After working for nearly seven years developing the technology to “craft a more sustainable sip,” Massachusetts-based Zenso Labs is toasting to its success.
Last week, the company announced its entry into the beverage industry via two alcoholic RTDs – a Pear Ginger hard seltzer and a canned Moscow Mule. But there’s a catch. The products Zenso is launching are “demonstration” lines, according to founder Russ Heissner, designed to showcase the company’s unique upcycled production process and stimulate demand for licensing its technology within the beverage industry.
What is Zenso’s process?
Zenso’s technology helps brewers and distillers utilize spent grains and waste streams leftover from the production process and create new products and revenue streams.
The technology works by separating each structural piece of the grain into its three main components: protein, cellulose and lignin. Cellulose, the most abundant component of spent grain, is then converted into sugar, primarily glucose, Heisser said, which can be used to sweeten food, beverages or be sold as fodder for precision fermentation systems.
The process can also allow beverage makers to access biological yeast within these grains that can then be used to turn it into bio-based fuel such as ethanol.
“What we’re really doing here is we’re trying to enable craft brewers and distillers to become mini biorefineries,” Heissner said.
How did this concept develop?
Over the course of a nearly four-decade career spanning beer making, food manufacturing and biofuel development, Heissner has long been toying with the idea of upcycling alcoholic beverage byproducts.
“I’ve always had an interest in upcycling waste streams from beverage companies,” said Heissner while reflecting on a job he held as an undergraduate at UC Davis. “The concept came to me when I was working at a winery in California during the [grape] crush. I was working on the pumice truck and thought there’s probably a better use for this stuff than just turning it into dirt.”
Upon graduating, Heisser went on to become the founding head brewer of Harpoon. After six years there he shifted gears and eventually went to work at British Petroleum (BP) where he dealt in biofuel development and licensing for over a decade.
In 2015, Heissner founded Weymouth, Mass.-based brewery Barrel House Z, and began working on an answer to the question he’d been tossing around since his college years. Before tasking himself with finding a solution, Heissner said he pitched the concept to all the big alcohol producers.
“All the incumbents literally said to me: “We don’t want to be an experiment,” Heissner said.
But he soon found someone who was up for the challenge: Brian Hollinger, a former executive at Dogfish Head, Two Roads Brewing Company who has led many beverage “startups and exits,” Heissner said. Hollinger will lead Zenso’s B2B sales.
The company’s founding team also includes Alexandra Griffin, a former marketer for Molson Coors and Dunkin’ Brands who will head up the new beverage demo development, and Dr. Kevin Gray, a biotech executive who is in charge of evolving the technology and processes.
By 2021, Heissner’s side project caught the attention of Gingko Bioworks, where he now also serves as director of business development. In May, Zenso closed its first family and friends investment round, raising $350,000 from key investors including Ferment Co., a creation studio for novel synthetic biology product companies and commercial partner of Gingko.
What is the impact?
Zenso is working with large enzyme, yeast and equipment suppliers to continue scaling the process and its ability to be licensed, but its core business remains in applications development. “We’re creating the cookbook,” Heissner said, to help enable other breweries and distilleries to be able to create and sell another product from their waste outputs.
“We can produce [our new] products for just under $4 per case cheaper, compared to conventionally produced [beverages],” Heissner said. “Those are of course Barrel House Z’s unit economics and different breweries are going to have different unit economics, but it’s massively compelling when you think about it that way.”
Waste disposal for byproducts can be a significant cost for brewers. According to a 2016 study, every 100 liters of beer produces 20 kilograms of spent grains. Zenso claims spent grains account for 85% of solid waste generated from brewers and distillers. So in addition to giving brewers a second revenue stream, upcycling waste streams can also help significantly reduce operating and haul-away costs.
What’s next?
Heissner said the team is also working to perfect a second generation of its technology that can create a “clean, mixed sugar simple syrup” for brewers to utilize. He said he also has “quite a few” breweries and distilleries waiting for the technology to roll out to begin utilizing in their own operations.
As Zenso continues scaling the business and technology, Heisser said it may also introduce protein shakes, food products and additional alcoholic and non-alcoholic beverages made with ingredients derived from upcycled grains. Like the brand’s new launches, they will be used to demonstrate the tech’s application and sold with limited distribution.
“The entire purpose is to enable a category based upon sustainable sipping,” said Heisser. “The best way to do that is to put consumer brands into the market to demonstrate market adoption. Then our core business [is to] allow other brewers and distillers to think about doing something with [spent grains] which for most of them is a disposal and cost issue.”