Rafaela Gontijo Lenz @ NUU
Brazilian Cheese Bread Goes Regenerative
Rafaela Gontijo Lenz is the Founder and CEO at NUU. NUU is supporting regenerative agriculture with its lineup of regenerative cassava-based foods that includes cheese bread, cheese bread pizza, tapioca sticks, and more. Cassava (aka yuca root) is similar in size and weight to a sweet potato and has a starchy flesh. It is a staple in the developing world, and the base of indigenous and contemporary cuisine in Brazil.
NUU products are available at over 1,500 retail and food service points of sale in Brazil. NUU is a Certified B Corp and certified carbon neutral. They are led by an entirely female C Suite and have been recognized by the United Nations as 1 of 50 global companies to help lead the regenerative food movement.
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Betting On Better Cheese Bread
Cheese bread is to Brazilians what the croissant is to the French. "Cheese bread (“pão de queijo”) is found everywhere – from schools to coffee shops – and is a $2 billion market. Like many mainstream foods, cheese bread has become highly industrialized and mass-produced, losing much of its flavor and ingredient integrity in the process.
While working at Johnson & Johnson in Rio, Rafaela would return from visiting her parents’ farm and share homemade cheese bread with friends and co-workers. (At the time, most Brazilians were buying it frozen from the supermarket, sold by the few legacy brands that owned the category). Their enthusiasm about Rafaela's bread triggered her decision to exit her multinational career path and head to the farmers’ markets, cheese bread in hand.
“I wondered why people thought [my native cheese bread] was so different. I went to the supermarket and saw that over the decades, companies started ultra-industrializing the products and really changing the key ingredients to make it cheaper. So I decided to quit Johnson and Johnson and start in my kitchen with a mixer, powered by my mother-in-law, staying true to the original recipe of cheese bread.” – Rafaela
Committing To The Regen Journey
Rafaela knows that NUU will never make "the best cheese bread in the world" as that will always come from her mother's kitchen; however, they can work on making "the best cheese bread for the world."
Her early launch in farmers’ markets and cafes quickly expanded with a launch into a large retailer in Rio. But then COVID hit and everything changed. Rafaela and her family escaped the city for her family farm. There, she felt the profound connection between animals and food and saw how everything worked together with purpose.
“Unlike the plant-based movement, I saw how animals and agriculture work together as a whole. And then I saw the “Kiss the Ground” documentary, learned about regenerative food systems and agriculture, and realized there’s a way to keep using milk cheese and so on. We decided that we were part of the problem, but we would fight to be part of the solution.” – Rafaela
Building a Regenerative Supply Chain
As they searched for ways to build a more resilient supply chain, Rafaela soon realized that most of her fourth and fifth-generation farmers already practiced basic regenerative principles – rotational grazing, grass-fed grazing, and reducing reliance on chemical inputs with some even using biodigesters to provide nutrients and energy. Yet, transitioning them all to solely regenerative practices would take many years and a large amount of capital.
Instead, they took a progress-over-perfection mentality, chipping away at on-farm transition while also looking at their manufacturing footprint. Taking advantage of having all of their dairy producers within 40 km, they built the first carbon-neutral manufacturing facility in Brazil and, as a result, reduced their overall emissions by 15%.
Now NUU is turning its focus to yuca, their other most important ingredient. Presently, they source from a standard ingredient supplier in Southeast Brazil who is largely divorced from the growing of the plant. Rafaela and her team wanted to change that by sourcing yuca from the Amazon, where it has been cultivated for millennia.
But there is no ready-built supply chain to source from. Deep, capital-intensive work needs to be done to build these supply chains that can aggregate multiple smallholder farmers and provide adequate market access. NUU is working on doing just that with capital from their recent fundraise - working with their investor partner, EcoEnterprises Fund, an accelerator called Jornada Amazônia, and impact supply chain development organization, farfarm.
“During the construction of the factory, we saw how if we mimic nature and if we use the natural resources that we have, we would decrease normal expenses and also increase our positive impact. On this journey, we don’t say that we are a regenerative company. We say that we are on a regenerative journey.” – Rafaela
Daring to be Different
Many of their decisions were driven by a need to remain competitive and continue a steady pace of growth.
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Price Architecture:
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Knowing that consumers “want sustainable products but don’t want to pay a premium for them,” they’ve priced their products on par with competitors but offer a lower product amount. This gets the consumer a meaningful amount of food at an accessible price without the “sticker shock,” while allowing NUU to factor all of their sustainability efforts into the unit economics.
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Product Differentiation:
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They’ve relied on their hero ingredient, yuca (cassava), to be the base of multiple first-to-market gluten-free offerings in their category. Spotting a massive uptick in air fryer adoption, they quickly made all their SKUs air-fryer-friendly to help out their target customer - busy moms.
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- Marketing:
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They’ve introduced and are expanding an event program that financially rewards product ambassadors who work concerts and festivals, sampling and promoting NUU products across new geographies. They specifically target geographies they’ve recently expanded into and ones with specific economic qualifications that match their target consumer group.
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“We talk a lot about impact and ESG. All of these things that we fight for – it’s not to prove a point. No, we need to sell a lot. We need to grow three times. We’re not an NGO. We need to have good gross margins, good contribution margins, and positive EBITDA. It's so tough to scale up and scale deep at the same time. And if you're scaling deep in Brazil, you're needing to fix a lot of things – manufacturing logistics, supply chain, gender equality, legislations.” – Rafaela
It Takes Women
Rafaela admits that much of their ability to solve problems directly correlates to them being a female-led company. 100% of the C Suite is female, 70% of their leadership is female, and 47% of all employees are working moms.
“We are moms trying to understand how we can create a better world for our kids, but also have better quality time. While fundraising, I’ve talked to people saying they work 14 hours a day – as if that’s something they should be proud of? You should be proud of working 8 hours a day and spending time with your kids and connecting with nature, doing hobbies.” – Rafaela
Recently, NUU raised $4 million and has set a goal to grow sales 3x. They’ve also introduced data-driven methodologies to guide that growth. At the same time, they’re collaborating with other institutions, NGOs, and big legacy brands to find solutions and reduce barriers for the farmers who produce our food. Rafaela credits her team for NUU's success and its ability to engage in so much multistakeholder collaboration.
50% Market Share for Regen
For regenerative to reach the necessary scale, Rafaela believes we need to involve the legacy brands and multinationals like Coca-Cola, JBS, Nestle and the like. Thanks to all these small brands and start-ups, these large corporations can see that the regenerative model is viable.
“I just don't see another way, especially in Brazil. [The multinationals] are so present, they have so much power in the government, particularly. If we want to see changes, we have to start paying farmers premium prices for regeneration, for increasing biodiversity, sequestering carbon, and more. If farmers see these changes as a way to increase their profitability, they will change the food they’re producing and selling.” – Rafaela
You can check out the full episode with Rafaela Gontijo Lenz @ NUU HERE.
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This ReGen Recap was produced with support from Kristina Tober