A check-in conversation with Philipp Stangl, co-founder of Rebel Meat (now Rebel Kids), a company we featured earlier working on hybrid blended meat. The story isn’t over, but definitely didn’t develop as we discussed more than 3 years ago.
Let’s all talk much more about changed plans and pivots and companies not being overnight unicorn successes. The founders of companies, in general, have to be very optimistic and visionary people. They need to convince people to join their crazy ideas and people to partner with them and invest in their vision. But things don’t always go as planned; actually, usually they don’t go as planned. But we hardly talk about that. We as society mostly cover the beginning of a story where everything still seems possible or the end where exits or big successes happen.
LISTEN TO THE CONVERSATION ON:
BUILDING CONSUMER PACKAGE GOOD COMPANIES (CPG) IS SUPER DIFFICULT
Philipp discusses the transition from a tech startup to a CPG startup, highlighting the differences in business models and the need for a PNL that aligns with a CPG company.
”On the other hand, we also realized that blended meat is actually more a matter of product development than actual research. And so, this is what CPG companies do as well. And, yeah, we basically, of course, changed a lot the investment case, right? Because you suddenly need to have a PNL that is more according to a CPG company, and you cannot invest a lot of money into research, and at some point, it’s going to scale crazy, but you have to grow organically into making a profit. And that is something very different, just from a business case or investor.” Philipp Stangl
”I think these three components—moving to CPG but not having the traction that is required to raise as a CPG startup—and inflation, which was showing in our traction—because the high inflation meant that thus our sales were not going as planned because people were buying cheaper products again. And number three, the difficult fundraising environment. It just meant that it was really tough for us to raise on the financial markets.” Philipp Stangl
GETTING ON SUPERMARKET SHELVES WAS EASY AFTER COVID, BUT SELLING ENOUGH TO STAY THERE IS VERY DIFFICULT
The initial product was a high-quality premium product made from organic beef and king oyster mushrooms, which won several awards but was expensive.
”But due to the pandemic, which hit in early 2020 and which basically closed down a lot of food service, or at least closed down their doors for new products, because they had other problems, we had to pivot into retail, which actually worked well in the beginning, because they were quite open for innovation. They had really amazing years in retail during the pandemic. So, it worked. So, getting in is the easy bit; staying on the shelf is the hard of it. And so, yeah, we soon realized this product was a bit too expensive.” Philipp Stangl
WHY FOCUSING ON CLEAN AND HEALTHY KIDS’ FOOD IS SO IMPORTANT
Parents used Rebel Meat products to sneak vegetables into their children’s diets which led to the development of a children’s product line.
”Unfortunately, really, there tends to be a correlation. The more marketing there is, the worse the products. It’s not true for all of them, but it seems like really products marketed towards children, typically, you know, a lot of sugar, very little organic options, probably because, you know, the money just goes into marketing rather than in product quality.” Philipp Stangl
”Fortunately, we realized one thing, and that was a use case for the products that we hadn’t anticipated at all. And that was when parents told us that they use our products to feed their children, because that’s the only way they would eat vegetables. And that was really very interesting.” Philipp Stangl
”They’ve been working for a long time and against a lot of obstacles, but at the end of the day now, it seems to me, they’re doing quite well. And they show that healthy kid’s products can be done in the market. So, they’re definitely an inspiration.” Philipp Stangl
WHY REBEL MEAT DECIDED TO SEEK AN EXIT AFTER THEIR PIVOT TOWARDS KIDS
After many discussions with strategic partners, Philipp exited to a family-run business in Austria that shared and believed in the vision of Rebel Kids.
”We also started discussions with strategics, and that was basically, in the end, where the exit came from, from one of those discussions, basically about fundraising. And with a strategic from Austria, we had international discussions as well, but at the end of the day, I think the concept of blended meat as a CPG product was something quite new, also for those players that we talked to. And yeah, it was very interesting two years of fundraising in many different ways.” Philipp Stangl
”It was not super easy. It was not something that came from one day to another. But I think what really helped was that the company that bought Rebel Kids, they are a family-run business, and they really believe in the vision of Rebel Kids. They really like the products. There are a lot of parents that work in this company as well, and it’s just good to see that they actually like the vision of the product, and so we really think it’s in good hands. And we also realized how inefficient we were.” Philipp Stangl
OTHER POINTS DISCUSSED
Koen and Philipp also talked about:
- Why it is so important to really really know your customer
- Lessons learned
- The importance of transparency with investors
LINKS:
LINKED INTERVIEWS:
- Philipp Stangl on why blending regenerative meat with plant-based is key to get animal protein consumption down and regenerative production up
- Zach Ben – Breaking down centuries of oppression through indigenous baby food
- Jaclyn Schnau, the success and health of our society starts in the pregnant belly
- Tina Owens – Only 1% of nutrition data is tracked on food labels and that means lots of opportunities for companies
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.