NEW YORK — NotCo is looking to the United States to grow its plant-based empire.
The Chilean startup last year introduced NotMilk to American consumers. The dairy-free milk alternative features nontraditional ingredients like cabbage and pineapple juice, plus pea protein, chicory root fiber, coconut oil and sunflower oil. The formulation was created by NotCo’s artificial intelligence technology, which discovered the combination of cabbage and pineapple juice creates lactones, the aromatic compounds that give milk its unique taste.
NotMilk is closer to dairy milk than other alternatives, which often rely on a single food profile like oats or almonds, said Matias Muchnick, founder and chief executive officer.
“It’s about a new generation of plant-based products,” he said. “Our algorithm is bringing new combinations of ingredients that we never thought of to generate certain textures, smells, colors and aromas.”
Capturing an authentic flavor was key, with 30% of consumers who try plant-based milk reverting to dairy milk due to taste, he added. NotMilk also delivers from a functional perspective, offering the same foaming and emulsification properties as dairy milk.
“Sixty percent of plant-based milk consumers are not completely happy with the product they’re buying,” Mr. Muchnick said. “They’re not happy with the taste, how it reacts with coffee or how it foams. They’re trying to transition to plant-based but can’t because they’re not finding what they find in milk.”
Leading in Latin America
NotCo is just getting started in the United States, but it already has a strong record in Latin America, where it quickly rose to become one of the region’s fastest-growing food technology companies.
Mr. Muchnick created NotCo after selling his first startup, a vegan mayonnaise company called Eggless.
“I hired a company to produce the formulation for me,” he said. “It was three guys in lab coats doing trial and error, reading research papers from the 1980s on how to replace animal-based food. It was so obsolete, and this was a company that made food formulations for really big companies around the world.”
He enlisted the help of a computer science expert and a genetics expert to reimagine the process. Together, they developed a platform that uses artificial intelligence and machine learning algorithms to reverse engineer animal products and recreate them with plants.
“We needed to rethink R&D in order to create a better food industry,” Mr. Muchnick said. “Taking animals out of the equation was the top driver for me, because it is absolutely inefficient.”
The trio spent two years developing their first product, a plant-based mayonnaise called NotMayo. Launched in Chile in 2017, the lupin- and chickpea-based product was an overnight success.
“Chile is the third biggest mayo consumer in the world,” Mr. Muchnick said. “We became the No. 3 player in the category very quickly. The most successful thing for us was in-store tastings. People that tried the product bought it, and people that bought the product repurchased.”
The company expanded into Argentina and Brazil and added NotMilk, NotBurgers and NotIceCream to its lineup. Adoption of the products quickly gained momentum, with NotCo securing a 5% market share for both conventional and plant-based burgers and a 2% share of the entire dairy category in Chile.
Its mainstream status was further propelled by key foodservice partnerships. NotCo’s meat alternative (made with pea protein, spinach and cacao) is used in Papa John’s vegan pizza and Burger King’s Rebel Whopper in Chile.
“We’re turning 43 units per store per day with the Rebel Whopper,” Mr. Muchnick said. “The product has performed unbelievably well. That is how you move the needle. You need awareness and other partners to join you.”
Competing in the United States
Just three years after launching in Chile, NotCo set its sights on the United States.
“The algorithm was allowing us to become the company that produces faster and better than anyone else in the space,” Mr. Muchnick said. “The United States was always one of the top priorities for us, but we knew we needed to perform and learn before we came here. It’s the most competitive market out there.”
The company opened offices on both coasts and recruited a slate of industry veterans, including former Danone and Coca-Cola executives, to develop its go-to-market strategy. The “eureka” moment came in early 2020, when Mr. Muchnick got a call from Whole Foods Market.
“They tasted our milk and said, ‘There’s nothing like this in the United States,’” he said.
“They tasted our milk and said, ‘There’s nothing like this in the United States.’” — Matias Muchnick, NotCo
By November, the product was on shelves across the country. Within the first three weeks of sales, it was trending above the category average. The company recently expanded into Wegmans and is working with additional retailers to grow its distribution footprint.
“It’s not only the natural channel that wants this product,” Mr. Muchnick said. “It’s the mainstream, mass market companies as well.”
Further expansion in North America is on the horizon, with NotMilk set to launch in Canada and Mexico this year. With an innovation platform capable of executing across a wide range of animal-based foods, NotCo already is planning its next move in the United States.
“We’re on the verge of understanding what the next product in the United States is going to look like,” Mr. Muchnick said. “Is it chicken? Burgers? Mayo? Does it make sense to create a pipeline of dairy alternatives?”