Austrian foodtech Kern Tec announced it raised $12,8 million in Series A funding on September 25th, to upscale the commercialisation of its stone fruit pits derived ingreadients, for plant-based dairy and confectionery products, said to have nutritional and taste values similar to nut alt milks.
The company specializes in advanced processing technologies that transform stone fruit pits, typically discarded as waste, into valuable food products. The $12,8 million Series A round was led by Telos Impact, with participation from the PeakBridge Growth 2 fund and the European Innovation Council (EIC) Fund.
“This investment will accelerate our global scaling capabilities and enable more products to the market that are derived from the valuable stone fruit seeds. This will scale our impact of reducing waste, whilst unlocking further growth in the plant-based dairy industry,” said Luca Fichtinger, Co-Founder and Managing Director at Kern Tec, adding that their technology can unlock further growth in the plant-based dairy industry.
Dairy companies are in fact finding their plant derived alternatives as a major contender to current popular plant-based milks and willing to enter or expand their presence in the dairy-free market with the startup’s products.
Scalable tech solution for kernel processing
Founded in 2019, Kern Tec’s journey can be traced back to conversations with Austrian farmers and fruit processors grappling with the surplus byproducts generated during the production of jams, marmalade, schnapps, and juices. On the other hand, knew that there is a very interesting kernel inside the fruit stone, which remained untapped due to the lack of efficient extraction methods: “Large processing companies could have even four thousands tons of these byproduct, this sounded like scalable solution,” Fichtinger told.
The team decided to employ a series of processing technologies – now patented – to crack the stone pits, extract plum, cherry and apricot kernerls and obtain valuable oils, protein powders and milk. Their tech turns the stone pits into ready to use compounds for the food industry that can use these ingredients for all kinds of dairy free alternatives.
By processing these pits into safe and sustainable food ingredients, Kern Tec actively contributes to the realization of a circular and resilient food system with less food waste. According to Kern Tech, over 500,000 metric tons of stone fruit pits are land-filled each year in Europe alone, for an industry that account for 18,6% of the total of the European fruit sector.
Typically local biomass company would buy these byproduct to generate heat, paying a fees to juice processors: “Every kilogram of byproduct we collect counts and put it into the food system again is a good things,” said Fichtinger: “When you think about the value we are creating, that make sense (for producers) to sell to us (instead),”.
Asked if there are byproduct left from their processing of pits and seeds Fichtinger said: “We are zero waste company,”, explaining that the excess biodegradable material is ground to very fine particles, mean it’s good grades, as well as used in the landscape industry to cover pathways as an alternative to gravel, or farmers might use it to give more structure to soil they cultivate.
Just like almond, but allergy free and more environmental alt milk
If the company won prestigious prizes for its cherry seeds oil, its best seller ingredient with the most advantageous opportunity derives from apricots kernels, due to its taste, look and nutritional profile, which is similar to an almond.
Unlike many new plant-based ingredients, apricot seeds do not require approval from the European Food Safety Authority (EFSA) as novel foods, as they have been historically part of the European diet in small-scale capacities. According to EFSA and several other national food safety authorities, kernels can be eaten but only when processed or cooked, as if eaten raw, they can cause poisoning.
Despite similarity to almonds, this ingredient does not trigger allergic reactions in individuals with nut allergies. The product does also go hand in hand with environmental gain compared to the oval nut: as in recent years almond production has been scrutinized for its intensive water use, the production of almond kernels demands 95% less water than the cultivation of almonds.
To test the market, the company has put its apricot kernel milk alternative on Austrian supermarkets shelves through its in-house brand Wunderkern: “It’s at $2,66 per liter which is 20-30% less than triple A plant based brands,” said Fichtinger. The product – and its price – caught the attention of many diary milk companies eagerly charting a course into the competitive plant-based market. KernTec’s ability to conquer the diary industry comes from their unique selling point: “Companies are not willing to put on the market the fifteenth almond milk or the seventh oat alternative,” added the co-founder.
The startup has processed so far over 25,000 tonnes of pits which compares to 40,000 tonnes of stones fruits. In their state-of-the-art processing facility, they anticipate an annual production capacity of approximately 200,000 tonnes of fruit pits, equivalent to a staggering 15 million litres of almond seeds plant-based milk.
With these numbers, the Austrian team already signed purchase orders for its ingredients worth millions of dollars in revenues over the coming years. “Because of the high demand we received by the market we need to upscale our production very fast,” said Fichtinger when announcing the fund received.
Kern-Tec’s challenge is now to collect even more stone pits and it plans to expand its business into neighbouring countries such as Switzerland, Poland, Italy and Germany. The startup does not exclude that, as with stone fruits gaining added value, farmers could, in future, sell their produce at slightly higher prices and fruits processors could profit by the selling of these hidden ingredients.
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