kind of deep into plan-based space and understanding, um, how to create products that resonate with consumers, you know, who are in this plan-based sys sphere.

Right. Um, and then we also have a C O O who's coming on board. Um, and he brings a lot of food manufacturing background. He, he's a former VP manufacturing adjust and had worked at Amy's, um, prior. And so we've really cobbled this team together that has this. Multitude of skills that are complimentary, but we all share, you know, a mission and a vision and, and this passion for, for making a real difference in the world.

And I think that's kind of the what, what [00:30:00] really? Made us come together very quickly and, and it's, it's almost like we've worked together for so long, . Cause we have such a shared understanding and, and language and passion for what we're after.

Paul Shapiro: Well that story is certainly a great endorsement for using LinkedIn.

Uh, my wife and I actually were, she was just asking me, she saw me on LinkedIn, she's like, who used this LinkedIn? I said, actually, a lot of people use everybody LinkedIn. Right. . Right. Um, but uh, yes, that's uh, quite an endorsement for using it. Uh, for sure. But I, Irena you talked a little bit about terms like precision fermentation and we have had on the co-founders of Perfect Day on before, but in case people either don't remember that episode or maybe didn't listen to it, just mm-hmm.

just tell people what is precision fermentation? Like, what is change foods actually

Irina Gerry: doing here? Right. So precision fermentation is, uh, what was now dubbed at the third pillar of alternative protein space. So, you know, the first pillar is a classic plant-based, right? Soy milk, soy burgers, bean burgers, et cetera.

Then you have your cell-based or cultured meat. [00:31:00] Pillar and then precision fermentation or fermentation. Pillar is the third one, and it's the newest, most nascent pillar of the space and most exciting to me because the promise is instead of growing, whether it's animals to produce certain proteins or creating products that resemble their analogs through plant-based, now you actually have the ability to instruct microorganisms to produce the compounds that you want to create products that are bioidentical to their traditionally farmed animal products.

So when you look at the biggest gaps, right from traditional plant-based space with product performance, with taste, texture, et cetera, now you have technology that can allow you to close those gaps. And if you look at consumers and. [00:32:00] The, the vast kind of one third of population who are flexitarians, who are kind of dabbling in and out of, of this plan-based space.

Once you close that performance gap, you have the potential to bring all these people plus more on board to this movement. And so to me, the, the precision fermentation space is what allows us to produce, you know, in our case we're focused on dairy proteins and fats, um, to create the beloved dairy products.

In our case, we're starting with cheese, um, to give people that cheese they love, right? Because if, if you're vegan today, cheese falls short. Um, and when I saw that we could create, you know, cheese that performs taste, smells, you know, chew and stretches, like collect the dairy cheese that, you know, without using cows and the impact on the environment.

I just couldn't stay away. You know, it's, it was so exciting. I, I, I just leaped with, you know, both feet in, and [00:33:00] you're right, I left. , um, quite lovely career behind

Paul Shapiro: to do this. Yeah. You know, it's interesting because fluid cow's milk sales have been falling and falling. Yes. And falling and plant-based milk has been taking over a lot of that, but it's also been falling as people are, you know, drinking more water and other things like that too.

But, uh, you know, part of it is plant-based milk is actually taking over a larger and larger portion of it, whereas cheese sales has act, have actually been increasing. Mm-hmm. . Um, and so, you know, plant-based cheese has not really taken almost any substantive market share away from cow based cheese. Cow based cheese, in fact is increasing in its consumption.

Mm-hmm. and it takes way more milk to make cheese. In fact, you know, to make a pound of cheese, yeah. You make one pound of cheese, you need 10 pounds of milk. So even though, uh, cow's fluid milk is falling in demand, the number of dairy cows, which is really from a sustainability perspective, what you really are concerned about hasn't really fallen.

Right. And, and that's cuz cheese demand is just going up and up and up and it [00:34:00] takes so much more milk to make cheese than it does to make milk. So having some type of a really great cost competitive taste, competitive, uh, cheese that doesn't involve actual whole organisms that we call cows is a, uh, great alternative here.

So, uh, you know, one of the, one of the ways that I describe it for people who have a hard time understanding how microbes could do this is that, you know, if you think about taking brewers. and you feed it sugar, it produces alcohol. If you think about baker's yeast, you feed it sugar, it produces co2, which leaves you bread.

In this case, a company like Change Foods is taking a special type of yeast and feeding it sugar and is getting cows, proteins like casin. Right? Um, and so you're producing real cassin, not something that's similar or an alternative to casing, but real casing simply without the cows. And so let me ask you then, Irena, because obviously a perfect day has been around for about, uh, six years or so.

They've raised hundreds of millions of dollars. They now have their whey protein ice cream mm-hmm. On the market. Mm-hmm. That is [00:35:00] real whey protein made from microbes rather than from cows. What is it that you're doing differently from them? Like what's your, uh, what's your claim to fame that is, that separates you out from a company like Perfect Day?

Irina Gerry: Right. Well, I mean obviously they have quite a bit of years ahead, right? They, they were one of the first and, and. Focused on kind of building out the tech, and I have tremendous respect for them. You know, actually connected with, with Ryan, one of the co-founders a few days ago, and, and we're chatting about, um, you know, building a coalition together to collaborate in this space.

Um, what I think makes change foods specifically different is unlike many of the food tech startups that, that lead with technology, right? You talk to the co-founders, it's a lot of PhDs, a lot of labs that, you know, they're, they're focused on what is the tech, and then they build the tech and then they look for product.

We are almost doing it in the opposite direction where we are food company, consumer focused company, first [00:36:00] backed by tech. What that does is it, it really allows us to focus where, you know, we've identified cheese is the biggest opportunity for us given the. , um, like you said, sustainability impact as well as performance gaps, as well as just the love for cheese that people have.

Because cheese is what's holding so many people back from, from going fully plant-based. When you have such focus and such attention, you can then direct your r and d efforts, right. And your product development efforts. And what we've done also is, you know, because I've come on board, because we have Luis, who are our c o o, who's come on board with food manufacturing experience, we can stagger.

a lot of these processes in parallel, almost like operational warp speed in a way, right? Mm-hmm. , where we're, we're parallel pathing, our go to market, our product development and formulation, and our r and d work all at the same time to speed the time to [00:37:00] market. So what, you know, have taken perfect day, you know, six years to get to, to market.

We're hoping to, to do that in, you know, less than a year and a half. So, because we're doing

Paul Shapiro: it differently. What do you think is the best story then to tell Irea about these precision fermentation proteins? Do you describe them as real dairy? Do you describe them as vegan? Like what's the best, what's the best way to explain it to a consumer?

You

Irina Gerry: know, that is literally when I came, uh, into this, into this space, and I looked at it from, from a kind of the marketing, the consumer perspective, and I looked around, I'm like, oh my gosh, there is not a name, um, that that is used consistently or that works really well, which is fascinating, right? It, it goes to show that a, the industry is so new that there's not on the aligned.

Name convention, right? The f fda there, there's not a standard of identity that we've kind of settled on. Um, and there's not a consistent usage of the name within the industry, which is both a tremendous, [00:38:00] you know, opportunity for us to shape it. And also just an kind of one of those things where you're come in like, wow, how exciting is it to be able to truly craft this entire pillar of alternative proteins from scratch?

Mm-hmm. . So what I've actually done in just the, the first few weeks since I've joined is, as I said, I'm, I'm kind of working on collaborating with a lot of, I've, I've talked to ever startup in, in the space and the GFI P B F A New Harvest, you know, kind of the, the big organizations in this space, um, to say, Hey, let's come together and, and let's do this purposefully.

The reason for that is if you look at what happened with, you know, cell meat or cultured meat, The, the cat kind of got out of the bag a little too soon, perhaps, right? Where people were working on the tech, a lot of the different terminology was used, and now it's, it's much harder to get to a common place.

And I do think it's tremendously important because no one startup can, can move the needle quite [00:39:00] as, as as much, right? We all have these limited budgets. We can't talk to consumers and we have so much consumer education work to do, right? You and I can geek out on precision fermentation, but for your average consumer, they have absolutely no idea what that is or what's even the possibility.

And so for us to come together and shape this in, in terms that are clear, that are positive, that, you know, communicate the space well is so important. And, and I've had such tremendous response from every company in the space to say, we absolutely wanna work. On this and, and shape this, right? Because precision fermentation is not necessarily a great consumer facing , uh, language.

Right. Or vegan debate. Right. Like it are these products vegan? Well, depends, right? If, if I look at it from an ethical kind of animal welfare perspective, which I think a lot of vegans come, come through, yes. Because no animals are involved or harmed in the process. But [00:40:00] if I put this product on shelf, what does my average consumer understand it to be?

It's very different. Mm-hmm. . And if I now have a dairy protein, which is an allergen and I say it's vegan, and my average consumer has never seen a vegan product that is also a dairy allergen, how do I talk to them about that so I don't create a potential issue? Um, so I think we need to tackle all of that.

And it's, you know, it's a lot of work and, but we need to do it. But I also think we have people who. Our shared, you know, in our shared mission are very collaborative and actually very excited to, to work on it together and get to language in terms that we all can get behind.

Paul Shapiro: Yeah. And I think that, uh, is perhaps one reason why a pre-revenue startup that doesn't have plans to commercialize for another year or two could use a C M O.

Um, you know, some people may think, well, you're not selling anything. Why do you need a cmo? Well, this is something that, you know, really does, uh, exemplify and illustrate the saying [00:41:00] that you only get one chance to make a first impression. And as these, uh, products come out under the market, you don't get that many chances to actually explain it to consumers what they are.

But it, it, it leaves merina to ask this following question because in dairy products today, we already have an example of widespread use of a precision fermentation product. Uh, um, basically, you know, instead of using rennet from a calf's intestine for decades mm-hmm. , now cheese has had a precision fermentation.

Um, Enzyme of CIN that is put into cheese to make it, you know, melt basically. Mm-hmm. . And, uh, nobody thinks about it. Nobody talks about it, even though that's pretty much exactly what you're doing, except it's producing this enzyme rather than what you're doing is producing proteins and fats. So why, why is it that we had that type of an introduction that o of this pretty revolutionary product of removing the calf intestinal renit in exchange for a precision fermentation type [00:42:00] rennet that is now widespread.

It's obviously cost effective and nobody even knows about it, let alone talks about

Irina Gerry: it. Right, right. Well, because I think, and, and you know, another example is insulin, right? Like PE and it, it, this technology has been used in, in pharma and other industries and you're absolutely right. It's been used kind of quiet.

Um, what I think is different is that there is this amazing opportunity to introduce these products to consumers and tell the story of this new way of, of creating food, whether it's, you know, cultured meat or precision fermentation derived, um, proteins where it actually matters, right? We, we've reached a point, as I mentioned to you with younger consumers, they want to have the product they know and love.

I mean, e every vegan would, would tell you what a struggle that is. Or it was initially to give up cheese, right? Mm-hmm. . Um, and, but we want to be sustainable and, and we want [00:43:00] to live a, you know, a lifestyle that aligns with our values. And to be able to tell that story to folks, I think would create tremendous tailwind for, for the industry.

And as you talk about cost competitiveness, Let's be honest, we're not gonna be parody with dairy proteins, especially today, where there's tremendous amount of government subsidies going on where they're not paying for, you know, negative externalities like pollution, et cetera. It, it's going to take some time.

I have faith that we will get there, right? And not to distant future, but it's going to take some time. So be able, being able to command a price premium for these products in the interim while you're building. Is important. Yeah. And the way you build that price premium is by telling the story. Because if I, if I just quietly substitute, let's say it's casing right in, in, in a regular cheese, and I don't have the ability to tell the story, I really don't have the ability to price it higher.

Right. Like, why would I buy craft [00:44:00] slices versus craft slices? One is three X or two x. Yeah.

Paul Shapiro: So why is, I mean, do you know anything about the economics of renit then as to why it must be that renit is just a really expensive ingredient if, if, if using, you know, microbial fermentation could outcompeted on cost, which is I presumably what, presumably I, what happened, I guess.

Right. I

Irina Gerry: mean, to be honest with you, I don't know. Right. Yeah. What I do know is I, I believe you had to kill the calf in order to get Oh yeah. The rennet. So it sounds really incredibly cruel and probably inefficient. Right. Given how mu how much.

Paul Shapiro: We may. Yeah. Um, yeah, I, I'll look into this and put something in the show notes if I see anything.

But one theory that is coming to my mind right now, which is not based on any evidence, but only on my presumption, is that as demand for veal declined from the 1970s through the 1990s, that the number of available calfs for slaughter must have gone way down. Because, you know, uh, veal consumption plummeted during that time largely for animal welfare concerns.

Mm-hmm. . And, uh, because of that, [00:45:00] maybe it was just that there weren't enough calf intestines around, you know, that's a, you know, one form option. Um, yeah. Okay. Well I'll, I'll walk into this and, and find out why,

Irina Gerry: but it's fascinating. You're right. I think that would be great. It's, it's been around for, for time, right.

And now it's, it's done at such massive scale where I'm sure now it's, it's incredibly price competitive or advantageous. Yeah. Well, You know, and we'll get there. Right. I, I fully believe that both, you know, cell-based and fermentation based sectors will get there with time. Mm-hmm. , but there is this period of, of ramp up, of production, of, you know, scale technologies of all the supporting ecosystems that need to come online.

Fermentation capacity is a bottleneck, right. That needs to come online. And while we're doing this in order to give us the space we need to, to put these products out to market, I think going with a branded product, with a story that can educate consumers and bring them on on board is, is mo very

Paul Shapiro: important.

Yeah, for sure. For sure. [00:46:00] Well, we'll look into this and, and figure that out. There. There is a, a comparable analogy, and I, I wrote about this in the book, clean Meat, which is that in, uh, during World War I, uh, the Germans had these zeppelins that they were, you know, raining down terror on British cities with, and in order to keep them afloat, uh, they needed, you know, they were keeping them afloat with very lightweight gases and they needed something to hold all the gases that was also lightweight.

And so they were using, uh, intestinal lining mm-hmm. and the Germans during World War I actually banned sausage making because you needed those intestines for the sausages and they wanted them for the zeppelins. Hmm. And so, um, it wasn't though until, um, I think it was Goodyear actually. They came out with a super thin material that could be used to keep those type of, uh, wimps af flute that, uh, ended up reducing the need for, for, uh, intestines and zeppelins, but anyway.

Anyway, you know, another example of a plant-based store, a non-animal alternative, uh, rendering another animal usage, OB weight , right? So speaking of rendering animal [00:47:00] usage, obsolete ire, um, you know, you have talked about the, the Rethink X report that has, uh, been widely touted among believers in the alternative protein space and who have said that, you know, they think that industrial animal ag is gonna collapse by the year 2030.

However, uh, you know, others have pointed out that animal agriculture is still expanding today, you know, as we are in 2021 and increase for the meat. For meat is going up not down. Yep, yep. The number of animals raised for food continues going up, not down. So do you think that it is really possible that that system will collapse within a decade or do you think that's more like aspirational thinking for them?

Irina Gerry: Well, I do, and here's why. Um, I think we have reached a point, kinda almost like a tipping point in. Consumer awareness, right? We've talked about that with, with covid, with health, et cetera, where more and more younger consumers are starting to ask these questions. [00:48:00] We have reached a technological point. The latest number I've seen is there's 83 cell-based meat companies operating today, which is mind boggling from just a few years ago.

We have now reached a point where multinational food companies, you know, including the largest meat producer in the world, j. Is now investing pretty strongly into the alternative space. We have reached the point where there's now money, VC money, institutional money that is flowing into the space. We have reached the point where talent, um, is flowing into the space.

You know, people like myself who are saying, look, I have skills and talent and I will deploy them to move this industry forward, and I'm willing to go above and beyond my scope of duty to help, you know, other startups or, you know, other companies and I wanna do that. When you see so many massive changes happening all at the same time [00:49:00] across the world, like you see governments are now waking up to, um, you know, like a Singapore government saying, look, we need food independence.

We wanna pro, you know, promote this, this technology. You see, Chinese government declaring that they wanna have, you know, majority of the protein needs met with plant-based sources for their population. , all of these processes at the same time create tremendous momentum. And it's almost like none at all.

And then all of a sudden it kind of, the dynamic, right? You where, where there's little, little bits and pieces and you're hearing things and all of a sudden it's a sea change. And I think we're about to, to experience that sea change in the next 10 years cause of all of this. And, and when you look at meat and dairy industry, it is highly scaled, absolutely optimized to the nth degree.

And it is unprofitable, right? Like if you take the government subsidies out of the system, Majority of the farmers would go bankrupt, [00:50:00] right? The inputs into the system, if you look at those farm operations, et cetera, they are not massive money-making enterprises. So when you start taking scale away, right, as even a little bit of of demand shifts, and you start taking potentially some of the government action and support a way and potentially introducing new sustainability taxes, right?

Or, or other measures to help shift the food system, these pressures could create tremendous shifts within those systems to, to disrupt them in, in a meaningful way. And I think that's what the Rethink X report lays out. And I agree with you. It's, it's very bold. Think. , but I also believe that these systems do not operate on a linear fashion.

Meaning you can't just say, look, we are at 7 billion people today. We're going to 10, therefore we draw a straight line from here till tomorrow when you have so many changes happening that could lead to these inflections. Mm-hmm. . And so to me [00:51:00] it's, it's adding up the inflections, I think is what the Rethink X report does in a, in a very interesting way that leads to a dramatically different future.

Is it 10 years? Is it 15? I dunno. Um, I think a lot of it will depend on the pace of these changes and, and politics and in some areas of the world, but I do think that it's undeniable and to me then it's not a, a matter of of when or how, it's a matter of when, um, which is, it's such a fascinating change of per.

Mm-hmm. . Well,

Paul Shapiro: I guess this would explain Irena, why you refer to yourself as a stubborn climate optimist. Cause that is definitely optimistic thinking .

Irina Gerry: I do, I do. And you know what, like, um, and I dunno who said that, but I just so very much live by the philosophy of the best way to predict the future is to create it.

Mm-hmm. , I just think it is, it is so true, right? If, if you can get enough people pushing in the same direction and, and believing in [00:52:00] a certain version of the future, I just think there's, it's, it, it becomes inevitable.

Paul Shapiro: Um, well for Irena, for those who want to help create that type of a future, uh, for a future where we are no longer reliant on the exploitation of animals for our food system, a future where we don't have runaway greenhouse gas emissions and climate change, a future where people are leading healthier lives.

Are there any particular resources that you, in, in your experience, have, uh, benefited from that you would recommend to others, whether it be books or speeches or anything else that you think those who wanna create that type of a better future should consume mm-hmm. ?

Irina Gerry: Well, so as I mentioned to you, I think LinkedIn has actually been tremendous, um, resource in terms of connectivity.

A, there's a ton of just information and news that comes out now because a lot of people have, have really truly started sharing this great content. Um, so I think it's an education platform. It's also a connection platform. So for somebody who is interested in [00:53:00] getting involved in this space, It's amazing how easy it is to figure out who are the key voices in this space and be able to connect with these people.

Right. You and I are talking for exactly this reason. Um, and so I think a, getting involved in leveraging LinkedIn in an active way is a amazing resource. Like if, if you're an MBA student or you are just somebody who's working in a corporate job and you're saying, look, I I just need to make a change, right?

I can no longer just work for a paycheck. I wanna work for, um, a, a bigger purpose. You can now do that. Right? And, and the talent game has gone global with the pandemic, which is kind of one of those silver linings, right? Where you now, like, I've connected with David from Australia, right? I still have not met him in person.

I've only seen him in 2D . Um, But it's amazing, right? You can now start working with people and creating teams and having conversations and learning so much about the space and figuring out how do you [00:54:00] apply your skills and talents and time to make a big difference. I think you can do that using LinkedIn.

So that's one, one resource that I'm just a big fan of today. The other one is, and I just read this book literally on, on vacation, um, the Tipping Point by Michael, uh, Gladwell. Yeah, Malcolm Gladwell, right? Sorry. Malcolm Gladwell. Yes.

Paul Shapiro: Um, he, he's famous enough that if you admit, get his name wrong, he probably doesn't care.

Okay, good .

Irina Gerry: Um, but I, but I read his book and, and in the tipping point he talks about exactly this type of trend, of inflection point and how do these inflection points get created. And there's kind of three different things he outlines. And I thought, oh my gosh, how, how relevant is that one? You know, he talks about how do you create this, right?

How do you reverse engineer inflection point? Um, And, and he talks about, you know, how, how the law of the few, right? Where these big trends are started by the, the small fraction of very passionate people. You know, in case of the pandemic, it's the [00:55:00] super spreaders, which now we're very familiar with, you know, in, in, in other spheres.

It's in influencers, right? It's, it's those key voices. He talks about the stickiness factor. Like how do you develop a message that is memorable and impactful, right? And gosh, do we have a message, right? To deliver? And, and how do you change context? Because humans are incredibly influenced by their context.

So what does that mean is, is how do we create these communities, right? How do we engage the influencers to make this. Massive tipping point change. Right? And when I, and I literally, as I was reading this book, I thought, gosh, I wish everybody in the plan-based movement would read this with that lens in mind and think about how do we create this tipping point in the masses?

Like, how do we take our passion and purpose and, and this, this food movement and flip it from, you know, the smaller, uh, percentage of population to the masses. And I think we are at that point and [00:56:00] leveraging lessons in that book. To drive it. I think a great example I'm seeing now is vinu movement, right?

That, that started in, in the UK as a small kinda vegan movement, and now you have celebrity endorsements, right? You have this great messaging behind it, reinforced by the pandemic and you know, all, all the health and, and sustainability messages. And you have this context, right, where all of a sudden it's groups of people coming together, finding a new community, where everyone in this community is participating, right?

In this kind of a new way of life, of living a lifestyle where you feel connected. So again, you bring back that connection, the emotional connection of food to community, to other people in your life. And all of a sudden you have yourself a groundswell, right? And I, and I just thought, what a great, you know, I know this book has been around for some time, but I just, I re, I reread it with this.

Perspective and I thought it was fantastic.

Paul Shapiro: Oh, cool. That's great. Yeah, he, he actually, uh, pre pandemic, uh, [00:57:00] he, he passed me in an airport and I was, I was, sadly I was on the phone, I really wanted to go up and talk to him and I was like, could not get off of this call. But he walk by me, he was by himself and I was like, ah, man, that was my chance to talk with Malcolm Gladwell.

But, um, probably to his, uh, benefit, I, I could not ever get off that phone call. . Uh, alright. Irene, a final question for you here. So you now are, uh, doing chain tudes. You're gonna try to commercialize some fermented dairy proteins that are cal free mm-hmm. . But what are other ideas that maybe somebody who wants to create the type of future that you were talking about should pursue?

If somebody's thinking, wow, that's really cool, I really admire what Irena is doing, what do you think that they might consider doing? Are there any white spaces or other areas where you hope that somebody else will either join or start a company doing X?

Irina Gerry: Right. Um, I do, you know, if I wasn't doing this, I would be looking at, um, away from home eating experiences.

What I mean is if, if you are, you know, trying to be healthy, ready, if you're, if you're trying to follow whole food, plant-based diet or a vegan diet today, [00:58:00] and when people ask me like, how do you do this? I'm like, you basically have to cook all the time, right? Because there's just not a lot of options. And it's, it's, it's such a barrier for so many people, especially, you know, when you look at European North American markets where, you know, we're busy, we have jobs, we have this and that, and, and we just, we don't want to cook.

It's not part of our culture anymore. And when you eat so much in this away from home context, right, especially quick service restaurants. There is such a void in, in healthy plant-based food. There's only a handful of restaurants that I can, you know, true food kitchen and flower child and maybe like a handful of others that, that do food, right?

Like the do food, the way I would do it if I were cooking, right? Where they cook from scratch, they use lots of vegetables and, and actually create delicious food that's, that's priced reasonably. Um, what a void today where you can't get this. And so I feel like if, if I were looking for an opportunity, [00:59:00] what I would love that.

Um, and the other one is schools. You know, we talk a lot about how this kind of education around school, you know, starts at school right around nutrition and what you eat and how it affects your body. And then you look at what our school meals are. It's a far, far cry from what I would like, you know, for my kids to eat.

That's a puzzler. Um, right, because you need to, to have it be accessible and you need to bring kids food that they will actually eat right? And, and shift those habits over time. And it needs to be affordable, but it also needs to be healthy. And I think when I, you know, I'm a parent and when I look at the next generation again, what avoid, um, we have there to, to feed our kids better meals and give parents options, right?

Like, I would pay money and, you know, good money for my kids to eat, you know, whole food, plant-based diet at school. Yeah. Um, well, school, I think there's another, there's another gap there

Paul Shapiro: too, for [01:00:00] sure. Well, yeah, school food is, uh, among the most inexpensive, uh, foods out there, so it's very difficult to compete on cost, but, um, it, it can be done and hopefully somebody will be inspired by you, Irena, to do it.

And I hope that, you know, even though you and David have never met in person, you and I have also never met in person. But I hope that when we do meet in person, that we're gonna get to go to the type of restaurant that you have fantasized about here and that there'll be some listener who is inspired by your suggestion and they're gonna start that restaurant.

You and I will get to dine there, uh, sometime and I'm really looking forward to that. And I appreciate everything, Irena, that you have done to advance the plant-based space with these, uh, legacy brands like Silk and So Delicious, which again, I am a huge fan and consumer of myself and I can't wait to become a change foods consumer too, when you all commercialize.

And I'll be looking forward to that too. So, thanks for everything that you've done and continue, continue to do to make a better food system. Aw. Thank

Irina Gerry: you for having me. A pleasure to chat.

Paul Shapiro: Thanks for listening. We hope you found use in this episode. If so, don't keep it to yourself. Please leave us [01:01:00] a five star rating on iTunes or wherever you get your podcast.

And as always, we hope you will be in the business of doing good.