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Scaling up and partnerships: What do alt protein industry experts say?

In a competitive business environment, the ability to scale up effectively is a critical determinant of a company’s long-term success. From early planning to decisions about partnerships and infrastructure investments, scaling up is a complex journey that requires several considerations at each stage. By delving into the experiences and advice of industry experts, this article highlights the pivotal factors that can accelerate a company’s multifaceted journey towards growth and expansion.

Plan from the start

Think long-term from the beginning

Scaling up requires early consideration of many factors, such as hardware requirements and vendor sourcing, to prevent delays in the process. “We dialed in optimised processes on a smaller scale and underestimated some of the adaptations that would be needed for large-scale production,” shares Mihir Pershad, CEO and founder of Umami Bioworks. “That was a mistake. We could have avoided delays and probably made the process even better if we had thought about that earlier. We are now using machine learning to enable us to better develop scalable processes from the early stages.”

Infrastructure is the biggest challenge in the scale-up journey

As a startup, preserve your flexibility

Startups can often find themselves in a situation where they lay out a plan and make early orders and commitments before the technology is proven, because of the long lead times of certain equipment and facilities. As they optimise their technology and product, they come across better opportunities but are locked in a certain pathway that is no longer relevant or the best choice. 

Gautam Godhwani, managing partner of Good Startup, recommends that startups prioritise validating their technology and market opportunities before making significant infrastructure commitments. “Understanding where your technology is and laying down infrastructure commensurate with that is crucial. Even if a company has to pay a premium for the short term to preserve optionality in the long term, it is worthwhile because the alternative can kill the company. This preserves different pathways that the company can explore depending on the outcome of its technology development.” 

Assess if you really need your own manufacturing facilities

Green Queen founder and editor-in-chief Sonalie Figueiras notes that one of the most common mistakes is thinking you need to build your own manufacturing facility without considering the company’s long-term financial sustainability, which can drain resources and lead to budgetary strain. “Especially for plant-based brands, consider what is the minimum viable product you can scale up to without spending too much on or building your own infrastructure, because the latter is a cost and resources sink.” She adds, “Explore viable opportunities for leveraging contract manufacturing partners. It allows for testing products and markets without the burden of owning and maintaining manufacturing facilities.” This advice was echoed by most of the other experts we spoke to and is a critical factor to consider.

Figueiras also stresses the importance of defining your company’s role in the market, which is crucial for optimising resources and focusing on core competencies. “Are you primarily an ingredient supplier, a technology provider enabling other businesses, or an end consumer product? Once you’ve clarified your identity, you can make informed decisions about whether to invest in your own manufacturing facilities or outsource manufacturing to others.”

Leverage shared co-manufacturing facilities and equipment

Trying to build a facility by oneself comes with its own set of challenges, says Ka Yi Ling, Ph.D., co-founder of Shiok Meats, the first cultivated seafood company in Southeast Asia. “For a bioreactor setup, you don’t know the exact parameters early on. There are a lot of assumptions that one has to make. Moreover, you cannot make adjustments once it is built. Access to testing facilities where companies can experiment with different bioreactor setups is essential for mitigating risks and optimising designs.” She emphasises that in countries like Singapore, the U.S., Australia, and across Europe, there are at least one or more supporting facilities for companies to rent out. Some options for co-manufacturing in Singapore include Bühler and Givaudan’s Protein Innovation Centre, Esco Aster, and the Agency for Science, Technology and Research (A*STAR).

Protein Innovation Centre, Singapore

Diversify your supply chain

Jolene Lum, former head of business development at Nurasa, advises against relying solely on one contract manufacturer or supplier and suggests spreading resources across multiple partners to mitigate risks. “Never put all your eggs in one basket. As you scale up, you need to plan for contingencies, something that is needed for every part of your supply chain, every part of your process. Ensure you have a plan B, C, and D for every step of the way.”

Who you work with matters a lot

Have someone on the team who has prior experience scaling up

“It’s especially beneficial to have a technical lead or team with experience in scaling up technology,” advises the Mills Fabrica team. “If not in the company, at least collaborate with a scale-up expert or partner with relevant experience so you are not moving in the dark.”

Choose your scale-up partner carefully

Building on the point above, Andrew D. Ive, founder of Big Idea Ventures, believes “The most critical decision from a scaling perspective is choosing the right partners. There have been multiple companies that chose to work with the wrong scale-up partner, leading to significant setbacks, including failure of the company.” To mitigate this risk, he advises assembling an advisory board consisting of individuals with expertise in scaling up businesses. “Work together with the advisory board to evaluate different potential scale-up partners to find the right one that everybody agrees to be most suitable for the company’s needs. If the partners are not delivering, be quick to find a better partner, don’t drag out a bad partnership because of fear of change.” Better Bite Ventures founding partner Simon Newstead agrees that this is a very important process, as important as hiring a good team. “There is an opportunity to do better background research and reference checks to decide your potential scale-up partners.”

Ollie Cohen, head of strategy at cultivated meat startup Meatable, says that his company’s fundamental scaling challenge is that most of the facilities available are designed for pharmaceutical processes. However, for the company’s purposes, a suitable facility would need to adhere to food-grade standards and costs. “Finding a partner who is able to bridge that gap is essential, and they can be hard to find. Getting the right partners when scaling up is critical.”

Consider collaborations with corporates

“Corporates have experience in larger markets and are aptly suited to sharing advice on what can and cannot work when scaling up. If you are not yet ready to go big by yourself, proactively reach out to corporates and try to build up collaborative relationships,” advises Dr. Aparna Venkatesh, Regional Innovation Lead at Bühler. 

Lum adds a word of caution though, stressing that while scale-up collaborations are really important because they help you solve a problem that you couldn’t solve yourself, as a small company, always aim to protect yourself in case of an unfavourable situation.

Protein Innovation Centre, Singapore

The right partnerships can help you succeed

Identify your strengths and gaps to guide the kind of partnership needed

When seeking partnerships, the Mills Fabrica team advises startups to think through their biggest gaps and needs to hit key milestones. “Avoid wasting resources on something that is not your forte, instead focus on the company’s key areas of specialty or differentiation. Look for companies with complementary expertise to work on a solution together.” Dominique Kull, co-founder and CEO of SGProtein, shares that their clear focus is on building excellence in manufacturing. On the other hand, their partners want to build a leading brand or have distribution channels, but manufacturing is not their core. Establishing this clearly helps create wins instead of everybody wanting to be everything.

Mathieu Van Giel, founder of cell culture startup Wasna, collaborates with companies that contribute to the growth of the alternative protein sector by focusing on specific stages of development. “We’re less interested in organisations that attempt full vertical integration, covering all steps of development, including consumer-oriented selling, and marketing. Few industries operate this way, and we believe cultivated meat will follow the model of other industries, with key players at each stage of the development cycle.”

Conduct due diligence on the potential partners

Lum says that determining the right partner can be challenging, depending on the level of due diligence. “Financials are, of course, important, but it always comes down to the capabilities of the partner entity.” Dr. Venkatesh also stresses the importance of doing your homework on the partners you plan to reach out to. For instance, if a startup is seeking a corporate partner, she advises asking key fundamental questions, such as: What is their goal? What industry knowledge do they have? What kind of solutions do they offer? What kind of customer base do they have? What kind of network do they have? What is their prior experience working with startups? Who else are they working with? Doing these early checks can help determine the fit.

Protecting IP can be tricky, seek advice from a legal expert

Often, first-time founders are concerned with IP protection, which can hinder engaging with potential partners, be it for a memorandum of understanding, a joint venture, or anything else. Ive suggests reaching out to an IP lawyer early on who can advise on the key steps to protect company IP and what to disclose as you progress through the partnership stages.

Dr. Venkatesh notes that corporates are approached by many startups, and they need to prioritise which ones to work with. If a startup is unable to communicate its value proposition due to the fear of IP loss, the corporate will move on to other options. Citing the example of academic partners who also have a wealth of knowledge, she highlights the need to be open to sharing know-how so that companies can learn from them as well. “Spend some time and resources to get the right legal advice to put in place a non-disclosure agreement so that constructive conversations can happen.” The Mills Fabrica team further explains that for an investor, it’s very important to have a clear idea about what part of the process or core technology would fall under the company’s protected IP – not just to evaluate defensibility, but also potential future licensing opportunities.

Build trust, have open and transparent communication

Maarten Geraets, former managing director of alternative proteins at Thai Union, stresses the importance of partner entities having open conversations about what each wants to do, what the gaps are for both, and how the parties can fit together. Both sides should be able to trust each other to make the partnership work. It’s easy on paper, but in reality, the “people factor” is what will determine success. People need to work together, and companies need to demonstrate that support exists all the way from the top to deliver upon it.

Kull from SGProtein agrees, adding that partnerships are challenging. Making a partnership work requires continuous effort, exchanges, and clarifications to build a solid trust base. “In the absence of trust, an effort at collaboration runs the risk of being a transactional exchange rather than a partnership. Consequently, you will not innovate, the other partner will not prioritise you, and things will not move forward as fast as they should.”

Calibrate your expectations to align with reality

Nick Cooney, managing partner of Lever VC, says that sometimes startups have an inaccurate understanding of what will happen in a corporate partnership, and how quickly things will move. This can lead to non-optimal decisions by the startup that affect their production, scale-up, revenue, or other plans. “Corporate partnerships are valuable, but manage your expectations of them before dramatically changing the direction of your company.”

Want to take a deeper dive into GFI APAC’s business insights? Check out our latest report on Southeast Asian consumer perceptions, or reach out to our team of experts at APAC@gfi.org.

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