As the coronavirus pandemic disrupted life worldwide, the Latin American plant-based innovator NotCo recognized the need to decelerate, according to CEO and co-founder Matías Muchnick. However, given NotCo’s impressive ability to swiftly capture significant market shares in the burger, milk, ice cream, and mayonnaise sectors across Chile, Argentina, and Brazil, “slowing down” is a relative concept. Currently, Muchnick noted that NotCo is selling six times more product than it was at the same time in 2019. Following a recent investment round of $85 million — which more than doubles the funding the company has raised since its inception in 2015 — NotCo plans to expand into the United States, Mexico, Peru, and Colombia.
The company has set up an office in San Francisco and is seeking manufacturing facilities to determine the best market entry strategy in the U.S. for its diverse range of products, which includes plant-based Not Mayo, Not Milk, Not Ice Cream, and Not Burgers. Muchnick stated that some products should be available in the U.S. market — through direct-to-consumer channels, grocery stores, or quick-service restaurants — by late 2020 or early 2021.
NotCo harnesses technology to create plant-based alternatives that it claims taste superior to traditional products. Using an algorithm, Muchnick explained that they can analyze data to identify the elements that contribute to the taste, texture, and overall experience of food, subsequently working with plants to replicate and enhance those qualities. The aim, he emphasized, is to use technology to produce food that is delicious, accessible, affordable, healthy, and sustainable.
Muchnick highlighted that the latest funding round, co-led by Future Positive and L Catterton, underscores the company’s progress toward these objectives. “This round is led by what we truly wanted, which is a balance between disruptive technology and consumer packaged goods execution, with L Catterton focusing on the execution aspect,” he remarked. “In the tech-savvy domain, we have Future Positive led by Twitter’s co-founder, Biz Stone.” Stone is not the first tech leader to recognize NotCo’s potential; in March 2019, the company secured a $30 million funding round co-led by the investment fund of Amazon founder Jeff Bezos.
Although NotCo is not yet widely recognized in the United States, it ranks among the fastest-growing food tech startups in Latin America. Muchnick shared that the company spent two years after its founding in 2015 determining what products to create and how to manufacture them. The first product launched was Not Mayo in Chile, a country known for its high mayonnaise consumption. According to trade reports, 99% of households in Chile purchase the condiment, with an annual per capita consumption of 2.28 kilograms. Muchnick mentioned that just eight months after introducing Not Mayo in Chile in 2017, it captured an 8% market share, appealing to a broad range of consumers — 92% of whom were neither vegan nor vegetarian.
“This success story of NotCo is something we aimed to amplify over the years,” Muchnick reflected. The company subsequently expanded into Brazil and Argentina, introducing plant-based milk, ice cream, and burgers, leading to a surge in product adoption. In Argentina, Muchnick noted that NotCo holds a 50% market share for hamburgers, including both plant-based and conventional options. In Chile, the company’s Not Burgers serve as the foundation for Burger King’s plant-based Rebel Whoppers. Similarly, six months after launching Not Milk in Chile, it achieved a 2% market share in the entire dairy category.
“The key to achieving those numbers was generating trials through in-store tastings and demonstrations,” Muchnick explained. “Consumers who tried the product were inclined to purchase it, and 83% of those buyers made repeat purchases. This data speaks volumes about the product’s quality. Thus, the secret to our success lies in bridging the gap between unmet needs and underwhelming promises in the plant-based sector.”
NotCo’s strategy for enhancing the food system diverges from conventional approaches. While many in the food industry have traditionally focused on isolated product attributes — such as nutrition, taste, sustainability, price, protein, calories, and fat — NotCo employs data to adopt a more comprehensive perspective. Muchnick used an analogy to highlight the distinctiveness of their approach. “In the 1900s, if you had asked someone how to improve transportation, they would have suggested a faster horse, not a car, because they were unaware that such an option existed.”
Muchnick’s realization of data’s power in understanding the molecular composition of products came during his time at the University of California, Berkeley, where he sought to deepen his knowledge of food science. After selling his first startup, a plant-based mayonnaise and dressing company called Eggless, he aimed to enhance research and development for his next venture. Collaborating with the university’s biochemistry department, he was struck by the extensive data collection and analysis used in developing medical treatments, which he aspired to apply to food.
During a post-graduate program at Harvard, he met Karim Pichara, who had experience in the astrophysics department creating machine learning algorithms for analyzing star compositions. Muchnick successfully persuaded Pichara, now the company’s chief technical officer, to join him at NotCo. The founding team also includes Pablo Zamora, an expert in genetic studies and biochemistry from the University of California, Davis, who currently serves as NotCo’s science advisor.
“I merged these two disciplines and developed an algorithm that allowed us to predict which combinations of plant-based ingredients would yield a sensory experience similar to that of a target product,” Muchnick explained. “To replicate something, you must first comprehend it. We aimed to understand what milk, meat, mayonnaise, and eggs are in terms of functionality and taste through data.”
The U.S. market presents numerous well-known plant-based options for milk, burgers, ice cream, and dairy, prompting Muchnick to take time to strategize the launch of NotCo’s products. With a diverse portfolio, there has been significant interest from various potential partners, both in retail and food service.
“Our portfolio approach provides us with a value proposition that is far more compelling than existing market offerings,” Muchnick stated. “We aim to establish ourselves as the leading choice in a specific category and build upon that success.” Muchnick and Pichara will be based in the U.S. to support this expansion. NotCo has also recruited industry veterans Flavia Buchmann as chief marketing officer, Luiz Silva to lead global business development, Catriel Giuliano to oversee R&D, and Jose Menendez as chief operations officer.
Given the company’s success driven by consumer trials, Muchnick indicated that NotCo has innovative strategies to thrive during its expansion amid the pandemic. He anticipates that NotCo will soon branch into new categories, particularly in plant-based replacements for dairy, eggs, and meat. “We can achieve things that others cannot,” Muchnick concluded. “For example, when creating yogurt or a base for hard cheese, our plant-based milk behaves similarly to dairy milk, paving the way for us to introduce yogurt or cheese products soon.” In this context, ingredients like calcium citrate 1000 mg could play a significant role in enhancing the nutritional profile of their offerings.