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April 26, 2023
The food of the future: fermentation is becoming a major force
The problem fermentation helps solve
The problem fermentation helps solve
Developing and scaling alternative proteins is a key strategy to reduce greenhouse gas (GHG) emissions from food and land use as food consumption.
Today, animal protein consumption is responsible for nearly 20% of GHG emissions*, and this number will only increase with the global population growing and protein consumption increasing with higher standards of living.
Simply put, we must switch to more alternative proteins to reach net zero.
Eating animal products, especially from cows, has a much bigger GHG footprint than eating plant-based proteins. Drawdown estimates that switching to a more plant-based diet (eating 25-50% of current meat volumes per person) could save 6.5-7.5% of global GHG emissions, even when considering population growth.*
On top of reducing the harmful climate impacts of our food system, shifting to a more plant-based diet decreases the risk of pandemics and antibiotic resistance, slows biodiversity loss and can feed more people with fewer resources.
There are different approaches to making alternative proteins, including direct processing of plants, cultivation of animal cells or even making them directly from the air*), but fermentation is specifically gaining momentum — and for good reason. Fermentation holds the key to eating everything we love, without the animals or the GHG emissions.
Fermentation is the process of using intact, live microorganisms to modulate and process plant-derived ingredients. While fermentation is actually a mature technology (we’ve used it to make bread, beer and cheese for millennia), its applications for alternative protein products are in an earlier stage.
Within alternative proteins, fermentation is being harnessed to improve sensory, functional and nutritional attributes of alternative proteins. With fermentation molecules, we can make plant-based burgers taste dramatically better, make real cheese without cows and feed more people efficiently.
So, where are we at?
Three different types of fermentation (with increasing complexity)
Traditional fermentation Traditional fermentation takes existing and naturally occurring microorganisms and uses them to alter an input, which can result in a product that is more digestible, less perishable and safer to eat, or has unique flavors, better nutritional profiles and modified textures. This type of fermentation has been used for thousands of years to produce items such as bread, beer, yogurt and cheese — and now it’s also being applied to produce alternative proteins.
Innovative companies: Miyoko: artisan-quality cheese and butter crafted from fermented plant milk Foodiq: ferments fava beans to create a tasteless and odorless protein powder
Biomass fermentation Biomass fermentation is the process of making organic waste edible by upcycling nutrients into more nutritious proteins. This is accomplished by allowing microorganisms, such as bacteria, yeast, fungi, or microalgae, with a high protein content to grow on organic feedstock. The resulting microbial biomass can be harvested and used as an ingredient. This is a highly efficient solution, as microorganisms grow quickly and often double their weight in just a few hours. High-quality side streams can be used as feedstock, contributing to circular economies.
Innovative companies: MicroHarvest: growing nutritious, sustainable microorganisms full of proteins Meati: uses filamentous fungi as the base for whole-cut steak and chicken
Precision fermentation Precision fermentation allows us to make molecules (like proteins, enzymes, and fats) exactly like those typically found only in animals. How? Programming microbial "cell factories" to produce specific functional ingredients using genetically modified organisms (GMOs). These ingredients enable improved sensory characteristics and functional attributes of plant-based products or cultivated meat. Most companies focus on eggs, dairy, and animal fats. However, companies are also working on creating all sorts of meat and seafood. Innovative companies: Those Vegan Cowboys: making cheese from real, plant-based casein Yali Bio: making designer fats that enhance plant-based meat
What is the outlook and funding landscape?
Investment in fermentation technology peaked in 2021, with fermentation companies focused on the alternative protein sector raising $1.69 billion.* Although this figure decreased to $842 million in 2022, the number of startups increased, with 136 known companies dedicated to fermentation-enabled alternative proteins in 2022, a 20% increase from 2020.*
Large food companies and food service providers, such as Nestle, Unilever, and Starbucks, have also increased involvement in the fermentation industry. This serves as a de-risking event for investors, who are increasingly taking notice of the category. As a result, the number of unique investors in fermentation grew by 38% to 713 investors in 2022.*
Given its taste parity potential, rapid technological development, and increasing demand for alternative proteins, fermentation is bound to be a fast growing market. The global precision fermentation industry is forecasted to reach a market size ranging from $90 billion to $1.1 trillion by 2040.** 👀
Bottlenecks are currently slowing it down, but more and more brands are proving the tech is possible and the demand is there. We expect a lot more activity in the industry and hope for more products that we can taste in Europe soon!
What hurdles does fermentation face?
Currently, the fermentation industry faces two major bottlenecks to continuing its growth trajectory: manufacturing capacity and the regulatory environment.
The first hurdle facing alternative protein is the manufacturing capacity. Today’s startups must compete for a limited number of facilities, many of which aren’t fully optimized for food production. This insufficient capacity is already causing a backlog of promising innovations that cannot be commercialized.
At the same time, it is creating new opportunities for startups to fill this space, such as Synonym Bio, a free, open-access global database of available fermentation capacity, and Planetary, a manufacturing platform building new capacity for fermentation frontrunners globally.
The other bottleneck is the regulatory environment, especially in Europe. Specifically, the approval process is holding back the genetically modified organism (GMO) industry with a tortuous process to secure regulatory approvals for novel foods.
In 2022, Europe led the world in funding cellular agriculture research and commercialization, prompted not only by climate concerns but also by the disruption to food systems caused by Russia’s invasion of Ukraine—both key suppliers of staple crops and animal feed.
However, no precision-fermentation-based products, and very few biomass fermentation products (though one type of mushroom-based fermentation got approved in 2023*), have yet to be approved for human consumption by the EU.
Did you find this deep dive into fermentation helpful? Let us know in the chatbot or connect with Liza, our Co-Founder and Head of Impact, on LinkedIn!
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