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Investing in sustainable nutrition—podcast

Investment round allows Comet Bio to invest in a dedicated manufacturing facility to grow the supply of upcycled ingredients and innovation.

Recently completing its series c round of fundraising led by Open Prairie, Comet Bio will now be able to invest in a dedicated manufacturing facility to grow the supply of its upcycled ingredients.

For this sustainability series podcast episode our guests Rich Troyer, CEO at Comet Bio and Tom Doxsie, partner at Open Prairie share insights about how sustainability is driving investment decisions and businesses operations. Tune in to hear more about:

  • How the production of upcycled ingredients contribute to broader sustainability initiatives, and why is that important at Comet Bio
  • Comet Bio’s internal and public-facing commitments to sustainability
  • How sustainability is shaping investment decisions these days
  • What about Comet Bio was attractive for investors?
  • Advice and lessons learnt for nutraceutical companies out there looking to attract the attention of investors

Guests

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Rich Troyer
CEO at Comet Bio
Rich brings a unique combination of corporate development, operations and finance expertise in industrial biotechnology. He was previously the chief business officer at Coskata, where he oversaw business development, strategic planning, project development and external relations. Before joining Coskata, he was a managing director at The Blackstone Group, where he was responsible for investments in biofuels and bio-chemicals companies. Earlier in his career, he was an equity research analyst at AllianceBernstein, Credit Suisse First Boston, and Piper Jaffray, where he focused on the clean technology and biotechnology sectors. Rich received his M.B.A. in finance and marketing from the Wharton School of the University of Pennsylvania, and a B.B.A. degree in accounting from Baylor University.

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Tom Doxsie
Partner at Open Prairie
Tom is a Partner with Open Prairie and will utilize experience from his 30-year career in agribusiness with Tate & Lyle to identify and assess investment opportunities and assist portfolio companies in development of strategic objectives resulting in operational efficiencies and value creation for stakeholders. He is the founder and president of Tadvise, an independent consulting firm that works with corporate and private equity clients, ranging in size from small businesses to Fortune 100, to improve performance and accelerate profitability. At Tate & Lyle, a leading multi-billion global agribusiness company providing high quality, specialty ingredients solutions to the food, beverage, health and wellness industries, Tom held a variety of leadership positions.  As SVP of Food and Industrial Ingredients for the Americas, he was responsible for all commercial aspects of the $2 billion division covering North and South America and specialty businesses in Asia, Australia and South Africa, achieving record sales.  Tom was also SVP of Food Ingredients for the Americas, an $800 million business unit with operations on five different continents. In this role, he produced double-digit margin growth in each year of his tenure, managed multiple new product launches, developed merger and joint venture strategies and directed several acquisitions.  While serving as Vice President of Sales for Food Ingredients for the Americas, Tom managed all components of sales and marketing for the $400 million business.  He received his Executive MBA from the University of Illinois and has a Bachelor of Science in Finance from the University of Denver. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                   

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Episode transcript:                      

Vitafoods Insights 00:05
Welcome to the Vitafoods Insights podcast. Join us as we explore the latest science innovation, helping the global health and nutrition industry connect, develop and progress. Today's host is Natalia Franca Rocha, content producer.

Natalia 00:23
Hello, and welcome back to our Vitafoods Insights sustainability series podcast. I'm Natalia Franca Rocha and today we'll be exploring how sustainability is driving investment decisions and business's operations by looking at Comet Bio. Comet Bio has recently completed its series C rounds of fundraising led by Open Prairie, allowing them to invest in a dedicated manufacturing facility to grow the supply of their upcycled ingredients and innovation. Today, I'm joined by both Tom Doxsie, partner at Open Prairie and Rich Troyer, CEO at Comet Bio. Thank you for joining us today, Tom and Rich.

Tom 00:59
Thank you, Natalia. Glad to be here.

Rich 01:01
Thanks for having us.

Natalia 01:02
The concept of sustainability is a term very trendy these days. So Rich, I would like to start with you by asking: How does the production of upcycled ingredients contribute to broader sustainability initiatives? And why is that important at Comet Bio?

Rich 01:17
Yeah, it's critically important, it's really core to everything we do. And we've really looked at and thought about how you define sustainability. I think simplistically, people have thought of sustainability as reducing your carbon footprint. And that's certainly one of the things we look at. We also look at things like land use, using food waste, now that would have other gone to waste and putting it back in the supply chain. And even making farming practices like no till farming, organic farming, profitable by buying food waste from the farmers. That's also a way we look at sustainability. So we have a pretty broad definition. We do often reduce carbon intensity through our manufacturing process. And our first commercial plant, in which we'll be disclosing full information on that plant soon, but it actually uses renewable power and biogas, our so we're very focused on reducing our carbon intensity. But what Comet does is, we use crops that would have been left on the field or food system waste and put it back into the supply system. And food system waste has been identified as one of the largest contributors to greenhouse gases. In fact, I read a statistic that if food system waste was a country, it would actually be the third largest emitter of greenhouse gases in the world. So, doing our part to reduce food system waste has a big impact, we believe on sustainability. So, it's like I said, it's core to everything that we do as a business.

Natalia 02:40
And following that you've now secured series c of fundraising for Comet Bio, and when considering the company's mission in the years ahead, what are your internal and public facing commitments to sustainability?

Rich 02:54
Yeah, so our mission as a company is we produce ingredients from food system waste, that's what we do. So our commitment is that everything that we do, will make food more nutritious, and it will be upcycled, I guess, is the word that we tend to use these days cos it encompasses a lot. So that's our commitment just in stating that's who we are. That's one of our commitments. Another really important one that I've kind of alluded to is, as part of this financing, this financing really allows us to build our first commercial plant. And that plant will use renewable power as a source. And that's a huge commitment. Power from renewable sources does tend to be more expensive, but it's something that we think is important to do, and so we're doing that. And then we are also looking to add various certifications to our product, to also signal our commitments to sustainability. And so that's around things like upcycled, certification, organic certification. Those are all things that we're going through the process of doing.  Then we've also done a lifecycle analysis for our process, and we share that with our customers and our partners.

Natalia 04:00
When collaborating with brands, do you help them in telling the story of upcycled ingredients to your consumers?

Rich 04:07
Definitely we do. So, with our materials and we talk to customers, upcycling is front and centre. And we have a lot of advantages with our product. It's very nutritious. It has really nice prebiotic effects, metabolic effects. And so that's important for us and we talk a lot about that. But everything includes our upcycling story. So, we tell our upcycling story in a certain way. And then what we found is that customers are also very focused on upcycling, they may call it different things, but virtually every customer we talked to is looking to reduce food system waste in their process. And so they really like that idea, and in fact, some customers were talking to or even looking to launch products that are labelled as upcycled. So, you know, this product is made from 100% from upcycled ingredients. Folks are really looking to do that. I think just by telling our upcycled story, that does get incorporated into the way customers kind of talk about our ingredient and talk about their products in general. It's been pretty interesting to see how the use of the term upcycled has changed or been adopted over the last couple of years when we first started using it. And we'd have discussions with the board, saying it's not, you know, it's not even a word. Why, why are we using this and featuring this prominently in our product? And really, that's changed significantly over the last couple of years. And I think that's because companies and consumers really both want upcycled products. So it's been hugely important for us. And we try to tell the story in a way that customers can then use and pass on to their consumers.

Natalia 05:43
That's very interesting. Actually, I recently read a paper that in Europe, when consumers are given two products, and they, they are displayed one of the products have upcycled ingredients, and they understand that to be better to the planet, they are willing to pay a little bit more for the product as well. So, it's very interesting to see how the term upcycled is impacting consumers purchasing behaviours as well. Well, thank you Rich for sharing more about Comet Bio commitments and initiatives toward sustainability with us today. Now, I'm sure our listeners are also very excited to hear directly from an investor's perspective. So, Tom, turning to you, can you share with us how sustainability is shaping investment decisions these days?

Tom 06:28
Sure, the word is everywhere. I'm not sure it used to be, but I was curious about that. So, I went to Google trends and put in sustainability and expected to see a spike in activity over the last few years. But to my surprise, the line was pretty flat for 20 years. So, I don't understand that. But I think there's a deeper understanding by consumers what sustainability is. And that's pushed the whole supply chain. So, people we sell to and people we buy from, there are all wants that entire supply chain to be sustainable or improved. A smaller footprint, which is encompasses many things. There's a term that's been used a lot called impact investing. And I think investors are trying to do more than just make money for their colleagues and our partners. They want to do something good for the planet. And we see a lot of that, we see a lot of money in the area. And everybody wants to make a claim about impact investing and as impacting the planet some way positively. We think that the word is just simply better understood. And had both our portfolio companies asked for sustainability, one of our customers will say, we want you to be sustainable and measure it in carbon or some other agreed upon term or factor that drives the entire supply chain. I think the investments shaped for the future are not just about financial returns, they're about doing something good for the planet, is really high on almost everybody's list these days. Although making returns for our investors is important to the Open Prairie's fund.

Natalia 08:03
What attracted you the most from Comet Bio? and what do you hope to gain from investing in them, apart from obviously, profit?

Tom 08:10
Our group Open Prairie is a bunch of experienced people. And if it was just about making money, or capitalism, I know our team wouldn't be together. We feel like we want to give something back to the planet. We're not all retired guys like me. But we have a lot of experience. And this is a way to give back. So that's kind of an unwritten activity for Open Prairie. But I've got a list. I think Rich's team is first rate. You know, what attracted us to Comet Bio, Andrew and Lula and Rich and the rest of the team are first rate and that's important to us. It has rural impact. We're a rural business investment company and our money is supposed to go to agriculture, and food, and in rural settings. And that's exactly where Comet Bio's technology is going to be used. So, we feel real good about that. It's agriculture. So that hits our guidelines. It's lower cost. So, we're adding value to society by putting a lower cost process out there to get to ingredients that are already sold, much less extracting the revenue from arabinoxylan which is a very highly regarded fibre that Rich was mentioning. It makes strong products out of essentially waste, you know. I don't know that we straw is exactly waste, but it's a low valued commodity. And we're adding value to commodities which is good for society. And it's the upcycling, taking things that have little value and adding value to them. So, there's a lot to gain for not only us, but we feel our portfolio and our investors will benefit from Comet Bio is creativity and innovation. One thing that I like to talk about is Comet Bio is a technology company. They yes, they're making nice fibre and they're making dextrose but it's their process. That is particularly innovative, lower cost, lower use of energy, faster than other things that are out there. So, it has a real competitive advantage. So, there's a lot to attract us to Comet Bio.

Natalia 10:10
That's so interesting, thanks so much for sharing. Now with our listeners, you mind, what advice would you give to other nutraceutical companies out there looking to attract the attention of investors such as yourself?

Tom 10:22
I'm not sure I'm qualified to give much advice. Something that I like when people came to us looking for money like Rich when we did the management presentations, I think it's important to give a balanced, clear picture of what's going on. It's easy to give a one-sided story, look at all the positives of Comet Bio. Well, let's talk about the competitors. Let's talk about competitive response. Let's talk about other things. I certainly like it when people give a balanced approach of good things and some things that are problems to work on. So, I guess that's it, I guess everybody else has the common things, they want the returns and all that. I'm focused on agriculture, so there's a lot of interest in agriculture. And in the flyover States and the United States, you know, everybody considers if you're not on the California, or not on the west coast, or the east coast, there's nothing going on, but the world has changed. People are starting to understand the value of food and that 10 billion people in a couple decades, need to eat, and we better start doing something about it. I think people are committed to solving that problem or are very valuable. 

Rich 11:25
And Natalia I wonder if I could weigh in here really quick on some advice I give to my fellow entrepreneurs.

Natalia 11:31
Yes, of course.

Rich 11:32
You would be to get to know guys like Tom or people like Tom, before you're actually needing money from them. So we got to know Tom, a few years back, actually, just from reaching out to folks in the industry, we got to know him very well over the last few years. And he also got to know us. And then he allowed us to present to the managing director of his firm a little over a year ago. And then when we were actually raising money, we went back to them again, I think that's really important to establish those relationships well ahead of time, and you might even learn a lot from those folks. Tom has actually been really helpful for us, as we think about what do we need to do? Where do we need to go as a business? So, for us, then it became a real, real obvious choice for us to go right back to Open Prairie when we were ready, because, we realise we'd love to have someone like Tom on the board. So, my recommendation would be get to know the folks before you need them. And then really be thoughtful about as you bring in investors, what they can do and what they can add to the board's level of expertise. Tom happens to have a bunch of years of really solid experience in North American ingredients, which is exactly what we needed. So that'd be my advice, spend some time getting to know the folks as early as you can.

Tom 12:49
I'll chime in a little bit. There's a lot of money to be spent, I was kind of new to private equity. I was surprised at the amount of money that's available out there. But it's also kind of a small world. You know, if you look at people that have like Open Prairie that invest in growth stage, technology companies that we've talked about over the last 10 minutes, there's 15 or 20 of those kinds of companies. Well, you ought to know them or know somebody there. So, it's kind of a small world.

Natalia 13:16
Definitely these are fantastic advice and learnings from both of you. And I'm sure it's also really helpful for our audience to listen to that, so thank you. Before we end the show, and this conversation that has been really enjoyable and insightful, do either of you have any final thoughts that you'd like to share with our listeners?

Rich 13:35
The only thing I would add, and I'm glad you guys are focusing on sustainability as part of this discussion. The thing I would add is that everybody we talked to, so Tom alluded to it on the investor side. He also, I think, described it really well on the customer side.  People want sustainability from the very beginning to the very end of their supply chain. And this is not something that's going away. So I would say really understand what value you have to add to that, because this is something that is happening, it's happening now and will continue to happen. So I would just say to folks really polish up those sustainability credentials and make sure you can tell a compelling story about how you can add to that supply chain, and how you're different from your other potential competitors.

Tom 14:21
I will add to that Natalia. You mentioned that there was price to be had by making the claim that you were more sustainable, or your footprint was less. And that's true to get a piece of business that might break a tie.

Rich 14:33
Uhum

Tom 14:33
You know, you may not get the higher price, but you might get the business instead: either one is very positive. We've seen that as we've added value to commodities over our careers. You know the market pays for features that they like and to have a supplier that gives you benefit of a smaller footprint not in your favour.

Natalia 14:54
That's a very nice way to end the show. Thank you for the extra device for our listeners. And also thank you both Rich and Tom, so much for joining me today. It's been a pleasure having you on the show. 

Tom 15:06
Thanks Natalia.

Rich 15:07
Thanks Natalia.

Natalia 15:08
Thank you also to our listeners for tuning in. And for more content from Vitafoods Insights, make sure to check our website on the link available in the show notes. And if you do like the show, make sure to subscribe and follow Vitafoods Podcast. Feel free also to recommend the show to any friends that you think you would like. That's it for now. Thank you and until next time

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