Startup Series: FYTO

Dec 15

Today's guest is Jason Prapas, CEO and Founder of FYTO, which is a technology company that is unlocking the potential of nutrient-rich aquatic plants to reduce the emissions and water footprint of food production, starting with cattle cultivation.

Raising livestock, particularly cattle, is known for its incredibly high emissions footprint. And while we can make responsible diet choices individually, relying on society to change as a whole is challenging in a world that’s increasingly adopting meat-oriented food products. If opting for plant-based alternatives requires consumer choice and sacrifice, what are the systems-level approaches we can take to solve cattle’s carbon footprint?

Each of humanity's major cultivated crops is a platform of sorts. Wheat, corn, soybeans, rice, etc. all have micro-economies surrounding them, including specific tools and machinery, input requirements, supply chains, markets, and geographies. FYTO is creating an entirely new agricultural crop platform that uses automation and sensor technology to achieve protein-rich aquatic plant mass at scale. It's a huge bet, with a huge reward for the planet if it pays off.

Cody and Jason have a great conversation about the negative feedback loops built into the emissions and water impact of cattle production today, plus what it will take to grow a closed-loop system that can halt and reverse these externalities.

Get connected:
Cody's Twitter

MCJ Podcast / Collective

*You can also reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.

Episode recorded on October 5, 2022.

In this episode, we cover:

[4:12] Problems with food and water security coupled with rapid carbon reductions
[6:04] Expected growth of food production and the climate impact
[8:15] The role of animal agriculture
[11:06] How climate justice fits in
[12:59] Downstream impacts of a cow's diet, including emissions and deforestation
[20:47] Groundwater pollution from animal food production
[25:21] Methane emissions from cattle and different approaches aimed at reducing them
[30:04] FYTO's farm solution
[34:31] Role of technology development in farming better crops at scale
[36:01] The FYTO farm setup
[39:39] Protein comparisons between FYTO's plants and other types of cattle feed
[40:39] Role of recycled animal waste as fertilizer
[41:27] FYTO's current trials for measuring methane impact
[42:51] The company's business model
[48:07] Understanding impacts on scope three emissions
[50:01] FYTO's shelf-life and storage
[53:59] The company's funding to date and plans for growth

Jason Jacobs (00:01):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:15):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:26):
We appreciate you tuning in, sharing this episode and if you feel like it leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:40):
Today's guest is Jason Prapas, CEO and founder of FYTO, which is a technology company that's unlocking the potential of nutrient-rich aquatic plants to reduce the emissions and water footprint of food production. Starting with cattle cultivation. We all know that cattle cultivation has an incredibly high emissions footprint. In fact, the single biggest thing most of us could do to make a meaningful emissions impact in our lives is to eat less beef and dairy. And while each of us may make responsible choices individually, relying on society as a whole to do that is a challenge in a world that's increasingly adopting western meat-oriented diets. So what are the systems approaches we can take? Plant-based meat is one, but that also requires consumer choice and sacrifice. So what things can be done to try to reduce the impact of cattle, assuming that cattle production isn't going to be going away and actually is most likely to continue to grow.
(01:31):
Much of the attention and popular understanding of cattle's carbon footprint is on methane emissions from cows. They're burps, in particular. What I didn't fully appreciate until talking with Jason is how many other climate externalities exist with cattle cultivation and particularly from producing cattle feeds such as soy and alfalfa, ranging from deforestation to water use to global feed transport. One big aha I had in our discussion is that each of humanities major cultivated crops including wheat, corn, soybeans, rice, et cetera, each is kind of a platform of sorts.
(02:05):
Each one has micro economies surrounding it, including specific tools and machinery, specific input requirements, specific supply chains, specific markets, and specific geographies. So what does it take to create an entirely new agricultural crop platform? That's what Jason and FYTO are doing. They're betting that today's automation and sensor technology plus external market factors, including emissions and water scarcity factors exist such that now is the time for an entirely new protein-rich aquatic plant to be able to achieve mass scale. It's a huge bet with a potentially huge reward for the planet and for FYTO if it pays off. Jason and I have a great conversation about the negative feedback loops built into the emissions and water impact of cattle production today and about what it'll take to grow a closed loop system that can halt and reverse those externalities and possibly scale a major new food stuff in the process. Jason, welcome to the show.
Jason Prapas (03:05):
Thanks. Great to be here. Thanks for having me.
Cody Simms (03:07):
So, I am quite interested to understand how you all landed on the solution set that is FYTO. But I think before we get there, normally in these interviews, I'll ask you to explain your background and how you ultimately landed on the problem you're working on. But I think it's really important for us to understand the bigger picture of the problem set and then maybe lay out what the solution is that you've landed on here and then get into how you did it just because it is such a unique solution from what I can tell to the problem or the multiple problems that I guess you're solving. So maybe before we go into everything, let's set the stage with looking at the really big picture from a human perspective; food, water, emissions, like where are we and what needs to happen over the next few decades given what we expect continued economic development and human population growth and all of that to look like. So the way step back, just framing the big picture here for us.
Jason Prapas (04:12):
Absolutely. Yeah. So I hope to convey a lot of positivity and optimism, but I'll start with some big problems that you're mentioning and something I jokingly call the Venn diagram because we have this overlap of food security, water security, and rapid carbon reductions to save the climate that are all imperative and urgent and concurrent. So when we look at the interface of those, food really lies in the center because obviously you need food for food security.
(04:40):
But if we look at where a lot of our energy, our fossil fuel usage and our water goes, it's embodied in food. And so that's a really amazing place to work if you care about the climate, if you care about water resiliency and food security and nutrition. It's also just abundant with problems to be solved through any manner of technologies, policies, and just behavior change. So it's a really rewarding place to be working and we did arrive at this with the intention of having a company that could really rapidly decarbonize the food system. But as you point out, along the way, we're realizing there's so much more to be solved and hopefully areas that we can really provide some compelling solutions on water use efficiency, on land management. We're looking more and more at labor considerations because that's been a huge issue for food producers around the world. Yeah, there's an abundance of problems to be working on in this area.
Cody Simms (05:32):
And from a food perspective, what does the expectation look like on the amount of, I guess, food production growth that we are likely going to need to hit. And then tying it back to climate change, what is food's impact today from an emissions standpoint, broadly in terms of anthropogenic commissions such that, I'm already burying the lead here, but jumping ahead, assuming we're going to have to continue to increase food production dramatically if we continue to do so using the methods we do today. The climate impact of that, I assume, is fairly devastating.
Jason Prapas (06:04):
Yeah. The climate impact and also growing crops in a changing climate is really difficult. So it's reducing the emissions from the food production so that we don't make the climate even worse. But it's also dealing with the climate change that's already upon us and meeting food security. So there are people out there that are really smart and spend their life studying and modeling how much food we're going to need for our population. And folks at places like the FAO talk about needing to double our food production in the next 30 years.
(06:31):
And if you look at smart people working on climate modeling, we need to reduce our carbon emissions from the food sector by at least 70% in the next 20 to 30 years. And if you look at land availability and water resource management, you're looking at having the amount of water you need to make a pound of food nutrition for human to meet these other goals. So it's a really difficult stack and there's a lot of risk in there that we won't be able to meet as a species. But that's where we get really excited to give it a go, because there are certain things you can do to have a synergistic improvement on all three of those things. And you have to look at, where does the majority of food go? How is it generated? And where are the largest areas for improvement that we could hit as soon as possible?
Cody Simms (07:13):
And I think to that point, the number one answer that many people will cite when saying, hey, how do we get out of this triple negative feedback loop that you mentioned is stop eating cattle. Eating beef is by far the heaviest emission footprint of any food that we produce at scale. It consumes a vast amount of water, and yet, what I understand that may be an important thing for each individual to know, but at large as global populations develop, they tend to adopt meat and beef-eating diets. And so while we all may know that individually we're faced with the individual behavior change versus broad societal systemic change conundrum there, which I assume is why, now jumping into a little bit about what you do, you have chosen to focus on cattle as an initial vector with which to try to solve a problem, but maybe unpack that a bit for us.
Jason Prapas (08:15):
Yeah, great question. And it comes up daily, both on a personal level and with our team and then with our broader ecosystem that we're working in. If you look at where the majority of crops go that humans grow, they're going to animals, they're going to livestock feed. Something upwards of 70% of the soy we grow, which is, soy, is the king of plant protein and has been for a long time; that's going to poultry feed, dairy feed, cattle feed and fish feed, increasingly as we farm fish. If you look at corn production and wheat production and you just look at where these flows of crops go, again, it's largely going to animals. So the natural question people ask themselves is maybe we should turn off animal agriculture, then we'd have all this food that we could divert to humans. And that's a very logical argument and also completely ignores what humans are like in terms of how do we change behavior and incorporate cultural traditions.
(09:05):
And what I like to look at rather than having a behavior change switch overnight, because I don't think that's very practical, is how do we continue to meet the needs of today while also building a stronger future, a more resilient future, a more sustainable future. And when you're doing something like what FYTO does and other companies are looking at things like this, you look at we're making plant-based proteins that are much more sustainable, use much less water, much less land, and make plant protein which can be used for a number of applications. Those applications could be directly to humans. They could also offset a very unsustainable way that we feed animals. And so we made the very deliberate choice early on to solve problems that we can solve today with the technologies we have today. And you look at cows alone and there's a massive opportunity to improve the situation as it stands.
(09:54):
And harking back to a question you asked about where food is growing and where it's headed with population? For better or for worse, even with the most sustainable diets in place and modeled out in the next 30 to 40 years, you can pretty much guarantee that animal agriculture will increase before it decreases. And I'm not hoping that happens.
(10:14):
A funny fact about me is I've been a vegetarian for over 20 years and a vegan for about eight of them. But that has nothing to do with what our company does because I look at where food goes, not what I eat personally. I'm able to make those decisions and choices because I have that luxury. A large fraction of vegetarians in the world are vegetarians out of economic inequality, not out of volunteer diet change. And so you have to look at, when folks get access to resources, where they can choose to more and more what they eat, is it ethically okay to say, sorry, we messed this up for the last several 100 years. You can't eat that anymore. I don't think that's okay. And I think what we want to figure out is how do we incentivize, again, building a more resilient future and food system, but also solving problems that are here now and are growing now. And in this case, livestock agriculture is here and it's not going away overnight. So we want to face that head-on.
Cody Simms (11:06):
It's interestingly some of the same conundrums in the energy sector, which is, can you possibly cut over to 100% renewables? But what about the parts of the world that still need to develop rapidly and quickly and cheaply where renewable deployment isn't quite ready to scale there yet? The ultimate climate justice, I guess, originally, is how do you help the rest of the world manage their own access to quality life while doing so in a way that doesn't torpedo the entire planet?
Jason Prapas (11:33):
It's a great point and it's very relevant to my journey because I really started, the bulk of my career has been in the energy sector and looking at energy access issues and emerging markets. And so I think you're exactly right that there's some direct analogies to how we want to get rid of fossil fuels, and I'm fully for that. And it's also true that fossil fuels have enabled the increased penetration of renewables into the grid because they offer that more stable backbone as we transition and as we learn about storage, using batteries, for instance at the grid scale. And so it's okay to have transition periods. In fact, they tend to make things a little smoother than a sudden binary switch overnight, which tends to lead to things like blackouts in the power grid and food insecurity in the food system.
Cody Simms (12:19):
Looking at the existing cattle production system, I guess, for lack of a better word, what do cows eat today? You mentioned soy. My understanding of soy is that it's obviously a very important crop but also a huge contributor to deforestation, particularly in the Amazon. I believe cows eat alfalfa, which living here in California, I understand to be a huge water consumer. So maybe break down, what does the cow's diet tend to look like today and what are those downstream impacts of the way we grow feed for cattle? And then we can go into all the other climate impacts of cattle, which we should probably touch on as well. But let's start with the food side of things.
Jason Prapas (12:59):
Yeah, and it's a huge chunk of the emissions. Livestock agriculture is the embodiment of carbon in the feed and not just the production of it, but the transport because it's often coming from very, very far away. There's some really shocking things happening in the way that feed flows around the world. So a cow is a unique creature in its ability to convert things like grass into very nutrient-dense products like milk, but it does eat a tremendous amount per day. I'm talking about dozens and dozens of pounds on a dry basis of feed. So we've had trials recently where we had to actually measure the ration out for the cows, and then you start to appreciate, wow, this is all going in one animal, multiply that out by the 1.5 billion cows we have on the planet, it makes sense why the bulk of crops go to cows.
Cody Simms (13:44):
So in my mind, I think of the idyllic country pasture where cows are walking around grazing and eating grass, but in reality that's not actually how most cattle eat. Is that correct?
Jason Prapas (13:54):
Yeah, unfortunately for the cows out there, that's a very small fraction of where the actual food is coming from. You might see a lot of that in a drive, even through Northern California countryside. And those are viable farms that are making products. But if you look at the bulk of the amount of food, it's coming from factory farming, it's coming from CAFOs, which are concentrated animal feeding operations. But you're making an important point, which is different cows eat different things in different parts of the world, and you want to always factor that in. But the bulk of milk production, the bulk of meat production, particularly in our neck of the woods, in the United States, is coming from these concentrated animal feeding operations that typically have over 1,000 head of animals per operation and they're spending millions per year on feed that's coming from hundreds and thousands of miles away and is just a tremendous source of carbon emissions.
(14:45):
When you look at how that feed was produced, how it was transported. And you touched on two feed ingredients that are very important to cattle and also very important for our mission at FYTO, soy and alfalfa, two very different crops that are grown in very different places but have huge implications to the global food system. So starting with soy, you're absolutely right that there's a very ugly shadow to soy, which is the amounts of deforestation it has required to keep it the king of protein. And Brazil gets a really bad rap for soy production because they have had to knock down several million acres per year in the Sertão and in Amazon over the last 15 years to make way for the demand. But you also have to look at the demand side, and it's us eating soy products and eating products that eat soy products; that's really asking for that soy to be produced. And in the United States, we've largely deforested the areas that now grow soy. So we have already did that. It's not that Brazil's particularly hateful of their forests, it's that they're trying to do with-
Cody Simms (15:47):
The same climate justice conversation we were just having.
Jason Prapas (15:49):
Exactly.
Cody Simms (15:50):
Around the order of events in which they happen. And did they happen before or after the climate awakening, I guess, for lack of a better term.
Jason Prapas (15:58):
Exactly. And so where I get more interested in how we can help is how can we make it economically incentivizing to have it be a no-brainer that you shouldn't knock that forest down. There's actually a better choice, a choice that's going to be more profitable, more sustainable. And that's where we really like to play at FYTO, is figuring out ways that this is a no-brainer, where you wouldn't do that practice that is not sustainable. So if you look at other things happening with soy, because it goes far beyond Brazil in terms of the environmental issues. Something that's fascinating, the US used to be the largest producer of soy and now Brazil has surpassed us slightly, but in terms of organic soy, so if you have an organic dairy operation or organic poultry operation, you have to use organic soy to feed those animals to have your certification.
(16:41):
More than 50% of that comes from India and Turkey to the United States. So we're importing from literally the other side of the planet because of the very strange incentives for whether you should grow organic versus conventional that farmers have to face the amount that they have to change to be able to produce their crop, which at the end of the day means most US soy farmers prefer to do conventional because it's less of a headache. And that means we have to import a tremendous amount. And all of the carbon that's involved in transporting that is a huge lift. So again, what you'd want to see is the consumers of this soy, which in a lot of cases is livestock. Wouldn't it be great if that was closer to the production centers of the things they're eating? So we look at distributed feed production as interesting as distributed energy production. You were talking about the energy sector.
(17:29):
The dream there is that we have distributed renewables that are powering homes close nearby where the consumption centers are. And usually the downside of that is scale of economics. Having centralized production of things tends to be cheaper. We want to really invert that and show that that's not the only way to think about things. That you can actually have more cost-effective decentralized production of feed, which we can get into a little bit later. But that's really the core.
Cody Simms (17:55):
Yeah, definitely want to touch on the logistics as we get more into how your system itself is set up. Maybe talk about the of alfalfa side of things. Yeah.
Jason Prapas (18:03):
Yeah. I'm glad you brought alfalfa up because it's such a complex issue. Recently, reports have come out that are, I'm getting a lot of in-bounds now about this, where the West's water problem, which is becoming everybody's problem in the United States because of how much food is produced in the west and how much water requires, more than 20% of the water is going just to grow alfalfa for cows. And so that dwarfs the amount of water that's going into all residential water use. And so you do want to have reduction in watering of lawns and non-essential water use. But if you look at where most of the water's going, it's going into growing alfalfa. It's the largest crop under cultivation in California where we grow hundreds of crops and almonds get a bad rap for water use because they're a large water user, but alfalfa's about 40% higher per year.
(18:50):
The question is why on earth would we do that? And again, it's because the demand is there. The largest agricultural product California makes are dairy products in terms of dollar amount. It's a multi-billion dollar industry from the state alone. It supports tens of thousands of people and it's really globally relevant. If you look at where all that milk product goes, it's to nearly every country in the world in the form of butter, cheese, ice cream, yogurt, milk powder. So it's an incredibly important commodity and it's completely reliant on alfalfa at this point, which means that the water and land use is intimately tied in California to what cows eat. And why is alfalfa used? It's because it's a nitrogen-fixing crop, which means it doesn't need as much fertilizer, which is a great thing, and it's in California, it grows at such a rate that you can chop it several times per season.
(19:38):
So it's almost like you get a boost in your yield because of the way in which it grows and you can continue cutting it back until a few years later you have to replant. So it's a really great choice if it was imperative that you have a land crop. But what we're trying to show is we can be an order of magnitude better in terms of water use, efficiency and yield, and you don't have to use arable land.
(19:59):
And so I think what you're going to find is as we reach scale, there's going to be room for alfalfa still. We're not trying to completely replace alfalfa, but the amount that we rely on this one crop that is incredibly water intense is pretty frightening and has really strong implications for water security in the state and beyond. And it's actually become illegal to grow alfalfa in parts of the Middle East because of the water use. The Kingdom of Saudi Arabia, for instance, has outlawed the growth of alfalfa and instead has purchased land in California to ship alfalfa back to Saudi Arabia for the use of their cows, which is just a fascinating flow of drought, basically, where it's needed in a place. And so you find a place that's going to allow you to grow it and then you send it back. But do we think that's sustainable?
Cody Simms (20:47):
Wow. It shows that there's no equivalent to scope two emissions in the water space clearly, if that's what's happening. Fascinating. You mentioned alfalfa's nitrogen fixing, but I also believe that there's quite a bit of groundwater pollution from nitrogen fertilizers from livestock operations as well. So you have a double whammy and maybe less on the alfalfa side and maybe more on the soy or corn or other animal feed side, but maybe talk about the underwater impacts of animal food production, too.
Jason Prapas (21:19):
Absolutely. Huge, huge problem. We just had a great group come through to see our technology because there's task forces being set up now to address the nitrogen emission problem in water supplies. It is a huge problem and it's actually largely coming from the manure management of these livestock operations. Much runoff comes from fertilization of crops and many of those crops are going to animal feed. But another huge issue is what happens with all the nitrogen that's coming out in animal waste. And if I can put a plug in for what we're doing at FYTO, we're really trying to solve one problem with the other. So what we do is we bolt onto a livestock operation, we take that manure that has really great nutrients in it in theory, and we safely convert it into plant protein, that is, essentially recycling that nitrogen instead of emitting it into the water supply.
(22:06):
So if you look at how things are done now, you're importing nitrogen, so to speak, onto that farm. You're bringing in a lot of feed that was not grown on that operation. You can grow some things on a farm, but when you have 1,000 cows that each eat 100 pounds a day, you don't have enough acreage. Typically, very, very few, a small fraction percent would have the acreage required to grow all the feed for that cow with land crops. And so they're buying crops from elsewhere, they're bringing it in, the cows eat it, the cows emit it in their waste and it concentrates these nutrients. And predominantly nitrogen is the one that people are really starting to point out as a major polluter of the water and it makes its way into our groundwater to the point where you cannot drink from well water in the Central Valley.
(22:48):
In most places it is incredibly dangerous and it leads to serious public health issues. And another fact that I've been hearing from more and more farmers is they no longer have to fertilize a lot of their fields if they use their well water because there's so much nitrogen in it from the runoff, which sounds like a nice thing, but that's not what you want in the water that you're using to drink. So it's really pretty scary to see what's happening. So what we want to do, because it's again very tempting to say, okay, great, sounds like we should really end animal agriculture. It's leading to all these problems. What makes more sense to me is these farmers live on these properties and they're often multiple generation families. And I can say with confidence, the majority of the folks we meet are really good people and they care about the land which they're stewards of.
(23:32):
They're not out there trying to pollute and they're not out there trying to degrade land. They want to leave the land healthier than they inherited it for their kids. That's legitimately what their goal is.
(23:42):
And so what you have to do is think, how do we make this a no-brainer for folks to improve their operations in terms of the emissions coming from their livestock operations but also have higher profitability because a lot of them are shutting down because they can't meet the demands in a cost-effective way. And so if you can find a way where you can use a crop that really consumes the majority of the nutrients in their waste and produces a feed on site, it's solving multiple problems. You're looking at water use, now you're looking at the embodied carbon that would've gone into growing those products elsewhere. You're looking at the transport that's now being mitigated by having it on farm. It doesn't have to be FYTO, but if you're looking at things that can take that waste stream and turn it into crops, and this is how farmers work now. I mean, they apply manure on their fields and they grow corn silage. And so what we need to do now is do that about 10 to 15 times better if we're going to continue to meet the demands of the food supply.
Cody Simms (24:39):
I can see you wanting to jump in and explain FYTO, but I've got one more set-up question for you, which is we've talked about the emissions of livestock feed production. We've talked about the water usage of the crops that are being used to feed livestock. We've talked about the groundwater pollution of manure coming from these cattle operations because the manure isn't necessarily used as effectively as possible. The one thing we haven't talked about is the thing that most people think of when they think of cattle emissions, which is methane and cow burping and farting as well. So maybe explain a little bit about the cattle methane problem just for people who had no idea what I was just talking about, just to make sure we've covered all our bases here.
Jason Prapas (25:21):
No, it's a great point and it is getting a lot of attention, which I think is deserved. Technically, it's called intertek emissions and that's the emissions that come from the digestion of feed products within the rumen, the first stomach of a cow. And if you add it up, it depends on which model you're relying on, but it's a sizeable fraction, potentially 30% or above, of the emissions associated with cattle are from intertek emissions. Some people think that numbers much higher. It really depends on what their practices are, but let's call it big. It's a big slice of the pie of carbon emissions. The reason it happens, some of it is natural and is going to be hard to fully suppress, and that's just a function of the microbes that create milk for the cow that start in the rumen have a byproduct that is methane.
(26:04):
But it's also true that if that nutrition for those microbes within that cow is not optimized, they're going to make a lot more methane than they would in an ideal state. And the simple way to think about it is methane is an energy byproduct. It actually has metabolic value to the cow and to the microbes. And the fact that it's being released at higher rates is a pretty good sign that that digestion is not occurring optimally because it's releasing this energy metabolically in a way that's not advantageous to the cow.
(26:31):
So there are companies, really interesting companies, that are proposing a number of solutions for intervening where the microbes are making methane. And so there's folks that are growing seaweed, and there are folks that are using other biochemicals to disrupt that pathway. And that holds a lot of promise to have a small dosage pill, let's call it, that will really disrupt that methanogenesis within the cow. There's another fact, though, which is what if we look at what we're feeding these cows and the nutritional benefits and the digestibility of these feed ingredients, how much could we take out of the intertek emissions if we just fed the cows better?
Cody Simms (27:08):
I'm guessing cows that are native to Europe, I think, or Eurasia maybe, probably didn't grow up from a evolutionary perspective eating corn, or alfalfa, or soybeans.
Jason Prapas (27:21):
Yeah, it's fascinating. That's absolutely true. That's also true with humans. We are constantly in this battle of figuring out what's good for us to eat and we're doing the same things to other species that we eat. And so there's tons of research that still needs to be done on what's optimal nutrition for a cow. But what we know already is that turns out if you give a cow lots of random byproducts, which is how cows are fed in a lot of cases, because that's what farmers can afford to do, it's not going to be an optimal metabolic reaction and you're going to have a lot of methane released. And so there's these very complex pathways you can disrupt. And that's what some of these companies are doing. And there's this very simple nutritional balance that you can work with animal nutritionists and veterinarians to say, I think this cow is probably a little bit deprived of rumen-degradable protein, or maybe it's getting too much.
(28:10):
And you can look at the mass balance within the cow, how much is it eating, how much is it emitting through waste? How much is it emitting through intertek emissions? And you can actually look in real-time at what changes to the diet do to that change in mass balance. And so we're doing that currently in scientific trials to figure out exactly what levers we can turn that allow the cow to be healthier and emit less methane because of that digestibility of its diet. And that's sort of a separate pathway from what these other companies that are doing important work on just disrupting methanogenesis. But it's a huge issue and what we really hope is that we can partner with a bunch of really smart groups and people to take a lot of the carbon sting out of dairy operations, and it's going to be a team effort for sure.
Cody Simms (28:56):
We're going to take a short break right now so our partner, Yin, can share more about the MCJ membership option.
Yin Lu (29:03):
Hey folks, Yin here. A partner at MCJ Collective. I want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast.
(29:14):
We started in 2019, have since then grown to 2000 members globally. Each week we're inspired by people who join with different backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, nonprofits have been established, a bunch of hiring has been done. Many early stage investments have been made as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks, and enjoy the rest of the show.
Cody Simms (30:04):
All right, back to the show. Okay, we've set up all these different problems and now I want to dive into what FYTO is because the way I think of it is, is you are basically building a closed-loop system for, and at least initially go to market, cattle farming that essentially mitigates a lot of these issues all in one fell swoop. Without me being an advertorial for what you're doing, maybe describe it, and then also, we'll go into what is the crop you're growing, but then how the whole closed-loop system that you're building tends to work.
Jason Prapas (30:40):
Yeah, that was a great description. You're officially hired for our marketing team. It's really a closed-loop system. You nailed it, that's absolutely the goal, and what we're proving out. But at its most basic, before we even dive into dairies and how we work specifically on dairies, what we're trying to do is show that there are these crops that we have not grown conventionally as a species for no other reason than they just didn't make the cut the first time around is what we thought we could farm in our agrarian communities. So if you look at why wheat and corn and soy made their way to the top, there are some logical reasons and there's also some happenstance that happened. So in our case, we grow these specialized aquatic plants that are incredibly productive at making some very important ingredients for humans and for the animals that humans derive products from.
(31:26):
Things like digestible proteins, starches, lipids, and that's really no credit to FYTO. We grow aquatic plants that we find wild type varieties of, and we breed for certain applications, feeding cows, feeding chickens, and we grow them in very specific environments. That's where we start to flex what we can do. Because farming has not been invented for these types of plants, it really is very nascent in terms of how do these plants grow optimally, how do we make them have year-round growth cycles? And there's some just amazing facts about these plants that lend itself to automation in ways that we're just starting to do in land crops as a species after hundreds of years of development.
Cody Simms (32:10):
So if I think of corn or wheat or soy using a tech brain, if I think of those as platforms, each one of those has had an entire ecosystem of developers and use cases and technology built up all around it to enable it to be a thriving platform ecosystem as a crop. And what I'm hearing you say is that the type of water-borne plant that you're using, which I assume you'll define a little bit more, is essentially at the seed stage. You are just starting to think about could this be a viable global crop platform and what would that need to look like if so?
Jason Prapas (32:52):
Yeah, and obviously I'm biased, but I'd say we've already passed that test internally. We know it can be a viable crop globally, and now it's up to us to prove that we can do it at scale and economically. Because just what it's capable of doing based on the biological evolution that it's undergone is so astounding and so much better than its competitors on land that it's really up to us to show we can actually figure out farming this much more quickly. And one thing that helps us is the incredible growth rate of these plants.
(33:19):
A season for us is several days. It doubles every two days. And so you can have a vast learning in a week trial. And so think about how many seasons that would require and how many years that would require it to do with corn. You basically get 40 shots as a farmer to figure out how to grow your corn better on that land. We get hundreds of shots per year to figure out exactly how to grow our crop and what different variables lead to in terms of outcomes for the crop. We like our chances of having a very steep slope and getting to a deeper understanding of how to farm this than would be possible with a land crop.
Cody Simms (33:53):
I definitely want you to dive into what that looks like in that whole system. But one more setup question for you, which is, we've defined the problem of why now is important for a different solution. We haven't defined the why, now is technology ready to support the solution that you are pursuing? So maybe use that as a way to help us define what it is you're building from a system perspective. And if there is technology advancement that's happened over the last decade or two that has enabled you to grow this crop at a scalable way such that it wouldn't have been possible 50 years ago, perhaps.
Jason Prapas (34:31):
Absolutely, yeah. And I should point out, people for literally over a 1,000 years have known that aquatic plants broadly can offer a tremendous value. And it's literally written in Papyrus scrolls, the use of aquatic plants to feed birds that were raised for food. What hasn't happened and is really being unlocked by technologies that we have today and very recently, is the ability to farm this at scale. Go from that serendipitous, let's pluck aquatic plants out of this river pond and use them to let's really farm this to be a globally relevant crop. And every crop that we have in the grocery store had to go through that transition. And it took a long time. And we're trying to show actually, with the tools we have available to us, we can do it much more quickly. So broadly speaking, I'd say automation technologies, power technologies in terms of generation and storage has unlocked a tremendous amount for us to the point where we can be truly a renewable food company.
(35:27):
That's sort of how we think of what we're doing. It's the equivalent of a solar panel generating power near a use case. We think food can do the same thing. You can use solar energy to grow protein and you can use renewable energy to drive the process that makes it a usable form. So it's really the concurrence of renewables, automation technologies, software, and a number of sensors that we can get into that has allowed us to develop a platform that's a very smart digital farmer for growing aquatic plants that learns as it goes, rather than relying on generations of knowhow in the way that we've done traditional farming.
Cody Simms (36:01):
And what does a FYTO farm look like?
Jason Prapas (36:04):
It looks like an aquatic plant farm, so it's hard to describe. We have shallow engineered ponds or pools that we grow aquatic plants and that float on.
Cody Simms (36:14):
So like a rice patty kind of?
Jason Prapas (36:16):
Yeah, that's a good analogy. And we cover these with environmental protection, which has been hoop houses in the past. And increasingly, we're moving to netting structures which really reduce a lot of the cost relative to a greenhouse. And the reason for that is we have to keep birds out because they tend to love our crop. And we also have to keep wind at bay because we have free floating plants that actually can pile up on each other. And it would really harm your yield in terms of your per acre production if you have the farm area that you've built not utilized because the wind is blowing all the plants to one side. So one very important fact about these plants is they reproduce vegetatively, which means you don't plant seed and wait for them to grow. They constantly bud off of one another. Mother and daughter plants.
Cody Simms (37:02):
Like a cactus, almost where it grows little pups or succulent, I guess.
Jason Prapas (37:06):
Exactly. And what that means is in the way that they grow, they need to have the sweet spot of spacing between them, not too much, not too little, which really points to where we've had to spend a lot of our tech development time in achieving the ideal growing conditions to generate the yields that we're able to in a way that doesn't require tremendous amounts of manual labor to go in there and pick out plants every day. Because the thing that makes this so exciting is also what makes it very difficult to scale at the beginning, which is these crops are so productive that you have to harvest them every day of the year. You have to feed them every day of the year. That's the downside of having a super productive plant.
Cody Simms (37:45):
And we did all this setup on water and manure and all of that. Explain a little bit about, I mean, I think aquatic plant, I'm like, wow, this is sitting in water. It's got to be using more water than an alfalfa or something. So I assume that's not the case.
Jason Prapas (37:59):
That's not the case, thank goodness. Yeah, no, great question. And it's a little bit non-intuitive, so we've got waterborne plants and they're incredibly water efficient. And how can that be? Well, you look at where water goes when you're using it for land cropping, and a lot of it goes straight through poorly water retaining soils. So you apply water, it drains through and it ends up not near your root zone where you're growing your crops. We solve that by having, we have a lined pond. Our plants grow in water, and so there's no egress of water beneath our pond. It's captured, that one's an easy one. The second one is evaporative losses. So in rice patties, for instance, and you apply water and flood irrigation, a lot of that water is lost back to the environment when it evaporates. If you were to look at, on our website, for instance, an image of what our plants look like when they're growing, they form a very dense mat on the surface of the water.
(38:48):
You actually can't really see the water. It's not obvious that it's in water until you start to move the plants aside. What that does is it creates a really great barrier and truly is sort of a pool cover to preventive evaporative losses. So you still get some through the plants themselves, but it's actually very small relative to if you had a pond that was open next to it without the plants on it. You'd have significantly more water loss. So then the last place where you lose water and I use lose loosely, is through the product itself. We have these wet plants that we harvest and then we can mechanically press them to remove a lot of the water from them to feed to the cows in a more dense format. But you can recycle that water because that water's not lost, it's been squeezed out of the plants. And so when you add that all up, you can have five to 10 times less water use per pound of protein produced than the best land crops out there because of just the nature of how these plants grow.
Cody Simms (39:39):
And how does it compare from a protein density perspective to, say, soy for cattle feed.
Jason Prapas (39:46):
That's where it's truly amazing plants. So there are some aquatic plant varieties. We grow a lot of Lemna in the Lemna family, colloquially known as duckweed, and there's 38 species of duckweed. Within each species, there's varieties that have different components, different conditions they like to grow in. So we've got our own special variety, that's a wild type, but we've been breeding now for a couple of years and works really well for dairy cows and we've been able to consistently hit above 40% protein by mass, which is a heck of a lot like your best soy that you'll find. And if you look at alfalfa, which is also fed quite a bit to get some protein levels in the cows, that tends to be 16, 17% protein by mass. So we're more than doubling the protein content of alfalfa, which is a big deal. And we're at parity with soy, with a product that is much, much friendlier to the environment as you grow it.
Cody Simms (40:36):
And yeah, on that point, fertilizer use impact here.
Jason Prapas (40:39):
This is something I really like to stress. We have never used synthetic fertilizer in our production of our plants. The only thing we have used in at least the last two years with our larger scale growth has been recycled animal waste. And that's a very important thing for us to live out because it is the whole point of the closed-loop nutrient process is showing we don't need to import chemicals and fossil fuel-derived fertilizers to make this work. We can use what is already present on a livestock operation, which is nitrogen, phosphorous, potassium, and micronutrients that are coming out of the animal in the form of waste. And we can put that into the system to generate feed that then offsets the need to import those feeding ingredients.
Cody Simms (41:19):
The final thing we talked about was the methane impact of cattle itself. Is there any positive impact on that with FYTO?
Jason Prapas (41:27):
Yeah, so we really want to definitively answer that. What I can tell you is we're in the midst of trials that are measuring that from live cows, which is the most important. We've done previous trials with third party labs that do in vitro tests where they take rumen fluid from a cow, they put rations inside of that fluid, and they detect how much methane has come off. We've seen a significant reduction in intertek emissions when we have a FYTO diet versus the conventional diets. But that was in those in vitro tests. And so we're really excited to see what the in vivo tests, the real cow tests tell us. And we're working with a great research organization this year to be able to share that data very shortly. So we have enthusiasm and optimism that there's going to be a significant improvement in intertek emissions based on the digestibility of the protein that we offer. But until we have those numbers, I can't say how much of an effect it has.
Cody Simms (42:17):
And I guess actually one more potential impact. We talked about the transport of animal feed. You mentioned the use case of Saudi Arabia growing alfalfa in California and shipping it halfway around the world. How are you planning to set this up? Are you planning to acquire lots of land and grow large crops where you have centralized control? Are these systems that you're selling to cattle farms, so they grow them locally on the ranch? What does that kind of look like? And presumably there's an impact on the transportation logistics side of the crop as well.
Jason Prapas (42:51):
Our presumption has been, we're not going to get dairy farmers to want to become aquatic plant farmers overnight. Just as we were talking about earlier with behavior change, that's a tough ask. Dairy farmers tend to be pretty busy as is in taking care of cows, and this is a pretty different thing to farm. So our model really hinges around, we'll build on and operate facilities and just sell feed to consumers of feed. Now, I do think that could change over time, is I get questions pretty often from folks that try our product through pilots. When can I own the tractor, so to speak? When can I really bring this equipment onto my farm and run it myself? And far be it from us to prohibit that in the future, what we think is for the near term, for the first phase of commercial rollout, we're going to be the people that run these farms because we know how to do it and it's difficult to convey quickly.
(43:40):
But this is also where the automation is so important to our scaling up. We need to make it and we're well on our way, but there's obviously still work to do. We need to make it so that there's not a significant amount of human in the loop in growing and harvesting these plants. It's really the engineering team, the plant science team that I work with, they're pulling off miracles every day on how much more automated it's becoming, but it's not for the fun of it or because we think that makes it an interesting tech company.
(44:05):
It's because it's the only way we imagine it's going to work across millions of farm across the globe, which is what our actual goal is, is to rapidly decarbonize the production of these ingredients for the food supply, which is going to require us to be on hundreds of thousands of acres. So even if we can use 10 to 20 times less acres than growing alfalfa or soy to produce these proteins, we still have to be on a lot of livestock operations to have impact. And the more that these systems can run themselves, the much more quickly the adoption curve will be overcome.
Cody Simms (44:35):
From a business model perspective, my head goes to roses where certain growers build proprietary strains of roses and own the IP on that and monetize that as a plant IP. Is that your business model or is it... I can't think of anyone who says, I own this crop as a company, this is my crop. And so I'm really interested to understand how you're thinking about growing the company as an agricultural business.
Jason Prapas (45:00):
Well, I will say there are some very successful giant companies that own crops, and it's led to a lot of challenges for farmers because it leads to a lot of issues with if there's accidental seed transplanting in a field.
Cody Simms (45:12):
Yeah, you're right. There are definitely, I own this seed mix, but it's not like I own this entire crop family necessarily.
Jason Prapas (45:19):
Yeah. So our business model is very much not around proprietary seed. And again, we don't use seed, but let's call it the equivalent of these mother plants. That's not where we're focusing our IP. Although, I will say there's a tremendous amount of in-house knowledge you acquire by running these constant trials that again, you're learning something every few days. And so you're constantly building your knowledge base, and not just on one crop, but we have a library of crops for different applications. And so you really start to build quite a large compendium of knowledge about how to grow these plants. And that means, when do I feed them? How often do I feed them? What do I feed them? How do I harvest them? How can I monitor for any pests that might happen? How do I proactively deal with that? Just like any farming application. And so there's a lot of IP in the trade secret of growing these plants even before you worry about protecting plant varieties.
(46:07):
But the bulk of our protected IP and where we have both patents granted and filing, is on the automation technology because we've had to invent the combine, so to speak, for aquatic plants. We call it aquatic robotics because it's really a very different application of robotics and automation than have been done, but also imminently solvable. So you have these plants that are flowable, which is such an advantage to a land crop that has to have several unit operations where you're preparing soil, you're planting seeds, you're tilling back the soil, you're applying fertilizer.
(46:42):
We have a flowable crop in a media that can have its nutrients flowed into it. Hydroponics obviously is a real field that's growing, vertical farming. We're using a lot of the same principles, but we're doing it in a crop that can double every three days. You don't need to go vertical. You can have those vertical yields for a protein crop in a much simpler growth system. But what has to be very sophisticated is that technology that addresses its daily needs. How do I feed it what it needs? How do I harvest the right amount? How do I scan proactively for any issues that might come in? And that's how you achieve the yields that allow the per-acre unit economics to make sense to scale up.
Cody Simms (47:18):
Got it. And so that presumably then does compliment the vision you said of there's no way you could own and operate enough of these to feed the entire dairy and cattle farm industry. Eventually you're going to have to have other growers and you're setting up your technology such that they could buy or license your technology to be a grower.
Jason Prapas (47:38):
Absolutely. And you can imagine there's CPG companies that are very invested in reducing their supply chain carbon emissions. And we're in conversations and look forward to new ones happening about how we can help these companies that have tremendous streams of dairy products and other livestock products coming in and don't really know how to clean up the supply chain on that side. There's a lot that can be done at the manufacturing, but how do we improve the production of the raw ingredients? And we think we have answers for some of it.
Cody Simms (48:07):
We use the scope two emissions analogy to talk about the water issue with Saudi Arabia, which is, there's no scope two for water, but there is a scope three emissions, and surely companies that are using dairy products, understanding the scope three emissions, meaning the emissions of the suppliers of their dairy products or their meat products into their end consumer product is something that every large company is pushing on right now. So if you're a large buyer of dairy product, presumably you would have some ability to influence the feed that your dairy growers are using.
Jason Prapas (48:43):
I'm very encouraged by what I'm seeing on the consumer level for consumers demanding more clean products, more transparency as to where their products came from and what it took to make them. And it's led to some really powerful statements in the supermarket. Which is in the UK in particular, they've started to ban ingredients that have Brazilian soy as part of the feed supply chain. So companies like Tesco are not going to import cheese that has Brazilian soy derived dairy in it, which is a very sophisticated thing to track down.
(49:12):
But it shows you the reason they're doing that is consumers are demanding cleaner and greener food supply because they can see the writing on the wall that this is not going to work for much longer as a planet if we keep business as usual going. So I think that's going to drive the companies and then the suppliers to those companies to improve because ultimately they're selling products that they want consumers to be happy about and to buy more of. So I think it's on its way. We just have to have more tools in the arsenal to address the issues. We can't just say, let's try. It's got to be, how are we going to do it? How are we going to reduce the emissions associated with these operations.
Cody Simms (49:44):
Jason, one more basic understanding question that I forgot to ask, which is, alfalfa as an example, can be dried in terms of its shelf life. How does your Lemna or duckweed product take to shelf life and storage and transportation?
Jason Prapas (50:01):
Yeah, we have a lot of flexibility there. And it's a good question because I think our first approach would be what I'd call just-in time protein, which is since we're so close to the operation, we can actually just activate the amount of cropping that we need to generate the protein for consumption within the next few days. And so in that case, you don't need to do drying. The downside of that is the shelf life on that would be a few days. So what you can then do is you can in sile, which is a trick that dairy farmers all over the world use, they take wet corn silage and they seal it in a bag and they ferment it. And that extends the shelf life to several months. And we can do the same thing. We have the ingredients within our plants that ferment and make a much more shelf-stable ingredient that cows really like.
Cody Simms (50:44):
Cow Kimchi.
Jason Prapas (50:45):
Yeah, exactly. And on the other end, you can fully dry it. You just have to account for that in your energy economics and your cost because it's going to require CapEx and opex to dry a product that has water in it, which is done routinely. But our first guess is would be, let's try to avoid adding more energy and cost to the product if it can be healthy and while utilized in a form that's not fully dry.
Cody Simms (51:08):
Excellent. Where do you think the company goes? Like how long? What does the path look like for you focused on dairy feed and cattle feed and then beyond that, does this become a human product? One of the questions I found myself thinking about as you were describing everything is, gosh, I wonder what the lifecycle analysis from an emissions perspective is of beef raised on FYTO versus alternative soy-based meat. Those kind of end-to-end lifecycle conversations aren't yet fully happening because there hasn't been a good alternative on the cattle side.
Jason Prapas (51:42):
I think we're really excited about preserving diversity of the human diet. We've been very deliberate about not trying to push a future in which all humans are only eating FYTO duckweed because we don't know that that sounds like a great existence for everybody. So I'm a Greek, I was raised on Greek mythology, and I like to think of the Trojan cow in this case, which is first, we feed the cows while we replace them. So it's again, thinking of problems we can solve now and also building a more robust food supply and sustainable system as we proceed. So if you look at cellular based meats and plant-based meat alternatives, they also have a protein supply chain problem, which is they're using soy and they're using wheat. And these are crops that are again leading to deforestation and water use practices. So it turns out they need a reliable plant protein as well to either feed their bacteria that are making cellular meat or to feed their plants.
(52:37):
So we think we can have a successful outcome whether we stay fully focused on cows for the medium term or we start to branch out. And what I think I'd want to make sure is clear we don't see ourselves as a dairy feed company. I think you really correctly labeled us as a platform company earlier on, which is we want to prove that aquatic plants can solve a tremendous amount of problems. All you have to nail is being able to compete with commodities on a cost basis. And then you'll get the tremendous benefits of the water use and carbon reduction improvements that a crop like this allows you to have because of its efficiencies biologically. We start with cows because it's a massive problem, massive market and is largely ignored in terms of bulk ingredient feeding of cows. Cows are getting a lot of attention for intertek emissions, but we need to also look at how we're going to keep them productive if that's going to be part of the food supply.
(53:28):
And then we are constantly evaluating opportunities for us to have even more impact on climate by looking at things like soil amendments and fertilizers. Because we make plants that you can feed other plants because they grow that fast. Some of our plants fix nitrogen so we actually can create fertilizer out of thin air. And that's a really exciting prospect, too. But we have to stay focused. I'm sure I'm not the first founder you've talked to that has a shiny object problem and I am well trained to try to stay focused from our board on one problem at a time. Right now dairy cows are keeping us plenty busy.
Cody Simms (53:59):
And I guess on that last note, you mentioned your board, you have relatively recently announced a series A round of funding. So you're funding the company to date with venture capital. I assume that's mostly to fund some of the initial technology development, but my guess is to scale this business, you're going to have to have a quite diverse capital stack in terms of accessing land, in terms of building out facilities, et cetera. How do you view the growth of the business from an operational cash flow perspective?
Jason Prapas (54:28):
Yeah, you're absolutely right. We recently closed our series A with Google Ventures or GV as the lead and that's a really exciting partner for us. And in particular, Andy Wheeler from GV has joined our board is one of the OGs in AgTech and really understands the space well from over a decade working in investing in that space. I think he shares the vision that this could be a massively scalable protein solution across multiple industries, but is going to need to be very cleverly financially engineered as you point out. Because what we don't want to do is have VC backed farm buildouts, that doesn't make much sense. It's not capitally efficient. So we are looking at debt as a major part of how we build out this business over time.
(55:05):
And similar to a renewables play, a solar project finance, which allows that to become massively scaled. It had a phase where it needed to be proven out on the first acre of solar production and then it was de-risked for banks to take it on. And we see ourselves in a very similar stage where we want to show what's possible on a unit economic basis using the forms of capital that are available to us, and then we want to show we can use even more efficient capital to scale it up.
Cody Simms (55:31):
Jason, what should I have asked that I didn't ask?
Jason Prapas (55:35):
I guess I just want to emphasize, we're always looking for really smart people to join the climate fight, whether it's with FYTO or many of our awesome colleagues that you've had on the show and others that are working in the space. But we're always open to hearing from people that have different backgrounds and perspectives and think they can help. Because we need everybody, we can get in this climate fight, as you know.
Cody Simms (55:54):
And I'm guessing, for FYTO in particular, you're looking for everything from mechanical engineers and roboticists and software engineers to agricultural specialists and people who know how to work with farmers.
Jason Prapas (56:08):
Absolutely. And then additionally, financial engineers, people that really understand how to leverage debt and how to make the right proforma economics that make this attractive for different financiers at different stages. So all of the above, yes, we're interested to hear from technologists and business folks and agronomists and farmers. Really excited to build out our ecosystem.
Cody Simms (56:28):
Jason, thank you so much for your time today.
Jason Prapas (56:30):
It was my pleasure, Cody. I'm a big fan of the show. Thank you.
Jason Jacobs (56:34):
Thanks again for joining us on My Climate Journey Podcast.
Cody Simms (56:38):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem-solving capacity. To do this, we focus on three main pillars, content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change, and our member community to bring people together as Yin described earlier.
Jason Jacobs (57:00):
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com. And if you have guest suggestions, feel free to let us know on Twitter at MCJPod.
Cody Simms (57:15):
Thanks and see you next episode.