NZ-founded vegan cheese startup New Culture raises US$25m from Kraft Heinz, others

“No farmers no food,” read several banners at recent anti-government protests.

But a number of startups see a future where lab-grown meat and dairy products are a mainstream alternative to animal protein.

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  • Dairy giant Fonterra looks to offset bovine decline with plant-based milks
  • Cheesed off: What’s going on with the price of a 1kg block of NZ cheese?

One is the NZ-founded New Culture, which was a fringer early-stage company when the Herald last spoke to its Kiwi chief executive Matt Gibson back in 2019.

Then, the Auckland University genetics and microbiology grad had just raised US$200,000 in seed money from a US business incubator, called IndieBio which was impressed by the prototype product he had made in Auckland. He packed his bags for San Francisco to house his startup at IndieBio.

Now, the Kiwi entrepreneur has just closed a US$25m ($35m) series A round, backed by investors including Evolv – the venture capital arm of global giant Kraft Heinz.

This morning, Gibson told the Herald his company aims to have its first product – an animal-free mozzarella – on the market by 2023.

And his ambitions extend beyond the vegan niche to mainstream consumers – and he says in the process, New Culture will undercut the price of traditional cheese (the cost of a 1kg block being something of a sore point right now).

“There is an unmet need right now for good-tasting vegan cheese and these conscious consumers and plant-based consumers will be our first market,” Gibson said.

“Afterward, we want to capture the mainstream dairy cheese consumer market with ‘cheese’ that will be better both in taste and function compared with current dairy cheese.”

He added this morning, “We will eventually meet and undercut commercial cheese pricing as we scale our process. It is also important to note that all dairy pricing [in most countries] is artificially low due to government subsidies. We expect these subsidies to decrease.”

Assuming New Culture does get product to market by 2023, Gibson said he thought a backlash from the NZ dairy industry was “likely” (not much of a stretch given his company’s seed raise coincided with certain NZ First and National MPs lashing out at Air New Zealand for choosing to offer the plant-based Impossible Burger on its San Francisco route).

“I think that will be likely,” Gibson says. But he says we also have to look at the way we produce food.

“New Zealand has a rich history in dairy and farming and our economy is heavily reliant on our dairy exports,” he said.

“But with the threat of global warming, the world’s rising population and the need for secure and sustainable food, we need to be able to look more than a few years into the future and think of how our planet will be affected in 50 years’ or 100 years’ time if we don’t move towards a more efficient way to produce food.”

The winds are already changing.

Fonterra spent $240m to add three mozzarella production lines to its Clandeboye plant near Temuka in 2018 – a move that saw it become the Southern Hemisphere’s largest producer of the stretchy, pizza-friendly cheese.

But the co-operative has also started to examine non-dairy products. For long-time observers, its move beyond its previous bovine focus represents a major product shift.

The Herald recently visited Fonterra’s Research and Development Centre (FRDC) at Palmerston North, where some 400 researchers are working on new products – now including plant-based milk.

How do they do it?

New Culture has now graduated from the IndieBio incubator and has its own facility in San Francisco with 12 staff on its research team. Gibson says the new capital will be used, in part to boost that to 35.

Non-animal cheese has traditionally had a bad rap, with people complaining about weird taste and texture. Gibson said the main thing that stopped potential vegans was the lack of good “cheese” – indeed, that was the primary motivation for him to found New Culture.

The missing ingredient was the casein protein of milk, which, until now, could only be had from milk. New Culture is working on vat-grown casein – or “cow-free cheese” as Gibson prefers to style it.

As VegNews put it, “New Culture, using giant fermentation tanks, is inserting DNA sequences into microbes that effectively instruct them to express the target proteins (alpha caseins, kappa caseins and beta caseins) after feeding on a sugar solution.”

Gibson maintains that casein produced by this microcobe-driven fermentation process is the only way to produce mozzarella that looks, tastes, melts and stretches like the real thing, or at least the animal-produced thing.

While vegan cheeses have lifted their game overall, most are still missing the mark with “mozzarella”, he said.

“There has definitely been improvement in cream cheese and aged cheeses in the plant-based category but no improvement in more functional cheeses such as mozzarella. This is because the same ingredients are still used -starch and coconut oil – to try and achieve mozzarella’s signature properties like melt and stretch.”

New Culture says its mozzarella can happily melt at the 450C used by commercial pizza ovens, while rivals top out at around 260C.

But don’t look for it on your Domino’s just yet – at least not in our part of the world.

Gibson says New Culture will initially focus on the US market after its anticipated 2023 commercial launch.

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