Hendrik Kaye is the Co-Founder and CEO of Esencia Foods, a food tech startup that focuses on creating alternative seafood products through biotechnology and fermentation. With their passion for sustainable food solutions and expertise in biotechnology, Hendrik and Bruno are leading Esencia Foods in its mission to transform the seafood industry and provide consumers with healthy, ethical, and delicious alternatives to traditional seafood products. DeliveryRank chats with Hendrik.
I believe what inspired me the most was a combination of my Co-founder Bruno's influence and my own personal experience. I decided to change my diet and cut back on meat, but found it difficult to give up fish and seafood. Despite my limited budget as an entrepreneur, I began buying cheap fish from discount stores. However, as I researched sustainability, I realized that this couldn't continue. I discovered a group of pescatarians who shared the same problem as me.
Meanwhile, Bruno, who has a PhD and worked as a cook in various restaurants, wanted to combine science and cooking. When we came together, our cross-inspiration led us to develop a revolutionary approach to creating great products. We didn't want to create just another plant-based alternative that could quickly flood the market and might vanish as quickly. We aimed to create high-quality products and whole cuts that wouldn't take 15 years, like cellular agriculture.
Our unique approach that sets us apart is our use of mycelium, the root of fungi, to create our products. If you were to zoom in on fish or seafood muscle tissue, you would see muscle fibers that are around 18-20 micrometers thick. Mycelium grows in filaments of similar thickness. By mimicking this texture, we can recreate the experience of seafood. We grow this texture in a bio-reactor to create a whole cut fish fillet. This texture is key for the overall experience of any seafood product.
When it comes to sustainability, there are two dimensions that one can consider. The first dimension is optimization, which involves making small changes, like encouraging employees to take the train instead of a plane, or reorganizing supply chains for more efficiency. While these changes are important for larger companies, my Co-founder and I are focused on the second dimension, which I would like to call substitution.
This dimension involves introducing new products into existing systems to substitute something that is harmful. For example, for every ton of fish caught, 1.7 tons of CO2 equivalents are emitted, while our product only requires 0.08 tons of CO2 equivalents. This means that our product has an environmental impact that is 20 times less than traditional fish. By offering products that provide the same experience as seafood but with a much lower environmental impact, we empower consumers to make sustainable choices. This is where all of our efforts lie.
Our key ingredient is mycelium, which we grow through a process called solid-state fermentation. This process involves using natural ingredients to achieve taste and texture, resulting in a very limited ingredient list of about 5-6 ingredients depending on the product. Our products have minimal processing, which results in a natural experience for the customer. This matters because food is complex, and when a customer eats something, there are biochemical processes that occur in the body. Natural products tend to result in a better reconsideration, which means a higher likelihood of repurchase. This is crucial for a company's survival and for having the desired impact on the planet that we aim to achieve.
Let me first explain the markets. The global seafood market is worth around 300 billion U.S. dollars. If we imagine that just 10% of it shifts to alternatives, we talk about 30+ billion. 10% would still not be enough to feed the growing population over the next two decades, but let's just stick with the 30 billion or the 10%.
When we look at seafood, there are probably 15 key species that are consumed across multiple countries, and each country often has country-specific or even region-specific value chains with different players like system gastronomy, b2b, or restaurants. I want to point out that there are currently not so many companies pursuing alternative seafood, maybe 40, or even 60 with recent incumbents.
Having said that, I think everyone will have his or her space. However, as a startup, you need to find your so-called “moat” and the ones that will survive in the long run combine two moats. One is the market moat that I just described, so a smart go-to-market strategy, and the other mode is the technology. I already outlined how we set ourselves apart from a technological angle, and I'm sure we will find the right market mode to tap into the gastronomic industry, which is at the moment kind of untapped when it comes to alternative seafood. What are some of the biggest challenges you've faced as a startup in the food industry, and how have you overcome them to build a successful and growing business?
We haven't overcome all our challenges yet, but let me share three challenges with you. One challenge has been overcome, one is still a work in progress, and the other is still waiting for us. First, as an early stage startup on the edge of food technology and biotechnology, what we need most is capital. Unlike software development where a few people can sit down and start programming, what we do is more capital-intensive.
So if you're starting, define these two moats, technology and go-to-market strategy. Then, I would advise taking on smart capital. Even though it's difficult these days, I still believe that companies with these two moats can raise funds.
The second challenge that we have overcome or are still overcoming is hiring talent. The food industry has a lot of talent focused on substituting ingredients to make products cheaper or greener. These are both viable goals, but very few people have experience in developing a new product, especially through fermentation. So what we did was systematically test different recruiting channels, like LinkedIn and other platforms, as well as direct outreach through universities.
We found that certain channels, especially direct outreach and university contacts, perform better in terms of getting strong applications compared to the effort you put in. This is the strategy we are using to overcome the challenge of hiring talent. (In case someone is reading this and wants to join an exciting start-up like ours, please reach out.)
The third challenge - for the whole industry, not just for us as leaders - that we are facing is related to the EU Novel Foods Regulation. This regulation states that any food that has not been consumed prior to May 1997 is considered novel and needs to undergo a regulatory process that takes around two and a half years to ensure that the product is not harmful. Even something as basic as a potato would be considered a novel food and likely not pass given that consuming too many potato fries is clearly unhealthy, if it were not consumed before May 1997.
Any new food product needs to comply with this regulation, which is a major challenge for all players in the industry, including us. We need to ensure that all parts of one of our product lines comply with this regulation to ensure their safety.
If you would like to find out more about Esencia Foods, visit https://esenciafoods.co/