Lou Cooperhouse - CEO of BlueNalu

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And welcome back to the Tacos and Tech Podcast. I'm your host, Neal Bloom and I am here with Lou Cooperhouse, CEO of bluenalu. Thanks for being here.

It's great to be here. Thanks, Neil, do you want to give.

Us a quick little readout of what Blue Nalu is?

Sure. So Blue Nalu is actually manufacturing seafood directly from the cells of fish. So it's a very novel way to really create a sustainable solution that's healthy for people, humane for sea life, but also sustainable for our planet. So we're excited to be here in San Diego and launch this very innovative company.

Wow, this is really exciting. I'm excited to get into this, but you have a long history in the food science space, correct?

That's correct. Yeah. I've been in the food industry for 35 years altogether. I went to school initially for microbiology and food science, but found myself starting up companies throughout my career. Initially in large companies. I was at Campbell Soup initially followed by conagra and then a Nestle funded startup out here in Northern California actually. And then started doing my own startups back in the mid-90s and doing a lot of consulting since then. And along the way I've also ran a Rutgers University Food Innovation center program. So I founded that program and then was executive director and actually had a chance to see so much innovation myself and provide support to all these companies. And along the way just really got increasingly excited about some niches that I saw that were beyond niches, were in fact could be quite transformative. And bluenalu actually was born from just my desire to really do something that could be quite disruptive.

Wow, really cool. So what's the food science world like now versus when you're doing your own startup like another startup say in the.

90S, it's big time different. So it's really funny from a consumer point of view. Back in the earlier days I was seeing foods that were really more about local or healthy, more convenient, so a bit more just differentiated in very more non innovative ways or not so exciting really, but just really more about personal choices. But what I saw really happen in the last five to 10 years where foods were taking on much more of an experiential role, they were really becoming more about sustainability, where foods were really messaging, not just healthy for me, but what can I do to make a difference for the planet. It has to do with packaging and plastics, but also the foods themselves and what they communicate. And so I really saw a particular category kind of get on fire. So first we saw a lot of ag tech, innovation, everything from farm sensing technologies to vertical farming. We saw a lot of activity in home appliances, but really in the middle of all that was alternative protein. And so there was a whole category that really began with plant based foods, with companies like Beyond Meat and Impossible Foods that really pioneered this whole new category. What they did differently that didn't exist before was there have been plant based burgers for almost 40 years actually. But what's new is that now there's products that really arguably don't have any compromise on flavor. So Possum beyond really tried to replicate the sensory attributes of a burger, but using plant based materials. And that itself was something that was the novelty there that really created. Just in the case of Beyond Meat, the greatest IPO in better part of 15 years and really lit the whole industry on fire that this whole category was really ripe for innovation and disruption. But cell based is something that really is a whole other category that I found to be particularly exciting.

So are big companies, have they been just as into the science aspect before or has it been more of a brand play?

It's really been the startups have really developed this technology, so it was really identified by companies that really wanted to frankly displace animal consumption from our planet. So it's really driven. The initial pioneers were founders that were really focused on finding new solutions for animal products using plants. And that was really what led to beyond meat and apostle foods and others in the plant based category. So now we're seeing phenomenal plant based cheeses and obviously we've had milk for some years and that's really transformed entirely with all new categories of milk, but also all sorts of other dairy based products, ice creams, novelty products, but certainly just a whole array of plant based meat products. Again, that's one generation, that was really the first one. And what we're doing with cells is a whole different solution, but meeting the same objective of actually making a product that is the same or tastes the same, I should say, as a meat product or a seafood product in our case, but in which no animal was harmed in the process.

So why don't we dive into what the cell based process is for? Blue Nalu.

Yeah. So what actually happened in about 2013 was the first proof of concept occurred. Actually Sergey Brin, one of the co founders of Google, actually funded a company, actually funded a researcher in the Netherlands who did the first proof of concept of a cell based burger. So what does that mean? He actually took a biopsy from a cow and he took cells and he grew those in large, large quantities. He found a way to proliferate them, relatively speaking, indefinitely, somewhat immortalized. And actually those cells were ultimately came together, the various myotubes were formed and the functionality of a ground meat product was demonstrated. So that was 2013 and what happened. And actually the early endeavors in this whole category began in mammal products, beef and pork and other products, because there was frankly a fair amount of science around human tissue and obviously rodents and hamsters and many other mammals were known. So various cell lines were established. And frankly I was looking at the category myself and was just dumbfounded by how exciting this could be. But I really saw the biggest opportunity in cell based seafood. So using the same principle to actually propagate cells from a fish. Mahi mahi, Red snapper tuna, what have you grow them in really large quantities. It looks a bit like a microbrewery. So they're bioreactors, but they could be 200,000 liters, the same size you might find in a large brewery. So great for our beer audience. Something to be very familiar with and that would actually then be processed. So the products would be assem. And actually are the same thing as fish products, seafood products. It's not a living fish. We're making a seafood portion, 100% yield to seafood. So it really solves a great number of benefits that we found to be really innovative. And we really found this cell based seafood category as being the most opportunistic of them all.

Interesting. This is going to be great when we start talking about what kind of tacos we can make out of this.

Absolutely.

So we'll get to that. But it leans on so many fundamental parts of San Diego, as you said. Right. Our brewing area, our blue kind of ocean blue, tech blue color, and then our biotech. I mean these are three pretty massive, like very San Diego things. Is that specifically, I mean, is that on purpose where you kind of found the talent and the team to build this was. It had to be in San Diego.

This is a big shout out for San Diego. We literally came from San Diego, from other parts of the world. I personally came from New Jersey because of the workforce here. So we were excited by the tissue engineering, cell biology, regenerative medicine knowledge that's here. Frankly, there wasn't any competition in this category here either. But we also recognize the heritage of the seafood industry here in San Diego, arguably one of the tuna capitals of the world and the home of companies that started here and are still here in San Diego, including Bumblebee. So obviously it's a great place to get started. And we were just so warmly welcomed by the various representatives at the city, federal, county level and really so happy that we chose to be here. And we really attracted an outstanding workforce that really is making a big difference.

That's great. What part of San Diego are you guys in? Right now?

We're in Sorrento Valley.

Okay, awesome. Great central spot. You have a tremendous background, obviously in the food space, but also on the tech or innovation side, I'm curious, at Rutgers and around, it sounds like, I mean, for Rutgers to have these kind of programs that you did your bachelor's and your master's and then had a whole innovation lab. Is there something going on specifically in New Jersey, that area that also has kind of this food science focus or.

Epicenter, actually New Jersey is a bit like San Diego in one way has a port. So New Jersey has Port Newark and San Diego has a large port as is la. And that really attracts a lot of international companies to the region. So what I created in New Jersey was really something that didn't exist before. Really a cluster putting together academia, industry and also the public sector, state government really attracting companies to New Jersey. It was something I did kind of giving back in a most recent period of my life, helping other entrepreneurs. And what was really fascinating, we built a world class program there, the Food Innovation center. And in fact Impossible Foods was one of our clients. We also worked on plant based cheeses and all sorts of other products. So it was just really a great window in innovation while we're also supporting many startups and helping them commercialize their technologies.

Got it.

So it was along that time that I really just became increasingly aware of how exciting plant based was. But I really saw Cell Base as something that could be even far more disruptive and innovative. To actually have the animal without the animal, in the case of seafood, offering so many benefits. The challenge of the seafood industry today is there's such an increased demand for seafood. People love seafood, they love the various nutritional benefits, the health, the quality benefits. But unfortunately global demand is only increasing, particularly in Asian countries as income levels increase. And around the world there's be more demand for seafood. And our problem as we all know is our supply is just diminishing from our planet. We just can't keep up with the amount of protein to support the world in the decades to come. Furthermore, there's issues of microplastics and mercury, environmental pollutants that consumers are increasingly concerned about. So Bluenald, when we make cell based seafood, we're actually offering a product that has all the positives but none of the what may be perceived as some negatives. So product that can be consistent, that can actually have no mercury and just really have something that you can be confident of. And what we're frankly really creating is a stable supply chain. So we're really here to supplement the wild caught and farm raised product with a third supply chain and hopefully all three of us can keep up with the global demand in the decades to come.

Wow, it's really exciting. What's the stage that you guys are at right now besides funding? Where is can you produce the product right now or it's not on shelves?

We're making small samples today. So I think what we demonstrated back in December and actually the San Diego Union Tribune Did a nice story on us. We did an event, a demonstration event. It was the first time any company worldwide had been able to show that cell based seafood, we used yellowtail amberjack as a prototype product, could actually have the structural integrity of traditional yellowtail. Meaning the way we prepare seafood in general is really three ways. We may cook it in something as abusive as frying oil, or saute or pan fry or sear what have you, or we may cook it, if you will, in an acidic marinade. So it's a raw product that might be going into a ceviche or poke or kimchi application and it's a pretty abusive marinade to a conventional product. Or we might consume it raw. So these are the three ways we prepared the product to show that it actually could withstand any of those cooking conditions, preparation conditions, and that itself was a huge milestone. But to answer your question, we're about a year and a half away. We plan to be in a test market. So the second half of 2021, it's our objective to actually launch here in San Diego for the first cell based seafood that may exist on the planet, but certainly will definitely exist in Southern California. And we're really excited to do that.

That's exciting. What do you need to get. What needs to happen between now and that launch?

A couple things. One is right now we're making really small volumes. The whole industry is in its infancy globally, so we're all making prototypes. But what we're all doing on a global level, and there's other countries, other companies around the world that are doing some form of cell based seafood or meat or pork or all kinds of other as well. But we're really increasing our capacity over the next, in our case, over the next 18 months.

This is from a batch like size.

Of product from a benchtop level literally to something that would be as much as 2000 liters in scale. So that's still not that much, but it's enough to kind of launch with several hundred pounds per week, maybe 2 to 500 pounds per week, and actually introduce our product in several stores. And the other thing that needs to occur is the fda where all of us, across the US for sure and around the world still require regulatory approval to get our product in commerce. So part of that process is, as you can imagine, is being very transparent and very forward with the FDA in our case, provide all the information they need to be properly satisfied that our product is safe and that our product is properly labeled to the public.

Yeah, this has got to be a whole New category for them or I'm guessing cell based? Or has someone already broken the door open for them?

Brand new category.

Okay.

It's great to be a pioneer.

Yeah, yeah, it is. Is there an FDA kind of local presence that you can, that are local, seeing what's going on here, or is it kind of a formal submit every so often?

It's national. So this. So what's really exciting, Neil, was about a couple years ago, the FDA and the USDA got together and essentially said, this is something that we recognize is coming around the world in America. We like to be an early adopter. So it was a very, very positive message at the commissioner of FDA and the secretary of USDA level. And I had the chance to actually be in Washington in both FDA and USDA public meetings and actually testify at that time as well. And what they basically said was this is in our wheelhouse. This is something that's similar to other technologies we currently regulate. We just need to understand it better. And what they ask for companies to do is please come early and often so we can understand your process, gain comfort with it. It'll follow some of the same standards and regulations that exist for meat and poultry products today that are in commerce. They're just different. So there's a principle called haccp. It stands for hazard Analysis Critical Control point. So our hazards are different, our control points are different, but every product goes through a similar process. And ours will have a very similar methodology of how we approach food safety and also how we also make sure that consumers are aware that this product is in fact cell based. Because we feel that we also want to communicate some of the benefits, like there's no mercury present. So these are some of the things that we're working with the FDA to kind of just understand how we can appropriately communicate this message to the public.

Got it. So you got a firsthand seed at seeing Impossible kind of grow. Sounds like any lessons learned that you're taking back to how you're starting bluenalo.

Impossible is a great example and beyond as well. They both did an amazing job at launching their companies. In the case of Impossible, they literally began not as a vegan product, but actually putting their product in meat eating. Some of the Michelin starred, in fact restaurants in New York City and then Northern California, Southern California as well. So they really went to demonstrate that this is a product that stands up to any meat product and let's actually showcase it in a meat restaurant, if you will. So similarly, we also recognize that we want to position our product in the iconic seafood brands companies in Southern California. So we're excited to work with restaurants here in Southern California who would like to be early adopters. And we're actually doing some primary market research right now just to better understand what species, what products, what forms will be most interesting because we actually demonstrated that we can actually do a platform technology. We can do a wide array of species. We're currently working on mahi mahi and red snapper. We've done yellowtail, amberjack, we're actually going to be working on tuna as well. And other species are on our horizon as well. We're very able to create a library of species that would be available based on consumer demand or any kind of national challenges we might have to our seafood supply. We could actually make it more demand driven than currently, as supply driven as it is.

Wow, really exciting. Do you think it'll be because impossible took a while, both of them to decide to be B2B? B2C. Do you think you'll go after both at the same time or is there more directly to restaurant to then get it in front of consumers?

I think impossible began at the B2B at the Food service level. And we see that as a natural way to go as well, frankly, because our volumes will be limited as we get started. And it's really very. It's the way the food industry has historically been that great ideas begin at restaurants and they migrate over to retail. And you look for the early adopters at the food service level who really help understand how it could best be positioned. There's so many benefits here. So how the product gets communicated. One thing that we've heard from some of the food service operators, you know, some of the first words, they go, oh my God, no bones. So no heads, no tails. 100% yield, no trim. So it really offers a number of benefits at that level. Lower labor, no cross contamination. Of course it doesn't have the mercury or microplastics or toxins or pollutants that might be present. But most importantly, it also becomes a stable supply chain. It's available consistently. So we're very excited by just the mere fact that we can have a more stable supply chain to support food service operators around the country.

So you just raised a good amount of money? About $20 million. Happy to kind of been a part of that with Tech Coast Angels, which we invested locally too.

Excellent.

Thanks for having us. What does day after all the wires hit look like? Grow and hire.

Absolutely. We're hiring right now and this funding was really outstanding. So we're excited because Blue Nalo has actually raised of funds from organizations 11 different nations. And we're excited that not only do we have a global presence, but we now have a strong San Diego presence. So thank you Techos, Angels and others from San Diego that invested. Really excited to have you because this is where we're launching, this is our home. Really important to us, but this funding will allow us to really get to what we call phase three of our five phase plan. And phase three is where we actually launch. In its initial test market, it's the first time our product will be in commerce under FDA supervision, regulatory oversight. That's a huge milestone for our company and even for this industry globally. We'll of course be out raising funds in the future as startups do, especially as we look to build large scale factories. Which is next after this?

Sure.

So it's a great journey, but we've come a long way in just a year and a half and we're excited what the next year will bring to us.

Yeah, we're excited as well. It does seem like, I mean it's a big swing obviously may take a lot of funding at least if you look at the impossibles and beyonds though a little bit different because they're not cell based. But still, I would imagine you have a lot more funding to go raise.

We do. And I think as exciting as Apostle beyond in a plant based category has been, there's actually some studies at Kearney, the accounting firm did a recent study that show that by the year between 2025 and 2040 from base of zero cell based foods they're predicting will grow at 41% annual growth rate and represent 35% market share by 2040 of all global meat consumption.

Wow.

Where plant based will grow at 9% over that period of time and represent, I believe it would be 35% or so market share or 25 or 35, somewhere in that range. So basically conventional meat will go from today's roughly speaking 95 to 100% of the market down to 40 and actually become unconventional by 2040. So they're predicting that cell base will actually be at the greatest growth rate during that period of time. So we feel that way too. And what's exciting about seafood is we're able to do the high value products, the fillets, so it'll be a bit more challenging to do the ribeye steaks on the meat side or some of the high value meat based products. But we're very confident we can do the high value Seafood based products, the filets, the finfish categories that really command at a premium price.

Well, that's. We've been talking a good amount about seafood. We got to talk about local San Diego tacos because you're going to one day be the best taco here in town. Is there a benchmark that you have that you want to say, all right, that taco in San Diego, we are going to be better than that.

Well, that's a tough one. San Diego is notorious for the most amazing fish tacos. So we welcome that competition in the future and we love to work with all the San Diego seafood companies and really help launch our. Our first product will be mahi mahi. We love to actually work with fish tacos with our mahi mahi. With any restaurants in the region that would like to participate initially our volumes will be very small so I have to be very selective. But we certainly would love to really grow with as many restaurants as possible and put our fish tacos to test.

Definitely. I could see a whole food truck kind of whole thing of just the cell based truck, right?

Absolutely.

That would be pretty cool.

Go across the country for that.

Yeah, definitely. Well, this has been awesome. We're really excited to just watch this grow physically and we're excited to not just rally around Blue Nalu but potentially bring a cluster, another whole cluster here to San Diego. You saw the three industries but I think there's more coming that could be born straight out of this being a really big name company out of San Diego. So thanks for that.

We hope so. We think so too.

Is there a place that on social people can Follow you? Twitter LinkedIn. Where do you like to be found?

We're on Facebook, Twitter, LinkedIn.

How about you?

Specifically, specifically mostly on LinkedIn.

Okay.

So LinkedIn you can certainly find Luke Cooper else. So look forward to connecting.

Great. Well Lou, thanks so much. We'll have you on again to get a check in and maybe even bring some tacos in with it.

That sounds good. Thanks Neil.

Thanks.

Thanks for joining us on the tacos and tech podcast with Neil Bloom. Thanks again to Cox business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Rap for our rad intro music and thanks as well to Nest podcast network where we are recording live in the inside their studio at Ness Co working in Bankers Hill. You can find Neil Bloom on Twitter, Neal Bloom as well as fresh brewed tech and tacos and tech pod on Twitter too.

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