TPBW brings you a conversation with Chris Kerr who serves as the Chief Investment Officer of New Crop Capital and is also one of the co-founders of up-and-coming plant-based seafood company Good Catch Foods. Chris shares his insights on the evolution of the food industry and how to get people to try new things simply by making foods that taste good and are priced right. He also offers valuable advice for aspiring food entrepreneurs as well as to seasoned food industry professionals who have an opportunity to reach a whole new type of consumer by advancing their perspective on plant-based eating.
Can you tell us about the mission behind New Crop Capital and how you chose these specific areas to focus your energy and funding?
Chris: New Crop is set up to be laser focused on direct replacements to meat, dairy, eggs and seafood. Our mandate is to address, through both plant-based and cell-based replacements, the inherent problems with factory farming of animals for food. We are a small fund in the grand scheme of things, but we are often the first ones into the companies that are highly innovative and have the potential for major disruption.
You can think of us as a proof-of-concept venture capital fund. We back companies that have a good concept, bring them into commercialization and prove that there is a market for them.
How long have you personally been involved in this industry, and how have you seen it evolve over that time?
I started this in 2007 when I went to work for the Humane Society of the United States, so this is something I have personally been doing for a little over a decade, and New Crop has now been doing for the past 3 years. At HSUS we had the same objective – how can we use innovation and commerce to attain sustainable behavioral change for the better?
I had gone vegan in 2002 and my wife is going on 30 years of being vegan. We realized that it is hard to, every day, be slightly disappointed in your food. Sooner or later you are going to break that trend, you’ll break your ideals and aspirations, because making decisions around food is impulsive. We saw that we were spending an enormous amount of money – as ethical vegans – trying to change policy, trying to change hearts and minds, trying to educate people… when in fact when it comes to making impulsive decisions maybe we should just be meeting the consumers where they are and just giving them something that tastes really good, and is convenient and priced right. This way they don’t have to make an ethical choice when choosing their food, they can instead just eat what is in front of them and tastes delicious.
In 2007 it was hard to convince people of that. The market has since caught up. Social media and new investors coming into the space have played a big role in that. But possibly the most important change is that the products coming out now are much better than they were in 2007, and consumers are able to be satisfied which makes it a lot easier to shift to a plant-based way of eating. And it’s getting better – give us another 5, 10 years and you will see a monumental shift in the quality of these products.
What current projects or ventures are you most excited about?
We see the seafood space as really big. It’s one that has not historically been addressed, and there’s an interesting dynamic when there’s a trend and still no players in it. Grocers are saying that one of the biggest trends for 2019 is plant-based seafood but there are no products on the shelves. That’s what makes companies like Good Catch Foods exciting, especially being a low-tech play that’s easier to scale.
We are not going to conquer the world with one company that makes a chicken alternative – we need a lot of players. Some other exciting things we have going on are Wicked Meaty, which is a collaboration between New Crop and Chad and Derek Sarno that’s a center-of-the-plate mushroom company. And NuMu which is a plant-based cheese made specifically for the pizza industry. We want non-dairy cheese in pizza shops to be as ubiquitous as non-dairy milks in coffee shops. That would be a herculean achievement but we just need more options and more distribution and I believe in the next 5 years or so we will see a major shift.
At New Crop we focus our investment thesis on something we call the food PACT (Price, Awareness, Convenience, Taste). We feel that if we can solve those 4 pillars it becomes a lot easier for people to choose the option that is more healthy, sustainable, you name it.
If you could offer a piece of advice for two different groups of people…
1st, what would you say to the aspiring entrepreneurs who are looking to change the world with an innovative food-focused business?
First off it’s a big globe, so don’t think of yourself as trying to conquer the globe – think of yourself as trying to conquer your local market and grow from there. Companies take a long time to grow, but think about building a good company first, so think regionally not globally.
Also, show some humility. I think if you have humility people will come to help you. If you have too much hubris they will say “good luck”. Surround yourself with people who will actually help your cause. And do not violate the principles of your early adopters. You need to be cognizant of who your early adopters are and truly walk the talk.
And 2nd, what would you say to traditional food industry professionals who are just now becoming aware of the shift that is taking place and are looking to keep up with consumer demand for more animal-free options on shelves, menus, etc.?
This is a big one, and I don’t talk about this much. Everyone talks about how millennials are driving this shift, but the reality is that the reason they have access to these options is due to another variable that acts as a catalyst in this space. This is a generation of middle managers who are making decisions that affect a wide swath of the population. This can be a single decision by someone in middle management at a major food service provider who chooses to add a certain item to a menu at, for example, a large university and affects thousands and thousands of people. It’s that shift that creates the opportunity for the millennials to even know that these products exist.
I think generally people feel like they are stocking their stores with products that their customers want, and for the most part they are probably right. However, what they are failing on is the whole swath of customers who are never walking through their doors because they know that there are no products in there for them. So with the example of Tesco, before Chad and Derek Sarno introduced the Wicked Kitchen line, a customer like me would never have walked in because I knew the best thing I could get there was maybe a hummus wrap. But then one person, who is the produce buyer for Tesco and actually determines what 40% of the population in the UK buys, decided to add chef-inspired, grab and go plant-based meals to the shelves… and a whole new type of customer began shopping there.
It has a lot to do with what we call the “Veto Vote” – that is, when a group of people decides not to go somewhere because one person in the group cannot find something to eat there. So I think the question for these decision makers to ask themselves is not who your customers are now, ie. the ones who are filling out the surveys inside the store, but rather, who are you missing? Let’s find those customers who are going elsewhere for their meals and bring them in by offering them something that they can get excited about.
Big thanks to Chris Kerr for taking the time to talk and offer his insight. We look forward to seeing the work of New Crop Capital evolve and to follow the growth of Good Catch Foods and your many other projects that are both delicious and impacting the world for the better!