By Anna Lardinois, Startup Storyteller
Third Wave Bioactives is the “secret ingredient” in many of your favorite pre-packaged, natural, non-GMO foods. Its products extend the shelf life and enhance the flavor of foods, all while using natural ingredients.
The company that develops fermentation-based products used in clean label foods is a spin out of Agro BioSciences, which was acquired in 2017 by Church & Dwight Co., Inc., the parent company of Arm & Hammer Animal Nutrition.
Located in Wauwatosa’s Technology Innovation Center, the company’s headquarters is near the home of three of the four company founders, all of whom came from Agro BioSciences. President Matt Hundt, Director of Marketing Elissa Coyer, and microbiologist Shelly Gebert, the Director of Research and Development, all live in the metro Milwaukee area. The fourth founder, Brett Thompson, serves as the Director of Sales.
Beyond being a convenient location, the Technology Innovation Center offered something that few other locations have — lab space.
“There aren’t a lot of places to rent lab space,” Hundt said. “We can rent offices. We can rent storage. It’s not a problem. But the lab is what makes this building unique.”
Operations and lab work occur in the Wauwatosa office, but manufacturing, packaging, shipping and delivery are all handled by other companies.
“We don’t have to own fermentation equipment. We don’t have to own trucks or hire logistical people who do that,” Hundt said. “We pay for it on the product side, but from an HR standpoint, it allows us to stay pretty lean. The other thing that allows us to do is to make decisions based on our business and opportunities, versus our assets.”
The lab is where the core work of Third Wave Bioactives happens. Lab work is divided by novel discoveries that spur product development and the analysis of customer products.
It is the customer service work that sets the company apart from its competitors.
Not only does the company work with smaller food manufacturers who are often overlooked by the major food additive manufacturers, but they also provide those companies with regulatory and food testing help that would be impossible for them to receive from a large manufacturer.
One of the services offered is an evaluation of existing products.
“In some cases, our customers know what’s wrong with their products,” Hundt said. “They have a problem with yeast, or mold, or whatever. In some cases, they have no idea. We do a lot of CSI-type work trying to figure out what’s wrong with their product and how we can help them. Sometimes, it is a product recommendation, but in other cases it might be that they need to wash their products differently. It is consulting work. We don’t charge for that — helping them realize what other changes they can make to their process to end up with a safe, longer shelf life or a better flavor.
“That’s one of the things that sets us apart from other companies. In a lot of companies, if the answer isn’t your product, they don’t want to do the work. If we can help them on a project, even if we are not the solution, we know that they’ll come back when we will be (the solution).”
The emerging company is always developing new products to enhance the shelf life and flavor of packaged food.
Four-legged family members provide a tremendous opportunity for growth for Third Wave Bioactives. In 2021 the global pet food market had an estimated value of $110.5 billion, and that number is expected to grow by at least five percent by 2029.
“Humans have translated their eating habits to their pets,” Hundt said. “If you walk through the pet food aisle, you’ll see clean label, natural food. It’s fresh in some cases. You can buy it now at home, and in home services that send you fresh pet food. They have microbial issues too. So, just this year we sort of put a little more focus on pet food.”
“On the human food side,” he continued, “plant-based foods have become a big deal.”
The retail market for plant-based food is valued at $7 billion. The industry has experienced 43% growth in the last two years. Plant-based food sales grew significantly faster than total foods sales, and sales predictions indicate that growth will continue.
“A lot of those products, the protein part of it, the marketing, and some of the color things got way ahead of food safety. As those markets have matured a little bit, they’re starting to want longer shelf life. So those are areas that will grow both the flavor and the preservative side of our business,” he said.
Often growth requires fund-raising. The largely bootstrapped company has no immediate plans to raise funds.
“In May of 2017, we had zero revenue,” he said. “And today we run a profitable business. After working for big companies where budgets were often discussed, but not the hold up, I think we all learned that having more money isn’t always the answer.”
As for an exit plan, Hundt said, “Right now, we’re happy running the business. It’s profitable. We can continue to grow it. At some point I think we would take an exit if it was the right thing for our shareholders and for use. But we’re not running around eliciting offers.”
Through its growth, Third Wave Bioactives is advancing food technology.
Ellisa Coyer said developments in food tech are “what keeps me in the industry and doing the work. We talk about the big, complex problems of feeding the world and living sustainably and having safe, nutritious, but diverse food supply chains. And (food tech) are the kinds of technologies that are going to do it.”
To learn more about Third Wave Bioactives, connect with them here.