Industry: Food & Beverage
Products: Okara flour and related foods
Founder and CEO Claire Schlemme is building a new supply chain from tofu byproducts.
Repurposed food byproducts are not a new concept. "Tater tots were a byproduct of making French fries," says Schlemme of Ore-Ida's 1953 potato innovation. "A product that had no value or low value now has value."
It's a big idea that's gaining momentum in alignment with broader pushes for efficiency and sustainability. "We are starting to see this move . . . to make this a standard part of the food system, making everything circular as opposed to linear," she says. "There are billions of tons thrown out every year that is clean food."
Prior to focusing on byproducts, Schlemme worked in renewable energy and on climate change issues. She started her first food manufacturer, Mother Juice, in Boston and opened three brick-and-mortar locations before moving on in 2014, and learned firsthand that the food industry had a similarly large environmental footprint. "In addition to energy, the food industry is a major player in sustainability and overlooked in terms of the impact it could have," she says.
The idea for Renewal Mill was born after she sold her stake in Mother Juice and moved to Connecticut. "It was in New Haven I was introduced through a connection at the business school at Yale to the owner of a tofu factory," says Schlemme. "The challenges he was facing were very similar to what I was facing in the juice business."
Schlemme took the concept west in 2016 and partnered with Hodo Foods and Oakland to commercialize it. "They're our first partner facility we're sourcing our okara from," she says.The big one: food waste. With juice and tofu alike, "You have a ton of this pulp that's left over," says Schlemme. The tofu byproduct -- soybean pulp -- can be dehydrated into okara flour. The process involved modifying off-the-shelf thermal dehydration machinery to suit the company's needs. "This absolutely works as a food," she says. "There's a fantastic opportunity at the intersection of sustainability of food."
After a year of R&D and a year of proving the concept, Renewal Mill is poised for expansion in 2019. "Looking forward, we see 2019 as the year of scaling," says Schlemme. "We've successfully built this bridge between food producers and their waste byproducts and consumers. We want to scale up both sides."
The business model is "co-location," with Renewal Mill providing its technology to tofu factories around the country to operate on their lines. "Essentially, it's a plug-and-play type of model," explains Schlemme. "We have ownership of the product coming off the line."
The financial relationship varies, as many companies are happy to give Renewal Mill the byproduct to reduced waste or save floor space. "We knew right away we needed to dehydrate these products," says Schlemme of the okara. "It spoils very easily and very quickly, and it's very heavy." By squeezing out the moisture, Renewal Mill stabilizes the okara and makes it lighter and more feasible to ship.
That plays into Renewal Mill's mission to keep its products affordable to the mass market. "We're very cognizant about keeping the process very efficient so we can keep the costs low," says Schlemme.
But it comes down to okara's value as a food. "The nutrition is more skewed towards fiber [than tofu], but there's still a lot of protein in there," says Schlemme, noting it's low in carbs, gluten-free, light in color, and neutral in flavor, making for an easy replacement for other flours. "It can be used in all kinds of products, from sweet to savory," and adds a "burst of nutrition” without altering the flavor.
Renewal Mill has launched a line of cookies made by a co-packer distributed in the Bay Area.. "It's important to have this product in the market for consumers to try it and taste it," says Schlemme, noting that the long-term strategy involves disrupting the supply chain. "We are an ingredients company," she says.
Renewal Mill might expand into pasta, pancake mixes, and other categories with a co-packer, while Schlemme remains focused on wholesale accounts. "Our first step is scaling our production of okara flour at Hodo," she says. "We're looking at expanding the ingredient production."
That involves cementing partnerships with other tofu facilities around the country. "We would decentralize it," says Schlemme of the plan to produce and ship okara flour with local flour mills in each partner's market. "We're talking to a few different options," she says, noting that Renewal Mill currently makes flour in-house in Oakland.
"For us, we see value in keeping this distributed model where we're coordinating the movement of product as opposed to the hub-and-spoke model," says Schlemme.
Challenges: In the food byproducts space, a new partner facility represents a sudden spike in ingredients, and then it's up to companies like Renewal Mill to find markets for it. "You're having to match up producers and consumers, as opposed to creating a product you can scale up over time as your sales grow," says Schlemme. "Trying to line up production and sales as much as possible is a real trick if you're playing in the byproducts space."
She adds, "One of the fun challenges is figuring out all the ways you can use the byproduct.
Opportunities: Using Renewal Mill's processes to repurpose byproducts in food facilities beyond tofu factories. Schlemme sees potential to use the same technology at almond milk producers. "The idea is to make it as universal as possible," she says.
"Obviously, we think this a fantastic opportunity, but it's fairly early days right now," notes Schlemme. "Byproducts offer so many benefits that are perfectly lined up for what consumers are looking for. It's exciting to see how different approaches are being used, all with the same goal . . . that there's an outlet for everything they're producing."
Needs: Tofu factories looking for a "solution for their byproducts," says Schlemme. "The big thing for us is finding partners."
She adds, "On the manufacturing side, [the need is] anyone who is looking for unique and novel ingredients."
The company also needs more employees. "We're going to be bringing on a few more," says Schlemme.