The plant-based and cultivated meat sectors are widely recognised in the alternative protein world, but there’s now a third category emerging – fermentation. Food scientists and companies are now innovating new ways to apply fermentation technology to create novel sustainable proteins as well as to enable the further development of both plant-based and cultivated meat products. While the sector is still in its infancy, it’s not one to be underestimated, as a new report from the Good Food Institute (GFI) highlights. We take a look into GFI’s deep-dive into the science, applications, investment, startups and exciting opportunities that lie ahead in the fermentation space and pick out the 8 most important and interesting findings of the report.
1. There are three main approaches to fermentation in alt protein
Many of us might already be familiar with traditional fermentation, which uses live microorganisms to process plant-based ingredients, which modifies the texture, taste and nutritional profile – take tempeh, for instance, which is created by fermenting soybeans with Rhizopus, a fungi. The second approach is biomass fermentation, which takes the high-protein and fast-growing content of microorganisms as an ingredient to produce large amounts of protein, which can be used to create an alternative meat product, such as legacy meatless brand Quorn’s use of filamentous fungi. Finally, precision fermentation leverages microbial hosts as “factories” where cells can produce specific ingredients that can enable the improvement of plant-based or cell-based products, from sensory characteristics to functional qualities – Impossible Foods’ heme protein, the ingredient which gives its plant-based burgers its famous iron-rich mouthfeel, is created using this technology.
2. There are 68 companies currently using fermentation to produce novel alt proteins
The GFI report identifies 68 companies currently using fermentation technology to produce or support the development of animal-free alternatives of meat, eggs or dairy products, though the real number could me much higher, as the cohort represents only those publicly disclosed projects. Of the group, 44 are companies focused mainly on fermentation for alternative protein applications, while 24 are developing product lines explicitly intended for the alternative protein industry.
3. The industry is in its very early stages
“Despite the high activity level, the alternative protein industry is extremely young,” said the report. The average median year of establishment out of all the companies using fermentation to develop alternative proteins is 2018, while the median founding year for those companies with alternative protein business lines is 2012. In 2019 alone, 14 new companies in the space emerged, and another 7 came about just within the first half of 2020.
4. The U.S. has the most fermentation alt protein companies, but many are now emerging elsewhere
Fermentation alternative protein companies span across the world in at least 16 countries, the report finds, with the U.S. having the largest concentration with 22 companies, followed by Europe with 16 and Asia-Pacific with 5. However, this geographic landscape appears to be changing fast. Of the 20 companies that have been founded since 2019, over half – 12 – are located outside of the U.S.
Read our interview with fermented egg maker Clara Foods CEO & Founder Arturo Elizondo here
5. Innovation in fermentation is poised to explode outside of the U.S. and Europe
Even though historically, the U.S. and Europe are the major innovation hubs when it comes to biotechnology and fermentation, the GFI report notes that other regions are now ramping up and quickly becoming leaders, such as Asia and Latin America. “With the advancement of new research tools that decrease the cost of R&D, innovation is likely to come increasingly from regions that have not traditionally led biotechnology developments,” said the report. “These regions will be able to couple upstream strain and feedstock improvements with the operational expertise required for swift integration into large-scale manufacturing environments, potentially accelerating the iterative innovation cycle and the path toward cost reduction.”
6. Most fermentation companies are going the B2B route
The majority of the fermentation companies – around two-thirds – are pursuing a B2B strategy. And the vast majority are also planning into the market by not relying on purely fermentation, but will work with plant and animal cell components too to create blended products like Impossible Foods’ plant-based beef, which is derived from a mix of plant and microbial sources. GFI believes that this approach will mean big days ahead for the fermentation sector. “[It] will be a valuable force multiplier for the industry because their expertise will benefit multiple clients rather than stay siloed in a single company,” wrote the authors.
7. There are loads of consumer-end facing applications, from eggs to fats
There are all sorts of consumer-end facing applications that fermentation companies are working on. Some are working on developing whole cut meat alternatives, such as Meati Foods’ fungi-based plant-based steaks, while others are working on fermentation-based egg proteins, like Clara Foods, a startup using yeast to produce egg albumen proteins as an ingredient for cooking and baking. There are fermentation dairy companies too, such as Perfect Day, who are using fermentation to replicate the molecular proteins in cow’s milk in labs, and have recently launched an animal-free ice cream line Brave Robot. Even fermentation-based gelatin is on the line, which is the focus of biodesign startup Geltor, as well as replicating animal fats using this technology, such as the projects underway at Motif Foodworks.
Check out Green Queen’s round-up of the most exciting fermentation dairy startups here.
8. Investment is pouring into the sector
Despite the fact that annual VC investment into fermentation companies didn’t exceed US$10 million until 2015, GFI’s report finds that the sector has quickly become a “robust part of the investment landscape” in the alternative protein ecosystem. In 2019 in the U.S., fermentation companies attracted more than 3.5 times more capital than all cultivated meat companies, and nearly 60% as much as the investment in plant-based companies. Then in 2020, even amidst the volatile economic climate given the coronavirus pandemic, funding for fermentation companies totalled more than all other years combined. Some of the biggest deals include MycoTechnology’s US$39 million Series D, and Perfect Day’s US$300 million Series C round, which broke records as the largest fundraising in the sector’s history, and brought the total investment into the sector to US$837.25 million.
Original Article by: Sally Ho, Green Queen