BlueNalu: The cell-based company about to make waves in the seafood segment
Lou Cooperhouse co-founded BlueNalu with a plan for a large-scale manufacturing from day one. With a wave of new products due to hit shelves next year, he explains his strategy to NutritionInvestor
BlueNalu is on track to commercialise the world’s first seafood product created from cultivated fish cells. It will be mahi-mahi, a well-loved fish in the US and particularly in San Diego, the company’s headquarters.
A three-year-old start-up, BlueNalu is building a 38,000 square-foot pilot manufacturing facility in preparation for market launch next year. The company has raised $25 million in funding from seed and Series A rounds with the backing of consumer-focused and impact investors, including Nutreco, Agronomics, and New Crop Capital, among other strategic partners. Pulmuone, the South Korean producer of perishable foods, is one of those.
Pulmuone participated in BlueNalu’s Series A announced in February, and five months later the company signed an MoU to commercialise BlueNalu’s cell-based fish products in the Asian market.
Lou Cooperhouse, BlueNalu’s co-founder and chief executive, recognises that the company is much younger than others in the cell-based space, and yet has attracted the attention of investors and partners who see the company is snowballing.
“Today, we have investors from 11 nations from Asia, North and South America, Europe and the Middle East,” he says. Cooperhouse argues that driving this interest are BlueNalu’s three unique features. “We have a very differentiated team and a differentiated strategy with a very differentiated product approach as well,” he says.
BlueNalu’s cell-based strategy
The company was established in late 2017, and like many start-ups, BlueNalu was in stealth mode for about six months. “That was a very important time for us,” says Cooperhouse. “We were the first company to put together a team with experience in food innovation, technology, commercialisation, and also from cell biology, tissue engineering, biopharma, regulatory and intellectual property.”
Cooperhouse says that BlueNalu is a consumer-driven company that uses science, leveraging on market insights, and making products that people want to consume.
“We’re not here to develop a technology based on what we know. We’re developing a technology and a process that we think will lead to the greatest consumer adoption,” he says.
Cooperhouse explains that this approach means that the products BlueNalu works on, the species it cultivates cells from, the distribution channels, and the markets the business will target are all part of a thoughtful strategy.
“We’ve been very thoughtful about how we develop the technology and how we’re going to market,” he says. “One of the first things I did was to develop a strategy for what a large-scale success looks like. I called it the five-phase strategy, but there’s even a phase zero: the fundamentals of getting the cells to grow.”
Cooperhouse continues: “We put together a design for a large-scale factory in the first nine months. We had no idea then, but when you have the end in mind, it allows you to really better understand the beginning.”
While most cell-based entrepreneurs in the world are working hard to mimic red, juicy steaks, Lou Cooperhouse embarked on the mission to replicate fish.
“Nobody has grown fish cells before, so we had very little information: all the knowledge comes from mammals!” says Cooperhouse. “We took a very difficult path, and we decided to do it without genetic engineering,” he adds.
Cooperhouse’s phase zero started in BlueNalu’s first year, and today, the company has many stable cell-lines from a wide variety of species, which basically, is the “fin stock” of BlueNalu’s cell culture factory.
“We recognise that finfish is a broad category and where the greatest growth potential is,” says Cooperhouse. He explains that BlueNalu has taken cell samples of high-value species and that the product line is made of bluefin tuna, red snapper, mahi-mahi and yellowtail amberjack.
“These are well-liked fish by consumers around the world, and we want to make them in fillet form,” says Cooperhouse.
Consumer demand and food innovation
Cooperhouse is a food industry veteran, having worked for 35 years at companies like Campbell Soup and ConAgra in roles spanning food innovation, technology and commercialisation.
He was involved in pioneering new technologies for perishable foods, entrée soups, salad produce, and in using new technologies like sous vide, high-pressure processing, and modified atmosphere. He also worked with a focus on the health market, including the first-ever gluten-free products launched in the mid-nineties.
Cooperhouse ran a business incubator at Rutgers University in New Jersey, supporting many entrepreneurs to bring their business to market, many of them in the alternative protein space. “I saw a total shift was happening as consumers were seeking more benefits from their food products, incorporating sustainability. Actually, Impossible Foods’ entire US launch happened under my watch at this facility,” he says.
He recognises that plant-based cheeses and other vegan products were trending, but he was more excited at a very different opportunity: creating sustainable fish products from cultivated cells.
Cooperhouse argues that analysts have projected that cell-based has the greatest disruption potential in the protein sector yet to be seen.
For example, the AT Kearney report entitled How will cultured meat and meat alternatives disrupt the agricultural and food industry? projected that by 2040 cell-based meat products would reach an annual growth rate of 41% to represent 35% of the global supply. Conventional meat will become less popular with annual growth at 3%, and supply at 40%. The forecast put plant-based somewhere in the middle, growing at 9% annually with a 25% supply.
These numbers are a testament to what Cooperhouse believes is “the Holy Grail” of the food industry. “To make an animal product without the animal is the ultimate food product. There’s nothing more superior than that,” he says.
Alongside the science and the market potential that Cooperhouse saw in cell-based seafood is the sustainable, eco-friendly approach of its manufacturing. “The world needs another supply of protein, we know that, but particularly seafood,” he says.
Cooperhouse argues that the seafood category is unique and has great potential. “The medical community suggests a diet with less red meat and favours fish, so there’s increasing global demand,” he says.
“Populations like Asia consume five times the amount of seafood that we do here in the US or Europe, and demand is expected to increase dramatically,” he adds. “We’re continually stressing the oceans; there’s not enough supply.”
Cooperhouse knows that the ocean is a highly vulnerable space where climate change and toxic contamination are serious issues. “Seafood is affected by mercury and microplastic among other environmental pollutants that are in the food we consume today,” he says. “At BlueNalu, we can create a sustainable, mercury-free bluefin tuna, an absolute oxymoron made locally, displacing long shipments with low yields.”
To the point
Where do you see the greatest market potential for cell-based fish?
We’ve done some consumer research, and also analysis with foodservice operators who find cell-based fish to have extraordinary potential. There’s a great deal of interest not only because it has all the health and sustainability benefits, but even at the foodservice level, it’s a 100% yield: there’s no head, no tail, is all useable.
Cell-based meat entrepreneurs talk about the challenges of recreating the mouthfeel, the texture, and taste of beef. Is it easier with cell-based fish?
You hit the nail in the head, Murielle. When we talk about this category, we thought why is everybody focusing on meat; it’s so complicated! When we cut a steak with a knife, it changes colour and is marbled, and there’s fat. The structure is complex, and it’s a huge sensory experience.
You cut fish with a fork and it flakes. It’s far less complex for its physical structure: there are layers of muscle and fat in a repeating structure; it’s a little bit like puff pastry.
What is BlueNalu’s most significant milestone to date?
Last December, we did a demonstration event. It was the first time that a company in this space demonstrated a cell-based fish product with the structural and functional integrity of the conventional product. The product that we chose to cook was yellowtail amberjack, and we presented it in various product applications.
I wish I could have been there! What was it like?
We demonstrated that we can create a same-as product. If you think about consumers, there are three ways to prepare fish: raw, cooked or acidified. You heat it or cook it. You pan-fry it, deep-fry it, sauté it, grill it, steam it, and sear it. You can microwave it or cook it with an acid like in ceviche.
All these cooking methods are very abrasive and can destroy the product, the tissue. It didn’t happen. So, our products can be cooked and prepared raw and responded the same way as conventional seafood. It gave our team a whole lot more enthusiasm.
Are you on track for the market launch next year?
Yes. Mahi-mahi is the first product to market. We understand the technology very well. It will be more in the form of a cube for use as filling in tacos, poke, or ceviche, like we did in the demonstration event. It’s a product for appetisers and entrée, which are very flexible applications. The next product would be a mahi-mahi fillet.
What’s next in the pipeline?
We’ve already developed a series of product roll-outs, it’s a matrix of species and product forms. First mahi-mahi cube and fillet, then bluefin cube and fillet. You get the idea.
Cooperhouse talks about BlueNalu with passion and confidence in his project. The company employs 24 people today, and he expects to have 40 employees by the end of the year and about 60 by this time next year. The company is gearing up as phase three, the commercial operation stage is scheduled to begin in the second half of next year.
Europe, Cooperhouse says, is on the horizon. He argues that BlueNalu’s expertise is in technology, manufacturing, operation, quality assurance, and regulatory, and recognises its lack of experience in marketing, sales and distribution. “We’re really looking for partners to help us bring our products to market,” he says
BlueNalu is currently reaching out to various organisations in Europe, Asia, and Latin America to identify the right partners to help the company build up the infrastructure and gain market share as quickly as possible.
“Our first factory will be in California. It’s quite logical that our second and third factories to be in Asia or Europe. Our process can be replicated across the globe quickly,” he concludes.