Technology and Pea Protein Are Key Ingredients in This Dairy Alternative

Nearly one-quarter of Americans surveyed by the International Food Information Council Foundation said they had increased their eating of plant protein. In this episode of Mastering Innovation on SiriusXM Channel 132, Business Radio Powered by The Wharton School, Adam Lowry, co-founder of Ripple Foods, talked about his company’s pea-based dairy alternative.

While people express interest in plant-based proteins — many for health and environmental reasons, Lowry said — nondairy drinks can fail consumers’ taste (and texture) test when compared to animal-based products. Lowry explained that Ripple Foods developed a technology to create pea-based Ripptein (a play on the company name and “protein”), which is the foundation of the company’s nondairy products. He said that owning the technology gives the company a competitive edge. He also discussed what it took to get Ripple into more than 15,000 stores, how the company continues to scale up and bring costs down, and what he learned from co-founding and running Method.

An excerpt of the interview is transcribed below. Listen to more episodes here.


Adam Lowry (co-founder of Ripple Foods)

Nicolaj Siggelkow: How did you think about convincing yourself, convincing investors, convincing others that, “Hey, we’ve got actually an advantage in our product versus existing products that are out there”?

Adam Lowry: That ended up being relatively straightforward, to be honest, because of the way the category was and because of the technology that we had developed. Very briefly, still even today, about 90% of the dairy alternatives sold in this category have a gram of protein or none per serving. A glass of milk has 8 grams of protein — obviously milk is the primary nutritional benefit of dairy.

We had eight times the protein or more of basically everything else in the market and we were matching dairy on nutritional content, actually better, because of the lack of saturated fat and cholesterol. And we had a huge taste advantage because of the technology. Removing those “plant-y” flavors meant that was the first plant-based milk that didn’t taste like the nut it came from or soy milk that tasted like soy.

At the end of the day, food is about good food and good food wins and we had a better food here. We had something that was nutritious and delicious and that was really the main selling point. It was also the reason why I was so excited about this idea, enough to put my next 10, 15 years into it, at least.

“We had a huge taste advantage because of the technology.” – Adam Lowry

Siggelkow: I would assume the cost side is also acceptable. Right? We can create a great product, but if it’s really very costly to produce, then that has its limits.

Lowry: Yes, the technology that we developed is still coming up a scale curve. The Ripptein that we make is an expensive material. And in the early stages of our business, we were definitely in an investment phase, for sure. We still are in the investment phase. Part of what we need to do to show our business success long-term is to make sure that we’re making this super-high-quality protein at a competitive cost. And, we’re well on our way. We just celebrated our third-year anniversary of being in the market. We still have plenty of things that we’re doing to scale up and bring the cost down, on the Ripptein.

Siggelkow: I can anticipate your answer to my next question, but I’ll still ask it. That was the creation of the competitive advantage. Now comes the sustainability part of it. Right? Now, you’ve shown the world, “Hey, actually, pea is a great ingredient.” And now, there’s a market out there for pea-based dairy. How do you prevent the next 20 startups going to venture capitalists and saying, “Well, you know, look, there’s a great opportunity here,” and they’re actually so timid, they are not wanting to expand very rapidly just, “Give me some money and I enter that market.”

Lowry: Yes. Well, we can’t prevent them.

Siggelkow: No, of course not.

Lowry: But, we can outcompete them. And that’s our plan. This is best demonstrated through the story of how [Ripple Co-founder] Neil [Renninger] and I reunited to start this business, Ripple Foods. Neil and I have known each other for a long time. We were at a conference about 10 years ago. We were talking about our respective businesses, Amyris and Method at the time. And I was telling Neil, “Man, I wish I had an owned technology platform that I could use to defend my competitive advantage.” And Neil’s response was, “Yeah, wow. I wish I had a brand, a real brand that I could stand behind, that could fortress my business from competitive attack.” There’s one of these grass-is-greener-on-the-other-side-of-the-field type of moments. We then clinked our glasses and said, “OK, well, you know, good luck.”

And that was exactly the reasons that we came together on this business, which was to build sustainable competitive advantage through an owned technology that only we can use that creates a better product, and a brand experience that really captures the lifestyle of people that are wanting to be more plant based. That brand promise is supported by the product experience the technology delivers. In short, it’s the brand and the technology that together work to maintain our sustainable competitive advantage.

“It’s the brand and the technology that together work to maintain our sustainable competitive advantage.” – Adam Lowry

Siggelkow: You’re already in 15,000 or more stores around the U.S. Tell us a little bit about how, this is obviously the hard part — well, not obvious, but this is part of the hard part of getting things into the stores, right? Because their dairy aisle is full and now, you’re saying, “Hey, you know, here’s a great product.” How were you able to get this started? And then, how did it over time develop to this?

Lowry: I think the pitch is that products in the dairy alternative category are really bad alternatives to dairy. They’re thin, they’re watery, they’re chalky, they don’t taste anything like dairy milk, and they lack the primary nutrition benefit, protein, of what they replace.

You’ve got this category that’s large and growing, but what it’s providing to consumers is completely mismatched with what they’re looking for. We’ve got a solution to that, to bring both protein and great rich creamy texture and taste and all of that. That doesn’t get the job done all by itself. I think you also need to demonstrate that you’re a company that can grow with the retailer, that can supply them, that you’ve got a good team that knows what they’re doing, that you’re well capitalized to be able to make the investments in the brand that are going to drive more consumers to the shelf over time. All of those things are pieces of that puzzle.

It certainly helps that I’ve had experience selling a different product, set of products, in Method to these same customers. And there are a lot of similarities in the category story as well. Both laundry detergents and milk are frequency-driving categories for retailers, meaning you run out of them and it drives a trip to the store. The dynamics of how a premium brand can add value, strategic value to retailers are quite similar between the milk category and the cleaning category.

About Our Guest

Adam Lowry co-founded Ripple Foods after years of experience creating businesses that benefit the environment and society. At Ripple, he leads a team of trailblazers who are accelerating the future of the plant-based lifestyle through products that transform the dairy-alternative market. Before founding Ripple, Lowry revolutionized the home, fabric, and personal care industries as co-founder and chief greenskeeper for Method Products. At Method, Lowry oversaw multiple businesses and brought sustainable innovation to Method across their product lines, design, sourcing, production, and marketing.

Lowry has been honored as one of Fortune’s “40 Under 40,” and received the Clinton Global Initiative’s Global Citizen Award in 2013. He serves on the boards of AeroFarms, an urban agriculture company currently building the world’s largest vertical farm, and the National Marine Sanctuary Foundation, which creates and preserves marine sanctuaries in the U.S. He holds a bachelor of science in chemical engineering from Stanford University. You can find more on Twitter at @RippleFoods.

Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.