NotCo CEO on the road to profitability and its new GLP-1 booster

Chilean foodtech firm NotCo is on course to be profitable in 2027, says cofounder and CEO Matias Muchnick. “However, I’m looking at profitability in Q2 2025 in our most mature operations in Chile, Argentina, Colombia, and Peru.”

Speaking to AgFunderNews at the Future Food-Tech summit in San Francisco last week, Muchnick said NotCo had made some “hard decisions” in late 2023 and early 2024 including laying off staff, de-listing underperforming SKUs, and closing its New York office and transferring responsibility for sales and marketing of its products in North America to joint venture partner Kraft Heinz.

However, the growth of the b2b business—whereby NotCo uses its AI tools to help industry partners develop better products—”is taking off faster than we thought and allowing us to get a P&L closer to a technology company than a CPG company,” he claimed.

“Therefore, there might be some opportunities for us to become profitable closer to the end of 2026.”

NotCo in North America

NotCo’s branded CPG products in North America (NotMayo, NotChicken, NotBurger) are now sold and distributed by its joint venture with Kraft Heinz, along with plant-based products co-developed by the partners such as Kraft Not Cheese and Oscar Mayer Not Hot Dog, said Muchnick.

But that doesn’t mean NotCo is focusing all of its attention on the b2b business, he said. “We need to preserve a CPG business as there are obvious synergies. We can also test our technology in our own CPG products. 20% of our business in Chile and Argentina is from [NotCo branded] snacks today, which is something that didn’t even exist even one year ago.”

As for the joint venture with Kraft Heinz, he said, “We are on budget. For Kraft Heinz, NotBurger and NotChicken are incremental to their business, plus they are not as strong in the natural channel, where we are very strong.” Conversely, Kraft Heinz has excellent distribution in conventional accounts such as Walmart and Kroger, which has helped get co-developed products such as Not Mac & Cheese in front of more consumers, he said. “The JV is operating really well and we will keep innovating.”

NotMilk, which was introduced in US retailers’ chilled cabinets in 2020 and then switched to their shelf-stable sets in early 2023, is still available in some retail outlets and on Amazon, he said. “But the focus has shifted to D2C. Why? Because it’s not synergetic to Kraft Heinz.”

The B2B business

Echoing comments made by cofounder and CTO Dr. Karim Pichara in a recent interview with AgFunderNews, Muchnick said that a large chunk of NotCo’s revenue in the coming years will come from partnerships with CPG companies that want to improve and speed up product development using NotCo’s proprietary AI platform ‘Giuseppe.’

In some cases partners want to create new products from concept to launch, while in others they want to reformulate existing products to reduce costs or comply with evolving regulations or consumer preferences, he said.

“Some big companies are skeptical about sharing their data. But the good thing is that we have enough data and different data than what they have to generate the value they’re seeking.”

He added: “We might find one day that they will be willing to share their data, but then the question is, do they have valuable data?

“Every company says it has incredible data, but the data is not always compatible because the protocols in which it was created 40 years ago don’t match the ones used 20 years later. Or the mass spectrometer isn’t calibrated in Germany the same way it is somewhere else. So you have a level of disparity or inconsistency of data that can impact whether that data is valuable or not.”

Ultimately, he said, “We never say that we can do something better than R&D teams with decades of experience could do in-house. What we sell is that we’re going to get there far more quickly and efficiently and come up with different ways of achieving the same goals.

“So say you want to improve the HFSS score [High in Fat, Sugar, and Salt] of a certain product [in the UK market]. It might not be just about removing sugar, it might be about re-imagining what that product is. And artificial Intelligence is incredibly clever at doing that because it doesn’t have any biases about what should be [in any given product].”

Giuseppe is well-known for coming up with unusual ingredient pairings and suggestions, such as cocoa in plant-based beef burgers or pineapple and cabbage in alt-milk. However, reformulation projects don’t always involve unexpected ingredients but might be about changing the ratio of existing ingredients or tweaking the production process, said Muchnick.

“It’s not always about novelty, because novelty has a risk. Plus all of the projects that we’re working on have the number one constraint of gross margin.”

GLP-1  booster

NotCo’s most recent project is a powdered ‘GLP-1 booster’ that can be added to foods that will help people regulate appetite and preserve muscle mass and metabolic function, said Muchnick.

“We’re not trying to replace GLP-1 drugs. This is for people that can’t access these medications or who are coming off these drugs and trying to avoid weight rebound or just looking for a natural alternative that isn’t going to have the same effect as a drug, but still provides meaningful benefits.”

Giuseppe has been collecting data on ingredients for 10 years and can also scour through peer-reviewed papers on ingredients claimed to stimulate the production of GLP-1, noted Muchnick.

However, its approach has been less about identifying an obscure ingredient that might boost GLP-1 than developing a combination of ingredients that “help support GLP-1 levels in the body through different mechanisms.”

“Algorithms don’t really care about the name of the ingredient,” said Muchnick. “They care about understanding the underlying patterns on how to create combinations to generate functionality, taste, texture, smell or color.

“It’s not just what you see on a product label. We’ve been diving way deeper into digestion, absorption, and bioavailability, and searching both what exists and what we can build. For example, we are really focusing on peptides and the engineering of probiotics and prebiotics that help boost GLP-1 more than any physical ingredient that already exists.”

He added: “It’s one thing to see what is the best combination of existing ingredients to generate the desired effect, and the other one is, how do we create new ingredients that will boost GLP-1 more than any other ingredient that’s exists today? So we’re doing both routes.

“The blend we have come up with so far is a combination of existing ingredients and ingredients created by us. As a disclaimer, we have already run some tests, but they’re not clinical trials, therefore we can only say that it will potentially help you, but we can’t say more until we get the results of human clinical trials.” He did not provide details of the timing or scope of the trials, but said: “We have moved ahead with human clinical trials.”

As for the business model, he said, “We are considering several options, from working with our CPG partners so they can incorporate this into their products to launching it as one of our own products in our foods business. But the product is designed to be applied to any food matrix from chocolate to beverages.”

One-stop-shop

Stepping back, Muchnick said: “We’ve had 10 years of data construction. We have more than 10,000 formulations with sensorial feedback from human beings. We’ve been testing digital twins [virtual representations of a physical object or system that are updated in real-time], which is now a buzzword in AI, since we started the company.

“It is the different dimensions of data and the training on the data sets that sets us apart. Then what comes next is that we’re not an AI company that builds AI without understanding the human angle of key problems facing people in the food industry, because we also make our own products.”

Critically, NotCo is not merely a concept generator, but enables partners to build products from concept to launch, said Muchnick. “There are lots of AI software startups solving parts of the problem now, lots of concept generators, social listening models, competitive analysis and so on.

“But our concepts are connected to a formulation. If you test a concept and you like it, you have a formulation already. Everything is connected.”

Speaking at a breakout session at the Future Food-Tech summit last Thursday, Muchnick told delegates: “NotCo started as a technology company 10 years ago when no one was talking about AI… we wanted to become an R&D powerhouse for many other companies.

“It didn’t work. No one understood what we were doing, and so we needed to show them what we could do with our technology through our own brands, so we created a plant-based portfolio, starting in Chile and then Argentina, Brazil, Colombia, Mexico, the US, Canada.

“And then we started to become the innovation partners of big QSRs and not just for a plant-based version of something. And then in 2022, we had an incredible conversation with Kraft Heinz, which had everything we didn’t in North America… scale, commercialization, distribution. And all of a sudden, we were operating eight different categories of products in only one year and a half of commercial execution.

“After that, ChatGPT was coming out and AI was suddenly what every board member was talking about. Today, we are working with seven out of the top 10 CPGs in the world.”

Further reading:

NotCo CTO: ‘Within three years, the bulk of our revenue will be from the b2b business. From design, we are an AI company’