Cheese, Changed
Five years ago David Bucca underwent a period of personal change that led not only to a new lifestyle, but also sparked a transition in his career. Leaving his job with Boeing, he decided to focus on accelerating innovations in food technology helping launch independent think tank Food Frontier, as well as taking on the role of APAC regional manager for plant-based meat company Hungry Planet. Now as a founder and CEO of his own company, Change Foods, David is utilising precision-fermentation technology to re-create real cheese. In this episode we chat more about David’s history in aerospace engineering as well as his experience having worked with multiple different companies in the plant-based space. We also discuss Change Foods' technological approach, strategic placement of HQ and how to bring on risk-averse investors in the Australian region.
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Image of David Bucca, founder and CEO of Change Foods.
It’s clear that David has had large amount of experience working for different companies. Having worked for a large corporate, as well as even becoming the COO of an Australian hemp-based startup, his range of roles seems to have played a large part in guiding his position as CEO of his own company.
David: “Having a diversified experience going from large corporate to very small and everything in between is so valuable because you learn things from both systems.”
David discussed some of the differences between corporates and startups, in particular focussing on their ability to innovate.
David: “It’s super important that the large companies play a role, but their cycle time to innovate a new product, let alone manufacture it and then get it to market could be 1-2 years.''
Whereas a startup is very quick and agile and they’re often the spark that’s needed to start a new food revolution.”
The food that David and his team at Change Foods are revolutionising? Dairy.
David: “We’re using precision fermentation to recreate real dairy starting with cheese via the use of microbes instead of animals.”
It started with David’s analysis of trying to solve the biggest gaps in the market both from a startup and consumer point of view. The largest of these he found was that the alternatives available are not sufficient enough for vegetarians and flexitarians alike to make the switch over to animal-free dairy.
David: “Once you can crack some of the key functional properties of cheese (and you can do that using precision fermentation), then you’re closing that gap and fixing for the problems that currently exist with meltability and stretchability, functionality, taste and texture which is so important to match.”
But also beyond the current gaps it was also about the impact.
David: “The impact of cheese and dairy on animals is really tremendous, and cheese as a category is still increasing in demand.”
David: “Out of all of the food products, per kg, cheese is the third largest carbon emitter behind beef and lamb.”
And whilst not everybody may know the real cost of dairy, and in particular of cheese, there has been a rising awareness about the environmental impacts of animal-based products. We’ve seen rises in the increases of plant-based milks, so why is it that cheese is still lagging behind?
David: “When you start considering things like stretchability and meltability, there’s something very unique about the key functional proteins that you find in real animal-derived dairy such as casein and whey that really you can’t replicate sufficiently from the plant-based kingdom alone.”
David: “They may in the future… but the reality is that the commerciality of bringing exotic proteins to market in the next short amount of time is a lot harder than people think.”
That’s where precision fermentation technology comes in, allowing you to re-create those exact proteins that can help achieve those key factors that hinder plant-based cheese performance. But what exactly is the technology all about?
Well a good place to start is to think about other foods such as beer and bread that are currently utilising microbes in their production.
David: “We take the yeast, but we instruct it differently so when we ferment it with sugar it produces your particular compound of interest, in our case that could be casein, tomorrow it may be whey.”
David: “This is where it’s slightly different from cellular technology like cell-based meat because you’re not actually ending up with the cell, you’re ending up with the protein (because you filter away the actual yeast).”
These proteins act as lego blocks, which can be reassembled and formulated into a variety of finished consumable foods. But precision fermentation is not just limited to the production of proteins.
David: “You can make proteins, you can make enzymes, we’re doing dairy fats, which we call aromatic fats.”
It’s important to note another difference between precision fermentation and cell-based meat, that is that Change Foods’ approach doesn’t require a biopsy. This is because due to dairy having been studied for decades, there are many scientific papers and genomes that have already been sequenced which David and his team can tap into.
We also spoke a bit about the various different microbes that can be used to grow these proteins, and the reasons behind choosing one over the other, starting with bacteria.
David: “They replicate every 20 minutes, so they’re very fast growing.
But they produce the proteins intra-cellular (inside the cell), so as part of the downstream processing you have to open the bacteria to harvest the protein.”
David: “Filamentous fungi on the other hand is very slow to grow, but then they secrete the protein into the fermentation broth, pushing out the protein.”
David: “It’s really a trade-off analysis of figuring out which system makes the most sense in terms of cost, processing, scaleability, yield, which is why you do need to test different systems.”
David then went on to mention that when it comes to the pharmaceutical industry, they can afford to use lower-yielding hosts as they can afford to charge a premium price which differs compared to food.
David: “We have to do everything in our power to minimise the cost as much as possible and scale as quickly as possible to very large volumes… which is why you have to naturally go to things that can produce very high yields.”
A large part of minimising the cost is also effectively manufacturing and producing finished products. With an early-stage startup how do the team balance what to create in-house and knowing when it’s more valuable to partner?
David: “At the end of the day it’s a new-to-the-world technology so there is benefit in us deriving the right process and having the control of the full value-chain from microbes to cheese, and in fact we probably will do a pilot plant in the US at some point in the future for that very reason.”
David: “We have to be nimble and figure it out ourselves so that we can create a model that is then commercially viable and makes sense. At that point… when we want to launch on a large scale we’ll absolutely have to partner with the right people.”
David went on to mention how Change Foods is looking to create their own food and brand products, initially going to market with that as it allows to control the language used with consumers.
David: “By us having and controlling our own product in retail, it will allow us to control the language a lot better, and we think that’s a really important aspect with a new technology.”
And consumer perceptions and education definitely differ across the globe, with some countries already being more on board with alternative protein innovations. This comes as one of the reasons behind David and his team’s early-stage decision to move the startup’s HQ to the US.
David: “We knew we had to at least have a presence there. But more than that we knew that to build a strong brand and be a pioneer in this technology, it just made a lot of sense that we’d have to first focus this in the US whilst still maintaining our ties here in Australia.”
David also mentioned that this decision was based around a lack of infrastructure that would block the ability for the startup to scale to very large volumes as well as a larger availability of capital and precedent, with companies such as Perfect Day already working alongside regulatory organisations such as the FDA.
A large reason for these differences in stages of development is because the investor community in Australia is not as familiar with these kinds of technology, and in David’s opinion are a little bit more risk-averse. His response? To find a way to de-risk it along the way and bring people on board.
David: “Instead of doing an initial $2 million raise, I actually had to ask myself how to do this in a more slowly, mapped out way. I did a small raise last year of only $125,000, but that allowed me to get started.”
David: “That then allowed me to step into the next round of raising where our target was $600,000 and we ended up being oversubscribed, bringing in $875,000 USD.”
Change Foods have also recently closed a bridge round of another $350,000, which David thinks is a result of the process being de-risked further as well as the current build-up of the executive team.
So the biggest piece of advice, especially for those starting in Australia with something a little bit more out of the box?
Be creative, de-risk it and take it more slowly with bite-size chunks.
David: “Yes it’s been more effort on my part since I’ve had to do a lot more investor meetings and it’s constant fundraising, but I think it’s worked out really really well and favourably, because now we’re attracting investors from elsewhere.”
David’s thoughts on the Australian dairy industry and regulations around new cellular technology?
David: “I think both will co-exist for a period until a point where the dairy that comes from things like precision fermention is always going to be being optimised. You can’t innovate a cow unfortunately, and so we have to find a different way to produce the same products or at least the same compounds that we want without the same inefficiencies that come from incumbent techniques.”
If you’d like to learn more you can head to Change Foods’ website, or follow them on social media.