QOA company wants to contribute new thinking to how chocolate companies use bulk cocoa. They think that some of those bulk cocoa products can be created artificially through upcycled waste and using local cheaper ingredients that are better for the environment. Some chocolate lovers may be horrified, but Sara and her mission deserve to be heard.
Watch the interview on our YouTube channel, or listen in on the podcast. The transcript and time codes for both are below.
[embedyt] https://www.youtube.com/watch?v=T9w85kKoJRw[/embedyt]Interview Transcription
[00:00:15.000] – Nick Baskett
I’m here with Sara Marquart from the company. Which your first thing you want to do. So is you’re going to explain to me how you arrived at the company name. Okay? So I was calling it Q O A
[00:00:28.320] – Sara Marquart
Yeah. I think that’s also a thing between the English native speakers. And let’s say non-English native speakers. We did a like, let’s say big survey, in the beginning, we ask native speakers how would you pronounce QOA? And the majority said co. And I think this kind of irritation with the name is also a cool thing because it sticks to your mind, right? If you walk down the supermarket whatsoever in what is that? Right. So where we came from, we thought about. Okay, there’s Cocoa. There’s Cocoa.
[00:01:06.720] – Sara Marquart
We are not Cocoa. We are not Cocoa. And how about we take this as a kind of like common root and then alternate it and strike out some letters and this kind of an arts thing. It’s like there’s no bigger meaning behind it. Okay.
[00:01:22.420] – Nick Baskett
But now it makes sense. Now I was there. I was thinking it was an acronym and I was playing kind of word games for the pen and paper, trying to come up with a Q an O and an A. I’m thinking quintessential. No, I just couldn’t come up with anything that’s fantastic. Tell us a little bit about yourself and what QOA does.
[00:01:41.100] – Sara Marquart
Yeah. So I myself. I am just one part of the founding team of QOA. I founded QOA together with my brother Max, who is holding a PhD in chemical engineering. I myself. I am a food chemist, so studied like a bachelors in chemistry, then Masters and food chemistry. So I’m a big fool myself. I like eating. I like cooking. I like the transformative process of taking ingredients and then, I don’t know, put heat, put all spices, whatever to turn them into something delicious. And I was raised with parents who like to cook and food was always an important piece or part of my life.
[00:02:25.550] – Sara Marquart
So yeah, that’s why I decided to move on with food chemistry. After my Masters, I spent one year in biotechnology research in Fraunhofer Institute it’s a research group in Germany, which is, I think, quite prestigious, at least in Germany, before pursue my PhD together with Nespresso in Switzerland in food chemistry. And the question was the elucidation or identification of pathways leading to the unique aroma taste of coffee. I think like a question that is interesting to most of us. Like, you might assume that after 100 years of research and coffee, you might know why coffee is tasting.
[00:03:07.110] – Sara Marquart
How does why coffee smelling. How does. But it’s not the case.
[00:03:09.240] – Nick Baskett
Actually, I was going to say, Sara, I tried reading some of your white papers, but they were in German, and I didn’t translate. So I thought I’d do my background, a homework and come up with some clever questions, but it was not to be. So let me ask just on the coffee side, just to quickly cover off. This is not your first rodeo, as they say in America, because you worked for Atomo coffee for a time, which we did an interview with about 18 months ago with Jared and Andy there, and they were effectively doing I’m going to come in to obviously what you’re doing a QOA.
[00:03:44.130] – Nick Baskett
But they effectively were doing what you’re talking about. But with coffee, right. So you had to go with that for a while. And you were heading up that division. Correct.
[00:03:53.200] – Sara Marquart
Exactly. So this was 2019 that they like, we have got in contact. Like before I tried Atomo, I was working for the world’s largest science museum, the German museum in Munich, and did an exhibition about coffee called Cosmos Coffee. You can Google it as well. So there I dealt with all kinds of topics all-around coffee. Also, like worst coffee coming from biology farmers. What is the whole supply chain also the artisanal aspect all around that? And that granted me as a German, because I mean, what American would ever contract a German granted me some visibility also in the US.
[00:04:31.170] – Sara Marquart
And that’s how we got in contact. That’s maybe important to understand before I dig deeper into Atomo. And yeah. And then the two founders reached out and basically, yeah, I joined them on 2019. It was like, amazing ride. Almost two years now. They have a great team over there making good coffee without a coffee. And yeah. I mean, I cannot tell too much about what they do because it’s also like IP and everything. But if you get a chance and drop in Seattle or All Foods into yes, grabs of their coffee.
[00:05:08.170] – Nick Baskett
They are a lot of fun. They are great guys. So you learned a lot, I guess, from there. And then you got the itch to where did the transfer to Coco come.
[00:05:17.140] – Sara Marquart
And actually, this dates back to my PhD work, mostly in my PhD work. I analysed what kind of Lego stones or building blocks in green coffee translates to what kind of aroma tastes and roasted coffee. And basically Cocoa and coffee is not so much distant from each other. Right, you have a natural product that you ferment and roast. And you have this transformative process of turning something into something else. And my brother, he asked me earlier, this is you can be not come out commercialise my PhD research.
[00:05:53.420] – Sara Marquart
And I said, yeah, but, you know, like, this was done for Nestle and this is done on coffee. And it’s like, yeah, but what about Cocoa? It’s like, yeah, actually, why not? Right. And that’s actually how I started. We came from the solution side. And then we learned about the environmental issues that cocoa can have at least mass-market cocoa that is produced for mass-market product. I’m not speaking about nice single origin cocoa from a Venezuela or Ecuador Columbia, only speaking about that chocolate that ends up in an M&M or so.
[00:06:25.980] – Nick Baskett
Yeah. Yeah. Absolutely. Let’s just talk about what it is that you do at QOA. So why don’t you just explain, explain what it is? What’s the objective?
[00:06:39.820] – Sara Marquart
So the objective is to make a sustainable chocolate that is suitable for a mass market. Chocolate applications for your snickers coating for chocolate chips and cereals, for cocoa powder in cakes and yoghurts and chocolate drinks. These kind of things. So we really want to satisfy the appetite on chocolate on a global scale with emerging markets like China, Japan and without. And with that kind of like releasing the pressure on the supply chain of Cocoa, because I think, like everyone wants to eat chocolate, we have just the one planet and can grow cocoa everywhere.
[00:07:22.450] – Sara Marquart
And I think we have maybe one solution to take off the pressure of the supply chain with that.
[00:07:26.760] – Nick Baskett
Right. So there’s a number of different directions this conversation go, but certainly that and not enough for one conversation. We might have to have you back another time. But certainly there are a lot of challenges, everyone’s aware of ESG challenges in the market. And they span everything from a living income issues for farmers, to, as you talk about supply chain. Now, at the moment, as we record this shipping costs have gone astronomical, and there’s simply not enough containers, the backlog of ports, the whole container. We realise now the whole logistics, the it contains the whole logistics network was a kind of a just in time.
[00:08:15.710] – Nick Baskett
It worked. Okay. As long as everything kept going, as soon as you stop things like, you know, they just recently shut down the port in China, and previously to that, we had shut down to Brazil and shutdown to Vietnam, shut down to various other places. As soon as you shut down ports, you get backlogs, you get problems, you get an inability to move commodities and prices have gone as absolutely astronomical. Now, that raises another question, which is why are we shipping stuff around the world?
[00:08:48.670] – Nick Baskett
And as you said, well, because it grows near the equator, a lot of the commodities that we want grow in certain regions. And so this feeds into a question I want I want to come straight into and what we should probably get a little bit ahead question want to come straight into, which is what the if you’re not making this out of cocoa, what are the raw materials you’re using? And can we or how can we solve some of those issues, through maybe changing the dynamics of where those materials are located?
[00:09:22.570] – Nick Baskett
Is that part of the problem you’re trying to solve? Yeah.
[00:09:25.320] – Sara Marquart
So I think what do you pointed out is a quite important fact that we kind of like humans tend to produce something for something in the global south, and the nutrients from the soil from the environment go into this product in the Cocoa bean in that case. And then we transport it into the global north. So we not just have the transport of a delicious cocoa beans from Ghana to Switzerland, but we also have a de facto transport of nutrients from the soil. So we kind of like export nutritious soil in a way to Switzerland.
[00:09:59.600] – Sara Marquart
And that’s one part of the problem. And we said, okay, let’s do a regional approach that we can make chocolate with ingredients that grow in a certain area with short supply chains, with direct supply chains. And and now coming to the ingredients that we are using the using a natural ingredients that this might sound still opaque. That’s to name it out quite clearly. For example, pea husk from pea production, oat Husk or Oats as well. Then also press cake from the food oil industry, like Rapeseed oil. I think in us it’s called canola oil.
[00:10:41.840] – Nick Baskett
That’s correct. Yeah.
[00:10:44.020] – Sara Marquart
So there’s a lot of food waste produced that had itself or has itself as CO2 carbon footprint. So that, for example, one kilogramme food waste has, like, 2.5 kilogrammes of CO2 footprint. And by kind of like saving these ingredients, which are perfectly fine for human consumption, is just not didn’t come up in the past with processes to valorize these for human consumption. That’s why we have to dispose them. And we came up with the fermentation approach, how we can turn them into something that tastes and feels like chocolate.
[00:11:22.370] – Sara Marquart
Of course, it’s not chocolate, but that’s where we are right now.
[00:11:25.790] – Nick Baskett
So this books us it brings on to the nub of the whole thing, which is, so you’re making chocolate without chocolate, right. And people might say, well, hold on a second. How that sounds? That sounds crazy. B. Are you crazy? And well, you know what isn’t it? Who is it? Steve Jobs from Apple said, here’s to the Crazy Ones. Or maybe he quoted different somebody else. But it was the Here’s to the crazy ones was, I think, possibly one of his most famous speeches or adverts did Apple, way back in the day.
[00:11:58.260] – Nick Baskett
And so it’s the crazy people that change the world. Right. But my question is, can you explain for somebody who is scratching their head at the moment who’s saying clearly like chocolate tastes like chocolate because it comes it’s derived from this raw material. So I’m imagining scientists in a lab with white coats and glasses and pens in their top pockets with Petri dishes trying to grow. I’m just saying, right. This comes to mind to everybody. And they’re going to grow chocolate that they scrape off into a tell me that’s not how it works.
[00:12:40.980] – Nick Baskett
What does this actually look like?
[00:12:43.380] – Sara Marquart
So I think that what people really have in mind, as you said, like lab coats and something growing in the lab. Also, I think this was reinforced by all this lab-grown meat thing that is popping up culturing.
[00:12:56.810] – Nick Baskett
Yeah. Exactly. Exactly.
[00:12:58.460] – Sara Marquart
And we’re not doing that because I also have my gut feeling that I don’t want to eat something that was grown in the lab. So what we are basically doing imagines more like a beer brewing process. So we get these ingredients, for example, pea husk or potato peel or oats, and we take them in our kitchen, let’s say, and we have a fermented. They’re similar to beer beer brewing in a way. And we have various yeasts that, you know, from baking that, you know, from beer-making us as well as the east, is nibbling on those ingredients and kind of like pooping out the building blocks that make kind of a part of the aroma and taste of chocolate.
[00:13:39.610] – Sara Marquart
And then we roast it in a conventional way, and then we end up having a cocoa powder that has I mean, you cannot call it cocoa powder, right. But that has the sensory properties of cocoa powder. And to make chocolate, you need not just cocoa powder, as you might be aware, but you also need the butter part, like the lipid or the snappiness for the flavour release between 32 to 35 degrees Celsius. So you have this smooth mouthfeel, right. And we have how about we apply this fermentation thing that we are doing, like having yeast producing our chocolate also on this part.
[00:14:16.540] – Sara Marquart
And we came up with a yeast, a certain yeast that is doing exactly that, also nibbling on these by-products and pooping out the cocoa butter. And so now we can have cocoa powder, cocoa butter. And we can make white chocolate milk chocolate or dairy-free milk chocolate and dark chocolate. So all in all, what we’re using, we are using yeast that human civilizations using for 5000 years, and that’s nibbling on something and producing something else. And, for example, when you Bake bread, yeast is eating the glucose and making CO2 and ethanol.
[00:14:52.140] – Sara Marquart
And in our case, it’s not so to an ethanol, but it is lipids and flavour components.
[00:14:58.020] – Nick Baskett
So lipids are kind of a fat.
[00:15:00.060] – Sara Marquart
Right.
[00:15:00.370] – Nick Baskett
Because exactly on the edge of my science capabilities, can I just say that I can tell you don’t work in marketing because you’ve used the word pooping twice, which you’re not allowed to do if you ever put it in your brochure?
[00:15:13.320] – Sara Marquart
I was just creating by secreting sounds even worse. Exactly. Pooping.
[00:15:21.250] – Nick Baskett
Fine. But the question is, you talked about the cocoa butter replacement, and that was one that was actual gonna be one of my questions in that I can kind of almost understand how non-fat, and maybe this is almost certainly a limitation of my or demonstration my ignorance. But I can understand how to like non-fatty chemicals and materials to produce, but that I don’t know. Isn’t that harder to produce at that that has the same kind of traits as cocoa butter?
[00:15:57.600] – Sara Marquart
And I think that is really where our, let’s say, tech-savvy ness lies, and like finding the right yeast string that is doing exactly that a Coco butter with the right fatty acid composition. And yeah. So that’s where our research is finding the right because we only know this base’s. Right. But there’s, like, millions of strings apiece. This is strings mutants. Now another name that is like maybe scaring. But it’s like as evolution goes on as humans, but also with yeast. There are also yeast that changes the metabolism, produces and screening them.
[00:16:38.130] – Sara Marquart
You will end up with a yeast that produces, luckily, the same cocoa butter as you found it in conventional Cocoa. And also their cocoa from Malaysia has a different cocoa butter then they want from Ghana and then one from Venezuela. Cocoa butter is also isn’t always cocoa butter—also, some changes where you have it from.
[00:16:57.220] – Nick Baskett
I understand because it’s a fact that absorb its surrounding chemicals and odours is of the bigger issues when you’re actually producing organically Cocoa, the butter within those Cocoq beans, if they’re left, for instance, next to coffee bags will absorb some of those coffee odours. And so you’ve got to be careful how that cocoa fat is processed and shipped and maintained. Okay. Going, how do you go back? Where’s the common denominator that you take this, too, when you’re trying to establish I want to make something that can taste like cocoa that can act, I guess, like cocoa where because you have to turn it into a chocolate bar or at some point, right.
[00:17:49.370] – Nick Baskett
So it has to have the same characteristics in the way that it performs unless you’re going to change the whole manufacturing process. So actually, that’s a question to ask in a minute is about the manufacturing process, the material. But where do you take that? Where do you start? You start at some kind of DNA level. Where do you start in order to understand the flavour characteristics of cocoa? And then, as you say, you’re using yeast, and I can just walk us through a little bit of that process.
[00:18:23.450] – Nick Baskett
I’m struggling to explain it. Well, but I think you understand what I am saying. Will you make this at the beginning.
[00:18:29.700] – Sara Marquart
Yeah. So we started in eating a lot of chocolate. Obviously, we started that sounds like a good excuse that really we ate; I don’t know, like, every day. I know ten bars to look at a feeling about what is the chocolate tastes like. And we and we realise there’s not the chocolate taste we all grew up with having a certain kind of like preference. When it comes to chocolate. One might like Cadbury, the other one like Lindt, the other one like, like single-origin 70% cocoa. So that was the first realisation that actually making chocolate.
[00:19:02.700] – Sara Marquart
It’s a bit easier than, for example, we want to make coffee because we all have a different understanding of how chocolate taste or different preferences. That was the first thing. So we tasted a lot. We had panellists, we had experts saying, OK, these are the kind of parameters that you have to nail when you want to have a chocolate taste. Then we correlated the data that we get from sensory experts with analytical data that we get, like, gas chromatography. These are all like, let terms. Now they could cut Chroma, chromatography and all these things that we get a kind of like idea of what humans can taste.
[00:19:45.870] – Sara Marquart
How can you can say that in the data points? Like, how can we connect both and then with this connection of both, like, people could call it machine learning nowadays or whatever you might call it. You will then get an under understanding of what you need to kind of like, mimic or that you have to make or that the yeast has to make it Cocoa. So that was kind of the starting point. We came from eating chocolate by then, breaking it down into, actually data points that you have to nail to make it chocolate and then be like, okay, how can we get those ingredients, those compounds to those these aroma, older and taste compounds.
[00:20:21.550] – Sara Marquart
Where can we get them? How can we get them? And how can we get them by using yeast by using fermentation from the by-products.
[00:20:29.000] – Nick Baskett
So I get Sara the analysis element, and that what you’re doing is you’re basically doing those lab tests of the various tests on the chocolate to understand to map out data points. So you’re basically able to take something that, I guess feel subjective to us because I tasted I go, oh, that’s through to you. That’s acidic or whatever. And you’re able to say, yeah, I can. Actually, I can actually represent that as data points that bit, I get. So now you’ve got representative data points. You can say this collection, like the matrix, you’re looking at the numbers, you can say, ah, that’s acidic.
[00:21:08.810] – Nick Baskett
That’s true. That’s bitter. That’s whatever. And you can take all those data points together. And you can say, I understand that. Now what I don’t get is then what I guess I’m thinking. But then you go to trying to recreate that. And when you say, well, we do is we use the yeast in the fermentation to it, don’t you? For me, yeast is a Marmite right side. I think that’s the only thing. Argh you’re a Marmite lover. Yeah. We’re gonna get on a well.
[00:21:41.300] – Sara Marquart
So, yeah, I know. I see where you’re heading. And yeah, like, the flavour of Cocoa and flavour of chocolate comes most, like, most of the flavour comes from the processing from the fermentation, from the roasting, from the conching. So with our yeast approach, we set the kind of, like, baseline we set, so to speak, like the raw fermented cocoa. or cacao If you want. In that case, then we set the baseline pre-roasting. So we kind of like, what we do is with this fermentation approach. We do not yet reproduce roasted cocoa.
[00:22:23.180] – Sara Marquart
We still have to roast it, so we have a roaster, and I think what’s essential to that is that Maillard reaction is named after the French chemist is and we Maillard that he founded in 1912 or something like that. It’s the reaction of minor acids and carbohydrates, and you find this reaction in any kind of food item and now coming back to my foodie love. So when for example, is this when you make fries, popcorn, coffee, roasting, bake a cake. This reaction is taking place everywhere where you have, like, flavour formation with heat and time.
[00:22:56.660] – Sara Marquart
You have this Maillard reaction. And also you have to during the roasting. And now, more importantly, during the conching step. And I don’t know if you are familiar with conching or. Yeah. So you have, like, I don’t know, 4 hours, 8 hours, 12 hours, 72 hours if you like, you have temperature 50s 60 70. So you have, like, all these factors that you need for the Maillard reaction with. Now you have the ingredients produced from the yeast, so to speak, the raw cocoa, and you can process them now, like cocoa.
[00:23:26.620] – Sara Marquart
Then you have the same reactions taking place, the same Maillard reactions. So it’s not like a chemical reaction in a lab. Just imagine it’s happening anywhere else, like all the time. So we roast it, we conch it, and then we end up with this flavour. And so it’s kind of like process derived flavour similar to natural cocoa processing as well.
[00:23:46.060] – Nick Baskett
Okay. So the actual processing isn’t that different? Or the way that you’re you’re bringing those flavours out isn’t very different here’s. The secret is the secret in you have got special yes, cultivations that you use, or is that what it is?
[00:24:07.140] – Sara Marquart
It is the yeast that we’re using that profile. That’s the one thing and also the unique approach that we did with connecting human sensory signs, like eating chocolate with analytical signs and then breaking it down on what kind of building blocks that we need. And that’s basically what I was doing for the last ten years. Like, I researched Maillard chemistry. I come from the chair of Maillard chemistry per se, worldwide. So that’s my core expertise. And yeah. So I think the trick is the complexity of connecting dots and then transferring these dots onto finding the right yeast strings, profiling a lot of profiling work and fermentation work and finding the right enzymes and that that can then turn your byproduct into something like cocoa.
[00:25:00.740] – Sara Marquart
Or cacao, in that case, is the non-process part of it?
[00:25:05.910] – Nick Baskett
Okay. Got it. So, Sarah, why focus just on the bulk Cocoa market? The bulk chocolate market is that was that a technical decision, a commercial decision or some kind of ethical decision?
[00:25:19.840] – Sara Marquart
All of the above? I think, first of all, I mean, I love chocolate, right? And I love a good single origin bean to bar chocolate, like, and there’s nothing like that. And, Max, we don’t want to have we want to have Cocoa to stay right, and I think that’s why we want mass-market chocolate because we also loved our breakfast years when we were hit with cocoa and chocolate. We also want to preserve that. But we also think that the cocoa that ends up there most of the times, even not sourced in the right way.
[00:25:57.880] – Sara Marquart
Or that is actually a waste that it ends up in there because, the actual contribution of the cocoa to the product overall, it’s just so so so small, so little that it’s a shame that we waste those resources and then coming to the technical aspect. Also, if you want to mimic a single a single-origin bar from Venezuela or from Indonesia, so we would have to come up every time with a new process like we could do that. But it’s just like we would then compete with people that really do amazing work.
[00:26:34.360] – Sara Marquart
That source amazing cocoa that is grown in a forest that is sourced directly. And that’s not where we want it. All right.
[00:26:44.340] – Nick Baskett
Understood. But by the commercial site for a second, how good is your math?
[00:26:49.760] – Sara Marquart
Yeah. I think I should be fine.
[00:26:54.120] – Nick Baskett
Okay. So I was trying to do the math, and I thought, why am I answering these questions? I’ll just pose the questions and do the easy job and let’s say I do it the hard stuff. So you buy a tonne of Cocoa. I guess Ex-works or farm gate, or maybe it’s FOB in Ghana for around 1750 a tonne. And then you got the shipping costs you’re all discussed. And who knows what those are going to be actually going forward. And then you’ve got the Port handling costs and logistic costs to get them to the factory.
[00:27:28.760] – Nick Baskett
And that’s when you start to process add value, assuming that’s what you’re doing, assuming of bringing beans across and not semi-finish products and so forth. You’ve got all of those are the costs. It’s actually not a lot, right. It’s actually quite cheap. Apart from the shipping side of things, it’s actually quite cheap.
[00:27:46.630] – Sara Marquart
It is too cheap.
[00:27:47.900] – Nick Baskett
It is too cheap. But that’s the price that chocolate companies are paying.
[00:27:53.340] – Sara Marquart
Yes.
[00:27:54.280] – Nick Baskett
How do you plan if you’re going for the bulk cocoa market? Have you done your numbers and worked out how you can get that to them at the same price or cheaper? And that is that even the direction you’re trying to go in.
[00:28:09.300] – Sara Marquart
So I think when you speak of bulk chocolate, like big corporates, they care about sustainability for sure. But what they care more is the price. And you need to reach price parity. And that’s also like one of the major starting points that we knew that we have to reach the price because all these startups nowadays that are there, they’re doing nice research, cell cultured stuff going to market, maybe 2030, whatever. And we know if you want to have if you want to have an impact, we have to meet the price.
[00:28:39.240] – Sara Marquart
And so we engaged with the firm in the US that helped us modelling this out because we wanted to get the numbers right, because also Max is an engineer, I’m a chemist. I’m not an economist, right. And we got help. And for example, ballpark number one ton, so 1000 kilogrammes of oats is €165. So it’s the factor ten cheaper than cocoa. And the supply chain is way shorter. So that place in our cards that these five products are extremely cheap and oats not even a by-product.
[00:29:13.990] – Sara Marquart
It’s a valuable food item. So I think we have to advantage on our side that ingredients that we are using our source regionally, they’re cheaper. But what is the disadvantage on our and the surprise driver that we have to process it with this fermentation part, which is more expensive but anything else, they’re roasting the milling and the conchin is the same with chocolate. So the only difference for us is the fermentation part. In the end, we end up to be 20% cheaper than bulk chocolate.
[00:29:44.540] – Sara Marquart
And this is like when we would produce 2023, I got to know 100 tonnes or whatever a year. O, let’s say, but we will not end up there, but maybe 2024 something like that. So we don’t even have to scale crazy high to reach that price point.
[00:30:00.740] – Nick Baskett
Got you, so you actually touch upon my next question is a beautiful segway, which is talking about scalability. Now, whenever I talk to technologists who have amazing ideas, the secret skeleton in the closet, which I don’t ever want to show investors and the terrified of anybody raising is scalability. And because something that might work in a lab, it’s always, always, always, always the biggest problem is scaling that to make a meaningful impact on the market or to reach your objectives or your potential. Let’s say so we know what the potential market is for bulk Cocoa.
[00:30:39.200] – Nick Baskett
And it’s huge. Right. Making this work and demonstrating it in a small scale is one thing. Can the scale to really being to really being meaningful. Have you approached the scalability problems?
[00:30:55.760] – Sara Marquart
So also, like speaking with this firm that we engaged in the US, we already mapped out a kind of pilot plant with where the CAPEX would be like 3 million, and we could produce 100. I would have to have a Max for the exact numbers, but I can produce sufficient chocolate. However, this has to be proved obviously. So I think what is easier for our case other than, for example, cell culture stuff. We don’t need sterility. We don’t need this kind of bioreactors where you have to kind of get a scale.
[00:31:32.400] – Sara Marquart
Our technology is basically kind of imagine as we’re growing. So the hardware costs are easier to match. But of course, we also face scaling problems. And I would lie if I would say it is easy. We don’t have the expertise. We are not process engineers. I’m a food chemist. Max is an engineer, but yeah, this is going to be a challenge in the future. We have to nail the scaling. This is going to be a challenge. Maybe not the biggest, but one of the biggest.
[00:32:01.680] – Nick Baskett
Let’s talk about aligned to this. Let’s talk about the big movement in vertical farming. And I want to just ask if your scalability plans a sort of based on using the vertical farming companies out there or copying their kind of techniques. Is that how you plan to do it or in fact, it’s not really like that. It talks a vertical farm they’re using, they’re actually planting, whereas you’re going to be going about in a different way. But do you see any use for vertical farms in your scalability plans, or is that just a really a dumb question?
[00:32:42.230] – Nick Baskett
A non sequitur question?
[00:32:43.260] – Sara Marquart
No, it’s not. So we haven’t taken this into a can’t yet. We didn’t factor that in because this system would also be a bet on the future. The numbers that we made up from the basement that we have right now. Additional farming methods, regional products and kind of like availability, supply.
[00:33:05.500] – Sara Marquart
Availability that we have right now
[00:33:08.440] – Nick Baskett
is the process of making. I want to call it cocoa. What should I call the product?
[00:33:17.500] – Sara Marquart
call it QUOA.
[00:33:19.200] – Sara Marquart
Okay.
[00:33:19.660] – Nick Baskett
Okay. So we actually will call the product QOA as well, not just the company.
[00:33:22.720] – Sara Marquart
So if you like to.
[00:33:28.880] – Nick Baskett
Okay. You know you know Quora, right. Okay. So Quora it makes like a vegetarian alternative to meat.
[00:33:40.860] – Sara Marquart
I think I heard of it based a mushroom.
[00:33:50.020] – Nick Baskett
You just don’t want to get confusion between the two. The QOA, the QOA that you’re making. How energy-intensive is that if energy costs move strongly against you, does that change the dynamic significantly for your business model?
[00:34:11.800] – Sara Marquart
Yes. In a way, because fermentation takes some energy, you need the agitation, you need the heating, but also, like the roasting. And the concept is applied, but also for the chocolate industry. So we have one part of the equation that could increase, like the fermentation part. But it’s not the biggest. The biggest part is always the roasting the roasting.
[00:34:35.960] – Nick Baskett
All right.
[00:34:36.430] – Sara Marquart
Anything right. This will kind of effect all of the companies is because usually, you will do this with gas.
[00:34:43.280] – Nick Baskett
And how much of the I think we were talking earlier. You mentioned that you may be able to use waste material as well. So you might be buying in, like, new raw materials, but you might also be able to make use of waste material. Is that how much of that is, do you think is going to go into your final product? What percentage can be effectively upcycled waste?
[00:35:12.700] – Sara Marquart
So the first product types that we shipped were 100% based on food waste in a way so circular. But we also realised that what is now a food waste could be in the future, the most expensive in ingredient. Right. If, like, for example, let’s talk about oat tasks that we are using what is we have to make ten millions of tonnes of chocolate based on oast husks and oat tasks might be the most expensive part. So we have to come up with alternative ingredients that might not be food-based.
[00:35:44.390] – Sara Marquart
So we have to be flexible in that regard. That’s what we’re heavily working on to be not dependent on the supply chain, neither the ingredients now the regional availability, so that we can provide a solution for the Philippines where it might not be oat. So why would I produce chocolate in Germany based on oat and then ship it all around the globe to the Philippines? So we have to come up with solutions there. And that’s what we’re tackling right now as well. But this is more like, of course, take some more time.
[00:36:14.660] – Nick Baskett
One of the touted benefits of cocoa. And this is actually one of the one of the things that I particularly like is pretty much one of the main reasons that I can see a small amount of really nice quality cocoa comes from a company up in Scotland called Chocolate Tree. The guy who makes it Alistair is amazing. And he sells his wonderful Cocoa flakes by the Kilo and 85% Belize chocolate, cocoa butter and a little bit of organic cane sugar. And I mix it in a glass with a small amount of hot water, and I make a shot, which I have in the afternoon.
[00:36:54.610] – Nick Baskett
I mean, the
[00:36:56.080] – Sara Marquart
Sounds amazing, you should do Advertising is like.
[00:37:03.260] – Nick Baskett
I’m just being honest about how it is because I give that to people who come around, and they think I’ve added something to it. I say, no, there’s no flavouring. There’s nothing, and they’re like, but this doesn’t taste like chocolate. This is amazing. It’s so intense, and it’s fruity, and they’re trying to pin me down on what’s different. I like, no, it’s the flavour from the cocoa, but also and it’s this water right. There’s no milk in and put milk in it or anything else, but also for me, I’m interested in the cardiovascular benefits.
[00:37:38.300] – Nick Baskett
I’ve been reading the white papers that were produced. I don’t know. There was, I think, a year or two ago, a number of new studies that were done on the cardiovascular benefit in particular. So help in the prevention of atherosclerosis or people who have difficulty in walking because they may have some not neuropathy, but different kinds of cardiovascular disease. And the studies have shown that Cocoa was one of the of one of the best products in terms of the flavanols and polyphenols that are in there is active ingredients in helping it.
[00:38:20.350] – Sara Marquart
Cardiovascular.
[00:38:21.360] – Nick Baskett
I guess I had this question because it sounded a lot more intelligent when we wrote our questions out. But having listened to what you said, you’re going for the bulk cocoa market. I just wanted to cover it off. You’re not going to have those those beneficial, those benefits from your QOA product, right. If you’re going to be using different materials to make it, you can’t inherit those benefits that’s going to be maintained for the high end cocoa. Is that right?
[00:38:52.760] – Sara Marquart
So, yeah, that we cannot nail exactly is the health benefits of cocoa. But I think what you also already like, kind of like included in your question is that you will find these benefits in high percentage cocoa. Yeah, it’s not in me. Not ina Mars bar. Exactly. Because if you want to eat Mars bars for the health benefits, you have to I think seven kilogrammes of Mars.
[00:39:15.560] – Nick Baskett
It’s possible
[00:39:20.800] – Sara Marquart
so all research applies pretty much for super high percentage cocoa talk at and also like, I just pull up the numbers.
[00:39:28.230] – Sara Marquart
I think some days ago from the Washington Post, you have to eat like seven average sized chocolate bars in the US. I think average size is 50 grammes after each six, three and and 50 guys of chucked a day to really to measure the output.
[00:39:44.500] – Nick Baskett
I think the studies that was like four. They were giving them four intense shots of Cocoa a day over a period of three months. I’m going to say I might be wrong on that, but it was as significant a lot more than I drink.
[00:39:56.060] – Sara Marquart
But to fairly answer your question and not to act like a politician. In a way, however, have different health benefits. One is that we don’t have a theobromine which is a caffeine analogue, so you could call it more child friendly in a way, because it’s not a stimulant. That’s one thing. We also do have the avenanthramides from oat like this very beneficial composites are in that’s one thing. And we also have flavanoids and antioxidants that’s them in one of the ingredients that we use to get this a strange and bitter taste if you want like it’s.
[00:40:33.620] – Sara Marquart
Actually, I should not disclose it too much, but there’s a residue from wine making and you might know a resveratol which is which is address for red wine has very health beneficial.
[00:40:46.570] – Nick Baskett
Yeah.
[00:40:47.820] – Sara Marquart
This could be potentially I don’t know. I suppose to end up in our chocolate as well.
[00:40:51.290] – Sara Marquart
And then you have kind of like the health
[00:40:53.790] – Nick Baskett
Max is cursing you right now from the sidelines.
[00:40:58.200] – Sara Marquart
No, but you could kind of like imagine having the health benefits of red wine in your chocolate without having the alcohol. But of course it’s not the same as cocoa is different. But I think if you want to have to help benefit of Cocoa, get this nice Belize 85% cocoa Chocolate and indulge it
[00:41:17.600] – Nick Baskett
that whole thing about the chemicals. I can pronounce the resevernol thing in all red wine. I read about that years ago and I tried drinking several bottles of wine a day, and I may have had some health benefits, but the hangover wasn’t worth paying the price, so
[00:41:36.080] – Sara Marquart
I can imagine.
[00:41:37.660] – Nick Baskett
So I can’t do that. But yeah, no, that’s very interesting what you say. And presumably you don’t have cadmium neither, which some has an issue with that. That’s fascinating. We are going to come back another time, but we’re almost out of time.
[00:41:53.510] – Nick Baskett
We’re going to come back another time, Sara. And we’re going to talk a little bit about the may be more about the supply change side and some of the problems there with the social, because I think that is an important question to ask. I didn’t want to get sidetracked. I really want to stick with the science today. I get a little bit nerdy.
[00:42:11.900] – Sara Marquart
But maybe I can jump in there with just one thing. They want that we engage conservationists. So we engage with people that help us to assess the impact of our invention on the on the origin countries. Because one thing that I learned from the exhibition that I did, the inventor usually never thinks about the impact that the invention might have in scale. For example, thinking of Nespresso capsules, the inventor didn’t think about what aluminium waste could as a potential outcome. And that’s why, for us, it was important the very, very beginning to engage with conserverationists, with NGOs to address that.
[00:42:51.860] – Sara Marquart
How can we by not just lowering the pressure on the supply chain also help the farmers have the families that base their living on Cocoa, right?
[00:43:01.940] – Nick Baskett
Yeah. That would be lovely to talk about it. And the biggest example of scientists getting that wrong is course atomic bomb. And if you ever read Richard Feynman’s fantastic. We’ve written a number of books, but his fantastic book, surely you’re joking, Mr. Feynman. He gives a wonderful portrayal of his involvement in the development of the nuclear bomb. But of course, nobody saw where that was going. They had their reasons at the time. And so you have I would say myopic but you have a very limited when you’re developing something, you’re developing it in a very limited artificial intelligence.
[00:43:36.190] – Nick Baskett
Right now it is another example. I’m at one thing we can end it a slightly odd in odd way because I was going to end it there. But I forgot to mention just forgot to mention you came out of Y Combinator.
[00:43:50.640] – Sara Marquart
Oh, yeah.
[00:43:51.200] – Nick Baskett
It was kind of shocking to me. I’m like, wait a minute. Y Combinator. So people don’t know. Y Combinator is an incubator for tech companies. And I try to think of probably think the most famous companies who come out. I can’t remember, but probably I’m going to take a wild guess and say probably something like PayPal or something came out of that’s the kind of company that you expect to come out of Y Combinator. You came out of Y Combinator. Is food becoming tech now
[00:44:21.760] – Sara Marquart
it seems so. But I think the main motivation for us was when we joined in May, that we’re Germans right. We are very structured. So we plan to do things slowly, like hiring the first people end of the year and things like that. Right. And Y Combinator gave us this kind of like US way of thinking to accelerate things hypergrowth do it quickly for a demo day. That was just like, two, three days ago. We had to have a product, and that’s what we had to nail, right? So we had to focus on making a product.
[00:44:56.550] – Sara Marquart
That was one thing. And also, we’re not just any more like a scrappy German startup somewhere in Munich doing something. But, we are, the Y Combinator startup doing the world’s first cocoa free, chocolate. Oh, there’s notification. Sorry.
[00:45:09.120] – Nick Baskett
That’s okay. You’re next meeting due.
[00:45:12.240] – Sara Marquart
And to answer your question, if it’s becoming tech now, I think food was always tech. If you think of agriculture, farming like humans tend to use technology to transfer food items and to not overuse the fermentation example, that, like beer brewing is per se, a technological process. And I think for Y Combinator, there are more and more food tech biotech startups getting their interests as well. And, yeah, I don’t know what was their motivation to take us. Maybe they like chocolate, or maybe they like the tech.
[00:45:52.930] – Sara Marquart
I don’t know.
[00:45:54.020] – Nick Baskett
You applied to them, right? You applied to them, and you said, okay, we want to go through that process. We want to get some of that mentoring, get access to the people involved, and they took you on. That’s really amazing.
[00:46:05.700] – Sara Marquart
Yeah. And, well, you really honoured, because I always wanted to be there. And I stand for stand for us.
[00:46:12.240] – Nick Baskett
It is just the gold standard in terms of incubate. So Congratulations on that. We really look forward to seeing where you go with this. I hope you’ll come back. I don’t ignore us. And we’ll look to talk to you in the future and see what kind of progress you’re getting to feel free to send me chocolate. I’ll be happy to invest my time into helping you assess your direction strategically by eating as much chocolate as you want to send me. And it’s been a pleasure. Thank you so much for your time, Sara.
[00:46:43.220] – Sara Marquart
Thank you, Nick. Thanks for having me. That was a blast.
[00:46:45.550] – Nick Baskett
It was a blast.
