Climate Smart Foods

Conservationist smallholder farmers are protectors of clean land and water, as well as stewards of native crops varieties that would otherwise disappear. However, they often live in staggering poverty.

Climate Smart Foods develops innovative plant-based food and beverage products using ancient crops sourced at ethical prices from conservationist farmers. By doing so, we support rural Andean communities with additional income. This also encourages biodiverse traditional farming practices for thriving local ecosystems and reduces the environmental footprints of consumers.

Throughout the Andes and elsewhere, biodiverse traditional foods are in decline as demand for meat and monoculture crops increases. Farmers transition to low-priced, genetically uniform, and less nutritious crops to earn a meagre income. By providing markets for ancestral foods, we enable farmers to earn a better livelihood by planting the climate smart crops of their ancestors, all while sharing health and environmental benefits with the world.

Smallholder farmers who conserve crop diversity live with high rates of poverty. This threatens their way of life and the survival of irreplaceable climate smart foods.

 Peru is a global biodiversity hotspot and home to thousands of native crop varieties. During millennia of seed selection, Andean crops have adapted to extreme conditions from sea level to 4,000 meters of elevation. With tiny environmental footprints and rich in plant protein, they are the perfect climate friendly foods. However, since colonial times incredible foods such as quinoa and tarwi have declined as Peruvians no longer want to eat them. For quinoa, international trade reversed this trend in a few regions of the country. However, more work is needed to conserve native varieties, bring back other ancient crops (like tarwi), and ensure fair prices for more farmers.

The rural Andes has a nearly 50% poverty rate, the highest in Peru where 6.6 million people live in poverty. Potatoes and colonial crops such as barley are widespread, but offer miserably low prices. (In 2018, farmer prices for potatoes dropped under $0.06 per kg) Of 700 million people in extreme poverty worldwide, most live in rural areas and earn a meagre income from smallholder agriculture.

CSF creates planet friendly plant-based food and drinks using ancient crops sourced directly from smallholder farmers in the Andes. By developing healthy, great-tasting foods that support mountain ecosystems, we are building a vibrant plant-based future.

We are launching plant-based milks in the UK made with quinoa and tarwi. Tarwi is an underappreciated superfood which contains 50% protein compared to just 35% in soy. It is also a powerful nitrogen fixer that restores degraded soils and repels pests without synthetic pesticides. Quinoa and tarwi are part of the same traditional cropping cycle, so our "MilQ" is kind of like a healthy ecosystem in a bottle.

We co-create create delicious recipes with our users. Then we work with labs and food scientists to develop a unique and scalable production process. We are currently focused on bringing MilQ to the world, but Andean biodiversity provides endless possibilities for future innovation. As pioneers of tarwi trade, we hope to develop tarwi protein isolate and tarwi cheese to become a leader in climate friendly foods.

We aim to improve the lives of Andean smallholder farmers and international consumers.

Alex has spent over 6 years working in the Andes to help farmers and artisans improve their incomes by creating access to international markets. During this time, he learned about the need for fair prices among remote rural producers who rely on middlemen. Having launched and sold MilQ in Peru, he has built trust-based relationships with smallholder quinoa suppliers since 2016.

Through ongoing collaboration with Bioversity International, we have learned about the specific needs of conservationist Andean farmers. Bioversity is a world leader in agrobiodiversity conservation that has identified endangered native quinoa varieties (some now used by CSF) and links us with conservationist farmers.  

Our company addresses farmers' needs in two ways:

1. We purchase native crops (planted with locally selected seeds) from conservationist farmers (who plant multiple native crop varieties). We pay fair prices negotiated with farmer associations each year.

2. We plan to reinvest 10% of our profits from UK sales into initiatives that support Andean farmers. A portion of donations will fund projects that are democratically decided by the producers and the remainder will fund agrobiodiversity conservation (i.e. paying farmers for cultivating endangered crops).

CSF connects innovative product development with some of the world's most climate smart foods. By creating new applications for protein-rich ancient crops, we are enhancing the plant-based foods movement and creating a more sustainable food system that embraces diverse foods.

Through quinoa trade, Andean farmers have demonstrated the potential to scalably meet global demand for superfoods. (Peru supplies half the world's quinoa supply, mostly from smallholders). The Solve community would provide expertise to help achieve our growth goals and access the US market, thus scaling our impact. Partnerships could create access to tech solutions for Andean farmers.

As the plant-based foods market grows and consumers become more aware of their environmental impact, innovative foods are needed. CSF designs foods that support healthy ecosystems, building on local knowledge from Peru and connecting it with global expertise in food science. By connecting sustainably produced ancient grains with markets in North America and Europe, we create demand to ensure their continued cultivation.

Our innovation has three key dimensions:

1. Ecosystem approach utilizes multiple foods from the same traditional crop rotation cycles in creating our products. By paying fair prices for multiple crops in the same cropping system, we incentivize farmers to practice regenerative agriculture.  

2. R&D process bridges the gap between food tech and iterative co-creation of delicious formulations with our early adopters.

3. Brand values and promise translate our impact into functional and emotional draws in order to build customer loyalty. 

Our competitors are both dairy milk and other plant-based dairy alternatives, including almond, soy, and oat milks. Sales of dairy and soya milk have been stagnating or decreasing around the world due in part to the consumers’ environmental concerns. Almond and oat beverages, while more environmentally friendly, have much lower nutritional value, especially in terms of protein content. Our product delivers high nutritional value and is committed to positive environmental impact. This makes our solution unique in the $20 billion global plant-based milk market.

In the future, we are planning to use the same product development philosophy to disrupt other categories, such protein isolates, cheese, and yogurt.

Our company is currently developing the first plant-based milk made with native quinoa and tarwi that is shelf stable and can be manufactured at scale. This requires a lengthy R&D process and is different from the small-batch version of the product launched in Peru. In 2019, co-founder Alexander Wankel won the Just Imagine If competition and was awarded a £75,000 research grant to develop a production process that can be executed by UK contract manufacturers while achieving optimal flavor and functionality. This project is ongoing at the University of Reading's Food and Nutrition Science Department. Our unique production process will use industrial machinery to produce an all natural beverage with the desired particle size, stability, texture, flavor profile, color, and protein content.

As much as possible, we are integrating this process with our iterative sample making to craft recipes with the sensory and emotional benefits that our customers crave, including by testing with baristas at independent coffee shops to achieve optimal foaming. We believe that this experience with product development will allow us to develop great-tasting future products. Through co-creation with our early adopters, we hope to create better plant-based protein isolates, yogurts and cheeses. This method differentiates our food and beverage R&D processes from others, which are purely lab-based.

Alexander Wankel produced and sold quinoa and tarwi beverages in organic supermarkets in Peru, thus generating a proof of concept that these beverages can be manufactured on a small scale and can be commercially successful. Climate Smart Foods is now developing a process to scale up production of the beverages for entry into major UK retailers. Our beverage will be manufactured using processes that are available at existing contract manufacturing facilities in the UK, as well as laboratory and research facilities. The components of our production process include customized milling, homogenization, UHT, aseptic filling, enzyme treatment and others. These methods have been studied and recognized as safe, but are uniquely modified for our product specifications. Our production process will be protected as a trade secret.

Our theory of change includes three primary areas of impact, each with measurable outcomes:

1.    Revitalise Rural Communities: 

• Income generation through fair price, increased yields, and price vs. alternative crops.
• Donations to projects supporting farmer communities, with outcomes assigned on a project-by-project basis.

2.    Support Healthy Agro-Ecosystems

• Number of identifiable varieties and number of acres of native crops planted.
• Soil quality improvements (nitrogen and phosphorous content)   

3.    Reduce Environmental Footprints

• Carbon and Water footprint of MilQ compared to cow's milk or other plant milks

By providing fair trade prices and reinvesting 1% of revenues in projects to support farmers, we support rural communities. Quinoa and Tarwi have not been extensively planted in vast regions of the Andes since pre-colonial times. Crops that were valuable in colonial times such as potatoes are widespread but offer miserably low prices to farmers. By encouraging farmers to substitute existing crops for higher-priced ancient crops, we generate additional income benefits.

Andean quinoa contains huge genetic diversity, with scores of local varieties and over 6,000 seed accessions in Peruvian gene banks. (FAO 2013) This represents a valuable genetic resource that can help crops adapt to new diseases and ecological conditions brought on by climate change. By purchasing native quinoa varieties for use as ingredients and donating to programs that pay farmers to conserve endangered native crops, we are conserving irreplaceable diversity for future generations.

Tarwi plays an important role in soil regeneration and pest control, fixing 160 - 500 kg of nitrogen per hectare planted. It also contains natural alkaloids which repel pests, reducing the need for synthetic pesticides which damage soils. While soil degradation releases carbon into the atmosphere, soil regeneration sequesters carbon- thus making tarwi an especially climate smart food.

In addition, Andean crops have an especially small environmental footprint. Quinoa requires just 200 mm of rainwater per year, or 30x less water compared to the same amount of almonds. Once our full supply chain is established, we can compare the environmental footprint of MilQ to cow's milk and other plant-based milks using the methodology developed by Oxford's Joseph Poore.

To date, 46 farming households have supplied quinoa for MilQ production in the UK and Peru, representing about 180 individuals. All quinoa was purchased at fair trade prices. We predict that by the close of our first year of sales in the UK, we will increase the number of beneficiaries in the rural Andes to over 250 and by year 5 we will reach 40,000 beneficiaries. The number of Andean farmers that we can reach will be determined by our sales volume.

We believe that our customers will also benefit meaningfully from the health properties of Andean foods and by reducing their environmental footprints. At 3 organic retailers and 1 farmers market in Lima, we had about 500 regular customers. During our first year of sales in the UK, we hope to enter 160 stores and reach over 10,000 customers. By Y5, we hope to sell in over 7,000 retailers in the US and UK and reach close to 1,000,000 customers.

We plan to measure our impact according to the metrics described in our impact model. By Y5 we hope to generate over $4,000,000 in income for Andean farmers and donate over $300,000 to initiatives that support conservationist farmers and their communities. By donations and direct purchasing, we hope to conserve at least 5 hectares each of 30 native crop varieties. In Y5, we expect that additional tarwi cultivation caused by demand for our products will fix 273,000 kg of nitrogen in Andean soils. Our objective is to demonstrate a smaller carbon and water footprint than soy milk, almond milk, or oat milk, thus reducing the environmental footprint of over 1 million consumers by Y5.

As part of a broader movement to support regenerative agriculture and crop diversity, we also believe our enterprise will have transformational global impact that is not directly measured by our impact model. Large companies such as General Mills have established commitments to implement regenerative agriculture. By pioneering a business model that supports closed-loop regenerative farming, we believe we will influence other companies to adopt similar practices as part of a broader movement. As one of the only companies actively conserving endangered native crops, we will preserve genetic resources that can help present and future generations adapt to climate change.

As with many companies, the COVID-19 outbreak has created delays in our plans for execution, especially R&D, market testing, and fund raising. The lab that is developing our industrial production process is temporarily closed. Our plans for in-person market testing activities are on hold, and investors have become more risk-averse and hesitant to invest in early-stage startups in the current economic climate.

Apart from the pandemic, there are additional challenges in bringing tarwi to European markets. As the first company to commercialise tarwi on a substantial scale outside South America we must obtain EU authorisation to sell tarwi in Europe. This process takes approximately 1.5 years.

We might also face challenges identifying and contracting co-manufacturers that can produce our beverage in the UK. As the startup producing first quinoa and tarwi beverage in the market, we will have to find a co-manufacturing partner who is willing to take a risk and collaborate with our business. We also must build a supply chain from Andean farms to UK factories while ensuring an uninterrupted supply of ingredients.

To ensure strong sales and competitive growth, we must create positive brand awareness and customer loyalty. In order to leverage our brand to become a leader in the plant-based foods market for years to come, we must also perform R&D for future products to maintain an innovation pipeline.

To adjust to the challenges presented by COVID-19, we have delayed R&D and market testing activities but will resume once partial reopening continues in July. We believe that the plant-based foods space will continue to grow in spite of  challenges created by the pandemic. We also believe that pilot sales data generated during our early market testing will demonstrate that our company is an attractive investment opportunity. 

Some might assume that smallholder agriculture is not scalable or that Peru lacks capacity to produce more quinoa. However, Peru is the world's #1 quinoa exporter and produced nearly 80,000 tons of quinoa in 2017, mostly from smallholder farmers located in just 3 of Peru's 25 regions. Although tarwi is mostly unknown in Peru, in 2017 Peruvian farmers produced nearly 14,000 tons of Tarwi, primarily for the Ecuadorian market.

We are currently working to prepare the notification for Tarwi Authorization and have hired a European food law consulting firm to provide a feasibility study and gap analysis. University of Reading is assisting us with research to prepare the novel foods notification. We are also working with a supply chain consultant to help find the right manufacturing partners in the UK.

We are currently strategising to create brand values, voice, promise and emotional draws in order to lay the foundation of a brand that will communicate our impact and create engagement. We are also seeking grant funding from the UK government and other opportunities that can support our future R&D efforts.

Two full-time staff work on our team, Alexander Wankel and Cristian Oancea. Additionally, our company is supported by a team of six advisers who provide assistance on various business topics on an ad-hoc basis.

Our team has a diverse set of expertise in the food and FMCG industries, rigorous training from one of the top business schools in the world, a strong relationship with our suppliers, and a high-calibre team of advisers who can guide us.

Alexander has experience in building social enterprises and ethical supply chains. His expertise will help our company navigate the operational challenges that startups face and enable us to balance our purpose with a sustainable level of profits. Additionally, Alex’s relationships with Andean smallholder farmers, our main suppliers, provide us with a competitive advantage in the price, quality, and diversity of our ingredients.

Cristian has 5 years of experience in the FMCG and food sectors. He held finance and strategy roles at WhiteWave Foods and Danone. Cristian will enable CSF to avoid the pitfalls that limit the growth of new food companies. We plan to employ sound financial management practices from the beginning and build strong relationships with retailers that will enable us to scale our business.

Finally, our team of advisers include successful food entrepreneurs, experienced FMCG leaders, and thought-leaders in social entrepreneurship. With our advisors’ help, we are confident that we can build a sustainable business that can prove that food companies can be significant contributors to regenerative agriculture, conscious procurement practices, and consumer health.

Climate Smart Foods has an ongoing partnership with Bioversity International, which has an office in Peru. Bioversity has advised founder Alex Wankel since 2016 as he launched his plant-based beverage company in Peru and is open to collaboration on future projects for agrobiodiversity conservation. We are also partners of the Skoll Centre for Social Entrepreneurship based in Oxford, which has advised on our theory of change and social impact strategy. Skoll Centre Director Peter Drobac is an adviser and investor in Climate Smart Foods. We currently have a working relationship with the University of Reading's Food and Nutrition Science department for our process development needs. We also are supported by the Just Imagine If competition network as winner of the competition in 2019. Paul Lindley, founder of the successful food brand Ella's Kitchen, is the founder of the competition and is now a close advisor.

We produce and sell high quality foods and beverages made with sustainably sourced ingredients. We source our ingredients from conservatist smallholder farmers in the Andes. Our target customers are grocery stores and foodservice companies, such as restaurants, cafes, and health clubs. We sell our products at a premium price that will generate a gross margin of 30%-40%. Our premium price and direct connection to farmers will allow us to build a financially sustainable business, while continuing to pay above-market prices to our farmers and donate 10% of our profits for initiatives helping Andean communities.

In Peru, our product has been sold in farmer’s markets and in 15 premium grocery stores. In the UK, we are still in the product development stage and are targeting a commercial launch by the end of 2020.

For the UK and European markets, we will continue sourcing most of our ingredients from smallholder farmers in Peru, ensuring that our impact model continues benefiting Andean communities and ecosystems. We will ship our ingredients to the UK, where we will use co-manufacturers with high quality and labor standards to produce our beverage. We are planning to start selling out product in premium supermarkets and gradually expand to mainstream stores, as we gain awareness and loyalty with consumers.

Our company could greatly benefit from joining Sove’s community and receiving mentorship from the Solve and MIT networks.

Our ability to improve our solution and remain competitive depends on continuous innovation. This means developing new products, finding more environmentally friendly packaging options, and finding ways to make our supply chain more circular. A collaboration with the Sove and MIT communities would support our ability to innovate.

Additionally, a crucial step in scaling our solution is launching in the US. The US has a much larger market than Europe for plant-based milks. If our solution is selected, we hope to work with the Solve network to plan our launch in the US.

We seek mentorship in finding the correct technologies to develop products from Andean grains, including performance milling and protein isolation from novel sources. We are also seeking advisors that can help guide our expansion strategy and help us through some implementation challenges – especially in the realm of supply chain. Finally, we would greatly appreciate regulatory advice on expanding to the US. 

We would greatly benefit from working with MIT Food & Agriculture Club and developing meaningful connections with MIT students and faculty working on solutions for sustainable agriculture. Connecting with Professor Chintan Vaishnav from the Sloan School of Management and discussing his research into organic smallholder farming and soil fertility measurement would also be very useful. Finally, we would appreciate any help from the Solver teams in connecting with organizations and non-profits that are working on sustainable supply chains, such as the Fairtrade Foundation and Regeneration International.