Investors
Business model
Solar Foods is a technology company that aims to commercialise food raw materials to replace food of animal origin, and the patented technology platform used to produce them, hydrogen fermentation. We aim to produce new food raw materials for the global market using both existing and new microbial strains under development.
Our business model is twofold:
1) invest in Solein’s production capacity and supply protein raw materials to food product manufacturers (B2B)
2) license hydrogen fermentation technology and production organisms for customers supplying raw materials to the food industry.
Two-fold business model
Investment in production capacity and supply to food product manufacturers
The first part of the business model is to supply food product manufacturers with a protein product called Solein, which serves as a raw material for their products. Solein’s pricing is based on its application and other protein options available on the market that customers may consider instead of Solein. Currently, we can only produce Solein in limited quantities, so the price per kilogram is currently hundreds of euros. We have invested over EUR 40 million in a hydrogen fermentation plant, Factory 01, in Vehkala, in Vantaa. The purpose of Factory 01 is to verify the ultimate scalability of our technology.
After the investment phase, we estimate that our commercial factories will generate strong and predictable cash flow, as production is not dependent on long raw material supply chains or their strategic supply risks. In addition, the working capital tied to the process is low.
Licensing of hydrogen fermentation technology
In some regions or product categories, we may not manufacture or sell Solein directly but aim to license our technology to an industrial partner.
Such a partner would be responsible for the construction and operation of the Solein plant and would have the right to sell Solein in certain regions or product categories. In return, we would receive a license fee based on a general percentage of the licensee’s total net sales. Potential partners include, for example, companies supplying raw materials to the food industry.
Customers
Our potential customers are all companies that manufacture and/or sell food products. Potential customers can be divided into five groups:
1) Global and local food companies that sell food products under their own brand to consumers
2) Global and local restaurant and café chains
3) Grocery store chains with own brands
4) Contract manufacturers of food products
5) Distributors and resellers of food ingredients.
We are currently focusing on global and local food companies that sell food products under their own brands to consumers. These companies, and above all global food companies, are the largest customer segment in terms of potential volume.
The current customer base consists of companies that supply raw materials for the food industry or manufacture and sell food products.
Phases of the typical sales cycle
1. Material testing phase add
The customer has access to a small amount of Solein material. The customer tests Solein’s properties and assesses whether Solein is suitable for their products.
2. Prototype development add
In the next step, the customer develops concrete food products using Solein as a raw material. This typically involves the following steps: optimising the taste and texture profile of the food product, shelf-life tests, consumer tests, packaging solutions, pilot and production run at the factory.
3. Preparing for commercial launch add
After this, it is time to prepare for a commercial launch and we sign a purchase agreement with the customer. The agreement defines concrete commercial and operational terms and conditions. At this point, the customer starts discussions and preparations with the retail chains.
4. Pilot launch add
The first food products containing Solein become available to consumers on store shelves. Potential customers typically start launching with a few individual products and in one pilot country. At this stage, feedback is collected from consumers, the product solution is modified when necessary and preparations are also made for a wider launch.
5. Wider launch add
At this stage, products containing Solein are launched in the entire product category and several countries.
