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February 7, 2022updated 08 Jul 2022 9:40am

Animal-free dairy firm The Urgent Company eyes M&A, new categories

“What we're trying to do is to have a sustainability impact on the food system" - Paul Kollesoff

By Simon Harvey

The Urgent Company, the consumer-facing subsidiary of US animal-free dairy firm Perfect Day, has eyes on expanding the business through M&A and organically.

Animal-free dairy involves making products from what are said to be bio-identical dairy proteins without the use of animals. Investment is flooding into the nascent area but, to date, few products have hit the market.

The Urgent Company (TUC) was set up in 2020 by former Glanbia and Aseptic Solutions executive Paul Kollesoff. He established the business alongside Ryan Pandya and Perumal Gandhi, the co-founders of Perfect Day, a business supplying animal-free dairy proteins to food manufacturers.

TUC’s existing focus is centred on three areas: indulgence with its Brave Robot alternative ice-cream brand – and with regular ice-cream maker Coolhaus following an acquisition in December – along with animal-free dairy and sports nutrition.

“What we’re trying to do is to have a sustainability impact on the food system,” Kollesoff said. “There are several ways to do that. You can go and create new products and then go and compete and take market share, or you can acquire and convert. And that’s the objective with Coolhaus – converting their traditional dairy products and consumer through to an animal-free dairy proposition.”

According to the Brave Robot website, current stockists include Harris Teeter, Safeway and Sprouts Farmers Market. The first collaboration between Coolhaus and Brave Robot – another animal-free ice cream – is due to launch with a “major” US retailer in May, he said.

Dairy alternatives account for 3% of the US ice-cream category, Kollesoff noted. According to research firm GlobalData, the US ice-cream category was valued at US$12.8bn in 2020 and is expected to increase at a compound annual growth rate of 3.1% to reach $15bn by 2025.

Kollesoff is also keen to expand into other dairy segments. “Dairy speaks for itself in the traditional dairy case, so go in a store and look at all the dairy products. I’d love to be penetrating all of those,” he explained.

In terms of potential M&A activity, Kollesoff added: “Strategically, we want to get into several categories. We can do that organically or inorganically. If the right opportunity comes, in the right category, then we’re open to it, and we’re actively pursuing several opportunities all the time.”

Away from ice cream, TUC launched Modern Kitchen last year as its animal-free dairy brand and rolled out a cream-cheese alternative domestically. Three months ago, the firm launched an animal-free dairy protein powder under another brand, California Performance Co., using Perfect Day’s non-animal, fermented whey protein.

Available in the US, the California Performance Co. protein powders have also recently been launched in Hong Kong and Singapore. “Several other things” are planned for those Asian markets this year, including the Coolhaus-Brave Robot ice cream, Kollesoff said.

Expansion into Europe is also on the cards once TUC gets regulatory approvals for the animal-free whey proteins from food standards authorities, a “hurdle that’s essentially a formality”, Kollesoff said, adding he hopes to get clearance toward the end of the year or early in 2023.

Demand in the US for TUC’s animal-free dairy products is likely to be supported by what Kollesoff describes as a “huge lactose intolerance problem”. He also pointed to environmental concerns.

“The fact our products are all lactose-free is a big buying reason. We know the way we make protein is 97% less greenhouse gas emissions, less energy and less water.”

Kollesoff added: “Brave Robot exceeded every expectation we had in the first year. So we hit the shelves (US) nationally in March of 2021. And by the summer, we were the fastest-growing ice cream in the category. I think the main reason for that is fundamentally the technology delivers a product to a consumer where it tastes like dairy, functions like dairy, feels like dairy. The negatives associated with typical alternatives are just not there.”

Perfect Day has secured $750m in funding since its creation in 2014. The firm’s most recent publicly-announced round of funding came in October, when it said it had attracted $350m in funds from backers including Walt Disney chairman Bob Iger.

Ryan Pandya and Perumal Gandhi, the co-founders of Perfect Day, were among the winners of the inaugural Just Food Excellence Awards. Pandya and Gandhi were the recipients of the Young Guns award. The full awards report can be downloaded for free by following this link.

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