Is the Future of Fat Fermented? Jeff Nobbs of Zero Acre Farms Is Betting on it

Paul Shapiro: [00:00:00] Hello, and welcome to the 94th episode of the business for good podcast. I hope that you enjoyed episode 93, about the revolution in recycling robots. I know I did. If you didn't hear it yet, but are interested in the economics of recycling and how one company is bending that cost curve, go back and check it out.

In fact, there are more than 90 great back episodes that are largely evergreen in just waiting for you to dive in. Of course, since this is episode 94, that means that there will be an episode 100 in the near future. And that will be a pretty special day here at the business for good podcast headquarters, also known as my house.

So let me pose a challenge to you, dear your listener. If you like this show, tell me who you think would make a worthy guest for that 100th episode. Who would you like to hear interviewed on this podcast? You can email me via the website business for good podcast.com. And I look forward to hearing your suggestions okay.

Onto this episode, which is pretty awesome. If I may say so. At the age of 18, Jeff knobs founded an eCommerce company, building it into a valuable enough startup that it was eventually acquired for [00:01:00] admittedly an undisclosed amount, but what Jeff calls a life changing event, he then opened a restaurant that now has two locations in the bay area.

And then. Jeff decided a couple years ago that there would be a third entrepreneurial act in his life. This time focused on fixing fat. What is wrong with fat today? You might ask? Well, Jeff argues that the way that we grow plants to make oils like Palm soy, coconut canola, and more is just pretty taxing on the planet.

It's often not that good for us either. So instead of farming plants to extract that tiny amount of fat that's in. Why not just farm microbes that produce vast quantities of fat and save a lot of land in the process. It would be especially beneficial. If these microbes were a joint at making mono unsaturated fats or the so-called good fats that we associate with avocados, olives, and so on.

And it turns out that producing fat, including monounsaturated fat, via microbial fermentation. It's pretty efficient. A life cycle analysis conducted by Jeff's new company. Zero acre farms found that their fermentation process uses far fewer resources even than farming [00:02:00] soybeans, which are a pretty efficient crop founded in 20 20 0 acre farms.

Now has three dozen employees. And they just closed a 37 million financing realm. Its first product, a cultured oil is now available to purchase from their website. In fact, I tried it in my own kitchen, stir, frying up some zucchini, eggplant, both of which one, my wife, Tony grew in our backyard by the way.

And I can attest that indeed the oil performed and tasted quite good. It's an impressive journey that Jeff has been on. And with tens of millions of dollars now at the mid 30 CEO's disposal, it is short to be quite a ride as they scale up and see how many acres. Land, they can free up by switching the world to their lower footprint.

Fermented fats, Jeff, welcome to the business for good podcast.

Jeff Nobbs: Thanks, Paul. Good to be here.

Paul Shapiro: It is great to be talking with you. We've done a number of episodes about fermented food products, mainly in the alternative protein space. Jeff. So companies that are doing really cool things like making animal proteins from synthetic biology [00:03:00] and other really cool things.

Like people making alternative seafood by doing fungi, fermentation and more. , but we haven't done an episode on fermented fats yet. And I'm really interested in why you think that this is the thing to do. Like many of these folks are trying to make protein yet. You're going after fat.

Jeff Nobbs: Well, the fat market is huge.

So

Paul Shapiro: unintended. Yeah, yeah.

Jeff Nobbs: Yeah. When you look at how many calories from vegetable oils we eat and, and the pure quantity of vegetable oils we eat, which are the number one contributor of fat calories in our diet. It's massive. So vegetable oils are the most consumed food in the world after race and.

And here in the us, there are about 20% of our calories. And when I say vegetable oils, I'm referring to canola safflower, soybean, Palm oil, any oil pressed from, or extracted from a crop, essentially. and obviously the, the protein industry is also massive and a hugely important issue. When you look at vegetable oils, [00:04:00] we produce more vegetable oils globally than chicken beef, cheese shrimp combined.

So, so is, is that

Paul Shapiro: by dollar or by number of pounds or like

Jeff Nobbs: by kilos? Yeah. Number of times production volume of, of vegetable oils. We spend a lot more on protein certainly than we do on vegetable oils because. They're very cheap right now when it comes to, you know, how, how many dollars we're actually dishing out for them.

And so it, it's a big market, you know, from a kind of business standpoint, but I really got interested in fat because I think it's a, a lead domino also on the health and environmental impact side of things. when you look at what's causing deforestation, you know, you're no stranger to the fact that that beef is at the top of that list.

What a lot of folks may not know is that the other two drivers of deforestation and, you know, the top three causes are vegetable oil crops soy and, and Palm oil in particular. And there's, there's a long history of, of studies showing really bad things when happening for our health. When we eat these, when we eat the oils extracted from these [00:05:00] crops.

So it it's my personal passion to figure out how to get these foods out of the food system.

Paul Shapiro: Interesting. Yeah. You know, in the alternative meat space, there's a lot of coconut oil use. Like, you know, basically folks are trying to mimic the meat experience and because meat, especially beef is pretty high in saturated fat companies are, you know, using saturated fats from plants to put into their products.

You know, there's a lot of evidence that sat fat is, is probably bad for you, but they still want to do this. And so because of the negative The negative environmental implications of Palm oil. These companies are largely using coconut oil, but I was actually just reading recently. And tell me if you are familiar with this Jeff, that a actually coconut oil is so inefficient, like a coconut tree is so inefficient at producing oil, that if you were to switch from Palm to coconut, it's like actually exponentially more land that you would need, not just like a 50%, like, like 10 to 20 times.

More land needed. If you were to switch everything from Palm oil to coconut oil which is pretty astounding to me, are you familiar with

Jeff Nobbs: that? [00:06:00] Yeah. And, and that's right. And the stats are equally astounding for other vegetable oil crops. You know, Palm oil gets a bad rep because of its precedence and how much Palm oil we produce in the world.

But Palm oil is actually the most productive oil crop on the planet. And the issue with Palm is where it grows. Palm only grows within about 10 or 15 degrees of the E. And that also happens to be the land where our most biodiverse rainforests are in another natural ecosystems. So when we're growing Palm oil, we have no choice, but to clear these rainforests and and, and grow Palm plantations.

But if you try to replace the Palm in the world with something like a coconut oil, to your point, coconut oil is far less productive and there have actually been studies done. Like the one you mentioned, and also other studies showing. Per liter of oil. Coconut oil actually has a far worse biodiversity impact than Palm oil, because again, of where it grows in the tropics and all of the species that it competes with in, in those areas where it grows and the, the stats also look quite bad.

If you try to replace Palm oil, something like [00:07:00] canola oil or soybean oil or, or sunflower oil, you end up just destroying a different ecosystem somewhere else on the planet and a lot more of it because those crops require a lot more land to produce the same amount of.

Paul Shapiro: You mean a lot more land than Palm oil does is what you're saying than Palm oil.

That's right. Yeah. Right. Yeah. All right. So, you know, basically what I, I'm picking up, what you're putting down here, Jeff, which is basically that growing crops is pretty bad for the planet. That's essentially what you're suggesting. And so you have a different way, right? Instead of agriculture, you essentially have lab agriculture and you are suggesting that rather than growing plants to press them and get the oils out that you can utilize fermentation.

So tell me, what are you doing?

Jeff Nobbs: Yeah, and, and some crops are better or worse than others. And it happens to be that vegetable oil crops are at the top of the bad list of, of the top five, most greenhouse gas emitting crops. Four of them are vegetable oil crops. And so that the means of producing these just doesn't make much sense.

And, and I'll, I'll tie this into, you know, what we're [00:08:00] doing and and how that's different. We essentially to grow something like soybean oil or, or other oil crops, we tear down a bunch of rainforest. We plant a bunch of seeds. We wait six months for them to grow. They turn into a larger plant. We pick their tiny seeds.

We press them for even tinier amounts of oil. And then we feed that oil to humans and the rest of the seed. Is now meal that is fed to primarily factory farm animals, making that whole industry propagating that whole industry. So it it's a process that's inefficient and doesn't make much sense. And when looking at potential solutions to this problem, there weren't any crops that would, that would do the trick, you know, somewhere better than others.

Some maybe were better for our health, but worse for the environment or vice versa you know, animal fats don't scale and have issues of their. But there's a really interesting way of producing oils and fats using fermentation. And when you produce oil and fat using fermentation, you're able to produce [00:09:00] fats with a much healthier fat profile and also a significantly lower environmental footprint.

It's it's just a much more efficient way of producing oil. So

Paul Shapiro: when you say a healthier fat profile, you know, there there's some controversy over this. I, I alluded to the fact that my opinion is that saturated fat, generally speaking is pretty bad for you. I don't know whether you're in concert with that opinion or not, but generally speaking, like most health experts will say, oh, like these mono one saturated fats that you get from like olives and so on are pretty good for you.

What is your view on that?

Jeff Nobbs: It, it is a controversial issue. Essentially everything in, in diet and nutrition seems to be controversial and has been for decades. But you know, there are some things that are, that are quite clear. And I, I, I think the fact that, you know, everyone can kind of agree mono and saturated fats are good.

And monounsaturated fats are, are typically found in high amounts in things like macadamia nuts and avocados and olives. And those fats tend to be more liquid at room temperature. There are other fats, the, the other types of fats are trans [00:10:00] fats, which we now know are quite bad. Saturated fats. As you mentioned, and polyunsaturated fats within the umbrella of polyunsaturated fats are omega three S which we know are good DHA, EPA.

As well as omega sixes, which are sort of like the, the evil cousin of omega threes that compete for omega threes and and, and require far more consumption of omega three in order to actually get their benefits. And then omega sixes need also to all sorts of inflammatory issues. So the first product we're bringing to market, which is called cultured oil.

Has extremely high amounts of mono unsaturated fat. That's the, the heart healthy heat, stable one, even more than olive oil or, or avocado oil or others, and very low levels of those omega six fats as well as saturated fats.

Paul Shapiro: Mm-hmm cool. Well, you know, it's funny, you mentioned this because literally one minute before we began talking, I actually took an algae based DHA supplement.

So as we speak, I have some DHA cosing through my veins here. But not doing your body. Yeah. Yeah. I'm thinking I'm [00:11:00] doing my brain a favor. I don't know. Would, would it, would it be COC me through my veins one minute in? I don't know, but I guess we're like more like eight minutes post fact. So maybe so, but anyway, so, you know, basically what you're doing is creating and I want to hear how you're also creating this, but so you're creating something that would essentially be an alternative.

Two monounsaturated fats today. So things like olive oil and avocado oil, as you mentioned, so first, how are you doing it? Like, how are, what are you doing to create this fat? And then also, you know, it seems like from a public health perspective and environmental perspective, like the, the big villains or saturated fats, like Palm oil and, and coconut oil.

And so is there a move to go into replacing those unhealthy fats as well? So first, how are you doing it?

Jeff Nobbs: A, and, and we're replacing not only. Existing fats that are high on mono and saturates, but really any liquid oil with, with this first product cultured oil. And what's interesting, and this is, you know, something that's a bit different than [00:12:00] the alternative protein space.

One product can replace many different foods. So with, with cultured oil, that's a substitute not only for olive oil and avocado oil, but also for canola and safflower and grape seed and rice brand and sunflower and, and all the rest. All of these crops are all of these oils rather. Provide SIM similar culinary functions, which is to be a liquid oil to make food taste better, to you know, saute eggs and bake and, and all the rest.

And so with cultured oil you know, it, it, it can replace all of those and cultured oil is made by fermentation. So I'm sure, you know, you understand deeply what that means and I'm sure much of your audience does, but to take a step back, you know, what is fermentation when it comes to producing?

Fermentation is the process where a community of microorganisms or cultures as they're called transform the sugars found in certain plants or animal products, whether that's from cabbage to make sauerkraut from milk, to make [00:13:00] yogurt and cheese from barley to make beer, they transform the sugars in those foods into other high value compounds that could be lactic acid that gives sourdough its sour or yogurt, its Tang.

It could be the ethanol and CO2. That gives beer its most prized alcoholic feature. And also the, you know, the bubbly carbonation and turns out there are also cultures that produce oil. We call them oil cultures. So they don't produce lactic acid. They don't produce ethanol or alcohol, but they produce healthy fats.

So, and, and are, are, are

Paul Shapiro: these particular organisms genetically modified or are they just naturally, that's just what they do. They exist in nature. They eat sugar. They produce.

Jeff Nobbs: They naturally produce oil and they do it more efficiently than any, anything else I've seen, whether that's a pig or an avocado or a cow, an olive you know, most oil crops are single digit percentage.

Maybe, maybe, maybe upwards of 20, 30% oil. Whereas when you look under an oil culture when, when you look at an oil culture trend or a micro. Each [00:14:00] microorganism is 80 to 90% oil. So it's, it's extremely efficient. And

Paul Shapiro: why, I mean, why, why would what's the evolutionary benefit to this organism to being nearly entirely fat?

So like, what is, what is happened in the natural selection process that this organism produces? 90% of its biomass is just fat.

Jeff Nobbs: If you found it in the wild and it's in its natural ecosystem, it wouldn't necessarily be up to 90. But with the right fermentation conditions, it can produce really, really high amounts of fat with, without any sort of genetic modification.

And it, it stores fat you know, the same way humans store fat, the same way. Any organism stores, fat, some organisms store more than others and similar to the right conditions, making. Human organism, quite fat, you know, up a growing percentage of fat. As you know, we get bigger the same things, the same thing can happen on a single cell microbial level where each organism [00:15:00] produces more and more oil or fat.

Paul Shapiro: So you, so you just have like the cultured equivalent of fast food and TV and everything inside of the fermentor. That's like essentially what these organisms are doing. Leading a sedentary life.

Jeff Nobbs: You know, it, it's actually a really good point you make, because I've learned a lot about maybe what humans should be eating based on what we feed microorganisms to make them gain a lot of fat.

And,

Paul Shapiro: , I, I presume you're feeding them a lot of sugar. So what, what is it? Is that true? What, what are you feeding these

Jeff Nobbs: microbes? They're fed plant sugars and mm-hmm so I, I don't recommend a diet of nearly a hundred percent plant sugars for humans because we see what happens into the microscope to organisms that consume that sort of diet.

Paul Shapiro: That's funny. So presumably though the, the plant sugars are producing or excuse me, are contributing a carbon source for the micro, but I presume there must be a nitrogen source also. So what is what, what is, what are you feeding them that gives them the balanced diet to help them thrive here and by thrive, I mean, become obese,

Jeff Nobbs: thrive in their own unique.

We do a lot of experimentation on that to, to see what works best and we can use different sources. And [00:16:00] I think, I think that's, what's really interesting about fermentation in general, which is still like magic to me. It's like alchemy is that you can turn these fairly low value plant inputs. And you know, that that can come from a number of different crops.

We can use whatever is most efficient is most sustainable. And you can turn that into something higher value. You can turn that into something. Healthy fats. You know, you can turn that into something like healthy proteins. You can turn that into a number of different products. And, and so we have our process that we use today, but we've also used different sort of plant inputs and we've even used plant inputs such as corn cobs.

That are usually discarded, but anything with carbon is essentially a, a potential feed stock. And, you know, there's been some really interesting research about literally pulling carbon from the air and turning that into the the carbon and the hydrocarbon chains that make up oil. So we're not really limited by, by feed buy feedstock there, but plant sugars are abundantly available.

So it's a good place to.

Paul Shapiro: Yeah. So, [00:17:00] so when we just press on you, then on this question, Jeff, because earlier you were talking about how environmentally taxing growing all these plants to squeeze the oil out of them is so what you're doing is essentially, you know, folks are growing plants and squeezing the sugar out of them.

You are then feeding the sugar to your microbes so that they can produce oil. So why is it that your way of doing this is actually more environmentally efficient than just growing plants for the oil, the.

Jeff Nobbs: because plants are very good at producing carbohydrates and starches and sugar. They do that extremely efficiently and abundantly most plants.

Aren't very good at producing lipids or, or oils and fats. And it's why so few do and why those that do like Palm or coconut are all over avocado are, are, are so few and far between they're, they're sort of the exception that proves the rule. Plants tend to not store their energy as, as fat. They tend to store their energy as a different form of carbon storage, which is carbohydrate, sugar, you know, starch.

And so mm-hmm, , they produce that much more efficiently through photosynthesis and we can [00:18:00] choose crops. They're grown in regions, outside of biodiverse, rich rainforests, or. You know, or other temperate forests that are rich in biodiversity that, that have a lot of carbon stored underground cultured oil can be produced anywhere.

You know, that's the beauty of fermentation, regardless of what you're producing and those plant sugars can come from anywhere, you know, tho those starches or carbohydrates. So yeah, it comes down to how efficiently plants produce different forms of energy and carbohydrates are what they produce most E.

All right.

Paul Shapiro: Cool. So Jeff, let me ask you, you have referred to the microbe as it, is it a, is it a secret, like, are, are you not disclosing publicly? What microbe you

Jeff Nobbs: utilize? We're not disclosing the species of microorganism that produce culture Doil, but really any microbe can produce lipids. Some, just do it better than others and okay.

Of course that's bacteria. Yeah. Microalgae, yeast, other fungi. Some of which are in a community together. And we go, we work with multiple there, there's not just one we're focused on. So our product [00:19:00] development includes multiple microorganisms. We favor those that produce healthy fats most quickly and efficiently.

Paul Shapiro: Cool. So you're doing this co-culture and just to give people a sense of what it looks like, we're not talking about fermentation in the sense of like sauerkraut, like you mentioned, it's more like beer, right? You're using big sta stainless steel tanks. Is that right?

Jeff Nobbs: It is more like beer. It's also more like beer in that.

You're not eating the actual organism. So with beer yeast produce ethanol and CO2. And they produce so much ethanol that, you know, they, they don't survive their own ethanol production. And then that, that beer is you know, is, is filtered and in the case of other alcoholic vodka distilled. And so you're, you're simply eating the, the output similar to this process.

You're not eating the entire culture. The you're, you're only eating the oil that the culture produce.

Paul Shapiro: Right. So you're not doing like biomass fermentation. You're essentially you are purifying what comes out of your fermentor at the end and just getting the oil

Jeff Nobbs: out, right? Yep. That's exactly [00:20:00] right. And, and, you know, that ends up being 80 to 90% of the biomass, but the, the, the rest is not what we're putting in a bottle.

Paul Shapiro: Got it. And what you're putting in a bottle, you said it's gonna be called cultured oil. That's that's the name of it.

Jeff Nobbs: Yeah. That's what we're calling it. And it's, it's not only a product, but what we hope becomes a new category that others work on as well. And you know, the, the naming is, is a funny thing because we didn't really have a name for a food grade oil that was produced by fermentation.

And so it's a little bit like what, what did we call beer before we had the word beer? You know, some sort of alcoholic fermented, carbonated, CO2, barley beverage, but that doesn't really roll off the tongue. So we come up with words to describe fermentation products like beer and cheese and yogurt and sauerkraut.

But when we don't have a word for it we need to create one and we think cultured oil kind of captures it. Well,

Paul Shapiro: Interesting. I, I saw on the us patent and trademark office website that you guys have already filed a, for a trademark on things [00:21:00] like cultured oil and cultured fat. I, I didn't see that it had been granted to you, but you do have a product that's coming out.

And so you, you presumably you're gonna be calling it this maybe it's not trademarked. I don't know you, you tell me if, if I'm missing something on their website, but I'm eager to hear, like, what is this product, Jeff, that is gonna be available for people to buy this cultured.

Jeff Nobbs: well, that's good investigative work there, Paul, and you're right.

That we do have a trademark on cultured oil, but I frankly I think we're going to drop it. And I think we're, we're going to look at cultured oil, not as our brand, but as this new category. And we don't want a trademark to get in the way from other companies producing cultured oil. So we do have a trademark on it.

For cultured oil in particular, not on, not on not on cultured fat. I don't think that one was granted. But we'll, we'll likely drop it so that others can join. And. You know, in, in terms of what is cultured oil. We think it's the world's best cooking oil, and we think it addresses the issues introduced by vegetable oils.

You know, it's just one product. But it like, like I [00:22:00] had mentioned it replaces essentially every liquid oil there's a bit more work to do for a cultured oil that can replace something like a, a coconut oil or a Palm shorten. But we're working on that too. And when it comes to cultured oil, our whole strategy is we want to produce something better.

So we, we think it can be a bit of an uphill battle. to try and convince consumers you know, to, to use their, their dollars to purchase an inferior product that maybe doesn't cook as well, or doesn't taste as good or isn't as good for them, or, you know, the, the list goes on. But like, like Tesla you know, if you just produce a car that's better, you don't have to convince consumers to drive less and take the bus to work.

You can just produce an electric car that happens to be better than gas powered cars. And it's a much easier decision to. The environmentally friendly transportation decision and yeah, so we we've always thought that's the right approach for cooking oil and, and for solving this problem. So when we say better, that means not only environmentally better and, and, you know, lower carbon emissions, lower land footprint lower water [00:23:00] consumption, but also better for our health and better for cooking.

I, I have a restaurant and it's hard to scale up oils that don't perform well in the kitchen. So that's, that's very important.

Paul Shapiro: So tell me then, you know, my father drives a Tesla and I have driven his car and I can tell it is better than a normal car, right? Like I know why it is better, not just environmentally, but I could enumerate the ways that I think it's superior superior.

So you have a restaurant. If I were a chef and I was saying, Hey, listen, Jeff, I, I really like using olive oil right now. Tell me why this is better. Like, what are the, what are the culinary benefits of using the zero acre farms, cultured oil

Jeff Nobbs: co. So let's, let's take all oil as an example. When you go to a restaurant and you're someone like me who obsesses over what's what ingredients are, are being used.

And, you know, you might be that annoying customer who asks the server what, what oil or fat is being used to cook the food often? They'll do you really

Paul Shapiro: do that? You, you, you ask them what type of oil they use, huh? Oh

Jeff Nobbs: yeah.

Paul Shapiro: Yeah. Wow. Okay. I, I would love to go out with you just to see the book on the waiter's face when this [00:24:00] happens.

I would love sometime we'll go out. Okay. I can't wait to go do this together, but alright, I'm listening. So you ask them all right. And then what do they say?

Jeff Nobbs: Yeah, I'll grill them on the oils and fats and you can grill them on the proteins. I'm sure. They'll love us. after

Paul Shapiro: spitting in your food, what do they say?

Jeff Nobbs: Yeah. So they'll, they'll typically say olive oil and being in the industry, knowing what that means. That actually means 80% canola oil, 20% olive. And the reason that they have to cut olive oil with cheaper oils is because olive oil tends to clump up when it's in the fridge. Because of some of the waxes in it and because of the, the higher, long chain saturated fat content, and, you know, there's, there's nothing.

Inherently wrong with that, but from a chef or culinary perspective, when you're making solid dressings and marinades and other other food products that use liquid oil, you wanna make that maybe a day or two ahead of time and, and have it stay liquid in the fridge. So with that, that, you know, this, this is one point, but cultured oil stays liquid in the fridge, which is really beneficial and, and convenient.

It also has a much higher smoke point than something like olive oil. So you can, you can cook at really [00:25:00] high temperatures. So it has that versatility, whether you're making a salad, dressing, or cooking a stir fry at 485 degrees it, it can do both. It has a very clean, neutral taste, which you, you also want versatile oil, something like an olive oil tends to be a bit more bitter.

I mean, obviously it can be delicious, you know, dipped, nice sourdough bread with some salt dipped in olive oils is great. But, but you can't, you can't use it for everything. Both olive oil and avocado oil sadly have had a history of adult alteration. And this happens with a lot of premium oils, especially those from from Mediterranean regions or from Mexico, where they end up being driven by the, the mafia and cartel, as much as the, you know, the oil company that that's producing it.

And so often at more premium oils, you know, you're not sure what you're actually getting.

Paul Shapiro: But tell me why I care. Like, so let's say I get olive oil and it actually has some component that's canola oil. Does it matter to me? Like what, what is the detriment? I realize this false advertising don't get me wrong, but is there some thing about canola oil that is worse that I should be concerned about?

Like why would I care? [00:26:00]

Jeff Nobbs: Yeah, everyone cares for different reasons. And I think partly because oil is tends to not be the main event, like a steak people don't think about it much, but every oil has a really big negative impact right now. And some, some of the, those negative impacts on the environmental side of things and some are on the health side.

So with something like a canola oil it, it's very high on these polyunsaturated fats and omega six fats that that are really problematic when you, when you heat them. And this is the reason most fried foods are are not so healthy. You know, they're actually, they're not cooked in high amounts of saturated fat.

We're not cooking fried food and in beef fat or, and Palmer coconut oil, we're cooking them in these seed oils like canola oil and, and safflower oil and soybean oil. And these oils oxidize very. When they're heated at high temperatures and that oxidation leads to oxidative stress. So we've all heard terms.

Antioxidants and free radicals, but many people don't know what this actually means when we consume foods that oxidize [00:27:00] easily it, it means they lose an electron and they become free radicals. And then they go havoc in, in our bodies. And when we have more free radicals than the antioxidants to combat those free radicals, it leads to oxidative stress that oxidative stress is, has been shown to be at the center of most of our health issues.

So we wanna prevent that oxidation as much as possible. And that means cooking with oils and fats that aren't so high in these polyunsaturated omega six fats.

Paul Shapiro: Interesting. Yeah, dude, I, I don't know if I mentioned to you, but this morning I actually lost an electron. I'm positive. Yeah. Thank you. Thank you.

No, so, I mean, yeah, thank you. Thank you. Trust me, I have a lot of atomic related jokes. So anyway, Jeff, I, I wanna get into the history here, cause we've been talking about what you're doing, why you're doing it, why the cultured oil is better than some of these seed oils that you're seeking to displace.

But you only started this company a couple years ago, right? In 2020, right? Yep.

Jeff Nobbs: We had, I've been saying about it for the better part of the last decade, but we got our act together in early 20, 20. Okay.

Paul Shapiro: [00:28:00] So the act comes together in 2020 and you fast forward. Now we're recording this in 2022 and you've, you've got several, or at least three dozen employees, you just raised a 37 million round.

Like how did this come about? You know, if you think about like people who dream or fantasize about starting a company. To them. Like that seems almost like, you know, like this is like this verified, like 1% of entrepreneurs who end up doing what you've done in the last couple years. And you're just now getting commercialized, which is very impressive.

Congratulations. I I'll definitely try your oil out. I can't wait to try it.

Jeff Nobbs: Send you a bottle, but what happened?

Paul Shapiro: Yeah. Ah, thank you. That's very nice of you, but I mean seriously, like, you know, and oh, by the way, I remember it's kind of a bad example to use, but so, you know, remember, so Zyme was doing fermentation based oils.

There were algae oils and I, I really liked it. Sadly, you know, the company didn't survive with for a variety of reasons, but it was a it was a good product. I, I liked using that. Did you ever try that oil, the soils IME.

Jeff Nobbs: Yeah, it was a great product. And I don't think the company [00:29:00] ultimately didn't survive because of the quality of its product, but because of a, a lot of other things going on in, in a long history of of needing to reach certain milestones in a very short amount of time.

And, and sadly didn't make it.

Paul Shapiro: Yeah. Yeah, yeah. Very sadly. But it was a cool product. I definitely liked it. So I will look forward to trying the zero ER farms and or that oil and, and rooting for it to, to outlast by a long shot, the the Sozo oil. But what happened, you know, like, This wasn't your first entrepreneurial rodeo.

It's not like you were just like some guy who happened to have a restaurant and you're like, Hey, I wanna raise tens of millions of dollars to do biotech startup. Like, you know, what was the story that led to you now being the CEO of this company, raising tens of millions of dollars?

Jeff Nobbs: Well, I've always been fascinated by food.

Ever since I was a kid you know, I was the weird kid bringing like radishes and chicken breast to school because I thought that was healthier. And I don't know why exactly I gravitated toward it, but I've always been interested in biology and health and nutrition and, and food kind of was the centerpiece of that.

And throughout my teenage [00:30:00] years, that manifested as trying to figure out what I should eat. And, and it didn't really take center stage in my life though until my twenties and in. Just after my 20th birthday, both my parents passed away from chronic diseases. And I, I, at that point essentially made it my life mission to figure out why they got sick and how, how I could prevent that from happening to others.

My most of my family was in medicine. My mom was a nurse, but my dad was always an entrepreneur. So. When I thought of solving a problem, my mind immediately went to creating a business that that was synonymous for me with solving a problem. And I, I had an e-commerce business at the time that I started when I was 18.

And you know, learned a lot about business throughout time, but always knew I wanted to do something in, in food. And as I researched food a ton, I realized that not only had this massive impact on our health, but also the environment my e-commerce business was ultimately acquired. And I knew I wanted to, to go do something with all that [00:31:00] research.

So started a restaurant, started a, a nonprofit at one point. Yep. And the food I kept coming back to was vegetable oils at the center of, of all of this. I knew I needed to do something about it.

Paul Shapiro: And Jeff, lemme ask you, you said the, the company you started when you were 18 was acquired and you wanted to do something with the research.

Did you meant to say with your new resources or you mean literally the knowledge that you obtained by running an e-commerce company as a teenager?

Jeff Nobbs: That knowledge partly because you know, I, I was not quite so incapable as I was when I first started the business at 18. And, and could maybe use business for good.

But at the same time I was running that e-commerce business. I, I was doing a ton of research on what happens when we put different foods in our bodies. And what does it do to every cell in our body? We literally are what we eat and what does it do to our planet. And ultimately the foods that I realized we should be eating less of and, and the foods I realized we should be eating more of that's not what restaurant menus looked like.

That's not what packaged food ingredient lists looked like. And that ultimately led to starting a re. [00:32:00]

Paul Shapiro: Interesting. So let's just go back. You you're, you're a teenager. You decide to start this e-commerce company that ultimately gets acquired. What's the time Delta between age 18. And then at what age was this acquired?

Jeff Nobbs: It was acquired when I was 25.

Paul Shapiro: okay. So you spent seven years doing this and I, I I'm presuming that this was a lucrative exit for you, that you actually made a good amount of money on this exit.

Jeff Nobbs: Yeah, it was, it was a, it was a life changing exit. And we had always looked at that business as a stepping stone.

You know, it wasn't our, our life's work. It it's, it was a, a college born business. And we spent, you know, the majority of the time making a bunch of mistakes and then did some things right. And got lucky the last couple years. And then, so we're able to. ,

Paul Shapiro: this was like the zip two or the PayPal of Elon Musk's career, ultimately leading to the Tesla or the SpaceX, I guess.

So you went from, you know, running the startup for seven years as a very young person to then doing a restaurant, which is of course a really different thing than an eCommerce play. So you're doing this restaurant. Is that the [00:33:00] restaurant that still exists today?

Jeff Nobbs: Yeah, it's a bay area restaurant called Catava.

Cool. What type of food is it? It's food for the people who care about food and it's food for the people who okay. You know, are the ones who turn over ingredient lists and, and look at it, whether you're vegan, plant-based vegetarian or paleo or keto you know, whether whether you want to, to eat food that doesn't contain any animal products, or if you do eat animal products, you want them to be, you know, a hundred percent grass fed pasture raised.

It, it's a fast casual restaurant that, that we think has the healthiest food.

Paul Shapiro: Will it be franchised or is it just one location only?

Jeff Nobbs: Right now we have a couple of locations and are expanding. We've talked about franchise model. Nice. We'll we'll see where that goes.

Paul Shapiro: And will it be using cultured fat?

Jeff Nobbs: We will certainly Catava will certainly be one of zero acre farms. First customers. There are some nice synergy. Ah,

Paul Shapiro: I think I can convince nice synergy or nice nepotism, but either way. That's great. Congratulations. Very cool. So if somebody wants to get cultured oil, the probably the easiest way is [00:34:00] you're in Northern California is to go to a Catava location and you can get it that

Jeff Nobbs: way.

Eventually not at this moment right now, it's it's only available via e-commerce at zero acre.com. Okay. But restaurants are sort of our north star, you know, that's where, and this is why I started a restaurant in the first place. Restaurants are where we get most of our calories. And so it kind of always boggled my mind that the channel where we get most of our calories is not optimized at all for serving healthy, sustainable foods.

And most chefs, most restaurant owners kind of don't think twice about the oils. They. You know, every other ingredient is, is pretty dialed in, especially at kind of Michelin star restaurants and, and same with Catawba. But we had a heck of a time finding cooking oils that we felt were healthy. Didn't destroy the planet.

And that actually did what we needed then to do in the kitchen. And so kind of the amalgamation of all the research I had been doing on what makes us sick, what foods are worse for the planet? Combined with this issue with trying to find a cooking oil for restaurants led to the idea for [00:35:00] doing something about it with zero acre.

Paul Shapiro: That's really cool. That's really cool. How old are you now?

Jeff Nobbs: I'm 34

Paul Shapiro: now. Cool. So you started this restaurant a while ago, right? I mean, that seems like almost a decade ago that you started this thing. Yeah. And it's still going. Yeah, that

Jeff Nobbs: was, that was seven years ago. Wow. Seven years ago. Yeah. Yeah.

Paul Shapiro: Yeah. I mean, restaurant mortality rates are new restaurant.

Mortality rates are pretty high. So you know, you've, you've had some success both with your eCommerce business and with your restaurant obviously, and, and hopefully with zero acres. So what's the scale that you're at now, like you know, fermentation is an expensive game to be in. You gotta build a bunch of fermentors or fine.

Co-manufacturers like, what is your strategy? Are you looking to own all of your fermentation assets or are you looking to do contract manufacturing to have them make the, the fermented fats for you? Like what, what's the play.

Jeff Nobbs: And this business would've been a lot harder, you know, 10, 20 years ago.

The, the field in general has made it easier to run a fermentation food company. And so to, to your point, we're not, we're not owning our own facilities. We're working with contract manufacturers and, and [00:36:00] have very close manufacturing partner relationships for the fermentations. Those fermentation facilities are expensive and it would be, it would be great to have our own facilities, you know, eventually that certainly brings down operating expenses, a lot of capital expenditure to make it happen.

But right now we focus on research in our own facilities. And then for, for both pilot scale and for manufacturing we, we work with partners on that.

Paul Shapiro: So presumably there'll be a cost Delta between cultured oil and conventional oils that you can find in the marketplace. So how much more expensive is it?

Like as an example, we were talking about alternative meats before typically those are like two or 300% the cost of commodity meats today, not, not 20 or 30%, but like two or 300% the cost of conventional meats. They are cost competitive with some of the like organic grass fed meats out there. But as far as factory farm meats are concerned, they're, they're nowhere really near the ballpark just yet.

So where are. Where is cultured oil going to be compared to let's say a overal oil.

Jeff Nobbs: We like to say we're the most [00:37:00] affordable oil on the market. If you take into account all the negative externalities produced by vegetable oil crops. Yeah.

Paul Shapiro: Very nice. Very, very nice pregnant pause there. Yes. I'm sure that'll be top of mind for people, but so, alright.

So, you know, sadly, you're not gonna be competing on the, in, on the externalized costs of of seed oil crop production. So what is the actual price to the consumer compared to if, if they're just buying, you know, olive oil or

Jeff Nobbs: soybean. Yeah. Yeah, not yet, but wouldn't that be great if that's how our world worked and we accounted for all those negative externalities, really, it would be in a better, it would be great.

Paul Shapiro: Yeah, it, it, it would be nice. It would be nice.

Jeff Nobbs: So we're similar to your example, actually, we're, we're sort of somewhere in between, you know, your conventional canola oil And a, a premium, high end, extra Virgin olive oil. And it's, it's a, it's a pretty big Delta. And at our scale right now, most of our costs are actually in all the other supply chain stuff from bottles to cardboard boxes to.

You know, our partners who fill the bottles to [00:38:00] transportation, to our, our shipper that sends it out to customers. And you know, all those costs come down over time. And this is, this is there are clear economies of scale, but right now we're we're, we're similar to. You know, in your example, alternative proteins being more expensive than something like a factory farm beef beef, but competitive with an organic grass fed similar.

Similarly, we're more expensive than your conventional canola oil, but but similar in price to like an organic extrover Virgin avocado oil or a, you know, grass fed GE or something like that.

Paul Shapiro: Interesting. Cool. Well, I'm really looking forward to trying it. And if you send me a bottle before this episode comes out which should be August 1st, 20, 22, I will try it.

And in the introduction to this episode, I will give my verdict on, on what I thought of it. But I do wanna ask you you are an advocate for doing unnatural things, right? Like you have written about why just doing what is natural may not be what's best. You know, there's lots of things that are natural.

We don't like lots of things that are unnatural that we do, like you know, fermentation is a natural process, needless to say. And [00:39:00] you said that you are not right now using genetic engineering. But you do have job openings, a lot of job openings on your site for jobs like strain, engineers, and so on which doesn't necessitate genetic engineering.

But would you consider. Would you consider, you know, let's say creating something, if you wanted to bring your cost curve down to get to be, you know, like that just conventional olive oil, let's say, would you consider genetic engineering as a strategy to help make a more productive strain or in some other way, improve the attributes of your product?

Jeff Nobbs: Yeah, I think, I think often GMOs get a bad rep and I think there's, you know, there's, there's good reason for some of that concern in the ways that we've traditionally used GMOs in the past. But the, the idea of any sort of giving any sort of genetic cons instructions to an organism to. Do what you want it to do more efficiently, that, that doesn't by definition mean it introduces all sorts of problems or is full of glyphosate and pesticides, or is some new unprecedented, you know, food compound in our diet.

I think when we get into [00:40:00] trouble is when we use that sort of technology to introduce foods that humans have never before eaten, like down to the molecular level. If, if we're introducing the. Proteins amino acids, fats, and fatty acids that humans have been eating for hundreds of thousands of years, and simply making them in a more sustainable, efficient way.

You know, that's a totally different ballgame. So certainly we'd use that sort of technology to, for us produce more healthy fats faster, but we wouldn't want to use that sort of technology to I don't know, try for, for those in your audience who are old enough to. Produce something like, or produce, you know, the next trans fat or that's the stuff where technology really, really gets in the.

Paul Shapiro: Yeah. And, and to be fair, Lester was not a genetically engineered product, but for those who don't remember it, it was basically something that you could cook, like potato chips in. And so you would get the fatty mouth feel, but your body would not digest the fat. Sadly it led to a lot of on the package, they had to be called warning possible anal leakage was like the the warning on there.

People are like having [00:41:00] diarrhea and swimming pools and everything. But a fun or lesser fact for you. Back in the early nineties, I was an intern. A place called the center for science and the public interest, which at that time was like crusading against etra. And I manned thera hotline that people called in.

So like they had some horrible adverse reaction Tora, like they would I'd pick up, I'd pick up and they would tell me about it. I was just this young kid, like hearing stories about people's diarrhea. It was horrible. That must have

Jeff Nobbs: been a busy.

Paul Shapiro: Yeah. Ah, you know, it, it, it was, it was not silent. I'll tell you that.

But, okay, so you are open to genetic engineering to create this the way that you were talking about it, Jeff what I, the way I was interpreting what you're saying, tell me if I'm wrong though. Of course, is that you don't think that you require any FDA approval for your current product, right? Like you're not filing a grass notice or generally recognized a safe notice with FDA, like you're going on the market.

Or am I wrong about that? Cultured

Jeff Nobbs: oil has received grass. Status. Oh, cool. Well,

Paul Shapiro: let me correct my error, then. I'm glad that you pointed this out. So you filed a grass notice for your product and you received a no [00:42:00] questions letter from the FDA on the grass status of it.

Jeff Nobbs: We, we work with some partners, so there's a lot of precedent here in producing oil from microorganisms and research has been happening here for decades.

What's really tricky with grass is. Going back to kind of the new food compounds is, Hey, this is, this is something humans have never eaten before. Let's see if it's safe with the case of fats. It's, you know, it's the same oils and fats that, that we've been eating for a long time. And there have been, you mentioned one of them in, so enzyme there have there have been previous, even commercial efforts to.

To, to bring oils and fats to market that are made for microorganisms in the us and in Australia. So we can take advantage of some of that precedence for what we're doing. And in, in the case of the grass letter, you know, that precedent certainly helped a lot where we didn't need to do everything from scratch on our own.

So yeah, cold, you know, there's no FDA approval, of course, of, of any food. It it's on the onus of the company, but the, the FDA did not have any more questions. Hence the grass status [00:43:00] for for qu Ciro.

Paul Shapiro: Cool. Well, congratulations on that. And yeah, it's surprising. think many people will be surprised who aren't intimately familiar with it, with what you just said.

If they're questioning whether that's true, I can assure you what Jeff said is true, that the FDA does not approve necessarily of it. The companies do a lot of research to prove that it's safe and then submit their research to FDA, FDA reviews, all of that, and then can either have questions or no questions.

And so the most coveted thing is to get a no questions letter, which basically means the. Doesn't have any beef or, or in this case, cultured beef fat with your with your product being safe. So that's great. Great. Well, you know, even if you didn't have grass, Jeff, I still would've used the oil anyway, but I'm looking forward to it now that I know that I'm not gonna get sick and die here.

The FDA would sure. So Jeff. Yeah, right, exactly. Okay. So, you know, let me ask you, like, you've had a number of entrepreneurial journeys. It sounds to me, at least the only ones you've talked about have been successful. Have any of them been unsuccessful or have you just had a straight a record here on starting things that turned out to, to go well?

Jeff Nobbs: So [00:44:00] ultimately, you know, I think I persevered through the, the really challenging times there, there were definitely some times in multiple businesses when I thought this will, for sure fail and not make. What are we doing? What am I doing with my life? And yeah, some of that was just pure luck and some was just kind of persevering until we, we had an opportunity to get lucky.

But I don't think any business has been fully, you know, shut down or, or, or failed. Right. Right.

Paul Shapiro: Yeah. Cool. So what, so what do, so you know, I, I know that you are obviously a humble dude and you're gonna say that you were lucky and that, you know, things worked out and the winds blew in the right direction.

And so on. But were there any resources that were useful for you? Like, I, I, I, I don't presume that you're gonna be the type of person who's gonna say. Ah, it was all my perseverance and resilience and grit that got me through this. So I won't ask you that, but I will say, like, were there any resources that were useful for you?

You know, a lot of people who are listening to this, they might be thinking, oh, this Jeff Guy sounds like he's really done some awesome things. I'd like to try to replicate some of the success that he's had. I wonder if he read something or saw something that was helpful for him. So is there anything that you would recommend to other people who are interested in trying to do something good in the world through a [00:45:00] business?

Jeff Nobbs: Yeah, absolutely. And first and foremost, it's, you know, to, to not do it alone. I I've had businesses where I was the the, the sole founder and businesses where, you know, I, I brought in others and anytime you do a business with others, you know, those people become family and you, you start to become frustrated with family.

And you wish you could just do it all on your own and then you do it on your own and you realize, well, that's a giant mistake because everything falls on your shoulders. So certain certainly working with co-founders is helpful and, and also taking advantage of your, you know, your network. And if you're in college playing the student card works extremely well for, for just having conversations with folks and then asking every person you, you talk to.

More recommendations on other people you can talk to there. There's no reason to, you know, you can learn from the mistakes of others and making a mistake yourself is probably the best way to learn, but you can prevent some of those. So yeah, other people first and foremost, They are going E even compared to books.

Other people are going to have the most up to date and personalized [00:46:00] recommendations based on that real time conversation with you. Whereas a book requires kind of an added layer of interpretation from what the author said at, you know, when it was written however many years ago to your personal situation where you are now.

But I, I kind of like the. The OG books on all things self-help and, and business. So like, you know, Dale Carnegie's books Pete, Peter Drucker's books on management, he's sort of like the, the godfather of of business management books. There's a book called think and grow rich, which is kind of like the original self-help book.

On how to manifest intention into things, you know, actually happening for you. And, and then of course there are some practical day to day books that are helpful for building a business, you know, especially when you're young and have no idea what you're doing, but even as you get older to kind of remind yourself of best practices couple of my favorites

Paul Shapiro: there.

Yeah. I'll tell, I'll tell you, Jeff. I, I am not young anymore, but I still don't know what I'm doing. So I'm ready to listen to to, it's not a reminder for me, it's all new. So what are the, what are the ones that you think young or old people who don't know what they're doing should be checking out?

Jeff Nobbs: [00:47:00] I, I like scaling up as sort of a good introduction to how the heck do you run a company and how do you create this heartbeat of a company in terms of, you know, what are the weekly meetings, the monthly meetings, the quarterly meetings how do you, how do you set goals?

How do you stick to those goals? And. And then a bit beyond that there's a book called high growth handbook that does a great job of shining a light on those issues that nobody talks about. Kinda like Ben Horowitz's book. The hard thing about hard things similar to that, where it is kind like being, you know, fly on the wall in board, in a, in a boardroom or in executive meetings, really, really getting some insights into how other companies.

That are in this high growth startup phase deal with problems. So, so I, I love those books on a more practical stand.

Paul Shapiro: Cool. Yeah, I loved Ben Ho's book. And there was a line in there that really stuck out to me, which was, he said that when you start your own company, you will sleep like a baby because you will wake up every two hours and cry

And I was like, ah, you know, that was, it definitely was like hitting home there. But that's [00:48:00] cool. We'll loo to all of those. Books and other resources that you mentioned in the show notes for this episode@businessforgoodpodcast.com. So before I let you roll here, Jeff, to go culture some more fat and get that bottle that you're shipping my way out to me.

I do wanna ask you, like, you've started a number of things. You probably are the type of guy who has a lot of ideas in your head about things that you would like to do, but you're already like a third of the way done with your life. Presumably you're gonna be spending maybe the next decade working on zero acre farms, who knows.

So what are some ideas for making the world better? If somebody's thinking I wanna start my own company? Like, is there anything that you wish existed that doesn't yet exist that you would think somebody else should do?

Jeff Nobbs: Sadly, the world does have a lot of problems and I think the best companies set out to solve a very specific problem.

I think it's important to also realize we can't solve each one of us can't solve all the world's problems. So, you know, you, we have to pick the problem and, and pursue the ideas that. That really speak to us and that are, that we're uniquely positioned to solve. And so I think that goes for everyone, you [00:49:00] know, don't force it.

And it it's gotta feel like the right problem for you in, in terms of specific ideas. So I think unsexy is really great actually. And I, I think most of the sexy ideas are what most people pursue. And, you know, food tech is fairly sexy and you know, you and I are both pursuing food tech companies and ideas, and having a lot of conversations about that.

And that's kind of step one, but I think there's a, there's an opportunity and a lot more people should be working on food and ingredient distribution. So step one is actually making the food. Step two is how do we get that to the people who need it most and feeding the world at this point is not a problem of calories.

It's a problem of distribution and. Getting those calories and those even more importantly, those nutrients to, to people that, you know, can't just walk down the street and go to a trader Joe's or whole foods. So I I'd love to see more innovation there. And I think there are still incredible opportunities and, and ideas in, in the world of food distribution.

Paul Shapiro: All right. Cool. Well maybe in a future episode of business for good, we'll be talking to somebody who's got a successful food [00:50:00] distribution company that was inspired by your words here today, Jeff. That would be pretty awesome. If so we will we'll circle back with you and let you know, but I really admire what you're doing.

I think it's cool. I can't wait to try the product and I just wanna say congratulations on all the success that you're having and hopefully we can move toward a world where our oils and. Foods as well have a much lighter footprint on the planet and we will then have maybe not zero acres devoted to agriculture, but much fewer.

So hopefully we'll have some more wildlife habitat out there. So Jeff, congratulations on zero acre farms looking forward to checking out the product and more about your success as the years go by. Thanks,

Jeff Nobbs: Paul. Really appreciate it and enjoyed the conversation.