Dan shares how he was first introduced to the problem of food waste. When he brewed his own beer back in college, Dan did a great job recognizing the environmental impact of food waste and ReGrained was born out of the desire to try to address this problem.
He talks about how, as a company, they’ve taken a leadership role in the upcycling movement by giving talks, releasing content, and highlighting landmark research on this subject.
He also shares some of the great opportunities for companies to differentiate their products by using upcycled ingredients, and also how companies can unlock additional lines of revenue by reviewing the byproducts of their production process.
Ken: Welcome to the Physical Product Movement, a podcast by Fiddle, we share stories of the world’s most ambitious and exciting physical product brands to help you capitalize on the monumental change in how, why and where consumers buy. I’m your host, Ken Ojuka.
In this episode, I talk with Daniel Kurzrock, Co-Founder and CEO of ReGrained. He describes how he was first introduced to the problem of food waste. As he brewed his own beer back in college, Dan did a great job describing the environmental impact of food waste and how regained was born out of the desire to try to address this problem.
He talks about how, as a company they’ve taken a leadership role in the upcycling movement by giving talks, releasing content, highlighting landmark research on this subject. And founding the upcycled food association. We also discuss some of the great opportunities for companies to differentiate their products by using upcycled ingredients, but also how companies can unlock additional lines of revenue by reviewing the byproducts of their production process.
This was a no fluff, dense and educational interview that I really enjoyed. I think you’ll enjoy it too. Hi Dan. Hey, thanks for jumping on. I appreciate you taking the time.
Daniel: Oh, Hey, Ken. Great to be here with you.
Ken: Hey, so, uh, where, where am I finding you now?
Daniel: I am in San Francisco, California, beautiful Bay area.
Ken: Cool. Is that, is that where you guys are based?
Daniel: We are. So our company is based in Berkeley, um, and you know, kind of have had spaces around them, the Bay area for, for some time I grew up around here. Actually, the, the idea for the company was started down in Southern California when I was a, uh, undergrad at UCLA.
Ken: Cool. Well, before we jump into that, cause we definitely want to hear that story. Um, we’d like to kick this off with a quote. Um, is there a quote that, that kind of, uh, you know, gets you excited and is impactful to you?
Daniel: Well, I, they submitted a few of them on your, uh, on your form here. Um, Yeah, I’m going to have that.
And I should’ve just pulled that out.
Ken: Yeah. Innovation is putting creativity into action. I think that’s the one that you submitted and, uh, yeah, that’s pretty awesome. Quote. And why, what is that, uh, why does that speak to you?
Daniel: Yeah, that one, that one speaks to me because innovation is one of those buzz words.
It gets, it gets thrown out a lot. And I think it, um, almost to the point of abstraction. Right where it’s lost, it’s lost its real meaning. And, you know, especially as it relates to like entrepreneurial ventures and, you know, doing, doing something new, you know, that, that, that action piece of it is, uh, is just so critical.
And when you’re, you know, when you’re, when you’re building a company or when you’re developing new products, you know, it’s really, um, Often challenging to not let perfection get in the way of progress. Right. And actually taking action on ideas is where a lot of, a lot of individuals and teams and companies get, get caught up.
And I think if we just can remember the, you know, truly being innovative, it’s about putting, putting creativity in action. Um, You know, you get a little more comfortable with maybe taking two steps forward and one step back, you know, for the sake of actually doing something new and Santo, how the, you know, how the rubber meets the road, so to speak.
So that’s something that, um, when I first heard that quote, I don’t, I don’t know who to attribute it to, uh, originally, but it just, it really resonated as, um, you know, words to kind of build a next generation. Good company.
Ken: No, I think it’s pretty awesome. Quote, and I think it’s really easy to get excited about the ideas, but really nothing happens until, until you act on those ideas. And I think that that’s where true innovation happens. Absolutely. So, Dan, yeah. So for those of those who’ve never heard of regrade, uh, your company. Can you, uh, can you tell us a little bit about it? What you guys do.
Daniel: Yeah, absolutely. So we’re in, we’re an upcycled food company, kind of pioneering upcycled food company.
Um, you know, some people know us for a product of, you know, lineup of consumer products that we’ve launched and I’m sure we’ll spend some time speaking about, but it really what’s behind, you know, what we’re doing is some technology that we developed actually with the USDA around rescuing overlooked, under utilized.
Ingredients, you know, that are, that are highly nutritious and flavorful and functional, like the grain that’s already been used by breweries to make beer. And what we do is we actually convert that into a high value, you know, source of sorts of foods. It’s kinda like the circular economy for food. So we. Have a ingredient, uh, business where we work with other food companies and help them commercialize up-cycled food products. We have our own line of products, which kind of act as a commercial proof of concept and, you know, something to physical that we can put out there for people to, uh, you know, for people to experience.
And, you know, it’s, uh, it’s really a platform for, for upcycled foods. And it all started with, uh, with beer making.
Ken: And so you mentioned that you, you guys, uh, you know, pioneered or one of the pioneering companies behind this, uh, how long ago was that? And, and you know, what, what do you think that your, your role and your contribution to the upcycling movement, that’s getting a lot more popular now? What do you think? What do you think your contribution was to that?
Daniel: Gosh. I mean, so, you know, for this, this all started for me when I was an underage member, actually I started making my own beer as I, as a college student. And this was 2009, 2010. Um, I learned with, uh, with a buddy from his, from his older brother and got, got really into making, um, Thank him beer.
And this was before food waste was something that was talked about, you know, commonly, unfortunately now it’s an issue that has gotten a lot of attention, especially since the landmark report in 2014, where it was first quantified that 40% of all food. That’s grown is wasted. Um, for me, you know, back then it was more about, Hey, you know, every time we’re making a beer really love this hobby, but the process is actually making food at the same time.
And that, that food is, uh, it feels like we’re, we’re wasting it. Um, you know, it was going to, uh, Basically in the, in the dumpster. And every time we made a batch, it’s like one pound for every six pack. So I started making loaves of bread and selling it to friends and would use the revenue from that to buy more ingredients, to brew more beer.
And, you know, started, started me asking some of the bigger questions, especially as a student of sustainability and of business and. In the world of sustainability, there’s this concept of cradle to cradle, you know, of, of, of having, you know, a circular economy, you know, products where there’s no kind of this, this basically dismantles this linear construct, that’s completely a product of.
Well, let’s call it, I guess, human, uh disingenuity or something where, you know, we’ve made these, these very, we built this very extractive economy. That’s take, make waste and, you know, in a circular economy, it’s about, you know, how can, how can the output of one process become the beginning of another process?
And, you know, there was this idea of upcycling, um, that was, you know, proposed, uh, I believe originally by Bill McDonough and it’s about creating products of higher value. So, you know how instead of making. You know, saying, uh, taking like a plastic bottle and recycling it into another plastic bottle, which by the way, less than 10% of all plastics are ever actually recycled, um, and actually, you know, creating something new with it.
So if you look at, like Patagonia, for example, some of their fleeces are made from recycled water bottles, right? And so Laura was very inspired learning about this, uh, this concept and realized that we were, you know, kind of stumbled we’d stumbled on with. With beer-making and with, uh, you know, the, the breads and, you know, eventually my sister made these like nutrition bars that, that was, that was really a very similar ethos.
Um, but it was, but it was for food. And so I started talking about it as edible upcycling, um, and which eventually became, you know, upcycled food, uh, Right around the same time, actually another stock Southern California based company, banana, you know, also had to put the words, you know, cycled food on there, on their packaging.
And, you know, if you fast forward a few years, you know, upcycled food and actually started getting some, getting some traction, started making some, some trends lists and, and, and, you know, reground started getting more and more attention. Um, you know, there’s a whole. Kind of subsample sector related.
That’s grown around this and about a year and a half ago, actually, um, a handful of companies, you know, rebrand included. We came together and we co-founded a nonprofit association called the upcycled food association, which, uh, started with it was, you know, seven or eight companies originally as of last week, we now have 155 companies worldwide that are participating in the upcycled food.
That’s awesome. Um, we’ve got a third party certification that’s coming out. Know I’ve given. Uh, the opportunity to give a Ted talk about this sort of thing, um, and speak at conferences and whatnot. It’s been a, it’s been a real privilege to have the opportunity to champion something that I think is as common sense as, Hey, let’s take all of the value that’s being created by our food system and let’s keep it and the food system by putting it to its highest use feeding people. That’s really what upcycled foods is all about is about putting food to its best use, you know, feeding people and, you know, Rio Grande has been championing this for years and we look forward to doing it for, for years to come.
Ken: That’s great. That’s great. And I have a couple of follow-up follow-up questions on that actually. Um, why do you think now, why do you think it’s catching, you know, um, some, some momentum now, um, as opposed to, you know, years ago, I think we, we’ve known about this problem for quite awhile, you know? W why, why do you think companies are interested in it now?
Daniel: Well from the company’s perspective and I’ll, I’ll, I’ll address that first. Cause you said, why do you think companies are interested in upcycled food now? I mean, there’s a pretty straightforward business case for doing this, right? I mean, we’re talking about, um, optimizing value, right? We’re talking about, you know, creating co-products where there once were, were byproducts.
Um, nobody likes. Waste, you know, whether you’re, uh, you know, at the head of a boardroom table or, you know, the head of your household’s kitchen table, right? Like waste is, is something that is deplorable pretty much to, to all. And the fact that we waste 40% of all edible food, I mean, that’s, that’s insane.
You know, that’s like leaving the grocery store with five bags and dropping two in the parking lot. Um, and so. Uh, I think one of the reasons that that shouldn’t be ignored is that there’s a really clear business case for turning waste into, into value. Um, now when done authentically, which is really core to the, to the upcycling piece of it, you know, this is something that actually can, can make environmental impact.
And so to be, you know, an upcycled food product and to be certified in the certification processes, that’s launching later this year, you know, you have to know to show that, you know, the sources of your carbon focus. Right. For example, and those, you know, really this whole environmental philosophy around this, not just the, the, the straight business case, um, you know, more broadly, if you look at just, you know, consumer trends, if you will, there’s been an increasing.
Awareness of what’s, you know, what’s in, what’s in the food, right? And, and people becoming increasingly, uh, interested in foods that are better for them and better for the planet. And, you know, this has become more marketable to create food products that are differentiated by being, you know, more nutritious and more sustainable.
And so there’s that kind of macro force that’s that’s going on. And then if you look at the consumer level, Um, you know, just, just, you know, I was at home in the last year. Right. You know, during this, uh, this shared experience, we’ve all had around the pandemic and, um, you know, everyone, uh, you know, there’s, there’s been a huge array of consequences from this, but the, you know, specific to the food system, there’s really kind of just shined a light on the fragility.
You know, of our, of our food system, especially in the early days when there was, you know, some, some of the runs on the grocery store and, and, and whatnot. And it drew a lot of awareness to, um, you know, to our food system and food waste actually is something that’s, uh, you know, if you look at like survey data, it’s something that people are paying more attention to now than they were before. COVID, which I think is really interesting.
Ken: Right, right. Yeah. And I, and I believe it, you know, and I’m, I, I’ve got, I’ve got five kids and, and, uh, you know, so food waste is something that, you know, just as a, as a parent, you know, I see. I just see all around us. Right. And I just think about it, you know, selfishly from my pocket book, you know, I paid for that food and now we’re just throwing it in the trash, you know, what’s going on there, you know?
Um, and that’s just, you know, just anecdotal and of course, you know, at the consumer level, but this is going on. You know, throughout the supply chain, you know? And so I wanted to talk just a little bit more about, about how you guys noticed this, um, in, in the process of making beer. Um, and, and maybe you can go into a little bit more detail about the process of making beer and what, what exactly what was wasted and just to maybe describe that to the listener.
Daniel: Yeah, absolutely. And, you know, upcycling the apps, like what food opportunity is, you know, somewhat of a. Esoteric subset right. Of the food waste problem. Cause we’re not talking about. There’s kind of two main buckets of up cycled food that you can think of, you know, one that’s, um, maybe a little more intuitive is, you know, farm, you know, things like farm surplus, where maybe after harvest and everything made it to the, to the grocery store for cosmetic reasons or otherwise.
And, um, you know, taking those, those crops, um, and you know, maybe doing some. Was actually, it’s a very old examples of, of doing value added processing, right. Creating juices, you know? So it was a great example of, of how a lot of these crops have been, have been used historically. And then there’s this other subset, which is really where rebrand plays in, which is an a, what would you, you could call like manufacturer byproduct utilization.
So that’s taking. Side streams that are created from other processes that would have gone to a lower use, maybe animal feed, maybe compost, maybe landfill, uh, and you know, basically preserving them as, as you know, high quality, you know, human, human food, uh, ingredients. And so, you know, with three grand, this was something that, uh, it was just so.
In our face when we were home brewing, you know, to make beer for those of you who are listening, who’ve never made beer before, which I think is a lot of people. It’s actually a very simple process. It’s not, um, the ingredients are very similar to making bread, um, just with the additional hops. So you’ve got, there’s four ingredients in beer.
You’ve got water, you’ve got grain, you’ve got hops and you’ve got yeast. And the first step in the beer making process is kind of like making a huge batch of oatmeal. So the brewer heats up, the water, mixes it in with malt, which is just a sprouted. And roasted grain, usually barley. Um, yeah. So it’s also an ancient grain, right?
So, you know, beers has made kinda by making like a barley porridge is the first step of the process. And then that, um, porridge is basically drained and rinsed through and what’s happened there, you know, simplifying is that the sugars are extracted, you know, is this like it’s called a wart. It’s kind of like a, like a sweet.
Water, you know, that gets boiled and hops are added to that. And you know, that gets cooled down and then the yeast is added and then ferments and fermentation basically converts the sugars into alcohol and gas, you know, which is why you have Uzi carbonated beer. But way back in the beginning of that process, you still have that porridge, right?
You have a physical. Mass of these saturated cereals, you know, there’s this barley that’s just been soaked in water. That’s all that’s happened to it. And so, you know, what we’re doing with rebrand is we’re taking that and what’s left in there as a company. Centration of, of plant protein and dietary fiber and prebiotics, interesting things like beta glucans and polyphenols and, um, saccharides and it’s, it’s, uh, you know, there’s actually a lot of nutritional value that’s left in this screen, you know, that’s not useful to the beer maker, you know, for the, the beer maker, all they care about is extracting as much of the sugar as they can, um, as efficiently as possible.
And then making the beer, the rest is of something that they need to get rid of before they can make more beer. And so, you know, we’re doing this, we’re coming in and we’re able to, uh, stabilize it and process it into a flower that can be used as a key ingredient and whole range of different types of products, baked goods, snacks, breakfast items, pasta, you name it, and we’re coming in and we’re making that possible for the first time.
Thanks to our breakthrough, uh, on the, uh, the technology that we developed with the USDA.
Ken: And so, yeah, you’ve mentioned that the technology, a couple of times, is there anything you could tell us about, you know, what’s unique about what you guys are doing to it? Um, uh, and, and I guess what makes it patentable?
Daniel: Yeah. And the, and the patent is a public domain, right? It’s just something that can be, that can be looked up. You know, our, our process, it’s a thermal mechanical process, you know, uses, uh, uses infrared and, um, you know, basically is. Taking a material that would have otherwise, uh, I guess what’s important to note is that when it comes into the brewery, it’s sopping wet, you know, it’s like 90% water by weight.
So it’s wet and heavy. It’s difficult to transport spoils quickly and it’s energy intensive to, to process. And it’s very difficult to process, you know, with, uh, You know, high standards for food safety, which is, which is, which is critical. And so we developed a hyper energy efficient method. That’s also, you know, of course, incredibly food safe and really optimized for, um, taking this, this material.
That’s so saturated, the traditional ways of processing it, you know, are, you know, difficult or expensive or, you know, produce, you know, a burnt product, you know, for example, and you know, we’re able to stabilize it, dry it out. Um, No at, at scale and it’s, um, you know, it was patentable, uh, you know, in large part due to the, uh, sensory results as well of, of how we process it.
So it’s gentle enough to preserve the nutrients and, you know, in a lot of the flavor, um, you know, while still, um, You know, basically stabilizing it, you know, sufficiently to be, to be used as a, as a hero ingredient and food product applications.
Ken: Uh huh. It’s interesting. Um, so, um, you’d mentioned that the beer companies, you know, throw this out, do they literally throw out, uh, this, this waste or how do they dispose of it? They do.
Daniel: And I’m glad you asked that Canada. It’s a really important question and something we’d like to be very clear about, you know, by and large, most breweries are not. Sending this to landfill, you know, this is, there’s a rich, we’ve been making beer for very long time as a civilization. You know, some would argue that since the origins of civilization itself, you know, is centered around the production of a beer making and cultivating the.
The gray and to, uh, to, to be made into beer and not wanting to carry big vets around it, right? Like we’ve been making beer for pretty much, just as long as we have records of anything. Um, for a very long time, this is mostly gone to, to animal feed and, you know, especially large breweries. Um, Yeah. And also, you know, small breweries do, depending on where they are and have historically been able to send this for offer animal feed, you know, cat, cattle, feed, hog feed, and, and whatnot.
Um, you know, some goes to. So it goes to compost. Um, and then what’s interesting as in an urban environment, that’s less practical now, which is really where we got started. So we were operating in a city where we, you know, we learned that there was actually breweries that were having to have this stuff hauled away, because it was difficult to get a, you know, a rancher to come in and pick it up when there’s access to this material much closer to the, to the farm.
Um, you know, we. Either there certainly are with more than two new breweries opening per day. On average, there certainly are breweries that that may have no other option, but to send this to landfill. But it’s, it’s not that the it’s really not that the brewery is them. You know, the brewers are being wasteful.
They just can’t make beer without also creating this coal product. Right. And so what we’re doing is we’re, we’re proposing a higher use, you know, we’re saying, Hey, rather than sending us to a lower use, like, like animal feed or, um, or composts, uh, You know, let’s turn this in. Let’s keep this nutrition in the food systems, feed it, you know, let’s feed it to people.
Um, and so we’re coming in with a better option. Um, but I like to be very clear that. You know, we’re not, it’s not like it’s not like the we’re not here to villainize the, the beer industry or anything like that. You know, they’re, they’re really key partner, you know, in the, in this, for us, it’s just the beer makers are in the business of making beer and you can’t make beer without also making this food.
We just want to see this handled and valued as the food that it is.
Ken: Okay. Interesting. Um, and, and that’s pretty awesome. So, so really, you know, by higher you mean like a higher value use. Um, as opposed to like a lower values
Daniel: Yeah. Vial value. And there’s, you know, financial value, which we’re talking about earlier, but there’s also something called the food recovery hierarchy as well.
Um, that the EPA put out on the environmental protection agency put out. So I’m talking about higher use. I’m also talking about higher, you know, on that pyramid of food, recovery and feeding people is at the very top of the, uh, of the pyramid pyramid, as you might imagine.
Ken: Yeah. Cool. Um, yeah, I wanted to switch gears just a little bit.
Um, it’s so at regrade it seems like you’re almost running, uh, two companies, right? You’ve got the technology, um, and ingredients, uh, part of your company. Um, and then you’ve also got a line of consumer products that you also, but you also offer, uh, is that an accurate assessment?
Daniel: Yeah, it, it certainly feels that way. Sometimes. You know what? There’s an integrated strategy between the two. We’re using our consumer products as a way to help build the market and educate both the consumers and you know, the industry and, you know, media and everyone, you know, about the opportunity for upcycled food and for our ingredients, like our, our flagship super grand plus, um, You know, that’s, uh, it’s, it’s really a powerful tool to be able to create a product ourselves, bring it to market and show that this can be done, that it can taste great, that it has better nutritional differences and, you know, great flavor and versatility.
And so it’s all a part of our, you know, early phase market development plan, but, you know, operationally, um, yeah. Yeah. I mean, there’s kind of the two key activities. There’s actually a third that I’ll introduce them in a second, you know, but one is the, and our primary focus is on the development of our.
Ingredient and capabilities and, you know, the, the innovation opportunity for putting these into all different types of food, product formats, and working with, with partners, you know, bakeries, other brands, restaurant groups, you know, just product developers worldwide on bringing this to bring this to market.
Um, and then we have our own products that we create where we can actually get things to market faster. And, you know, if money were no object, we, we could have a product in every aisle of the grocery store. Um, and then kind of the third leg of that is that this technology that we’ve developed is designed actually to be able to be co located at a manufacturing facility.
And so, you know, there are, um, various kind of licensing and various, uh, you know, other types of arrangements that we, uh, that we’re also pursuing on. How do we, you know, how we can scale this concept geographically.
Ken: Okay. And you’d mentioned that, that you’re, you’re launching something a little bit later on this year. Is that what you’re talking about?
Daniel: So we actually have a product launching this week. Can, we’ve got a, you know, an example of a cooperation, um, that we’ve, that we’ve been working on is a company called, called dope. They’re an edible cookie dough company. Really great, really great product. They’re launching a, uh, a flavor.
Um, that’s using our, using our ingredient. Um, You know, this is, uh, a sweet application it’s cookie dough that can be eaten right out of the bread, out of the pint, like, uh, like it’s like an ice cream pint filled with cookie dough, or it can be, you know, actually baked off into, to cookies really great product.
Um, it’s just our latest, uh, latest release we’ve had earlier. Uh, actually it was on the end of last year, we had an ice cream, you know, that was, that was launched. We’ve got some savory snacks and development with a few different groups. Should’ve got some breads, you know, so there’s a whole. Slew of, of products that are, um, going to be coming to market using this ingredient in the, uh, you know, in the year to come and, you know, even more in the years to come.
Ken: Yeah. So I was actually interested in that process. Um, and maybe we can take one of these examples, you know, um, what is the go to market look like, you know, for, for your company and, and finding these, these partnerships and, you know, co-developing a product or, you know, picking an ingredient to use, you know, what does that, what does that look like?
Um, in terms of, you know, within your own company and what type of activities are you doing to find those opportunities?
Daniel: Yeah, it’s sounds a little corny, but there’s a lot of just, I guess, community building, uh, around, around this we’re, we’re, you know, we’ve taken a very active role and, you know, I’ve mentioned this, you know, kind of at the top of the show with the, uh, with the upcycled food association and bringing together other upcycling food companies, you know, in a similar capacity, we’ve been really educating the, the, you know, the trade about, um, about upcycling.
Food. And there’s, you know, many of these, especially like big companies now they have, um, you know, entire programs dedicated to innovation around, around new ingredients. Um, also many companies have, uh, you know, they have this other silo of, of. Sustainability and looking at, um, you know, the environmental impact there, their company is making an opportunities there.
And then the, you know, the marketers, you know, and these, these organizations are always looking for ways to create products that are more marketable, you know, the, the meet consumer trends and, and whatnot. And so we come in and we try to connect the dots, um, you know, internally, you know, around initiatives that are relevant to upcycled food and fighting food waste and developing a better for you and better for the planet food products.
We’re working with huge multinational companies. We’re working with startups, you know, for us, it’s, it’s really critical that we, um, in our go to market involves being a supply chain and innovation partner with these other companies, because you can, if we were to let you know, if you’re just. Imagine, uh, like a hundred million dollars a year in sales of say our puff product, you know, this, this bag snack that we’re selling.
If we were out there selling a hundred million dollars of this a year, we’d work with one or two breweries, craft breweries, small ones, tops in terms of a supply. And we’re, we’re interested in closing this loop. At scale, you know, worldwide. And the way to do that is, um, is through, through partnerships. In some cases we’re selling the ingredient wholesale and other cases we’re actually providing some product development services or commercialization support, bringing in, you know, manufacturing capacity.
Um, And other cases we’re selling to companies who are creating solutions for their clients, you know, like, uh, like bakery ingredient companies, you know, for example. And so there’s a whole Decaux system out there of, of ways that we’re trying to, to close this loop, you know, meaningfully, um, and it’s. Yeah, it makes us a bit of a non-traditional, um, business thesis in that, in that respect, you know, cause we’ve got this like vertically integrated supply chain and, um, we’ve got our own products that we, that we also make, but we’re really focused on the ingredients and the opportunity with these other companies, but it’s, um, you know, it’s really a way to do this ad at scale, which is what, we’re, what we’re obsessed with here.
Ken: Yeah. Not imagine, you know, personally, as, as an entrepreneur, that it’s just an interesting and dynamic and just a fun, a fun thing to do, and to be working with so many different companies.
Daniel: Yeah, it’s a, it’s, it’s a whirlwind and you, you learn a ton and different companies have different processes for how they release products.
Um, you know, it can be painful as some companies have multi-year product roadmaps. Right. And so, you know, even at the beginning of the, of the relationship, you know, the best case, it might be two years before something hits, you know, the market. So it’s about balancing that and. The size that that might be, you know, when it launches with maybe a more, you know, more agile company, that’s maybe a bit smaller that you can do something with, you know, with, with sooner.
Um, yeah, it’s super dynamic and there’s not really, at least I haven’t found one yet. Maybe if you, if you do can, you can send it to me and there’s not, there’s not really a playbook for building a business exactly. In this, in this way. Um, No, it’s almost like a, in a sense it’s like an Intel inside model for food, or like Gore-Tex or Vibra or something like that.
You know, there’s all these examples and other, other sectors. Um, but you know, having this kind of vertically integrated branded ingredient platform centered around cycled food is pretty, pretty novel.
Ken: Yeah. Yeah. It’s very interesting. So I was looking at some of some of your early, you know, marketing materials and it looked like you guys were, were exclusively focused on, on granola bars.
So, so switching or, or nutritional bars. So switching over to kind of the consumer side of the business, um, why, why the switch from the nutritional bars to, um, to, you know, what you’re promoting heavily right now, which is the, the puffs. How did that come about?
Daniel: Sure. Yeah. I mean, actually the first product I ever made was bread.
Um, the bread was, uh, something we sell. If he doesn’t love to friends and buy more ingredients to brew more beer for free. And, um, the way that we landed on bars was actually related to the bread and that, you know, with bread, it takes, it takes hours to make. And then the next day it’s not fresh bread anymore.
So. And we wanted a product that we could make more of, you know, still by hand and, um, you know, have more of a shelf life and, you know, the bar category, wasn’t what, uh, what it is now, when we first started making bars in 2013, um, you know, we wanted to, our goal was to create a finished product that could introduce the concept to people to see if we were actually onto something or if we were just crazy.
Um, The, you know, the bar category is obviously, you know, very saturated now with, you know, lots of, lots of options. You know, you could be like a, there’s probably like a bar for. Moms that are in a Jazzercise specific, it’s become pretty niche. Um, you know, as a format, it’s one where people are willing to try new ingredients and, um, you know, it was, uh, something again that we could do by hand and we could make hundreds of them.
And an afternoon, that was, that was the original scale. And, you know, we got to the point where we were in a few thousand stores and doing a lot more than that, but the goal was never to be a bar company. We’re always, uh, you know, an ingredient company that had a bar, um, you know, we’ve been pretty over the years.
We’ve been fairly quiet about the ingredient side of our, our, our, our business. You know, our whole website is largely dedicated to the consumer brand and to, you know, educating people about upcycled food. Um, Which is why I think sometimes people are surprised to learn that we’re not, but that we were more than a bar company and that we’re not making bars, you know, any anymore.
Um, it just kinda hit that point. And, you know, in hindsight, maybe we could’ve, we could’ve walked away from the bar line earlier. Um, But in 2020, that whole category was, was down. And we had this new innovation, um, this, uh, this chip product, the savory snacks that you see on our website now are like a puff puffs chip kind of like in between like a picture of the texture of like a cheetah across where the sun chip.
Um, and you know, we’re, uh, we’re, we’re, we’re a startup. We don’t have infinite resources and the consumer brand is not the long-term focus of the business. And so it made sense to. Know, but the bar is on pause and, you know, the recipes are available there. We’ve got some companies looking at maybe kind of carrying them on and in a different capacity, but to, to bring this chip to market and the chip won’t be here forever, either most likely, you know, it’s, um, again, it’s a commercial proof of concept and we’ve already got numerous, uh, snack companies interested in developing similar products, you know, using this ingredient when those are in market, you know, we’ll maybe bring something else to market.
Uh, In a, in a different category entirely. Um, and so that’s, that’s kind of how, how we think about these, these consumer products. Um, as much as we, as much as we love them, um, they’re not something to get attached to because they’re kind of fleeting by design.
Ken: Okay, got it. Got it. And so my sense is that upcycling, um, in general, just presents some unique challenges and then also it presents some unique opportunities, uh, compared to traditional, uh, manufacturing.
So, you know, maybe you could describe, you know, some of the things that are, that are more challenging, uh, maybe less challenging. What are, what are some of the opportunities in this space?
Daniel: Yeah. I mean, if you think about the supply chain for upcycled foods, your supply chain is another company’s manufacturing process.
You know, if you’re doing manufacturing manufacturers, bi-product utilization side of it, like the type of upcycling that, that regrade engages in that means that we are downstream from decisions that are made around, you know, what, when ingredients are used and, and things like that. So for example, um, our super grand plus, you know, our, our flagship ingredient is not certified organic.
Know, we’re definitely a company that values organic agriculture, but our. Supply is coming from the breweries, right? So there’s not really a very big market for upcycled beer, uh, for a variety of reasons. Um, and the breweries, you know, as a result of not making organic beer, they’re not using organic malt, which means we don’t have access to as much organic Motley.
We would really limit our supply. If we were to say, Hey, we’re only gonna rescue organic, uh, grain, you know, so you can extrapolate that to, you know, other. Implications of your input coming from someone else’s output, right? There’s also a lot of, you know, food safety concerns that need to be, uh, really thought about, you know, carefully, um, and how to best, uh, source these materials and process them.
And there’s a lot of R and D that goes into, at least there was for us, you know, that went into to really optimizing that and cracking, cracking that code. Um, and then. You’ve got the education hurdle too, right. Of developing new ingredients. So, you know, what is this? Is it a flower? And that’s something we used to talk about it as a flower, we even call it a beer flower.
Um, at one point we did it, we would do a lot of kind of market positioning trialing. Um, for example, used to have like eat beer on them and it was a good way to get people’s attention. And, you know, we call it beer flower and you know, it was catchy and maybe clever, but. When people think of flour, you know, they think of.
Flour, right. Flour has certain functional properties and how it performs and like making, you know, those that become, you know, bread, especially if it’s like a yeast or ism product flour also has, you know, certain cost implications associated with it. And you know, this is really a new ingredient. Um, it’s really, maybe better described as a powder.
Um, and so, you know, there’s kind of these got to like come up with an identity for these new ingredients. Then you’ve got to educate the market on. What they are and why they’re, why they’re needed. Um, and of course, it’s, you know, with what we no, internally, it’s, it’s incredibly compelling on virtually every front that this is a, there should be a stable of the food system.
It should be on every aisle of the grocery store. It’s not something that people just know automatically. Right? You gotta edit you, you gotta do some, some education. Um, and that, that applies on the consumer level too. So those, you know, those are a few that come to. That come to mind. Um it’s and that question can come up with probably a thousand others, um
Ken: Sure, sure. And you’re right in the middle of it all too. So,
Daniel: Um, but yeah, it does, like you were saying, you know, suggesting is there’s a lot of challenges here, but it also, you know, is what creates the, you know, the opportunity. Um, and you know, for us, an example of that opportunity is that this process that we developed for the brewers grain, you know, we’ve, uh, Discover that our technology actually works really well to process, for example, like the, the oats that are leftover from the milking process and the poles over from juice production.
And so, you know, there’s, um, you know, a lot of, uh, it’s really a platform, you know, and it’s, that’s, again, another one of those words that’s used so much to the point of extreme abstraction, but, um, this is, uh, you know, really, uh, a means of creating these, these new. Supply chains from within, you know, existing food manufacturing processes. Um, and it’s, uh, just enormous in scope and scale.
Ken: Yeah. Yeah. And I, and I agree. I think, I think that the opportunity is just, it’s just incredible. Um, and in fact, that might be one of the reasons that it might be overwhelming, you know, so, you know, looking at the position, uh, or looking at it from the position of a brand or, you know, a manufacturer that wants to get involved in this and wants to, to get involved in this movement, what, what do you think are the first steps that they could.
They could take, um, to start getting a little bit more educated and finding out where, where are the opportunities there, you know, exist for them to include this in, in, in their ingredients.
Daniel: Okay. My email is firstname.lastname@example.org. Seriously, of course, anyone is welcome to, to get in touch here, but I think, you know, what we’re doing with the upcycled food association, um, is a great place to start.
You know, if you just go to like upside upcycled food.org and you know, on that site, you know, there’s a. The the D the formal definition that we released last year, as well as information about the upcoming certification standard and links to a bunch of press and media and whatnot about the opportunity.
So I think that’s, uh, you know, of course that we w we built that to, um, you know, as an organization to be the, uh, you know, the authority on the up cycled food movement. Um, You know, one thing, depending on where people sit in, the kind of the food product. Industry, um, you know, some companies, there might be opportunities internally to look at processes that throw off byproducts or, you know, that could be Coke products and do some internal product development where maybe it’s about sourcing, you know, using the supply chain power, you know, the power or the purchasing power of.
Sourcing ingredients that are, you know, they’re up cycled and there’s a huge array of ingredients that are there out there. Kenyan regains, super grand plus it’s made from the, you know, the grant from the beer making process. Um, but there’s other, you know, other examples include the. The fruit from the coffee plant, the coffee cherry also known as cascara, there’s also the fruit from the cow plant, you know, from, from chocolate.
That is a pretty interesting ingredient. There’s um, supply chain is being developed for the leaves from the coffee plants from the Oh, Cora. That is a by-product of tofu production from, I mean, there’s, there’s just this huge and growing list of different types of ingredients that are upcycled. And there’s actually.
You know, ingredients that people would commonly be familiar with that could be considered upside. I would consider it to be upcycled to whey protein, wheY yeah. See it everywhere. You know how it’s made, Ken.
Ken: Uh, is It cheese production?
Daniel: Yeah, exactly. It’s a product of cheese production. And that is the essence of upcycling, you know, before, uh, you know, whey protein was developed into, you know, human nutrition products.
It was. Given away or sold for animal feed or Tom, you know, dumped another, you know, in other ways, or, you know, put the lower use. Right. And so then, you know, there’s kind of a market that was, uh, was developed for this over the course of decades and it is what it is now. Right. And so in a lot of ways, like what we’re looking to do is, you know, systematically map.
All of the overlooked and underutilized sources of nutrition in our food system and figure out, you know, the different ways that they can and should be. But the best use as, as ingredients and food for people.
Ken: Okay, well, that’s awesome. And those are some great examples. I think of, uh, of some of the opportunities and even just the, for example, I mean, I, you know, I, I don’t know that they, the, you know, the people involved there thought that the opportunity would get as big as it has, but it’s a, it’s a massive, vibrant, um, very, very lucrative market that’s that’s grown up there.
Daniel: Well, you’ve even got some cheese companies now where, you know, cheese is the by-product of white production. Yeah. That’s true. Or it’s totally free. It’s kind of crazy. And then the next, you know, with the way there’s also now this growing movement around acid way, which is, you know, not a very good name, but it’s the way from yogurt production.
And so there’s a bunch of startups now that are doing different things with the, with that, you know, that, that way there’s a, yeah. Company called wayward spirits, for example, is making vodka. There’s a company called Norway that is making like a beer, you know, like a fermented, a way beverage. There’s a, a company called spare Tanya.
That’s making despair food company. Their product line is called the spirit despair tonic. It’s a ready to drink beverage that has much probiotic really has the probiotics intact from, from acid. Why? So, yeah. Yeah. Um, yeah, there’s a, there’s a lot of this. And then even like the one that I like to bring up ghettos, uh, just as an old example, they’re not marketed as upcycled, but you know, you go to the store, you find baby carrots, right.
And, you know, baby cares. Aren’t cute little carrots that are, that are grown, growing their cosmetic paper carrots that were, you know, shaved down to, um, to that maybe carrot size.
Ken: Oh, I didn’t even know that. I guess I had never really considered how baby carrots came to be, but that’s interesting. Yeah.
Well, um, I have, well, I have a little kids that eat almost exclusively, baby carrots. They won’t eat the normal ones. They just like the baby ones. So that’s interesting.
Well, um, you know, we’re, we’re at time here. Um, I just wanted to, um, to just ask you a couple of quick questions. So, um, we’re sitting at March end of March, March 29th is the day that we’re recording this. Um, what’s, uh, what’s in the future for you guys. What’s coming up later on this year. What are you excited about?
You know, what what’s that look like?
Daniel: Yeah, I’m really excited about the different products that we’re launching with with partners. Um, and there’s just such an array of applications for the regrade ingredient that are going to be brought to market, um, through, through some of these partnerships. And I wish I could go into more detail, um, but you know, everything from, from snacks to cookies, to breakfast items, to, um, Pasta, you know, there’s, there’s just a lot in the works and that’s really our original vision coming to fruition for the first time.
Um, you know, enabled by this process, getting commercialized that we developed and that, you know, everything, when you’re starting a company, it takes, it takes longer and costs more than you than you expect it to. And, um, you know, COVID really slowed down the, the opening for example, of our, of our plant.
And, um, you know, now we’ve got this, this. Beautiful facility. That’s able to crank out, you know, more, uh, super grand plus than ever before. So that’s really exciting. And then also just humongously excited for the progress we’re making as the upside well Buddhist association and, you know, by June, um, or so, you know, companies are going to have their products certified as being upcycled for the, for the first time.
But it’s, uh, that is. Really important to maintain the yeah, just the trust. And that comes with transparency, you know, around, uh, formalizing this as a, as a real stable of, of the food system, which is, you know, it makes both to be a little punny enemy and it makes both dollars and cents right. To do up cycle food, but it’s gotta be done.
It’s gotta be done. Right. And so, um, you know, really, uh, really proud of the work that the up-cycled food association and its members are, are doing. And then what’s to come there.
Ken: That’s awesome. All right, well, uh, just, uh, to conclude here, let’s do the quickfire round. I’ve got four questions for you. Just tell me what do, what comes to mind, um, w uh, name one tool or resource that has helped you the most in your career?
Daniel: Um, the internet,
Ken: Um, and I, you know what, that’s a heck of a tool, so we’ll, we’ll take it. Uh, what about a book? Um, what, what’s a book that you’d recommend, um, that, that has been really helpful to you?
Daniel: I, I read a lot actually in, um, you know, some, some of the early influential books for me on this are books like conscious capitalism, um, you know, natural capitalism, you know, books that are really biomimicry and the books that are really at the intersection of, of, of sustainability and of, of business and of kind of defining a new, a new status quo where.
No, it’s not about take, make waste. It’s about, um, making sure that there’s enough for all, for, for everyone. Which is a Buckminster fuller quote, by the way, I know it just rolled off the dock.
Ken: What’s the, what’s the quote?
Daniel: Uh, enough for all, for everyone, uh, forever, uh, Buckminster Fuller’s, uh, one of his most famous books is called operating manual for spaceship earth. It’s a great, it’s a great quick read
Ken: Cool, cool. Um, what is one piece of advice that you’d give to your 21 year old self?
Daniel: I would say two. Raise more money earlier and I’m just getting high, definitely to, um, continue to just surround yourself with people that have seen the scene, the movie, you know, before, um, that it’s about, uh, you know, not knowing everything, but, you know, knowing people who, who know things and, um, you know, just, uh, Yeah, I guess I’m bringing, bringing that attitude towards, uh, towards building where we are.
And I think that is a big part of what I, what I did. And, um, as something that all young founders should, should do in addition to taking action on their ideas, like we talked about at the top of the show.
Ken: Right, right. Um, and who’s the one person that you would love to take the lunch?
Daniel: Well, uh, to get to sentimental, I guess, but it’s actually been a year since my grandfather passed away who was in the food industry and just a huge, uh, hugely supportive, you know, mentor and advisor to me as I.
Yeah started, you know, building, building rebrand, and actually the lunches were one of the things that, uh, you know, we would meet and, and talk through everything and you know, now a year after he’s his, his past and been really, truly love to get to do that again.
Ken: That’s awesome. All right. Well, um, I guess, uh, as, as we conclude here, um, do you have any, any.
You know, partying bits of advice for those that are in the physical, physical product space, um, that are making their way, they’re kind of in the struggle, you know, what, what would your advice be to them?
Daniel: Don’t burn out. Um, you know, there’s this, there’s this romantic myth of entrepreneurship where you’re burning the midnight oil and, um, Yeah. I mean, you gotta, you gotta, you know, hustle or whatever the trendy jargon is for that these days, but really, really important to, um, take care of yourself and you know, your family and, you know, remember that there’s not a playbook for, for doing this, you know exactly. And that, you know, if you burn out, um, You’re done, you know, and, uh, so it’s, it’s just important to, uh, you know, invest in your physical and mental health, you know, along this journey or you’ll, you’ll never make it through the, in endurance sporting event. It was building a business.
Ken: I think that’s a, that’s a great note to end on Dan. Um, and, uh, I just want to tell you that I appreciate you taking the time today. This was awesome. Uh, I think you’ve really shared some, some great nuggets of wisdom with us and, you know, as well as kind of educating us into this, this problem of food waste and, and you know, the opportunities that there are with upcycling. So, yeah. Hey, thank you. I appreciate it. You take care. Yeah.
Daniel: Thanks so much again, take care.
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