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Happy Tuesday and happy (almost) Earth Day. Senator Gaylord Nelson first established Earth Day in Spring 1970 as a way to receive the attention of Congress. It worked. 20 million Americans demonstrated across the country. As a result, Congress authorized the creation of a new federal agency, the U.S. Environmental Protection Agency (EPA), to tackle environmental issues.

What better way to celebrate Earth Day's 51st birthday than by reading about one of the many climate-friendly equity crowdfunding offerings currently available? If that's what you were thinking, you're in the right spot. When you think of seaweed in food, you probably think of sushi. Think again. Courtney Boyd Myers and the AKUA team are reimagining plant-based alternatives, and they're doing it with kelp.

All the details on the innovative company and its kelp-based products below.
Deep dive - AKUA
Healthy for you, healthy for the planet too
AKUA creates foods that can feed the planet sustainably by reversing climate change and restoring health to our world’s oceans. All of its products are made from ocean-farmed kelp.
  • Committed to creating nutritionally superior products with clean and locally sourced ingredients, AKUA has developed first-of-its-kind meat-alternative products free of all eight major allergens, binding agents, and chemicals you can’t pronounce.

Why kelp?
The Problem: The foods we make at scale are causing irreversible damage to our planet. While still salvageable, global climate change has worsened dramatically over the past three decades as the earth has warmed to unprecedented levels.
  • Due to carbon dioxide emission from soil cultivation, methane release from livestock, and nitrous oxide discharge from fertilizer and manure management, agriculture is responsible for 26% of global greenhouse gas emissions.
  • The global agricultural system occupies a disproportionate amount of the earth’s resources, accounting for 70% of its freshwater supply and half of its habitable land.
  • Outnumbering wild mammals by a factor of 15-to-1, the global agricultural production system has faced 24,000 species with the threat of extinction.
  • Increased meat consumption from developing countries paired with a substantially larger human population could lead to livestock farming growing by as much as 100% to adequately feed the population by 2050. Growth of this magnitude could prove devastating in accelerating what has been dubbed the sixth mass extinction (extinction of the human race).
In order to most effectively address this quickly worsening threat, scientists are calling for reduced water stress and restoration of lands back to forests and grasslands. To make this possible, we must engineer and adopt alternative, sustainable food sources.

The solution: Alternative meats and plant-based products are viewed as the most viable source to reduce the world’s agricultural footprint. AKUA claims ocean-farmed kelp to be the most sustainable source of food on the planet. It is a zero-input product, requiring no fresh water, fertilizer, or dry land on which to grow. Remarkably, kelp also soaks up 5x more carbon from the water than land-based plants do from the air.
  • AKUA sources its kelp from majority women-owned ocean farms in Maine. These farms also function as storm-surge protectors and shoreline ecosystems for 150+ species.
Are we replacing one broken industry with another? That is the question AKUA has asked itself. The most popular meat-alternative products on the market today contain ingredients like GMO soy, canola oil, culture dextrose, chloride, methylcellulose, and “natural flavors”. In other words, most plant-based options are actually pretty unhealthy.

Committed to creating products with superior nutrition, AKUA’s kelp-based alternatives are made with clean-label ingredients that are free of all eight major allergens, binding agents, and chemicals you can’t pronounce. Most other plant-based alternatives can’t say the same.
  • Kelp is packed with protein, vitamins, minerals, amino acids, omega-3 fats, and fiber, including zinc, magnesium, iron, potassium, copper, and calcium (10x more than milk). In other words, it’s full of stuff that’s great for your health, but hard to come by in other foods.
The rise of plant-based alternatives
Over the past decade, plant-based meats have grown vastly in popularity as consumers have increasingly sought more sustainable alternatives.
  • From 2013-2018, sustainability-marketed products were responsible for more than half of the growth in consumer-packed goods.
  • Over the past two years, grocery sales of plant-based foods that directly replace animal products have grown 29% to $5 billion. Comparatively, U.S. retail food sales grew just 4% over the same time period.
  • Growth is being driven by meat-eaters, vegetarians, and vegans alike, with 90% of people eating plant-based alternatives considering themselves as neither vegetarian nor vegan.
  • In 2020, 83% of U.S. consumers indicated that they were likely to change what they buy to align with their environmental standards.
Accounting for just 2% of retail packaged meat sales, plant-based products have only just begun to chip away at the total market available.

AKUA’s kelp kraze
AKUA has debuted four initial product lines since its launch in April of 2019: Kelp Jerky, Kelp Pasta, Kelp Spices, and most recently, Kelp Burgers. The company is focused on creating a full suite of clean-label, meat-alternative products – including Kelp nuggets, Kelp sausages, Kelp Crabcakes, Kelp Balls, and more.

Kelp Jerky: Renowned for his mushroom foraging skills, AKUA partnered with NYC chef, Will Horowitz, to create a plant-based jerky made from ocean-farmed kelp, shiitake mushrooms, pea protein, and other superfoods.
  • The jerky boasts 10g of protein, 10g of fiber, and 70% of your daily value for iron. Offering customers with an unmatched source of clean protein, AKUA claims its Kelp Jerky is the only high-protein, high-fiber, plant-based snack on the market that’s free from refined sugar, soy, and gluten.
  • Flavors include Hibachi Teriyaki, Spicy Chili & Lime, Rosemary & Maple Barbecue, and Sesame & Nori Sea Salt.
  • Named to Time’s 2019 list of Best Inventions, Fast Company’s 2020 list of World Changing Ideas, Women’s Health 2019 list of top health snacks, and more.
Kelp Pasta: As simple as it gets – ocean-farmed kelp cut into noodle shapes and dehydrated into tangles keeping it in its purest form.
  • The AKUA team currently dehydrates the noodles in a home dehydrator, making it impossible to advertise for further growth. Failing to keep up even with the current demand for the product, the AKUA team is in talks with a processor that will allow for them to increase production this spring.
Kelp Spices: The Kelp & Lemmon Pepper Seasoning currently offered is a put-on-everything style blend that AKUA claims even the most seaweed skeptical folks will love.

The Kelp Burger
AKUA launched its “beta burger” in March of 2020. Forced to reimagine how to test the product in a socially distanced world, the team abandoned tasting parties and drummed up excitement for the burger from consumers all over the country through an exciting social media campaign.
  • AKUA sold 2,000 burgers in its beta period and received repeat purchase rates close to 50% with $0 spent on marketing/ads.
  • In October, AKUA chose Honeybee Burger, a Los Angeles chain that famously helped launch the Beyond Burger and Impossible Burger, to be its first restaurant partner.
  • In addition to Honeybee Burger, the Kelp Burger is being sold in a number of other restaurants, including HULA’s in California, Central Provisions in Maine, Standard Beer and Food in North Carolina, Foothills Milling Company in Tennessee, and The Crystal in Florida.
After receiving outstanding feedback, AKUA’s CEO indicated that she expects the Kelp Burger to be the company’s hero product that will have mass appeal and cater to more than just vegan, health-conscious, or environmentally mindful customers.
  • A hero product is a brand-defining product that introduces a new customer to your business and what it’s all about. It’s the ultimate product that creates your loyal customers and superfans who truly believe in your product and your brand.
Distribution
There are currently two distributors in place to sell the burger – one on each coast. Original plans included launching the 12-packs online and in stores with Costco during Q1, as well as 4-packs with Erewhon, Kroger, and others. Because of last-minute recipe and packaging alterations, AKUA is now aiming to move into national retail towards Q3.
  • In pursuit of a firmer, grill-ready plant-based burger texture, AKUA’s food scientist established a new recipe just after Q1 ended. Beginning in May, AKUA will begin producing its improved upon Kelp Burger.
In order to scale the Kelp Burger quickly, AKUA will work with its distribution partner who currently sells over $800 million in beef, chicken, and seafood into 4,000+ doors on the East Coast. AKUA will be their first vegan option.
  • Working to lower delivery costs, AKUA is preparing to partner with a new third-party logistics provider that will be able to support two-day ground shipping vs. overnight.
  • AKUA is targeting 1,500 doors across the country where its burger can be purchased.
Business model and financial highlights
AKUA has sold its meat alternatives online, direct-to-retail, and in grocery stores nationwide. Across all product lines, the company is reportedly operating at an average margin of 40%. As it broadly benefits from economies of scale, the team expects a gradual margin improvement as a result of continued growth ahead.
  • AKUA currently achieves approximately 70% of its sales through its direct-to-consumer distribution, which has grown between 20% and 110% month-over-month (MoM) since early 2020. Its current customer return rate is 23% and its average order value (AOV) is $59.84.
  • With the official launch of the Kelp Burger, AKUA expects its repeat customer rate to increase significantly.  
In January, sales of the Kelp Burger surpassed sales of all of AKUA’s other products. Considering the company has not yet officially launched the Kelp Burger and customers must reach out directly to the company in order to obtain the link required to purchase the product, AKUA is extremely pleased with these results.
  • Achieving over $3,000 in sales in one day, AKUA hit its coveted “million dollar run rate” goal at the beginning of Q2. Even without the official launch of the Kelp Burger, sales have climbed from $31,000 in January to $46,000 in March.
AKUA is reportedly on pace to reach profitability at a $1 million run rate (annual revenue). More immediately focused on achieving extensive growth through widespread distribution of its products and increased customer awareness, the AKUA team has suggested they expect to reach profitability closer to $5-$10 million in annual revenue.
  • AKUA is currently “conservatively” targeting $9 million in total revenue for 2023, and $14 million for 2025.
The company plans to launch at least one new plant-based, frozen product every 18 months, building a global community of customers.

Becoming beyond
Few are unaware of the colossal rise of the Beyond and Impossible burgers over the last five years. Whether you enjoy the taste of the meat alternatives or not, there is no denying the unbelievable growth achieved by the two industry leaders. So how does AKUA stack up against the two?
  • Courtney Boyd Myers, CEO – “I think AKUA’s Kelp Burger is going to be a similar story to how brands like Ben & Jerry’s and Halo Top took on Haagen-Dazs. Ben & Jerry’s won with authenticity, deliciousness, and good vibes. Halo Top won with superior nutritional info. AKUA is a much more fun-loving eco-conscious, young brand vs. Impossible & Beyond – which to me feel sterile.”
While AKUA’s branding and promotional strategy will incline its customers to try its new alternative-meat burger, the taste and nutritional information will ultimately determine whether or not AKUA can generate repeat purchases. The Kelp Burger is notably healthier than Beyond & Impossible Burgers, but how does it taste?
  • “The positive feedback for the Kelp Burger just keeps rolling in during our pre-launch trials. People are astonished and addicted. Our customers say ‘it’s the best vegan burger’ they’ve ever had, and we’re receiving customer ratings of 9+ on average.” – CBM
  • “Just finished up my first order of kelp burgers after getting home from vacation and decided to do the 10k level investment. These burgers continue to be delicious”.
  • “They are absolutely the best non-meat patty I have had hands down. Nothing has come close!”
  • “They were delicious! My only complaint is that the texture isn’t as ‘meat like’ as Beyond Meat or Impossible, but I will gladly compromise on texture for a healthier option.”
  • “THEY’RE SO STINKING GOOD”.
  • “Blew my mind.”
  • “The burgers are very, very good. You’ve got a hit on your hands if you get it out there wide enough.”
  • “Just had the veggie burgers with my kids and coming from a 45-year-old vegetarian they are top-notch. So good. Even my kids liked them and they don’t touch veggie burgers usually.”
AKUA has created the product, told the story, and established the distribution channels. The widespread customer response upon rolling out the Kelp Burger, however, is yet to be determined.

Amazon’s not so amazing reviews
Upon reviewing AKUA’s Kelp Jerky Reviews on Amazon, it’s clear to see that not everyone shares the same love for kelp.
  • 28% of customers rated the jerky with a 1-star review while 33% reviewed it with a 5-star review.
  • “Admittedly, our kelp jerky is a polarizing product. They’re soft & earthy and boast a nutritional profile that appeals to a very health-conscious demographic. Kelp Jerky is a niche health foods product compared to the much more mainstream, loved taste profile of our Kelp Burger.” – CBM
In efforts of catering to a wider audience, AKUA used its customer feedback to “reformulate” its Kelp Jerky and is currently in the process of relaunching the new product on Amazon with a new page.

The team
Courtney Boyd Myers (CBM) – Co-founder, CEO, & CMO: CBM is an entrepreneur, environmentalist, and writer.
  • Prior to launching AKUA, she helped Build Summit Community, a global network of founders, creatives, and innovators. In addition to building AKUA and her continued involvement at Summit, CBM is also an adviser to Greenwave, a non-profit focused on regenerative farming techniques for aquaculture.
  • Recognized as one of Fast Company’s Most Creative People in Business.
Matthew Lebo – Co-founder, COO, & CFO: Matt focuses on R&D, production, and finance.
  • Prior to co-founding AKUA, Matt worked in various roles including investor relations, equity research, and management consulting. In his time as a consultant, he worked with several startup food companies, helping across various functions in production, operations, and finance.
Suzan Rockefeller (yes, that Rockefeller) – Sustainability Adviser: Rockefeller is an award-winning documentary filmmaker, artist, and conservationist.
  • Her latest endeavor, Musings, is a digital magazine that curates ideas and innovations that pave the way for a more sustainable future. As the founder and editor-in-chief, she offers readers access to vetted products and brands that are pioneers in health, environmental, and social consciousness.
  • Rockefeller sits on the board of Oceana, the largest international advocacy organization focused solely on ocean conservation.
Use of funds & future fundraising initiatives
Raising up to $1.07 million, AKUA is offering future shares of equity through a Crowd SAFE with a $7 million valuation cap and a 20% discount. AKUA is raising growth capital to fund the national roll-out of its Kelp Burger and support key operations and logistics initiatives to bolster the company’s omnichannel growth.
  • Operations support (25%) – Support the cold chain delivery process
  • Branded packaging (25%) – Environmentally friendly packaging for Kelp Burgers
  • Initial ingredient costs (18%) – Source large scale purchase of product in order to improve overall cost
  • Marketing (26%) – Launch online marketing campaign
  • Intermediary fees (6%) – Fees paid to Republic
To further support growth, increase its environmental impact, and help with future fundraising efforts, AKUA is also a member of the Sustainable Ocean Alliance Accelerator and the SeaAhead’s BlueSwell accelerator in partnership with the New England Aquarium.

Looking ahead, CBM indicated that AKUA has runway “well beyond 2021 – likely till early 2022 to continue growing as we are now (20% MoM)”. That said, AKUA intends to raise a priced round of $1.5-$2 million in 2021 to further accelerate growth.
  • A priced round simply means that AKUA will receive capital based on the valuation determined by the investors. At the discretion of the AKUA team, this type of event can trigger the conversion to equity for the investors who had previously invested through a SAFE.
Fundraising history and capital structure
Prior to its Reg CF offering, AKUA raised $71,141 in its 2018 Kickstarter offering. The funds were raised to launch the company’s jerky products
  • Additionally, AKUA has raised $750,000 through prominent founders and investors. VC funds, Able and M13, have both participated in AKUA’s previous fundraising rounds.
  • M13 has notably backed many of the most prominent startups seen over the last decade, including Pinterest, Lyft, Ring, Bird, SpaceX, Snapchat, and more.
Final thoughts
AKUA has created an innovative solution addressing one of the most significant challenges currently facing the human race. Plant-based alternatives are fast becoming necessary to feed a growing population. AKUA has perhaps created the healthiest and most sustainable option currently available.

Brands like Beyond Meat and Impossible Foods have made tremendous strides in educating the public and facilitating the widespread adoption of plant-based alternatives. Still, AKUA will be tasked with further educating consumers and establishing its products in a market increasingly fraught with established competitors.
  • AKUA’s kelp-based products have shown particularly strong interest from women, with 60% of its purchases being attributable to women. Women importantly account for 93% of household purchases and have been historically been found to be earlier adopters to new products than men.
Want me to take a deep dive look into a particular offering, ask any questions, or just reach out and introduce yourself? Shoot me an email at drew@thecrwd.com. Otherwise, I'll see you next week.
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