00:00Kathleen Alexander is trying to solve some of the problems, especially when it comes
00:04to demand. She's the CEO of Saver. It's a California-based company that makes fats and
00:08oils without using crops or animals. She joins Tim and me here in our Bloomberg Interactive
00:13Broker Studio. Welcome, welcome. And it's not just because you bought some things to nibble on,
00:17but that always helps. Tell us how you are doing this.
00:22Yeah, absolutely. And so Saver is transforming how fats and oils are made. And you already
00:27kind of alluded to this. Fats and oils are actually some of the hardest working molecules
00:31in our lives. They drive our cellular metabolism. They make up the structure of the cells in our
00:37bodies. But then they also make some of the most delicious foods we get to eat. They make the
00:42skincare ingredients we use kind of truly amazing. But the planetary footprint of fats and oils is
00:49actually just enormous. We use kind of the better part of a continent's worth of habitable land to
00:54make fats and oils. And particularly for this macronutrient, we actually can, in many cases,
01:00kind of only grow them in some of the most unique and rich and biodiverse ecosystems on the planet.
01:06So that's the case of tropical oils. So what Saver is doing is really looking at, you know,
01:11is the traditional agricultural platform that we have really the only way that we have to make
01:17these incredibly functional ingredients. You're saying no. Yeah, it turns out not really. So fats
01:24and oils, again, are molecules. They're made up of carbon, hydrogen, and oxygen. And so we looked at
01:28that structure and we said, actually, we can put this together just directly. If we have a source of
01:34carbon, of hydrogen, and oxygen, we can directly synthesize those into the exact same molecules that
01:40we eat. We can get those same properties, that same deliciousness, but we can shrink the planetary
01:45footprint by, in many cases, on the order of like a thousand times. And so that's this kind of
01:50incredible opportunity, both from a supply chain perspective, but also planetary health and
01:55resilience. How have you been able to do it in a way that makes it so others can't copy you?
01:59Yeah. So the kind of diversity of fats and oils, if you think about what makes a palm oil different
02:06from a coconut oil or a dairy fat, is something called its fatty acid profile. And so what we have
02:13done at Saver actually has been able to really kind of commercialize a broad set of formulations
02:19from our platform to be able to access kind of the functionality of that whole landscape of fats and
02:25oils, but using our unique platform. So basically saying, okay, well, if I want to use a, I don't
02:30know, avocado oil type thing because of a high smoke point, you can get that versus an olive oil that
02:37would have a lower smoke point, but more taste. And you'd want to use that in a salad dressing.
02:41You can have that whole range base. Okay.
02:44Yeah. That whole, that whole range of properties, you design that in with the kind of functional
02:50form of the fats that you're making. So what's different?
02:53Yeah. In terms of the actual final fats that we're, that we make for, for our foods,
02:59it's really the same molecules that we're producing. So if you think about kind of our
03:04photosynthesis or agricultural platform that we have today, there's, you know, sources of carbon,
03:09hydrogen, energy, things like CO2, water, methane that go into that process. And at the far side,
03:15you get fats and oils that those inputs and outputs are actually just the same with our process.
03:20We just take out a lot of the machinery in the middle where we, you know, cleared a bunch of
03:23land and grew plants and processed them to turn them into fats and oils.
03:27So why wouldn't everybody do it this way?
03:29That's a fantastic question.
03:31No, I'm just trying to understand what's the cost though.
03:33And the cost differential.
03:35Yeah. So the reason that we're scaling this specific platform is actually that it can uniquely,
03:41among kind of all of the different routes that we've looked at for being able to make this kind
03:44of macronutrient, it can uniquely compete on cost with those very cheapest commodities,
03:49things like palm oil and soy at scale. Now, the scale that we produce palm oil and soy today,
03:55those are facilities that often operate at like 500,000 tons of operating capacity per year.
04:00So in order for us to get to that price point, we have to operate at that same capacity.
04:06So that, you know, part of bringing this new ingredient platform to market is really about
04:10getting to that scale. And so the technical risk is actually quite low. The kind of underlying
04:15organic synthesis platform really uses technologies that have been developed over the last hundred
04:20years, but it's a new ingredient platform. And so it really does take some steps to get to that
04:25biggest scale. You've raised totally to date, $65 million. You just closed a $32 million funding
04:31round. You're backed by AAK, the publicly traded global fats and oils company. You also got an
04:37earlier equity investment from United Airlines Ventures. How does, what's the relationship there?
04:42Is it sustainable aviation fuel?
04:44That's a fun question. Yeah. So United Airlines Ventures, a couple of years ago, created a fund called
04:49the Sustainable Flight Fund and specifically to invest in, to be able to commercial, to kind of
04:55improve the commercialization of sustainable aviation fuel. Sustainable aviation fuel is really
05:00about renewable molecules. So figuring out how to make fuels for airplanes in their case with the
05:07smallest possible carbon footprint. And it turns out that the type of platform that Saver has
05:13actually in the same way that kind of we have a current kind of petroleum industry where you have
05:20petroleum products that you use across all of the different industries. If you want to scale up a
05:24renewable products platform, your ability to do that and compete on cost looks better if you can scale
05:29that across many industries at once. So even though they created their fund specifically to support
05:35aviation fuel, they had developed this thesis that you actually want to be able to play across different
05:40products, different margins. And so that's kind of where we, how we got to know them and how we fit
05:44into that. What's the thing that you would like to change that would make it even easier for you?
05:51Ah, so one of the things that's really special about our platform is that because we were making our
05:56fats and oils, you know, totally from scratch, we have, like I said, about a thousand times less land
06:02that we need in order to make our fats and oils compared to traditional agricultural production.
06:08And so the first commercial facility that we're working to finance that will produce about 10,000 tons
06:14of fats and oils will actually map to about a hundred thousand acres of land that we did not need
06:19to
06:19cultivate. And so we are actually working on kind of developing a pipeline of conservation projects
06:26specifically for the land areas and geographies that our platform does not, you know, kind of allows us to
06:34protect. Okay. And so in terms of like what would make that easier, certainly if there were like
06:38better, you know, financing structures for supporting biodiversity and things like that,
06:42there's certainly carbon markets that are, you know, maturing or have been maturing in recent years,
06:46but those types of markets where, you know, we have ways of valorizing some of those externalities
06:52would be very powerful for, for being able to scale even faster.
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