TRANSCRIPT
Hans Tung
Hi! Today on the show, we have Timo Recker and Andre Menezes, co-founders of NextGen Foods, a Singapore-based food tech company that’s harnessing the power of plant proteins, to create the most delicious and satisfying food you can imagine. NextGen Foods is a GGV portfolio.
Dimitra Taslim
Timo comes from a lifetime background in the food space. Before NextGen Foods, Timo founded the German base Like Meat GmbH, where he was responsible for the successful conceptualization, growth and expansion of the brand into 10 European countries, with products sold through more than 15,000 supermarkets. Andre has lived and worked in many countries, and most recently served as the GM of Country Foods Singapore, the largest meat distributor and processor in the country, as well as the company responsible for scaling Impossible Foods in the region from a newcomer to household name.
Timo, Andre
Thanks for having us, great to meet you both.
Dimitra Taslim
Hans, let’s start with you. Why did GGV decide investing in plant-based meat now, given that the sector has been around for a while?
Hans Tung
The sector has definitely around for a while. Until Beyond Meat successfully went public, and other innovations that started happening around the space, it was unclear to them how long it would take, to go from the idea into actual commercialization, into a viable business. Right now, we feel that this capital is still very early, probably only in the second inning, so there’s a lot more that’s ahead. Now that innovations are increasingly global, we’ve seen amazing teams coming out of Asia, as well as case in point, with the guests we have here.
Dimitra Taslim
Got it, let’s start with Timo! Timo, you are German, you’ve spent your entire life in the meat industry; Andre is from Brazil, but he decided to work in Singapore with the largest meat distributor in the country. Tell us a bit more about how you guys are met, and how two decided to start Next Gen Foods?
Timo Recker
Yes, my journey started in 2012-2013, directly after my studies, when I joined our family business and then started Like Meat. After six years, Like Meat, and plant-based foods, it was time for my next step. After setting up a venture in Europe, I thought about the US as natural development, but my girlfriend, Katerina, really opened my eyes for Asia. I traveled a lot back and forth, scoped out the market and met Hans at the Rise Conference back in 2019. I was pretty inspired by him saying that he already invested in 15 unicorns, and after he spoke, I thought, “Let’s become number 16.” I discovered the investor landscape and market potential in Asia, and Singapore, which offered us a great base. I wasn’t aware of all that previously, I then also met the Temasek team with Rohit, Eddie, Kenny, and many more. They connected Andre and me, we had a great start and connection, and we headed off together!
Hans Tung
Timo, you’ve previously built and sold another plant-based meat company in Germany. What are some of the biggest insights from that experience, and how did you decide that you want to do NextGen Foods with Andre?
Timo Recker
To do something the second time is a huge difference compared to doing it for the first time — being a second time founder makes a huge difference. If you look back at the market in 2012-2013, everything was rather about vegan. It was disruptive to target the meat eaters, as well as Beyond Meats and Impossible Meats. My biggest learnings from Like Meat, first and foremost was about (the importance of a) team. At Like Meat, I was with the entire C level and with one other person more than 12 hours a day, 6 days a week, and that was not sustainable — that is not how you build a global brand. That being said, the first thing we did at Next Gen was building an amazing team.
The second big point was that we chose an asset-light business model. We don’t build our own production side, and rather focus on R&D and our brand, which makes a huge difference. Running a production takes a lot of resources and focus away from the value drivers.
Regarding branding, revenue and distribution doesn’t necessarily mean brand awareness and brand value. At Like Meat, we were in all the supermarkets and very well-distributed, but Beyond Meat or Impossible Meat were more popular and had the power of PR. My lesson learnt from that was that, and what we now focus on is product portfolio— we now focus on one product. Currently, our hero product is all about chicken, and becoming the world leader in that category. Back at Like Meat, we had 15 different products and were market leaders in sausages, burgers, chicken and pork.
Lastly, investor base is important. My journey came to an end at Like Meat because our investors were not vision-aligned to build a global brand. We were a German centric and profitable business at the point of time I exited. My biggest learning was that we have to team up with investors who have a global vision, to have the biggest possible impact.
Dimitra Taslim
It is interesting that you guys settled on chicken. To Timo’s point, Andre, how did you guys land on chicken, and how is your product different from the tenders and nuggets that people see out there today?
Andre Menezes
We have seen that the market has been developing from plant-based dairy for decades, to plant-based meats in the last decade. We have seen that the category of beef burger was the first one to pop, as well as oat milk rising in popularity for plant-based alternatives to milk, especially with strong brands like Oatly.
Having seen the development happening in categories like oat milk and beef patties, we realized the same could not be said for chicken. Chicken is the one element that has not yet been dominated at the same level as the categories I had previously mentioned. Despite that, coming from 7 years of experience in the chicken industry, if you look at animal protein, chicken is the most universal lean protein, having high presence, popularity and versatility, from New Zealand, Japan, all the way to the US.
Wanting to build a global brand, we realized there was nothing better than making chicken, to be truly global. Chicken is the biggest and fastest growing protein from land animals, with 80 billion chickens being slaughtered every year to feed the population, now surpassing pork as the most common protein. Chicken is also the most innovative meat, unlike a beef steak where you would expect it to be perfectly marble, with salt and pepper in the perfect doneness, with chicken you expect it to be innovative with different coatings. By definition, it is a category that’s more open to innovation, called “chicken consumers”, and that connects very well plant base. All things considered, it was an obvious choice for us, we also had the ability, in terms of technology, knowledge and understanding of chicken, to believe that we could be the dominant player in the space globally.
Hans Tung
A lot of the earlier teams were from the US, so dealing with hamburger patties was the natural place to start. However, for us, the world “chicken” was definitely a more interesting and bigger category. As you guys were trying different versions of chicken, how did you decide which was the right version to go to the market with? What was the process like?
Andre Menezes
What we thought was: What is different about the product? What’s a different approach to it? There are many types of nuggets and tenders that have been around for a long time, but the reality is that just like oatmeal, or quarter beef burgers, to really get excited about it you first need to have a very high level of performance that not all the products out there have been able to do, aka cracking that code, and a product that can perform at the highest levels. The highest levels of culinary of gastronomy of experience are dishes prepared by shops that can be served in the coolest restaurants and are actually the hardest nut to crack. We developed and understood that they are the hardest nut to crack, and are also the most influential from a consumer perspective. We wanted to develop a concept that could target those markets. After trying many different directions, technologies, and trials, including shops, we then understood that we were lending on the right concept and direction, and came up with our first product being sold around the world, TiNDLE. We tried it with a chef from Treatments here in Singapore, whom was one of the launch partners of Impossible, as well as one of the best workers in Asia. When we saw how he got so excited about it, it was clear to us that we were into something big. From there, we started getting more confirmation that this concept was unique, that no one has done it before. It’s a product that really caters to chefs, and enables them to be extremely creative, unlike tenders and nuggets. The moment I really realized it was when we were into something big from a product perspective.
Dimitra Taslim
If you are a consumer, and want to start being more flexitarian, maybe having some plant-based meat and vegetables in your diet. Customers can be very confused with plant-based and cell-based foods, could you further explain the difference between cell and plant-based foods from the category perspective? Within the different types of meat and options available out there today, how should customers think about being more flexitarian?
Timo Recker
The journey starts for the consumer with a need, the needs being to live healthier, more environment-conscious, more responsible with our natural resources and animal welfare, etc. There are many other industries that provide consumers with an alternative, with Coke Zero, electronic cigarettes, and EVs as disruptive examples. What I like seeing are the alternatives that are not there yet. It’s difficult entering a restaurant and wanting to eat plant-based meat, because of questions regarding like products to choose, and brands to trust. In the end, my perspective is boils down to a brand you can trust enough to guide you through that, which is what we want to build. People need a name go-to brand, where they know what they get. This is all in the plant-based space because it is available, established and here to stay.
Andre Menezes
As Timo was saying, the most important thing is that we do see the macro transformation going on. Climate change is the biggest topic we have in food accounts, with animal farming specifically accounting for the biggest portion of that heated topic, therefore solutions are needed. From our perspective, we welcome any developments in that space, being plant-based, cell-based, and so on. However, from timing, we are technology agnostic. We are not out there saying that we are an oat company, soy company nor plant company, because what we are really against is animal farming. Animal farming is what we believe we have to replace, and we understand what drives the market trends and consumer needs. Consumers are looking for taste, texture, experience, nutrition, and benefits. We also understand that technology is a more efficient way of solving that problem, delivering the consumer what they really want. Today, we believe that that best solution is plant-based, because we do not use anything GMO. However, for cell-based products, while it may become very interesting, there are many hurdles to cross from a regulatory, texture and cost perspective. As a company, we will keep looking out for any evolution in the space, and make sure that we are ahead of the curve, always bringing what’s best for consumers, and more sustainable for the planet.
Dimitra Taslim
I see like a few versions of the world in this case. When you meet cell-based meet founders, they always say: “I’m my biggest enemy”, and that it’s about reducing their cost curves getting the cost parity, I however feel there’s another version of the world they missed out on, which is the plant-based world. If plant-based meat gets to the point where it’s good enough that you don’t need meat anymore, what then happens to the cell-based version of the world? Do you think that will ever happen, where plant-based meat is so good that would not want to eat raw meat?
Andre Menezes
My personal take is that we don’t play bad space on an assumption that will never happen, and as a company, we are carefully monitoring it. But as of today, looking at the how the industry has evolved for plant-based meat, I have the impression that plant-based meant can perform well. We are all about the output, if you can learn all the aspects directly from plants, like taste and nutritional experience, you may not need to recreate meat from cells. We might reach a point where cell-based meat is good enough, however there is a very likely scenario that plant-based meat can consistently reach the possibility of matching taste, texture, experience, cost parity, nutritional value as meat. I would jokingly say, that I feel trying to do cell-based meat today may be trying to solve mobility by designing horse muscle to eventually power motorcycles? That may not be the right solution for that problem, not because horses were used as a means of transport, that you needed to recreate a horse cell muscle to drive an engine, so that we like to believe that as an output, what consumers are looking for in that case would be transport mobility, and the best ways to address it. From our case, our consumers are looking for taste and texture, we believe the best way to address that today is by going plant-based, and are monitoring the technology, as well as cell-based products in the future.
Hans Tung
We also see documents showing that the production of meat is bad for the environment, resulting in much more waste. Plant-based food can grow in popularity and affordability over time, with the help of automation, technology and environment and scale. It will be better for the planet.
Dimitra Taslim
I find emerging markets exciting because we have a once in a generation opportunity to educate people who are starting to dedicate more of their family’s wallet spend and wallet share into meat. We have a chance to tell them plant-based meat is an alternative to real meat, and I think there’s a real chance to get people in emerging market to leapfrog directly into plant-based meat, considering cost parity is achieved.
Andre Menezes
Interestingly, plant-based is fundamentally more efficient than animal farming. At the same scale, when resources are naturally progressed, they translate into cost. As time goes by, with scale and adoption growing, it’s only natural that plant-based will become as cheap, or much cheaper than animal meat, simply because only a fraction of the resources are needed. Today, the biggest challenge to achieve on that stage is scale. Meat is a big market, generating $1.4 trillion US annually, with plant-based taking up over one percent of that. Therefore, the costs associated to it are still not diluted, resulting in higher cost.
Timo Recker
The bottom line is that we are building a brand. Even on the cost side, we are close to cost parity. With Like Meat, we built production sides and broke even. Looking in supermarkets at price level, we were between conventional chicken and organic chicken. We sold under organic products actually. That being said, with the prices being very competitive we still built a profitable company, proving the unit economics work. Obviously, we are not selling a commodity, we are rather building a brand, so our selling point is higher right now. However, plant-based ingredients and technologies make it much more affordable— meat contains more than 70% of water, as well as our products, so the ingredient costs are very low.
Andre Menezes
Despite the fact that the industry as a whole have not yet been able to fully create products that have a commander premium over the animal equivalent. If you go out to a restaurant and have a TiNDLE dish here in Singapore, you only pay between 5-20% more for the dish equivalent; if you get a chicken burger against a TiNDLE burger, it’s going to cost 5-20% more. Likewise, that is also the case for Impossible— a beef burger against an Impossible burger is also around 5-20% more, so it’s getting very close from a consumer’s perspective, and won’t take long to be the reality across the board.
Hans Tung
Both of you are not from Asia, Timo from Germany and Andre from Brazil. How did you guys end up in Singapore? Given the different backgrounds and styles, how did you guys decide to partner, and how you complement each other?
Andre Menezes
I started an investment fund in Brazil, looking at the biggest portfolio company at that moment, was Koch, the largest poultry exporter in the world. As it was the biggest bet, I was seconded from the investment firm to the meat industry, which is how I got connected to the meat industry. I had a chance of learning on a global scale, which was really an accelerated birth from an investment perspective, consultants perspective and a board level perspective, on a multinational listed company in New York and San Paolo, all the way down to operating it and building up from supply chain as a Junior position in the meat industry. This experience built up to a point n where I had learned enough to be seconded to an international post. I came to Singapore in that moment, which January 2016, with the job post to effectively be a part of the joint venture with BRF and Sats, dealing in the meat distribution space. I came to Singapore as a post from the meat industry and had the chance to learn all the subsequent steps from importing all the way to consumers in Singapore in the meat industry. That’s how I got here in Singapore for five and a half years now.
Timo Recker
I shared a story in the beginning on how I got connected and discovered Asia. To be somewhere as a first mover, and bring technology to a region is very interesting, which is what we do. Being number one made in Singapore is definitely more attractive than to be number 10 in the US. Fom Singapore, we are going global and have all the ingredients here in Singapore to build a true global business from the beginning. With Andre, it was a natural connection, he also has a very comparable skill set. On my first journey, what I was missing was a co-founder, someone to be in it together and take it forward. Since we’re very vision aligned, Singapore is the best possible launching pad we could have ever imagined.
Hans Tung
How do you guys complement each other, and how do you guys divide and conquer as well?
Andre Menezes
We really liked each other since the first time we met on August 19. My first reaction was that he was doing something interesting, great products but more than that, he is a nice person whom I identified myself with in terms of values. We’re about the same age. We have global experiences, shared hobbies, vision, alignment. Despite all that, we have different way of operating, which is extremely good, because it’s very complimentary. And have also had a very complimentary background— while Timo was building up the technology that the upstream that he had experiencing during our company adventure. I had no experience in the plant-based space. I had an experience of operating a global business at massive scale and entering new markets. Being here in Asia running a company that had about 200 million revenues, a few factories, distribution, importing things from over the world. I also had experience distributing Impossible Foods here in Singapore. I started to connect all of that backbone from the meat industry that I had, the impossible downstream. Timo brings this huge core portion of the development and everything has done in the past, plus all the developments on the shareholding side and venture, that I had never done that before. He was a fantastic fit, at least from my perspective, that also explaining how we operate, and where we complement each other. We share the same fundamental core values, views, hobbies, and attitudes, but we are very strong in different areas, and we’re learning a lot from each other.
Timo Recker
What was remarkable for me was how we manage our relationship. If you work in a team, it’s all about the relationship, the power of the team, we initially had an executive coach coaching us and building the team with us. It’s always important to immediately address things because Andre and I love speed and scale, we say things we think out loud, we move fast. If you don’t dare to speak up, things could build up. When things happen between us, we raise it and address it, so no one feels alone, which I think is such an important part for us co-founders to really work as a team.
Andre Menezes
We have a very conscious state of mind and work. I have never had that possibility in my life, especially when you’re in a very high position, which was before I was the CEO of the company. With us, we have this body that we can weigh between us. We can complement each other, help each other think and are doing things at an unprecedented pace, not only for our path, but no one has moved in this speed like we are effectively six months from our launch. We’re going to be in four countries and seven cities in six months, which is not normal— no one has done that before. The fact that we both can move together and use our experiences to manage this relationship carefully between us and the team, making sure everything is being constantly improved. transparently is very good and powerful.
Hans Tung
You guys are two co-founders with each other, that is hard to do, hard to cheat, but we have magic.
Dimitra Taslim
This magical product of yours is very famous for tasting very close to chicken, with the behavior of the product also being like chicken. It sizzles and browns like chicken. Without revealing too much, how did you guys achieve this chicken-like texture and taste?
Timo Recker
It was a long journey. Firstly, when I started our meat factory, we were meat lovers but ate predominantly plant based. Our products are basically made of whole muscle meat, having a long fiber, a great bite, it’s also very juicy and succulent, delivering an experience. With meat products, which are formed and ground meat that lose kind characteristics of the meat. Looking at vegetarian products out there, it’s formed with ground weed and grains. Neither products mentioned were what we were looking for, and we found the technology with high moisture extrusion creating very long, succulent fiber, which was something not really established. We took this from lab scale to industrial scale, and it’s still work in progress. For chicken especially, you need fiber, and there’s different extrusion technologies to create this fiber. In Singapore, we took this to the next level by putting this fiber together with plant-based chicken fat, being the magic ingredient in making the product. Besides that, the application for chef’s is not a preformed nugget— we’re delivering an ingredient in a way chefs can make their dreams become true and create their signature dishes. It’s like playdough for chefs, where they can really create all their signature dishes, from chicken skewers, to burgers, to balls.
Dimitra Taslim
I’ve also seen where chefs stuff food with the TiNDLE products.
Timo Recker
This is like the chef is running a business, Andre explains it very well— they have to be efficient, fast and safe in a restaurant. I worked with John at Like Meat, when he heard I was going to Asia, he said the market looked great and came as well. He makes the move with his wife was a big gift, he’s our CTO and has 25 years of experience in the plant-based space, in both tofu factories and meat analog factories. He really is someone who had a deep dive in all the ingredients, with years of experience in it to crack the perfect combination needed. This is what we all co-developed with chefs, to create an experience for the consumer, because this is what builds the brand.
Andre Menezes
Everything we do and every everything mentioned can always link back to one thing. Unlike many other companies, not because we developed a technology magic bullet and tried to sell the market, but quite the opposite— we start everything we do from identifying a macro need, a strategic need and a business opportunity, and then understand how to address it. We dive into the decision makers along this chain, see consumers and chefs, then start understanding what they really like about it. Is what they fundamentally like about the ingredient, fiber, taste, or the versatility? We then try to use our technology to address those three needs, which is fundamental in our consumers and customers mindset. Everything we do is connected to that.
Timo Recker
A very interesting starting point for me was when we built our business model. We wanted to be commercially scalable from day one, so the operational scalability should be very high, and the product market fit should be there if we want to go global. A GMO-free is also very important to us, a product’s production capacity, which is bigger than we had made was 5000 metric tons. We got awarded for the cleanest product health award from the Singapore Board Health Authority, because our product is the benchmark in the market with low saturated fat and salt content. Based on our learnings, this is what makes TiNDLE now globally scalable, and gives you the perfect product market fit.
Hans Tung
I can’t wait to eat one out here in California! I like eating plant-based meat, whether it’s an Impossible burger or Beyond Meat, but I haven’t tried chicken yet. When would the TiNDLE product be available here in the US?
Andre Menezes
We are working hard to get it in the first half of 2022, available for American consumers. We’ve had very promising tests done with some people in shops in America, and the reception has been outstanding, just like it has been as well in Singapore and Hong Kong, where all the American brands are doing so well. Together with Europeans and Asian brands, as well as in Singapore in Hong Kong, we’re very confident that you will like it, and so will all the consumers, they will truly be surprised that plant-based chicken can be so good.
Hans Tung
When Dimi first tried your product in Singapore, he raved about it to the Investment Committee, which was one of the key reasons we decided to take a chance. In the US, there are more players and more choices. Tyson food has entered into this area as well, how would you guys want to compete and differentiate yourself in the US?
Timo Recker
I think the more companies offer this kind of product, the better it is, the more awareness there is amongst consumers, and the bigger the movement becomes. Recently, a Bloomberg intelligence published in 2020 reported $29 billion plant-based market size. In this decade, it should develop to $162 billion according to their research. We see explosive growth in this category, the question now is, who is taking a leadership role in that development? Is it a pure player? Or a conventional company like Tyson? Looking at the EV industry for example, similar things happen. Like the energy revolution, this is a meat revolution. I think there are a lot of competitors and companies out there, as well as first-time founders trying many ways to do it. Based on our experience, we know what to focus on, and I think that we will focus on chicken with our business model and aim at a white spot in a market where we can achieve a lot with the speed we are currently going at.
Hans Tung
Moving on to the quick-fire session in this interview, who was our favorite founder or entrepreneur?
Andre Menezes
For me it’s very clear— Bill Gates, the reason being because he changed the world more than more than anyone else, I can think of. Even after he everything he has achieved and done, he continues driving innovation in tackling the world’s biggest problems. That I think is remarkable, and why he is definitely the one I really look up to the most.
Timo Recker
For me, it’s Elon. His ambitious breakthroughs are highly inspiring and energizing to me. When I read his book, I feel so energized, like I’m flying and the possibilities are endless. It’s not okay to not try. For me this is just the way we go, we have to change the world! This guy is just to the moon over the moon, and further.
Hans Tung
What was a book you read recently that you would recommend to your audience?
Andre Menezes
For me once again, Bill Gates. I just finished reading “how to avoid the climate disaster”, it’s brilliant and spot on. What we’re doing is new, it’s there. I love it and highly recommended.
Timo Recker
The last book we read was blitzscaling, which was touching our heart. It’s speed over efficiency, and how to look at operational scalability and adapt our business model. We are not a software company in the first place, we are a food tech company, but how do we scale our operations? This book is our Bible, and everyone at Next Gen is recommended to read it right now.
Andre Menezes
Chris Yeh, the co-author, is our investor. The reason we started a company was partially because of COVID and lockdown, but we wanted to use all our knowledge to scale at the speed that we want, to focus our value chain and so blitzscaling is inspiring for us because it gives us a view on the challenges of growth insights.
Hans Tung
I remember hosting Reed Hoffman, when he and the LinkedIn team came to Asia, that was almost 10 years ago before the book came out. He was quite impressed by how Asian teams scale extremely fast and very aggressive at it. That may be part of reason why he went back, he started to provide this book, because the book definitely has a global audience. He and Chris have done a very good job articulating a lot of principles that we saw in our own portfolio companies. That book is like reliving some of the the the actual growth that we had over the last decade, so it was a fun book for me to read as well. That sounds like a good note to end on there, thank you, gentlemen, for coming on to the show today. It’s been a lot of fun.
Timo Recker
Thank you very much. Hope to see you soon in person.
