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It’s easy to get swept up in the news and activities of the industry’s global titans, but what about the smaller firms that are out there flexing their creative muscles? In this instalment of ‘Start-up of the month’ – which celebrates the lesser-known companies and their innovations – we speak to Neil Morris, CEO and co-founder of Kelpi, a material innovation company harnessing the properties of seaweed to create compostable, marine-safe low-carbon bioplastic packaging.

Congratulations on securing £4.3 million in investment funding! What inspired you to venture into developing biopackaging solutions, and how did the idea for Kelpi come about? 

We use seaweed to make packaging materials. From seaweed and vegetable oils we create a thin coating for paper and card that provides a great barrier to water, oxygen, and greasy or acidic foods. Paper and card coated with our material can replace plastic packaging made from crude oil and gas.  

Eliminating a major source of plastic pollution was my core motivation to start Kelpi. The company started when the three co-founders – seaweed expert Prof Chris Chuck, entrepreneur Murray Kenneth and myself – got together to explore how seaweed was a far more suitable feedstock for packaging materials for food and drink, cosmetics and personal care than fossil fuel plastic.   

 Your proprietary seaweed-based coating technology has the potential to revolutionise packaging. Could you share some insights into the development process and the challenges you faced in bringing this innovation to market? 

After Kelpi was founded in 2020, we spent the first two years in the lab developing our material, testing and iterating prototypes until we had something that would meet client requirements – a renewably-sourced coating with the right end-of-life outcomes that performed as well as fossil fuel plastics like polyethylene.

In early 2023 we then took that material out to market and got a remarkable, positive response from clients. Our challenges in bringing this innovation to market have included navigating regulation – the regulatory environment continues to be skewed towards fossil fuel plastics – and accessing the right early-stage support. Many investors are unsure about investing in deep tech that has longer times to market – we’ve now found the right investors to fund the business.      

Kelpi's partnership with global leaders like Diageo and Waitrose is impressive. How did you initially establish these partnerships, and what advice would you give to other start-ups looking to collaborate with larger companies in the industry? 

From early 2023 we sought opportunities to appear in front of prospective clients. We entered the ‘Beyond Plastics’ competitive tender that L’Oréal ran to seek the best biomaterial solution. From 140 bidders Kelpi was selected as the global winner and with that came our first contract with the global cosmetics giant (mid-2023).

Open competition or competitive procurement wins led to our work with Blue Skies and Waitrose; as well as a global drinks giant Diageo and some of the world’s largest packaging manufacturers. I would advise other start-ups to start entering competitions and engage with intermediaries like technology-scouting consultancies scouring the world for innovations to present to their clients.    

Sustainability is a key focus for Kelpi, evident in your use of renewable feedstocks and your commitment to reducing plastic pollution. How do you ensure that sustainability remains at the core of your business operations as you scale up? 

Towards the end of 2023, Kelpi won B-Corp certification. This was a major achievement for a start-up like us, showing our commitment to meeting the high B-Corp standards of social and environmental impact. We have firm commitments to ensuring all our raw materials are sourced from socially as well as environmentally responsible sources. And we’re carrying out our lifecycle analysis to monitor carbon emissions throughout the production process.     

 Your bio-material boasts performance comparable to, or even exceeding, traditional plastics. Could you elaborate on some of the unique properties of your packaging solutions, particularly in terms of water barrier and resistance to greasy or acidic contents? 

From the outset, Kelpi focused on developing a material with a strong water barrier that would still fully and readily biodegrade. This is what had been missing from the market. Until Kelpi, biodegradable coatings had failed to offer the long-term water barrier needed by large industrial clients to ensure a packaged product shelf life of years, rather than days or weeks.

Or where such a shelf-life could be offered, the packaging was not recyclable or compostable, and would persist (without biodegrading) in environments such as soil or marine. So it’s the ability to combine these two – biodegradability, together with a strong barrier to water, water vapour, as well as acidic food like fresh fruit or high grease contents like skin creams – which makes Kelpi so effective.     

Scaling up production and navigating regulatory approval processes can be daunting tasks for start-ups. How do you plan to use the recent investment to address these challenges? 

Scaling up production and navigating regulatory approval processes are two of the biggest challenges we face, and they will be key areas of focus for the £4.35 million in funds we secured in May 2024.

We’ve developed detailed knowledge of the regulatory approval processes for food contact materials across jurisdictions but it’s the time taken to achieve regulatory approval which is our biggest determinant of go-to-market. 

So while we’re awaiting regulatory approval, we’ll be continuing our scale-up pilots to ensure we’re ready to move into high volumes straight away once we have those approvals in place.  

 The food and beverage industry is highly competitive. How does Kelpi differentiate itself from other sustainable packaging solutions, and what strategies have you employed to gain traction in the market? 

Both packaging and food and beverage are indeed highly competitive. After the first two years of development, Kelpi started to engage with key players in each market to ensure product-market fit, so from those early days, we were already gaining traction by proving the relevance of our solution to market requirements.

But that was of course a two-way process – bringing back to the lab an enhanced understanding of what the market valued was a key part of that.   

Kelpi's technology has significant implications for reducing fossil fuel dependency and addressing climate change. What role do you envision Kelpi playing in the broader movement towards sustainability within the packaging industry? 

Addressing climate change has become regarded by many solely as a question of reducing carbon emissions. But addressing toxicity and reducing plastic pollution (with all its impacts on biodiversity) is a vital issue as well.

For Kelpi – whether we’re helping a global drinks giant to move from high carbon-emissions glass to fully sustainable packaging like dry-moulded fibre coated with Kelpi material; or whether we’re helping a large supermarket replace plastic punnets with Kelpi-coated card alternatives – in each case we’re helping industry adopt packaging solutions that are fully recyclable with paper and card (and so enjoying much higher recycling rates than plastic packaging).    

 Could you share some lessons learned or key milestones achieved since the inception of Kelpi that have shaped the company's trajectory? 

Key milestones that have shaped Kelpi’s journey: 

• Winning regional, national and global awards has brought Kelpi to the attention of brands and partners across the world 

• Alongside funding rounds at pre-Seed, Seed 1 and Seed 2 stages, we’ve been successful in winning non-dilutive grants from Innovate UK and others that have supported our ability to grow – particularly in the earlier stages when revenue had not kicked in 

Lessons learned:  

• A constant focus on what makes us different from others has ensured we’re distinct from our direct and indirect competitors and producing something genuinely different for our clients  

• Collaborative working with clients and packaging industry partners has ensured we really understand what the industry needs. It’s ensured that while based on scientific innovation, we’re always ensuring product-market fit. 

For other start-ups aiming to make a positive impact in the food and beverage industry, what advice would you give based on your experience with Kelpi? 

Kelpi was formed with a balance of entrepreneurial experience and scientific expertise. We developed a formula (c = Sci + Inn ent), which captures how change is driven by science and innovation to the power of entrepreneurialism.

We could not have achieved success without the start-up mindset and the scientific rigour working in partnership. That’s been the key to winning clients as well as securing investment. And it remains valid today. Six of the 20-strong Kelpi team have PhDs, five are entrepreneurs or have experience leading start-ups.