Startup Series: Zero Acre Farms
Today's guest is Jeff Nobbs, CEO and Co-Founder of Zero Acre Farms.
It turns out 20% of our daily caloric intake is made of vegetable oils that are not only harmful to human health, but also have a massive impact on the environment and deforestation. So when thinking about systems problems that impact climate change, how we produce oils for food consumption is a big lever that's yet to be pulled. Zero Acre Farms is on a mission to change that. The company is developing a new category of healthy oils and fats made by fermentation.
We have a great discussion about how vegetable oils are produced, how they've gained such prominence in our diets, and how Zero Acre Farms is applying fermentation to try to change the game. And since their initial product has just become available on their website, you can try cultured oil for yourself and see what you think.
Enjoy the show!
You can find me on Twitter @codysimms (me), @mcjpod (podcast) or @mcjcollective (company). You can 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 July 14, 2022.
In today's episode, we cover:
Broad overview of vegetable oil
Environmental impacts of different vegetable oils
The shift away from animal toward trans fats in the 1980s & 1990s
Drivers of vegetable oil growth, including consumer advocacy groups and large fast-food restaurants
An overview of Zero Acre Farms
How the startup is solving the problem of vegetable oils using fermentation
An overview of the fermentation process for food
The company's direct-to-consumer launch and future plans to scale to restaurants and packaged foods
Jeff's background in food, health, and nutrition
Zero Acre Farm's externalities
How the company creates its cultured oil
Their seed round, series A, and future funding sources
Zero Acre Farms as a Public Benefits Corporation (PBC)
-
Cody Simms (01:56):
Today's guest is Jeff Nobbs, CEO and co-founder at Zero Acre Farms. Zero Acre is developing a new category of healthy oils and fats made by fermentation. Also, you might notice that I'm not Jason. This is Cody Simms, Jason's partner at MCJ. I did today's interview with Jeff at Zero Acre Farms. And you'll hear me take on episodes here and there going forward. I was looking forward to this conversation with Jeff because vegetable oils have become such a huge part of the human diet, upwards of 20% of our average daily caloric intake. And the planting of palm, soybeans and the like for vegetable oil cultivation are significant contributors to deforestation. So in thinking about systems problems that impact climate change, how we produce oils for food consumption is seemingly a big lever that's mostly yet to be pulled. Yet another oil problem. We have a great discussion about how vegetable oils are produced, how they've gained such prominence in our diets, and how Zero Acre is applying fermentation to try to change the game. And since their initial product has just become available on their website, you can try cultured oil for yourself and see what you think.
Jeff Nobbs (03:00):
Thanks, Cody. Great to be here.
Cody Simms (03:02):
I am really fascinated to understand more about Zero Acre, but maybe before we do that, why don't you help us understand the broad landscape of vegetable oil? We all eat it. I read somewhere it's up to somewhere around 20% of many humans daily calorie intake. So it's clearly a big part of our diets and presumably the agricultural footprint associated with that. So maybe start by just talking to us about how vegetable oil is processed today.
Jeff Nobbs (03:34):
Yeah, you're exactly right. Vegetable oil is in pretty much everything these days, one in every five calories we eat, like you said. And it's actually now the most consumed food in the world after rice and wheat. And the crazy thing about vegetable oil is that we never used to eat it. So it wasn't a meaningful part of any human diet up until about 100 years ago. And it's grown more than any other food in our diet. And it's still the fastest-growing sub-sector of global agriculture. This wouldn't be so much of an issue if it was grown extremely sustainably and efficiently, and it was producing foods that were doubling our IQ, and allowing us to live forever, and were super foods. Unfortunately, that's not the case. So we're eating all these calories that are disproportionately bad for us, from a caloric perspective, and are also extremely bad for the environment, no matter how you look at it, whether that's per kilogram or per nutrient. And so when you look at vegetable oils as a whole, which we should say that includes things like soybean oil, palm oil, safflower oil, corn oil. There's a long list of these different types of oils, essentially oils that are pressed from grains and seeds. When you look at how they're grown, it's very inefficient. And so as a result, two of the top three drivers of global deforestation are vegetable oil crops, soy and palm oil. And we've plotted out a bunch of different crops that people eat. And the most greenhouse gas emitting crops are also vegetable oil crops. So to answer your question about how they're grown, essentially farmers clear a plot of land, whether that's in the rainforest or another natural ecosystem, plant these tiny seeds, wait six months for them to grow into larger plants, pluck those seeds, press those tiny seeds for an even tinier amount of oil, and then you're left with some oil that's marketed as human food. And you're left with leftovers, what's called a meal, which is typically fed to factory farm animals. It's a whole unsustainable system. And there are a number of studies now showing that, on the human health side, it's not so great when 20% of our calories are these vegetable oils.
Cody Simms (05:39):
And I'm curious, I assume the other of the three methods that are causing deforestation, I assume the third is ranching for cattle mostly; is that correct?
Jeff Nobbs (05:47):
That's right. Yeah. It's beef.
Cody Simms (05:49):
Of which a lot of them are fed these soy and corn oil byproducts, as you mentioned.
Jeff Nobbs (05:55):
Yeah. It's all interwoven.
Cody Simms (05:56):
And so you hear of certain... I mean, obviously there's a big movement if you're in the climate space to eat plant-based food, et cetera. And yet you're also hearing now not everything plant-based is necessarily good for us as humans or for the environment. Some of these vegetable oils, I always think of olive oil, or coconut oil, or some of these as being more healthy and more sustainable. Is that generally true? And palm, and soybean, and corn are the "bad oils"? Or is it all shades of gray here?
Jeff Nobbs (06:28):
Yeah. It's shades of gray. It's half true. As much as our brains don't like it, there's a lot of nuance here, and not every single food that comes from an animal is by definition unsustainable. And not every single food that comes from a plant is by definition sustainable. It's all gray area, and it's all nuanced. And in the case of vegetable oils, olive of oil has probably the best reputation as the healthiest oil, and for good reason. It's certainly the least problematic for our health compared to something like a safflower oil, corn oil, soybean oil. But unfortunately, it has one of the worst environmental impacts. And this is something a lot of people don't know about olive oil, but it's like the almond of the oil crop world. It's by far the thirstiest crop. It uses hundreds of times more water than other vegetable oils, which are also fairly thirsty. And all vegetable oils are typically a problem, either because of how they're grown or where they're grown. And in the case of olive oil, it's a little bit of both. In the case of something like a palm oil, which is the most consumed vegetable oil in the world, and for good reason, because it's the most productive. So with one acre of land of all conventional oils out there. You're going to get the most oil per acre from palm. The issue is it only grows within 10 degrees of the equator. And that happens to be where all of our biodiverse rainforest also are located. And so as a result, it has a very negative carbon footprint or very high carbon footprint, I should say. And a really negative impact on biodiversity. Coconut oil is actually worse than palm oil when it comes to biodiversity impact per liter of oil because, similar to palm, it only grows in the tropics. It's very picky about where it grows. And that's the case too with olive and avocado oil, not quite as picky as some of those other fruit oils like coconut and palm oil, but they require a lot of land. They require a lot of water, and frankly, they just haven't made headlines the same way palm oil has because their volume compared to palm is a drop in the bucket.
Cody Simms (08:24):
And then how would you compare... I mean, we talked about obviously ranching is the other big cause of deforestation today. How would you compare the footprint of animal oils to vegetable oils, and why are vegetable oils used more widely than animal fats in so much food production today?
Jeff Nobbs (08:41):
Animal fats spell out of fashion in the 1900s. And certainly, animal products have a large footprint. When you look at what's being produced, vegetable oils are being produced in larger quantities in terms of weight than beef, chicken, and some seafood, and dairy combined. So big footprint. And animal fats used to be what most, at least in America and much of the rest of the world, used to cook with. And there's a big push away from saturated fats in the middle of the last century going into the 1990s. And so there were consumer advocacy groups that convinced McDonald's, and Wendy's, and Burger King to switch away from animal fats and switch to partially hydrogenated vegetable oils, which we now know as trans fats. Turns out that was a bad idea. And trans fats caused a lot of harm. So once trans fats were removed from restaurants and from packaged foods out of consumer demand in the early 2000s, they were replaced by palm oil, and eventually by these other liquid oils, like safflower, and corn, and soybean oil. Trans fats weren't actually formally banned until 2018. So they were in pretty widespread use until then.
Cody Simms (09:48):
And what was the makeup of those, generally?
Jeff Nobbs (09:50):
Yeah. So when you look at what fats are made of, they're saturated, monounsaturated, polyunsaturated, or there's this other category of trans fats, which a very small amount occurs naturally in certain animal products, but the majority in our diet through much of the last century was from partially hydrogenating oils, which creates these mutant fats that our bodies aren't used to, and so they cause all sorts of issues. But when you put them in a deep fryer, they're actually pretty stable. They don't break down like a canola oil does. So we thought these were God's gifts to deep fryers because they stayed liquid and creamy. They were also quite stable, but they were bad news for our health. So now we're using vegetable oils, which we're not going to go back to animal fats. We're not going to go back to trans fats. So we're pretty far down the list on the preferred source of fat here from a culinary perspective, but it's all that we're left with. We don't really have any other good alternatives. And one of the reasons that they're really used today is because they're liquid, and that's quite helpful, and is what we've come to be familiar with in a restaurant setting. I have a restaurant and we've used all sorts of different oils and fats, and it is definitely easier to be able to just have a big jug and pour it in something than wait for a solid fat to melt. So all of our systems, our food service, food manufacturing systems now, many of them are built around handling liquid oils, which you typically don't get from an animal fat.
Cody Simms (11:05):
And what's been the biggest driver of vegetable oil growth? It sounds like obviously a big one of them was a fast food industry lobbying that you just mentioned, but beyond that, looking at just industrial food production in general, what has caused the upswing?
Jeff Nobbs (11:21):
Partly because of the growth in animal agriculture, we were growing a lot of soybeans and a lot of corn. So we had this oil that was in these soybeans in corn, and we're trying to figure out what to do with it. And that was around the same time that the American Heart Association began recommending corn oil. They had a huge campaign around corn oil preventing heart attacks. So it started to be promoted as heart healthy. And you've probably seen the heart healthy thing that's lost its meaning on everything from like Honey Nut Cheerios to Froot Loops and beyond. And unfortunately, nutrition has more to do with politics these days than good science. And a lot of that started in the middle of the last century with the promotion of these never before consumed oils as being heart healthy.
Cody Simms (12:03):
I mean, I have to ask with my climate hat on. Obviously, there were huge efforts in the 2000s to lobby the growth of corn as a crop primarily to try to grow it into biofuel. I'm wondering how much of that also spilled over into corn oil as a food stock.
Jeff Nobbs (12:21):
It's a great point. And I think it's not an insignificant amount. Anytime we put a lot of resources into growing something productively, and focusing a lot of tension on it, and putting subsidies toward it, it makes it more accessible for any use, whether that's for biofuels or for food. And also, going back to your question of how do these become so prevalent, part of it is they're really, really cheap. And part of that is subsidies. Part of it is because we've dedicated our most productive land. Some of the most productive land in the world, in the continental US, we've decided to dedicate that to soy, and to corn, and to other oil crops. Certainly, we could grow other things there, but we've done a really good job of growing those very productively.
Cody Simms (12:59):
I grew up in Kansas, and when I was a kid, it was all wheat. And today it's mostly corn. It's actually starting to move to cotton too, which is fascinating.
Jeff Nobbs (13:07):
And cotton seed oil is the oil product of that crop.
Cody Simms (13:11):
Interesting. Now that the stage is set, tell us a little bit about Zero Acre. What are you building? How are you trying to solve this problem?
Jeff Nobbs (13:18):
Well, we've been pretty obsessed with this problem for a while. And we started with the problem and didn't necessarily know what the solution was going to be, but knew that something had to change, to clear all this land, and cause all these emissions, and biodiversity loss. Obviously, y'all are My Climate Journey, and you think a lot about climate, but you as much as anyone know there's a lot more to the story when it comes to, it's not just about carbon in the atmosphere and oceans. It's about, how does this impact people? How does this impact plant life, and animals, and smog, and pollution, and quality of life, and biodiversity loss. So many different factors. And our food system plays a huge role in this. So we've been banging our head against the walls for a while now in our team on, how are we going to get these destructive vegetable oils out of the food system? They're not good for us. They're not good for the planet. They've got to go. But like I said, there hasn't been a good alternative to them. And so we looked at, could we scale up olive oil? And then that's what we learned, no, that would be bad. Olive oil has... We'd end up using the entire land mass of earth to make enough oil for our future. Animal fats, for a number of reasons, weren't the option, weren't the answer. Palm oil is so picky about where it grows. So we look to other sources of fat, and turns out you can produce oils and fats using fermentation, not just using animals or plant crops. And we are fascinated by this and I've been studying food, and health, and nutrition, and have a restaurant, and have been thinking about food's impact on the environment for a long time now. So when I saw what could be possible using fermentation to produce oils and fats, it was a light bulb moment, and it was clear that was the answer. And it doesn't mean that overnight, all of a sudden, all the vegetable oils in the world were going to be replaced by oils and fats made by fermentation, but it seemed like the way to go. So a few years ago we started Zero Acre Farms, and started on a small scale, and have worked with a number of really great partners, and brought on a great team to scale up. And now, our first product's on the market, it's called cultured oil, and it's a cooking oil made by fermentation. And the idea is that, by bringing this oil to market, that's made by fermentation, we can have huge impact on the environment by displacing these foods that are disproportionately bad for the environment.
Cody Simms (15:28):
And so just to clarify, with the cultured oil product and the Zero Acre process in general, are there still vegetable inputs into the oil you're creating, or is it all based on microbiology?
Jeff Nobbs (15:39):
I have to mention, the word vegetable in vegetable oil is such great branding because it's not oil pressed from kale, and asparagus, and lettuce, it's from all of these industrial crops. And I think that was Crisco who first came up with that back in 1911. They called their product vegetable shortening, even though no one considered a cotton seed vegetable. But yeah, so there are plant-based inputs that go into the fermentation process. So the microorganisms that make up a culture, they need to feed on something, and they feed most efficiently on natural plant inputs. And all that's taken into account in the LCA that reflects cultured oil sustainability numbers, but there's no seed, or grain, or plant that's actually pressed for oil. Actually, the most efficient way to produce oil is to produce carbohydrate or sugar in abundance because that's what plants are really, really good at. They're not so great at making fat. And then allowing microorganisms to ferment those carbohydrates and sugars into healthy fats, which they do really, really efficiently.
Cody Simms (16:35):
Yeah. I mean, when I think of fermentation, obviously, my mind immediately goes to beer. And I think of barley and hops, and yeast, and really think of it as a carbohydrate or a sugar. I've never even considered that there is an oil or fatty byproduct there. Help me understand what that looks like. And even in fermentation processes that we may think of outside of what you're building at Zero Acre, is that a typical byproduct of a fermentation process?
Jeff Nobbs (17:03):
It's not just a byproduct, it's the main product. When you look under a microscope at, we call it an oil culture, it's 80 to 90% lipids, or oils, or fats, depending on the organism in the process. So when we're pulling oil from a corn kernel, you're talking single digit percentage fat content. Our most productive crops are 25, 30% oil content. So microorganisms are 80 to 90%. That's significantly higher. It's very efficient. So maybe I can step back and describe fermentation. It's a word that probably everyone has heard, but probably very few people would actually understand what fermentation means and what it is. So in the context of food, fermentation describes the process where a community of microorganisms, also known as a culture, consume plant sugars and convert those sugars. And to your point, those sugars can come from things like barley. They can come from grapes. They can come from milk. And a culture transforms the sugars and those raw inputs into things like beer, and wine, and yogurt, and cheese, and all sorts of other fermented products that we've come to love.
Cody Simms (18:09):
And most cultures we're used to seeing are yeast, or E. Coli, or something like that. Is that generally correct?
Jeff Nobbs (18:16):
Yeah. Yeast, E. Coli, which is a species of bacteria, microalgae, fungi, a number of microorganisms. There are a number of microorganisms, and there are also microorganisms that instead of producing the lactic acid in yogurt or the alcohol in beer, they produce healthy fats. And so we call them an oil culture. And they're fed natural plant sugars. And they transform those sugars into these healthy fats. And those fats are pressed from the culture, and that's cultured oil.
Cody Simms (18:43):
And the specific culture cocktail that you're using is the secret sauce of Zero Acre, I assume.
Jeff Nobbs (18:48):
Yeah. That's one of the secret parts of the recipe, those specific inputs to that fermentation, but it's all just natural stuff you could find out in the wild and grow very efficiently.
Cody Simms (18:58):
And so there's not a specific gene editing, or synthetic biology, or anything involved in your process? It's all essentially a natural process then if I'm hearing you correctly.
Jeff Nobbs (19:08):
So the plant sugars that are fed to the culture, those are non-GMO, abundantly available plants, and those sugars can really come from any number of sources. We took a hard look at how we want to incorporate and what our philosophy is on incorporating technology into food. We pretty strongly believe that when humans get too involved and start introducing new compounds into the diet, it doesn't end well for us, whether that's trans fats or our over consumption of high fructose corn syrup and sugar. When we start eating something in large amounts for the first time, usually not a good idea. And in the case of GMOs, obviously, it's a controversial topic. A lot of crops have been engineered to be herbicide and pesticide-resistant, have BT toxins, contain glyphosate, and cause all these other issues. So, no, we don't do any gene editing like that that would introduce any new compound into the human diet. It's just the same healthy fats that we've been eating for forever, essentially, but in an even better composition. So more of the good, less of the bad, and then made with a very low environmental footprint.
Cody Simms (20:10):
And then, let's talk about your go-to-market. You've got cultured oil product just now on the market. Is the focus direct-to-consumer sales? Are you looking to go industrial? How are you planning to grow the footprint of your, both initial product as well as how do you see it growing over time?
Jeff Nobbs (20:25):
Yeah, we're starting with direct-to-consumer on our website. And this was a long process to figure out, where does it make the most sense to start? Is it in packaged foods? Is it B2B, selling to other businesses? Is it selling to restaurants? Is it getting on grocery store shelves? Ultimately, we decided to start direct-to-consumer because we want to build a brand, and build awareness, and build education around this topic. And you can just learn really quickly when everything's digital and everything's online. So that's where we're starting, but definitely have our site set on restaurants and in packaged food. I think that's ultimately where we'll have the biggest impact. That's where most people are getting vegetable oils in their diet. So we'll get there eventually, but starting with consumer.
Cody Simms (21:08):
And what are the flavor profiles of your initial batch?
Jeff Nobbs (21:12):
Oil in general is interesting in that, in many ways, the target is to taste like very little. You want the flavor of your food to really be the star of the show. And so cultured oil has a really clean, neutral taste. Some people describe it as light buttery or lightly nutty. You can imagine, around our office, we're doing a lot of oil tastings and taking shots of oil. And so we've become... We have very sensitive tongues now to the taste of oil. It's good. Just on its own, it's tasty, but it's even better with food. And yeah, our whole goal is, even if you could care less about the environment and the health of the planet and the health of people, we want to just bring a product to market that's the best in its class. And we think cultural oil is that. We'll love to hear what everyone else thinks now that the product's out, but it just tastes better and performs better.
Cody Simms (21:57):
And so the focus is, at least initially, home chefs and just cooking at home. Is there a flash point comparison? You're not supposed to cook olive oil really hot. You can use grape seed oil or coconut oil at higher temps, et cetera. I'm curious, how that factors in as well?
Jeff Nobbs (22:12):
Yeah. It's one of the highest recorded smoke points. So an extremely high smoke point, which is great for your kitchen, obviously. Also good for your health. And then, on the other side of the temperature spectrum, if you've ever made a dressing at home using something like an olive oil or avocado oil and put it in the fridge, it'll start to clump up and solidify after a day or two. So what's pretty cool about cultured oil is it doesn't do that because it has even more mono unsaturated fats, which are the good healthy heat stable ones, even more than all over avocado oil. It stays liquid in the fridge, which is just convenient. And then when you're cooking oxidative stability, it's a term most people haven't heard of, but it's not just whether the oil's smoking, but what's actually happening on a molecular level. And is it staying stable or is it breaking down, turning rant, and turning into all these other toxic compounds? And cultured oil also has one of the highest oxidative stability out there. So it can really be used for anything.
Cody Simms (23:05):
Well, I am fairly addicted to making an evening bowl of popcorn in a Whirley-Pop. So going to have to try it with some cultured oil here, I think, soon.
Jeff Nobbs (23:13):
Yeah. I can't wait to hear that goes.
Cody Simms (23:16):
I mean, help me understand your background because, coming into this, you've worked in the food space for a few years, but that's not a deep part of your background, I don't think, but you clearly seem to know what you're talking about here. So I'd love you to take us a bit on your journey on how you ultimately got to building this business.
Jeff Nobbs (23:37):
Oh, let's see. My journey. Food is a common thread throughout my journey. I've always been fascinated and interested in food ever since middle school. I was turning over cans of soda, and looking at the sugar content, and trying to convince my family not to drink it. I was definitely seen as a weird kid for the food I brought to school, always very health conscious. And throughout my teenage years and into my 20s, I became much more interested in food. I had some deaths in my family from various chronic diseases. And so I became passionate about trying to figure out why people get sick and how I could prevent that from happening to other people. And food seemed like one of the largest, if not the largest levers. So I went down a pretty deep rabbit hole on all things food, and health, and nutrition. And like we were talking about a little bit, once I was so deep into that food rabbit hole, it seemed very obvious that we should also consider the impact of a food on the environment. That was another very important variable. And so that's one of the things I've always found so interesting about food, is it's like this lead domino in how we feel, and perform, and look as humans, and also how our planet's doing. So it can have this big impact.
Jeff Nobbs (24:41):
So I started my career in e-commerce just because I was 18 and looking to start a business, and that was the only idea we had. So we ran with it, but it was never my passion. It was a stepping stone to learn how to actually run a business. And then, after that business was acquired, I immediately went into food. So around, I think it was 25, started what would become a restaurant in the Bay area. Worked on some other packaged food companies, built some software for food, and was just constantly thinking about this problem of vegetable oils. And it's been on the background processor in my brain for a while now. And then started Zero Acre farms a few years ago. So the restaurant background definitely help because I feel like I can empathize with what chefs and restaurant owners are looking for. And then, working within the packaged food world, also understand, if you're making a packaged food, it's not something you serve 30 seconds after it's made. There's a whole other host of requirements when needs to sit in a bag, or a jar, or a carton for six months to a year. And had brought all that to Zero Acre.
Cody Simms (25:41):
Clearly, I think, you didn't mention, but you're also co-founded HelpKitchen, which clearly has an impact lens in a big way. You can maybe share a little bit about what that does, but you've obviously been thinking about how to make food more accessible to people as well, and help people in need too.
Jeff Nobbs (25:55):
Yeah. I appreciate you giving the opportunity to talk about that. HelpKitchen is an organization that we started in 2020 after seeing the impact that the pandemic was having on individuals who don't necessarily know where their next meal is coming from or are relying on food they buy from the gas station for most of their calories. So HelpKitchen's an organization where anyone with a cell phone can text a number, and they can go to a restaurant in their neighborhood, and pick up a meal for free. So we raise money from high net worth philanthropic donors, and we pay restaurants to make that food for food insecure individuals. And it's a number of folks. I brought the food chops, and some other folks brought the technology chops. And so it's all built around SMS. And the team is very small, but we're able to serve millions of meals at this point by automating it through SMS and these partner restaurant relationships.
Cody Simms (26:46):
That's awesome. Well, and I'm curious, you've obviously got a lot of relationships in the restaurant space. What do you see the path looking like for Zero Acre? Do you see going into restaurants as a priority, or do you see it more eventually getting into the direct manufacturing part of processed food and everything like that?
Jeff Nobbs (27:04):
It's a huge priority that we're probably too early for right now, partly because of cost. And whether it's a food product or any other product, when you're just getting started, all your unit costs are pretty high. And things that I know, very, very large companies are paying, very large oil companies like Mazola, and Procter & Gamble. What they're paying, a few cents per pound or unit for, we're paying dollars per unit right now. Think bottles, and cardboard boxes, and freight. So we just got to build up scale. And as we build up that scale and put dollars into R&D, we'll hopefully bring those costs down. But that's really one of the primary things. The other is we don't want to go to restaurants and just do top down sales, and say, "Hey, you should use cultured oil. Here's why." We want to focus on education so consumers ultimately are the ones demanding that restaurants make a switch and stop using all the harmful oils, and switch to something better. And if that's us, great. If it's something else, but that's still an improvement, that's also great.
Cody Simms (28:03):
And I presume, given what you just said about cost, at least, initially, there is somewhat of a green premium for your product. It'll be more expensive than a typical bottle of oil for the consumer, at least at the beginning. So you're doing direct sales via e-commerce, but you're going after that whole foods customer to start, it sounds like. Is that accurate?
Jeff Nobbs (28:23):
Yeah, I wish we could say we're cheaper than palm oil. One of the things we say tongue in cheek is that we're actually the most affordable oil on the shelf if you take into account all the externalities that are generated from palm oil, and soybean oil, and the like.
Cody Simms (28:36):
If only our economy took account of externalities.
Jeff Nobbs (28:39):
Wouldn't that be nice.
Cody Simms (28:40):
That would solve a lot of problems, wouldn't it?
Jeff Nobbs (28:42):
It really would. Maybe someday. So right now, we're not there. And the way our government does accounting is not there, but we're right in the range. We're between a canola oil price and a premium extra virgin olive oil. So you get what you pay for, and someone's got to pay for it eventually, but we also didn't want to be $100 a bottle for some crazy premium oil. So it's already quite affordable.
Cody Simms (29:07):
And speaking of externalities, obviously, we've covered the externalities of the oil industry, whether it's deforestation or monocropping, and the issues on biodiversity or human health, what externalities are there in Zero Acre? Have you guys done any life cycle analysis of your product anticipated at scale when all of a sudden you're needing to build, whether it's bio reactors or, or use all these inputs? What do you feel like that looks like? And are there potential downside risks as well for a fully-scaled, global version of cultured oil?
Jeff Nobbs (29:40):
Cultured oil definitely has externalities. The benefit is that they're significantly lower than any other oil out there. So we've compared the sustainability numbers, yes, via lifecycle analysis, to a number of other common oils, soybean oil, and olive oil, and can oil, sunflower oil, palm oil, et cetera. And we have soybean oil in the cross hairs. That's the vegetable oil that, at least in the US, accounts for about 60% of all oils, and is particularly bad for you, and particularly bad for the environment. And compared to soybean oil, cultured oil has about a 90% smaller land footprint. So use about 10 times less land, and also about 10 times less water consumption required to produce cultured oil, and about 10 times fewer greenhouse gases are emitted. So it's not zero. That's our goal. That's where we'd love to get to someday, maybe around the time that all the negative externalities are accounted for in the food system, but a fraction of conventional cooking oils. And we had talked about olive oil earlier. Olive oil uses far more land and water. So cultured oil has something like a 300 times smaller footprint than olive oil. And we write about this. We have a sustainability report on our blog, on our website, but it's pretty crazy how much water and land, just one bottle of oil can save. And this is the case with other more sustainable foods too. Every bite, every bar, every package, it really does add up.
Cody Simms (31:05):
And I assume, in terms of what your footprint itself looks like, it's some warehouse or factory with bioreactors, and the big... You're using water in those bioreactors, I'm guessing, but maybe talk a little bit just so people have a sense of what does producing cultured oil Zero Acre or actually look like.
Jeff Nobbs (31:24):
Yeah, they're large fermentors, like brewing beer. So if you've ever seen large scale beer production, or even small scale beer productions, the same thing. Fermentors that are full of water and oil culture, and the plant inputs that are fed to that oil culture. And you just let them do their thing for a few days. you give them enough oxygen. They need to breathe. And unlike an oil crop, which takes something like six months or longer to produce all the oil within its cells, and oil culture only needs a few days. So once that oil culture is plump and full of oil, then it's removed from the fermentor and pressed. And that's the process. And what's pretty cool about that is it's location agnostic. So that same process could happen in South Africa, in Siberia, or in Kansas, and you get the same oil. And that's not the case with any other way of producing oil. And even if you take the same crop, even the same crop on the same field, if they're on different ends of the field and maybe get different types of sunlight, they have completely different compositions, or they have different compositions. So cultured oil is very consistent, which turns out is quite helpful for food manufacturers when they know they'll be getting the same thing every time.
Cody Simms (32:36):
Interesting. I always hear... Sorry, I keep going back to beer, but you always hear Guinness tastes better in the Dublin brewery itself because of the content of the water and the mineralization of the water. You could almost start to imagine local versions of cultured oil that taste slightly differently because of different water table uniqueness that creates it all totally different version of local oil than we have today, which is crop-based.
Jeff Nobbs (32:58):
That is interesting. Yeah, that'd be cool. That's not something that we've tested with a fine pallet, but maybe.
Cody Simms (33:04):
Yeah. Interesting. And do you imagine ultimately setting up essentially lots of micro, I don't know if you call them factories or what you call them, or do you imagine breweries? Yeah. Or do you imagine it being more of a large scale manufacturing footprint where you're producing for an entire geography in one place?
Jeff Nobbs (33:26):
Certainly, there will be different footprints in different geographies, and that would also dictate what those plant inputs are. Certain plants grow more productively in certain parts of the world, so it wouldn't make any sense to have a facility in Asia and be shipping plants from north America to feed to the culture. But at the same time, this isn't like everyone has a fermentor on their kitchen counter. I mean, that'd be cool. Maybe someday. So it'd be somewhere in between that. And I think, ultimately, would come down to what is the footprint of transportation. And transportation in general gets a pretty bad rep. And I mean, I have a garden. I grow my own food. I'm a huge fan of that. But when you actually look at the impact of transportation on a food's footprint, when you're shipping hundreds of tons or thousands of tons of something on a boat, it's actually not that significant, it's everything else that goes into making that food. So we'd weigh that against the economics of having a number of smaller facilities versus a smaller number of large facilities. So economics and footprint, I think would go into that decision, but not sure exactly right now.
Cody Simms (34:29):
Yeah. And I would just wonder, eventually, as you're selling to large scale process food manufacturers and whatnot, potentially, they would even want to license your cocktail, and your method, and brew in house to verticalize production. I don't know if that's the kind of business you're wanting to build, or if you're wanting to keep the brand around it.
Jeff Nobbs (34:45):
We definitely want to keep the brand around it, partly because when you let go of that, especially with the premium product, you start to have authenticity issues and you start to have a lack of trust. With brandless, no name cell phones, they end up just being pieces of crap because no one's really standing behind them. Whereas, you buy an Apple iPhone and it's a piece of art and science-fused into this incredible product. And that's also what happens with something like an olive oil. There are huge issues with adulteration because many people just buy whatever olive oil they find in the store, as opposed to really buying a certain brand. So yeah, we definitely want to stand behind that with the brand. I mean, we've been brewing beer for hundreds, if not thousands of years. So there are a lot of people out there who know how to brew beer. Aren't a lot of people out there who know how to brew oil. So it would be more difficult to be able to hand it off to a number of different partners.
Cody Simms (35:34):
Makes sense. Let's talk about how you're capitalizing the business as you grow this. You all raised a significant series A, I guess, earlier this year with who's who of climate tech investors. Maybe share a little bit about that, and also what you see the path for the business going forward. Do you see it continuing to grow through venture capital? Do you see there being other forms of capitalization that will support the growth of the business?
Jeff Nobbs (35:57):
Yeah. We raised our series A earlier this year and had raised a seed round before that. It was co-led by Lowercarbon Capital and 50 years, who we work closely with. They're awesome. And a lot of the feedback that we got along the way was, at least what our investors told us about why they were excited, was that it wasn't only better for climate, it wasn't only better for the planet, but it had this other component of also being better for human health. And I think where a lot of climate companies hit a wall or struggle is try to break out from the My Climate Journey audience and listeners to a broader audience who needs to make a decision every day of, how do I spend my hard earned money? And unfortunately, it doesn't seem like we're at the point yet where the majority of people are making that decision based on what's best for the planet. First and foremost, it's like, are my taste buds going to like this? And then after that, it's, is this going to be good for me and my family? And then after that, it's, is this going to be good for the future of our planet? So ultimately, you can have a really great climate impact by making a very healthy food that also has a small environmental footprint. So I think that's why a lot of investors were excited about what we're doing and that we're we're bringing a product to market not 10 years after being founded, but pretty quickly here. And in terms of the path forward, we started Zero Acre Farms by self-funding. That didn't last too long because we realized this is a pretty capital intensive business, and it will continue to be a pretty capital intensive business. And we have a lot of infrastructure to build. So the series B, and then the series C, and that whole process will continue to be part of the plan. We don't own our own facilities right now. That's really expensive, so we have some very close and strategic manufacturing partners. That will continue to be the plan for a little while. At some point, it may make sense to build it on our own. And there are ways of bringing in that capital, some non-dilutive funding that would not require venture money. I mean, we're open to a number of different ways of capitalizing the business. Ideally, everyone loves cultured oil so much that profits can ultimately funnel back into R&D and fund the business, but we're just getting started. So I don't want to put the card ahead of the horse there.
Cody Simms (38:06):
What talent do you need on the team as you grow? I guess we haven't talked about who you even co-founded the business with yet, but you presumably have some folks who are fermentation experts on the team alongside you, but maybe share a little bit about what talent has gotten you to where you are today, as well as where you see the biggest needs are going forward.
Jeff Nobbs (38:23):
Yeah. My background in restaurants and tech was certainly not enough to figure out how to get a microorganism to produce fat. So my co-founders are Steve del Cardayre and Jay Keasling, and they've both been working with microorganisms for a long time. And a lot of that work has been in fatty acid production in microorganisms, but in a number of different fields. So a lot of relevant work that they brought to the team and to the table. And we've hired a number of really incredible scientists, and supply chain folks, and marketers, and all the ingredients necessary for building a team and launching a product. And that's in everything from starting with the strain, the microorganism itself, all the way down to the downstream processing, or actually getting the oil out and getting it into a bottle. And there are million little steps in between that take really smart people to do and to figure out. And going forward, I think it's a lot of doubling down on those core teams that we've already built across science, and marketing, and operations. This would've been a really hard business not that long ago. It would've been a really hard business 10 years ago. It would've been a really hard business 20 or 30 years ago. The idea of food science and food tech was limited to what Procter & Gamble and Kellogg were doing at a very large scale. Wasn't so much a startup thing.
Cody Simms (39:42):
I always think of Clark Griswold getting the bonus for his coded cereal Varnish in Christmas Vacation. When I think of food science, that's where my mind goes.
Jeff Nobbs (39:53):
Yeah. How can we get this processed food to be a little shinier, to last a little longer, to make you crave it a little bit more? I mean, yeah, that was food science up until recently. And I think other companies have helped pave the way that, "Hey, we can actually use food to do something good in the world." And scientists and other talented people, they want to spend their time in a way that they can talk about at Thanksgiving and feel good about it, and feel good about how they spend most of their waking hours. So all of that, which we weren't responsible for, but we're certainly taking advantage of it, and that it makes it a lot easier to hire great people.
Cody Simms (40:28):
Well, on that note, you've got listeners here who may be interested in helping you with that mission, or may just be interested in being curious consumers of your product. What should people hear, who are interested in what you're doing? How should they take action?
Jeff Nobbs (40:43):
For curious consumers, cultured oil is now for sale at zeroacre.com. So if you're interested in checking out cultured oil, every purchase is a vote toward a better future, we think. And every purchase of cultured oil, we're a public benefit corporation, so any profit just are going to go right back into looking to bring down the price over time. And for people interested in supporting the mission in other ways, we're always hiring at zeroacre.com/jobs. So shoot us a note. We'd love to hear from you.
Cody Simms (41:11):
Talk about the PBC side of things, the public benefits corporation. What was the process of doing that with the company, and what does that actually entail for you from, both a day-to-day perspective and a long term perspective?
Jeff Nobbs (41:21):
Yeah. We started this business because there was this very specific problem we wanted to solve. It wasn't like, let's go out and try to make millions of dollars. What business do we think we need to do in order to do that? So when we were fundraising, and putting together our board, and starting to realize, okay, we're not going to be the only ones making decisions around here or having a say in things, we want to make sure that was very clear. Actually, less for people that are involved now because everyone is extremely aligned. But thinking ahead to, I don't know, we have a board of a lot more people someday and maybe even shareholders someday, most businesses, C corporation, S corporation, they have a fiduciary responsibility to make the decisions that are best for the bottom line. And that comes down to also who is going to acquire us, and what are they going to do with this? And if the price is good enough, most companies, they have to accept certain offers. As a public benefit corporation, we have a legal responsibility to do what's right by our mission of, in our case, improving human and planetary health. So that just makes it a lot easier when we're talking about, Hey, is there an acquisition offer on the table? How are we going to price this product? What products are we going to bring to market? If they're not aligned with that mission, then it's not that hard of a discussion. It's just clearly something that we can't do. So we wanted to do that to really align everything we do. Honestly, I don't think being a public benefit corporation really affects what we do day-to-day because we just do it naturally, and we hire people who are passionate about the cause. And then the public benefit corporation, when people find out it's like, "Oh, that makes sense." That's par for the course for Zero Acre.
Cody Simms (42:42):
Jeff, thank you so much. Anything I didn't ask that you wanted to make sure people were aware of?
Jeff Nobbs (42:47):
I think you asked the right questions, Cody. So I appreciate the time, and it was a fun conversation.
Cody Simms (42:53):
Awesome. Thanks for your time today. Hopefully, everyone gets a chance to check out cultured oil at zeroacre.com.
Jeff Nobbs (42:59):
All right. Thank you.
Jason Jacobs (43:01):
Hey, everyone. Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note, that is .co not .com. Someday we'll get the .com, but right now, .co. You can also find me on Twitter at JJacobs22, where I would encourage you to share your feedback on the episode, or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
