The Mountain View, California-based biotech and data science company captured the attention of new investors from Rabo Food&Ag Innovation Fund and SOZO Ventures, as well as existing investors Ulu Ventures, Radicle Growth, Capital Energy and Merus Capital by developing a database that connects human receptors, ingredients/chemicals and word descriptors that through a proprietary platform can quantify consumers’ taste, scent and other sensory perceptions accurately and quickly.
“Every food and beverage company out there for the last 1,000 years has used human tasting panels as its major method of determining whether a product is good or not and trying to predict how people in the marketplace will react to it. And everyone we talked to will tell you immediately how terrible the data is that comes out of these things,” Aromyx CEO Josh Silverman told FoodNavigator-USA.
He explained that Aromyx can vastly improve the reliability of sensory data and provide detailed, actionable consumer insights that help companies understand how consumers will perceive and respond to their product.
During the first year of the pandemic, Aromyx tested more than 100 products for customers and is on track to test more than 300 products this year – establishing a demand curve for its unique, time- and money-saving services that soon will outstrip its capacity.
“We basically had a line of customers out the door. People wanted to engage with your services, test their products and get more data, but we were just at our limit. So, a major use of proceeds from this fundraise will go to increasing our automation, bringing in more automated robots, so that we can process more samples, generate more data and really just address the demand that we’re seeing in the marketplace for our services,” Silverman said.
An ‘explosion of demand’
He explained that the “explosion of demand” for Aromyx’s services during the pandemic is due in part to social distancing requirements severely restricting in-person taste testing capabilities.
“We talked to a lot of our customers who normally would put 50 people in a room and have them taste the product tell them what they think, no longer be able to put five people in a room – let alone 50 people in a room. So, getting these things coordinated, getting controls in place, just became exponentially harder in the face of the pandemic,” Silverman said. “We know that will be a major limitation going forward.”
This compounded existing frustrations about the limits of consumer tasting panels, including struggles recruiting the target demographic, controlling for subjects’ hunger level, whether they smoked a cigarette the night before, wore perfume or any other number of variables that can influence their sense of taste and smell. Not to mention most people are very bad at quantifying and describing flavors or why they like or dislike something, Silverman said.
Despite these limitations, companies still need experiential data to help guide innovation and reformulation.
“Taste and flavor are top of the line for consumer buying decisions. So, all these companies need to make products that taste better, that meet consumer demand, yet they don’t have a good source of data to tell them what consumers want. That is why we see very high failure rates and churn rates of products,” Silverman said.
He added that Aromyx not only can provide these data, but it can do so more accurately and quickly.
“We have one customer who told us specifically they thing we can cut their R&D cycle by 50%. So going from an 18 month product design cycle to nine month product design cycle because we can get them better quality data faster, and hopefully more accurate to what consumers actually want out of their product,” he said.
But first it needs to increase its capacity and automation capabilities, generate more data, improve its AI algorithms and expand its lab and software teams – all of which is now possible thanks to the series fundraise led by Rabo Food&Ag Innovation Fund, SOZO Ventures and existing investors Ulu Ventures, Radicle Growth, Capital Energy and Merus Capital.
‘There’s a rush … to reformulate’
Aromyx’s technology appealed to Rabo Food&Ag Innovation Fund venture partner Kieran Furlong because it not only speeds innovation and improves the odds that the finished product will meet consumer demand, but it does so faster and at a lower cost.
“There’s a rush on right now with large food companies trying to reformulate their products to be healthier – whether it is because of consumer demand or because of labeling requirements or in some cases regulatory pressure – and they still want to deliver a great taste experience. We see technology like Aromyx as a key that can help them unlock some of those challenges,” Furlong said.
He said he also believes that Aromyx’s technology can help companies improve the nutrition profile of their products, clean up ingredient decks or innovate better-for-you alternatives to existing products without compromising the consumer experience.
“For example, you may have a plant-based alternative that is really trying to mimic that same behavior of the burger right off the grill. And I think Aromyx is going to be able to get that sizzle without the steak, so to speak. To help companies really nail that flavor profile,” he said.
Aromyx also can help companies dig deep into the minutia of consumer experience to discover taste preferences by certain groups – allowing food manufactures to create produces for different regional or group preferences and as such expand their reach and consumer loyalty, he said.
Finally, Furlong said, Rabo Food&AG Innovation Fund was drawn to Aromyx because it is a proven concept. He explained Aromyx’s technology is already tested by food and beverage clients providing revenue, and is now “at the point where the curve begins to bend upwards pretty rapidly.”