Pioneers for the Philippines
As a biologist, Stephen Michael Co understands and has witnessed first-hand the destructive nature of industrial agriculture on our environment. With a support for small-hold farmers as well as a love for science commercialisation he started his own vegan craft beer company Nipa Brew. 5 years later and Stephen is now the CEO of the Philippines’ first plant-based protein company Worth The Health (WTH) Foods. In this week’s episode we get raw and real about the challenges faced when starting up in a region where the market is early, as well as the complexities that arise when trying to find the right co-manufacturer. We also talk about the potential positive impact of micro algae, and what other exciting things WTH Foods has lined up for the future.
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Image showing one of WTH Foods’ five plant-based protein products, sourced from their website.
As WTH Foods is the first startup we’ve had on the show from the Philippines, we thought it would be best to start with some context around what current attitudes towards a plant-based lifestyle are.
Stephen: “We’ve noticed in the past few years that the plant-based lifestyle is gaining traction, especially in the big cities where people have access to documentaries.”
Despite that however, similar to other countries in SE Asia (and around the world), meat consumption is also on the rise.
Stephen: “Pork consumption is really up there, I think we are only second to Vietnam in south-east Asia, so protein consumption is definitely a growing trend.”
Having a scientific background in biology, for Stephen the passion to make a difference is primarily environmental.
Stephen: “I know the impact of livestock and industrial agriculture on our environment and the Philippines being one of the most biodiverse countries in the world, I’ve personally seen the destruction of forest land to cater to these industrial farms.”
Stephen: “We’re losing small farm-holder lands to large conglomerates, and I don’t think that’s sustainable at all.”
But the leap from academia into entrepreneurship, despite one we’ve been seeing more of, is still on the fringe of scientific communities. What started Stephen to make the jump?
Stephen: “I’ve always been passionate about science commercialisation, and for an agricultural country like the Philippines I believe science is best expressed through food.”
The first manifestation of this can be seen 5 years ago when Stephen saw the opportunity for craft beer, starting his own plant-based brand Nipa Brew.
Stephen: “That’s when we got to know more about the vegan community in the Philippines.”
An early investor and well-known scientist / entrepreneur Ryan Bethencourt then introduced Stephen to pioneer brands like Beyond and Impossible, and that led him on to a new journey of understanding food innovation. After having completed a fellowship at Rutgers Food Innovation Centre he came back and spent 2019 and 2020 researching and trying to understand the different availabilities of plant proteins in the Philippines. But the research doesn’t end there.
Stephen: “We are also currently researching micro-algae and local species that we can make into south-east Asian favourites like hot dogs and fish ball.”
Stephen: “Our theory is that if we can make micro algae work for our products, then we would have a far more nutritious product compared to the traditional animal-based processed meats.”
The startup also has launched a pilot kitchen called Botany in order to test consumer reactions to potential products.
Stephen: “Our R&D goes out of Botany before they graduate to be part of WTH Foods”
Stephen: “For example when we were developing our mung bean ground meat, we were also selling a nacho dish. We thought of putting our plant-based nacho dip side-by-side with the animal-based nacho dip and offering it to our customers at the tap room, and before you knew it they couldn’t tell the difference. That’s how our first product came about.”
Stephen: “That’s how we market test the product without committing to a packaged product so that we could reformulate it based on real-time feedback and since there is a steady stream of customers, it gives us the opportunity to refine the product before distributing it to retail.”
A heavy reliance on in-person market testing however means increased vulnerability to shocks such as COVID-19, with the pandemic closing Botany and as a result also halting the startup’s current feedback process.
Stephen: “We ended up sending our products to our favourite customers and we gathered them over Zoom to have a focus group discussion.”
The pandemic has also affected other aspects of the business such as plans for international expansion.
Stephen: “We don’t have the infrastructure for manufacturing plant-based or meat alternatives, and that’s when I envy Singapore or Thailand or Malaysia.”
Stephen: “Logistics has been a big problem for us, we couldn’t send out our samples to potential manufacturers or let potential investors taste our products; that’s been very difficult.”
Other challenges that the company has been facing is the issue of raising capital.
Stephen: “It is the first time that I’ve been raising money for the startup and it’s been a difficult process. The Philippines is not usually seen as an investment case and that’s what we’re trying to prove to potential investors.”
For me this echoed Change Foods’ CEO David Bucca’s thoughts on last week’s episode, with risk averse investors often being difficult to convince and bring on board. We asked Stephen if he also finds the same with the Philippines.
Stephen: “Generally Filipinos are a very risk-averse group and our investment mindset is still very traditional, so it’s been very difficult to raise money from the Philippines.”
Stephen: “To be perfectly honest I haven’t found that magical bullet to convince investors to invest. I actually have more success convincing investors from other countries.”
Stephen also went on to ponder on the potential reasons behind this.
Stephen: “I don’t know if it’s because of our market dynamics or the fact that we’re blessed with an abundance of food which is why feeding the future doesn’t seem to resonate as much in the Philippines compared to countries that are more food insecure.”
On a broader level, we speculated that perhaps it’s because there are no pioneering alternative protein companies in the region, with the startup scene in general being less mature in the Philippines compared to neighbouring countries.
This is tied to WTH Foods’ exploration of working with overseas co-manufacturers, to expand beyond local borders and deliver their products to other communities. But finding a co-manufacturer doesn’t come with extra challenges.
Stephen: “Most of the manufacturers that are willing to contract manufacture our products are actually animal meat-based companies.”
Stephen: “We use the same equipment because we make the same end product, but we haven’t gotten to a point we get an assurance where there would be no cross-contamination.”
Stephen: “We are also open to looking for fully plant-based co-manufacturers that understand the needs of the industry.”
Despite these challenges Stephen and his team have continued to persevere, with exciting new opportunities and plans for the future.
Stephen: “Our first aim is to enter and explore the Singapore market.”
Stephen: “Whether through R&D, or through bringing our products there and seeing how a multi-cultural, diverse country reacts to our products that we aim to design for South-East Asians."
If you want to follow WTH’s journey or get in touch with Stephen personally you can head to their website or find them on social media.