Dairy Dialog podcast 68: TurtleTree Labs, INTL FCStone and Essenza
There is an interview with Gianluca Iazzetta, founder of Essenza, from the Sigep event in Rimini, Italy. We feature our weekly look at the global dairy markets, with Charlie Hyland, from INTL FCStone, only this week it’s a little more in depth, as we also discuss the effects of the coronavirus outbreak on the dairy industry. [Virus image: Getty Images/Naeblys]
And we also talked to Singapore-based TurtleTree Labs’ chief strategist Max Rye, and CEO Fengru Lin about their work on creating breast and cow milk from cells.
Essenza S.r.l. is an Italian gelato business established in 2015 when Antonio Iazzetta decided to use his 30 years of experience as a gelato technician in a new venture.
Essenza developed a 100% plant-based nucleus for ice cream, made from proteins and fibers, from natural elements, often the result of reuse of products from other manufacturing processes.
The company’s products are clean label; there are no additives or emulsifiers (not even natural additives).
One of the goals of the company is to reduce sugar in gelato through the use of fibers.
The company’s LESSenza product is a semi-solid syrup made of long and dense fibers. Visually similar to honey, the syrup plays the technological role of sugars, even though it contains no sweetening molecule: it is sugar-free (therefore, not a browning agent), with no flavor and no flavoring substances, and it is soluble in water, without allergens, with a viscosity that changes with temperature changes.
It can be used as a total sugar reducer, as a cryo-protector with a lower freezing point, which delays the crystallization of ice cream; and as an ice cream improver – added on top, it gives longer texture and creamier results.
TurtleTree Labs secures funding for production of milk from cells
TurtleTree Labs, the Singapore-based company working with biotechnology to create the full nutritional content of milk, has announced it has completed its pre-seed funding round.
Co-founded by CEO Fengru Lin, CSO Rabail Toor, and chief strategist Max Rye, TurtleTree Labs is the world's first cell-based milk company using technology to create milk from animal cells, with no animal needed.
TurtleTree said its breakthrough allows for not just the full functionality of dairy milk but will also disrupt the existing baby formula industry.
The pre-seed round, led by Lever VC, a venture capital fund specializing in alternative protein investments, includes KBW Ventures and K2 Global.
"What TurtleTree Labs is doing is fascinating, and their technology could be a serious disruptor in the global dairy industry," said Nick Cooney, founder and managing partner at Lever VC.
"They are the first company in the world producing real, whole milk from cell cultivation - which opens the door for safer, healthier and customized dairy products that can be produced with far fewer natural resources."
Prince Khaled bin Alwaleed bin Talal Al Saud, founder and CEO of KBW Ventures, said, "KBW Ventures' interest in TurtleTree stems from both the team vision and the company's strategic approach to the future of food using stem cell technology. Having spent time with the founding team in Singapore, we have a lot of confidence in TurtleTree's progress as a biotech company and in the direction they are taking from a business perspective."
TurtleTree uses mammary cells to produce real, full milk, the end product being the same as human breast milk and cow milk, which will be sold as food products.
"The seed funding will be used to further build out the company's scientific team and to create additional prototypes. TurtleTree Labs plans to publicly debut the world's first cultivated milk (and mother's milk) products in the spring," said Rye.
Lin said the focus now is to bring in the right talent during the company's early stage to provide TurtleTree the support needed for rapid acceleration, thereby contributing in the global change the company is passionate about.
"We believe the entire landscape of human breast and traditional bovine milk will be transformed as a result of our technology," Lin said.
K2 Global founder, Ozi Amanat, said, "The next level of disruption will come from food technology companies solving heath and sustainability at a mass level. TT is solving for an important gap in the food chain at a critical time in history.”
INTL FCStone on coronavirus issues
The recent evidence suggests that the world will get a grip on the current coronavirus outbreak, a vaccine will be developed and the economic impact (on a global scale) will be relatively small.
This is according to Nate Donnay, director of dairy market insight at INTL FCStone.
Forecasting dairy demand breaks down into two broad categories, population and per capita consumption, Donnay said.
He argues that nearly all the impact will be per capita consumption.
“We know from previous pandemics that travel will decline sharply in aﬀected areas,” Donnay said.
“Overall consumption in those areas will be down, but the people who aren’t traveling will still need to eat wherever they are.
“Maybe people will be afraid to go to restaurants and be around other people, which will decrease food services sales. But people will then have to cook at home (and go to the market to buy ingredients, where there are also lots of people).
“I would guess that meals cooked at home probably have less dairy in them than restaurant meals, so maybe there is some mild negative impact to dairy demand. On the other hand, consumers going to the market may stock up on goods to limit the number of trips and there could be higher spoilage rates because of the infrequent trips, so maybe total retail dairy sales would increase enough to oﬀset lower food service sales.”
Donnay said that while sick people eat less than healthy people, even if there is a big outbreak like swine flu, 25m sick people is 0.3% of the global population, and if they ate nothing for one week, that would only reduce annual global consumption by 0.006%.
“Another way to look at it would be to estimate the impact it will have on GDP and then translate that into an impact dairy demand and prices,” Donnay said.
He pointed to studies that on the ﬁnancial impact of pandemics. Estimates from the SARS outbreak show a hit to China and Hong Kong’s GDP, but global GDP was likely reduced by 0.3% or less.
“The current coronavirus outbreak looks like it is on pace to be worse than SARS,” Donnay noted.
Donnay said impacts inside of China will be bigger, and short-term there could be a price drop more than 3-4%.
However, Donnay said, a 3% change in New Zealand milk production corresponds to a 5-10% change in global dairy prices, so some mildly adverse weather in one of the major dairy exporting countries could quickly negate any negative price impacts of this outbreak.
He added that it is also possible that China and other governments might take steps to boost their economies and oﬀset some of the potential negative impact to GDP.
Virus image: Getty Images/Naeblys