NotCo CEO and Founder Matias Muchnick joins Yahoo Finance Live to discuss how AI technology helps the company create plant-based products.

Video Transcript

- Alternative protein companies raised $5 billion in 2021. That's according to the Good Food Institute. That was five times as much as in 2019. And one of those companies is a Chilean startup called NotCo, whose backers include investment funds of Jeff Bezos and Danny Meyer. It recently started a joint venture with food giant Kraft-Heinz. NotCo CEO and founder Matias Muchnick joins us now. Matias, thanks so much for being here.

First of all, I would ask you-- I mean, we've talked to some other plant-based food companies, alternative protein companies, Beyond Meat, Impossible, we know the names. What makes NotCo different? Is there a taste difference? Is there a development difference? Talk to me about the company.

MATIAS MUCHNICK: I would say that fundamentally, everyone's trying to do and create a better food system. But in our case, I would say that we leverage artificial intelligence in a way that is allowing us to create food products faster, better, more accurate, less costly, and more affordable than anyone else in the space. And I think that's one of the things that has allowed us to create a company that has raised $368 million executing eight different countries, five different categories of products.

So we are very cross category product. And I think maybe we've only seen in the space companies that advocate for only one replacement of product. So we have milk, eggs, and dairy replacement. And that is pretty unique for a company. And utilizing AI has allowed us to do this faster than maybe the other challengers in the space.

- When you say you use AI, walk us through that process. Is technology to the point where you can essentially go out there and create AI-driven fish, and that product might be on the market at some point this year?

MATIAS MUCHNICK: 100%. Actually, it's going to be in the market this year. So what the artificial intelligence element does is basically understand food. So one of the biggest problems we had in the food industry is that we don't understand what we eat. So, basically, what we've done is understand the food that traditionally comes from animals, and then we understand the world of plants.

There are more than 300,000 species of plants in the world that we have no idea what they can do. We have no idea if the combination of pineapple and cabbage can create the taste of milk. And by the way, it does, right. But it's not going to be a human being that understand that. It's an artificial intelligence platform that is allowing us to predict which combination of plant-based ingredients should result in the same sensory experience as the target product.

We always thought that we're not going to change anything in the consumer dynamics and change people from animal based to plant based if we don't replicate exactly the same experience at the right price, which is another factor that is very, very important. Price and affordability is the number one driver of this category to be mainstream, or just to be a premium sector.

- I wish you could see some of the responses when you said AI fish here in our Slack channel. What is AI fish? Does it smell like fish? Does it have the mouth feel like fish? What is AI-driven fish?

MATIAS MUCHNICK: No, forget about the behind the scenes. So, ideally, what we want to do is to really understand what is a piece of fish, what is a fish? And you have different types of fish. You have salmon. You have tuna. And so first, we need to understand what a cut of tuna is. And we do it through data. So we extract data to understand what that piece of tuna is in order for the algorithm to understand which plant-based ingredients that are available out there that we know about. What is the combination, the right combination of those ingredients that will result in that kind of fish, that piece of tuna?

So the AI works behind the scenes. What you're going to see is a product, a plant-based product that tastes, smells, looks, and has the price of a tuna fish. AI is the research side. It's the more product development side. But it's not the product that you're going to see. You're going to see with plant-based ingredients a product put in the aisles of every supermarket here in the US.

- Now Matias, I eat plant-based products. Full disclosure here. But whether you're talking about your company or your competitors, you have to admit there's something not super appetizing about the process, if you will, or even if you look at the ingredients and you see oil, pea protein, various other sort of additives. So how do you market it? How do you sort of convince people that this is sort of whole food or wholesome food, for lack of a better term?

MATIAS MUCHNICK: Yeah. That's a great question. And I think we need to understand that we just started to use technology and science to really understand what animal-based products are. 10 years ago, we didn't know what made you know the appetite, appeal, or the taste, or the texture, or the smell, or the color of a piece of meat. We just didn't understand. So what we're doing here is to utilizing or understanding the world of plants. What plants out there can really recreate what animal based products are.

And, sometimes, we need to put together puzzles to really create what the animal-based product is. So what we're putting out there, it is a combination of ingredients. But it's a combination of ingredients that deliver not only the sensory experience, but it is packed with nutrients. I mean, our burger, you know, and the challengers you products as well, they are packed with nutrients, or they're packed with proteins, they're packed with fibers, or they're packed with things that, really, the human being needs. So it's not only about the sensory experience, it's about the delivery of nutrition as well. If you think about the industry itself, it's an industry that distribute nutrition throughout the world. That's basically the main purpose of the food industry.

But the food industry has been making this in a very inefficient way in terms of use of resources, water, energy, oil, land. It's become the common denominator to every major environmental ill to humankind. Deforestation, land use, water scarcity, ozone depletion. So what we're doing here is to replacing the animal. And we've just begun to understand how to replace the animal to deliver the same taste, texture, smell, and color, but using way more efficient resources. And protecting climate change, that is something that our generation is living firsthand.

- You have a lot of big name backers in the company here. Did you get to pitch Jeff Bezos directly? What does that process look like?

MATIAS MUCHNICK: I did not. I did not. So I pitched to Melinda Levinson. She's one of the partners at Bezos Expeditions. She did cross the idea, the pitch, the deck with Jeff. And the decision was made by Jeff. So I know that he knows about us. But we have not yet had the chance to cook or you have a direct conversation with Jeff.

- Well, I would be very interested to see him trying your products, or maybe, who knows, maybe Shake Shack eventually will have some of the NotCo products. I'm sure that's a goal for you guys. Really interesting stuff. Matias, thank you so much. Matias Muchnick, NotCo CEO and founder. Thanks for your time.