21 January 2022 |

Keep Cool Deep Dive #0003: Akua


Wise words from the kelp father 

Courtney Boyd Myers (“CBM”), the CEO and founder of AKUA, is no stranger to consumer packaged goods (“CPG”). In fact, she grew up in a house that was inundated with them. When we sat down with her and asked her what her “a-ha” moment was that sparked AKUA, she said it all started with her upbringing: 

“My dad was the marketing lead behind iconic brand mascots like the Keebler Elves, Chester the Cheeto, and spent most of the 80s as the VP of Marketing at Pepsi. We grew up around these highly processed foods and sugary beverages. But then I started paying close attention to my diet when I was in high school (like many teenage girls!) and started learning all about healthy eating. During this time, I watched my own father’s health decline and I’d spend hours at my parent’s house donating or throwing away junk food, especially anything that had high fructose corn syrup. I’ve seen first hand what a poor diet can do to someone [and] what the food companies behind so many of these products do to our planet. I thought, ‘Why are our food systems so broken?’” 

Having identified the significant need for better solutions in food systems, a whole host of things clicked for CBM when she got introduced to kelp. And she has one of her childhood friends (now an independent Board Director of AKUA) to thank for her discovery: 

“My very good friend, Brendan Coffey, from growing up in Connecticut took me out on a boat near New Haven and taught me about kelp farming. I remember thinking ‘Oh wow. Growing and eating kelp has so many nutritional as well as environmental benefits.’”

Having grown up in New England, CBM is also attuned to economic benefits that sustainable aquaculture practices can unlock for local, coastal communities: 

“I’ve seen first hand how devastated the New England communities have been as a result of the fishing industry.” 

Rolling all three of the above factors into one, as CBM puts it, “It was a confluence of a lot of different things… I finally felt like ocean-farmed kelp is the thing that I can do full-time for the rest of my life.” 

Another important component of AKUA’s early journey was that CBM and her friend didn’t just visit any farm on that first exploratory trip into the sea .They visited one of Greenwave’s farms. Greenwave is a marquee player in the space; the non-profit pioneered and is now popularizing algae farming at scale. Bren Smith, who is co-executive director and co-founder of Greenwave, saw a spark  in CBM and her vision for AKUA and recognized the symbiotic relationship their organizations could build :
“Bren Smith looked at me as I was getting all excited about Kelp and he thought ‘Alright, if I’m going to be the guy who is getting this industry off the ground from a supply chain perspective, you’re going to be the woman who convinces everyone to eat it and creates a consumer market for it. And I was like ‘“KELP YEAH!”

This origin story cuts to the core of AKUA’s larger climate impact story. AKUA isn’t just a sustainable CPG company. By popularizing kelp (and in the future, other regenerative foods), great products like AKUA’s can stimulate more market demand. This will allow suppliers to scale, attract capital and should also provide runway for the development of more robust technical solutions in the algae space. For instance, the methodologies and technologies that will prove algae farming can remove carbon from the atmosphere still require more innovation.  

If products like AKUA’s ‘work’, the industry has a much better chance of scaling regenerative algae production as a verifiable method of carbon removal .

Fired up and ready to dive a whole lot deeper into the world of AKUA? Same here. This is where we’re headed. 

  • Building the business 
  • Kelp Burgers, at scale 
  • The climate impact 
  • What’s next? 

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Building the business 

AKUA has been in business for a few years already. After her introduction to kelp farming, CBM started building out the supply chain for kelp-based products by forming relationships with farmers and processors on the ground in New England: 

“We were always at that ground level meeting all the new players and mapping out the supply chain. It’s about trying to help the players that will help this whole ecosystem come to life. Farmers, processors, and us.”

Given how nascent the kelp farming industry is, AKUA also works to mitigate dependency risk for suppliers; they buy kelp from a variety of farmers, rather than sourcing all their kelp from one, which ensures kelp farmers don’t become overly reliant on one buyer and also diversifies AKUA’s portfolio of suppliers, minimizing risk for the business in the process. 

Provided with sufficient supply, AKUA spent the past few years nailing their recipes. Taste is priority number one for any great food products company. Of course, convincing traditional players in the industry to get excited about kelp wasn’t always easy. CBM recalls that trying to find the right copacker, short for contract packer (companies that package products for their clients) was no small feat: 

“When you’re trying to do something innovative within this antiquated industry, it is really hard. We got kicked out of four co-packers before we found one who would experiment with us enough to build a kelp burger line.”

Their first product, kelp jerky, which is sold both in stores and online, was more of a minimum-viable-product than a permanent cash cow. The recipe isn’t perfect, and AKUA is pulling it back from retail storefronts, moving it to online only. Kelp Burgers on the other hand, which AKUA is now focused on, helped unlocked a new phase of growth for AKUA after a challenging period back in 2020: 

“We really just couldn’t fundraise. It was 2020, we had a mediocre business, we had a mediocre product, no traction on a future product… We had a lot of money waiting to come in but not ready to bet on the jerky. With the burgers [investors decided] ‘Yes, we can back this product.’”

The allure of a delicious kelp-based  allowed AKUA to close not one, but two fundraising rounds in the past few months. First, AKUA raised north of $1M on Republic, a crowdfunding investing platform. CBM dove deep on the decision to fundraise on Republic for us:

“Republic kept reaching out to us, and we loved the team; they weren’t sales-y, I loved the UX, I could [visualize] our campaign on it…Public fundraising has the added benefit of setting your own terms, increased marketing exposure, and transparency.”

Not only was AKUA able to meet their initial fundraising goal, but they had the longest waitlist that Republic had ever seen. Further, the PR from doing the fundraising in public doubled their sales while the Republic campaign was live.  

Importantly, on the heels of the Republic round, AKUA had a ton of inbound interest from traditional investment outfits that wanted in. They raised a $300k SAFE note immediately after the Republic campaign, and now, a few months later, are announcing a $3M equity round, led by LA-based Vibrant Ventures. You heard it here first, folks . This fundraising period will be finalized with a second close in September for strategic investors still looking for an allocation.

Kelp Burgers, at scale 

Now, AKUA has plenty of runway to pour gas on the fire . CBM notes that transaction volume has continued to ramp up since the Republic campaign. This is also organic growth; AKUA hasn’t turned on massive amounts of marketing spend yet:

“We were doing $20k a month during the Republic campaign, now we’re doing $50-$60k…. I haven’t increased our ad spend. All I’ve been doing is hiring. We haven’t really hit the gas on spend to increase sales; we’ve been building the structure to be able to hit the gas.” 

As AKUA transitions into their next growth phase, they see the primary challenge continuing to be taste and product, especially maintaining quality at scale. CBM shared valuable insights with us here, particularly for anyone who may be planning to build their own food company: 

“The hardest thing about starting a food company is creating food at scale consistently, especially when using organic ingredients. Doing something in your kitchen is one thing, but doing it on giant machinery and putting out 100,000 a day and having it taste the same and look the same is nuts.” 

While the production side will continue to pose challenges, on the sales side, AKUA has secured critical help to scale demand meaningfully. Recently, they inked a partnership with Next in Natural, an agency that has helped blow up brands like Beyond Meat and Chobani. Make no mistake, this is a HUGE deal for AKUA . CBM had glowing things to say about the type of growth this partnership should help facilitate:

“[Next in Natural] has scaled some of the biggest brands from Stumptown to Hu in retail, an industry that in my opinion, is quite antiquated. It would take me the next 25 years of my life building the kind of Rolodex that Next in Natural brings to the table.  They are an amazing partner  running point on our retail sales, hiring merchandisers and brokers and sampling teams…”

With a 5-year partnership in place with Next in Natural, AKUA can continue to focus on perfecting the product, inking partners and supercharging marketing. One example of how they’re getting the word out? Making splashy  appearances at big events. For any Yale or Harvard alumni out there (looking at you, Dad), you’ll be able to try AKUA’s burgers at “The Game” this fall : 

“We’ve partnered with Yale University to be an official vendor at all their football games this fall serving up Kelp Burgers…we’ll be the only vegan food there!” 

This will be a big proving ground for AKUA, especially in light of the production challenge we highlighted earlier. Will they be able to produce and subsequently make that many burgers to taste all for a one-day event? We might have to make an appearance to find out .
Events like these paired with stellar content marketing could start to drive meaningful awareness around and demand for AKUA’s Kelp Burgers. On the content marketing front, CBM is cognizant that there’s plenty of room to grow: 

“We need to do a better job of that… we haven’t really touched thought leadership content…”

Hopefully this deep dive is step one in a journey to more great thought leadership! 

kelp burger in action

We tried the Kelp Burger. Can confirm — it’s delicious .

The Climate Impact

Zooming back out, the most interesting question for us at Keep Cool is always “How can this company help reverse climate change?” As we learned in our deep dive conversation with Nori, a carbon removal marketplace, there aren’t all that many truly ‘mature’ carbon removal methodologies. There’s a whole host of key boxes any methodology needs to check before it can be onboarded into marketplaces reliably . How deeply has the methodology been researched and studied? Can CO2 removed from the atmosphere be accurately accounted for? How and where is the CO2 sequestered, and for how long? Is this a permanent carbon removal, or could the carbon be released back into the atmosphere? 

Here’s how CBM positioned where the kelp industry is on the journey to verifiable carbon removal methodology: 

“Greenwave is starting to explore carbon offsetting with kelp farming. Most of the other farmers we work with are still focused on the increasing efficiency around the farming itself. However, recently we’ve seen big funding pour into studying ocean farming for carbon removal, so I have no doubt that groups like GreenWave or Oceans2050 will have key data for us to use soon.”

While the industry isn’t ready for carbon removals yet, CBM positioned how AKUA currently frames their climate impact as follows:
“There’s still question marks on complete carbon removal. We don’t say we’re taking CO2 out of the atmosphere, we say we’re removing it from the ocean, which has amazing benefits for ocean deacidification and local marine life.”

Removing CO2 (and nitrogen) from the ocean is no small feat. Increased levels of greenhouse gasses (“GHGs”) in the ocean trap heat in the same way that they do in the atmosphere and are already causing significant changes in the earth’s climate. By bringing kelp-based products to market, AKUA can scale carbon removals from the ocean, which is a great first step. 

Further, as we pointed out in our deep dive on algae based climate solutions, increasing demand for kelp and seaweed allows the market as a whole to scale up. Here’s what we had to say in that report from a few weeks ago: 

“As far as a tentative sequence of development is concerned, we see retail demand for algae products providing the necessary tailwinds for carbon removal, capture and storage technologies to mature.” 

Our hypothesis is grounded in the idea that consumer goods are easy for people to understand and appreciate. CBM shared a tidbit from their experience in the BlueSwell accelerator that they participated in that brought this home:

“We had all these amazing deep tech companies in our [accelerator] class… and the press only wanted to write about AKUA because they almost couldn’t easily explain the other companies and it was more fun for them to write about consumer products….”  

If people go and eat a delicious kelp burger and learn that it’s based on regenerative practices (that could even be carbon neutral or negative) it not only drives demand for kelp, it helps the whole supply chain. It drives education and excitement about solutions like algae tech. Attracting attention and capital investment to the space is critical to allow technology players in the space to mature and to allow companies like Nori to verify methodologies for carbon removals, which they can then onboard onto their marketplace. 

The ideal future state will be one in which the farmers with whom AKUA works are able to contribute carbon removals to marketplaces like Nori and in which AKUA can map purchases of their products directly to these carbon removals. This will make their products increasingly attractive to consumers whose interest is not just predicated on taste, but on buying sustainable, carbon-neutral or even carbon-negative products. 

All of this will also be contingent on understanding what happens to carbon in products when they’re consumed as food, a question which requires significantly more research as well. It will be a challenging journey for the algae-tech industry, but Kelp Burgers are a great step in the right direction .

What’s Next?

On the heels of a big wave of fundraising and an exciting partnership with Next in Natural, what are the key accelerations and milestones that parties interested and invested in AKUA’s success should look out for? For one, watch for additional products to come online: 

“The Kelp Burger is great for us because AKUA is trying to do so much more than just build a food company. We really want to create conversations around sustainable eating and being able to have those conversations while bringing people around a dinner table, a BBQ, or fire with the Kelp Burger is a lot of fun…Next up we’re launching a 12 oz ground Kelp Burger meat pack and next summer, look out for our Kelp Krab Cake!”

AKUA is excited to scale demand for any and all foods that are truly regenerative, sustainable, and that can help reverse climate change. CBM’s grand vision for the business includes broadening the range of inputs that AKUA works with in its products: 

“If other sustainable forms of growing seaweed or alternative proteins start to emerge, we’re there for it. We’re really excited about bringing whatever the most regenerative foods are to people in plant-based food form. We are open to experimenting with all sorts of food sources. We’re particularly excited right now by “duckweed” aka ‘water lentils’.”

Of course, given the opportunity at hand, there’s plenty of competitors in the space. There are big alternative meat players like Beyond Meat and Impossible. And there are a number of companies focused specifically on seaweed and kelp as well. CBM broke down the competitive landscape by honing in on three distinct categories of players with whom AKUA will contend: 

“The first is the products that I know are being made right now but haven’t launched. I know there are a number of plant based food companies that are going to start incorporating kelp into their products. [Second] are other kelp companies like Atlantic Sea Farms and 12 Tides… we’re in different product categories, we’re both fighting the same fight, and banging the same drum from a marketing perspective…”

These first two categories won’t necessarily cannibalize AKUA’s business. If the overall market for kelp-based products grows as competitors popularize new products, a rising tide can raise all boats. This is a common phenomenon in growing industries; a number of first movers can grow side by side if the total market size increases sufficiently. 

Meanwhile, the third group of competitors CBM identified are the biggest players in the alternative meat space: 

“[Beyond Meat and Impossible] are crushing plant-based burgers, but they’re very processed and contain a lot of ingredients that I don’t like such as methylcellulose, GMO-soy, and cultured dextrose. We think it’s important to point out to consumers that these products are actually not that healthy for you.” 

That said, AKUA appreciates what these companies have done for the industry. Without their path-paving, the market for products like Kelp Burgers would be considerably smaller. The opportunity now for AKUA is to capture their own market share, especially with customers who are focused on sustainability and wellness: 

“We’re going after people who want to eat more plant-based. They’re the ones trying to incorporate more plant based foods. They’re unhappy with what’s out there because it’s boring or it’s overly processed. They’re committed to health and trying sustainable foods… and the Kelp Burger is about to be their favorite plant-based patty.” 

If AKUA is successful (godspeed, team!), they’ll challenge other alternative meat players and the entire plant-based industry to match their ethos of focusing on sustainable supply chains and products that are truly good for the environment. 

Sound like a journey that you all are as excited about as we are? A great first step to get involved is to support AKUA and to try their burgers yourself! You can purchase packs of their burgers online here. If you’re so inclined, feel free to use code KEEPCOOL at checkout for 20% off . 

Further, CBM notes that the company plans to launch the Kelp Burgers into retail stores in NYC in September and in LA in October. And we get back into the swing of dining out, we’re stoked to try the Kelp Burgers in person at some of the nation’s top restaurants. Keep your eyes peeled too ! 

In closing, rather than try to match CBM vibrant energy ourselves, will finish with the same words that she closed our conversation with: 

“Our ship is just leaving the harbor. If you want to, hop on and find a seat!”