By Taylor Hinds
Over the past five years, since the publication of Rethinking Food and Agriculture (2019), there have been a lot of changes in the novel food space. New technologies have debuted, new companies have appeared, and new products have been launched. We have seen a shift in the funding environment, transitioning from an era of abundant, easily accessible capital to one where securing funding has become increasingly challenging and competitive. And crucially, we have seen the industry shift from a focus on big ideas and proof of concept, to the active pursuit of scaling up.
The novel food space is incredibly diverse, with a wide range of products, target markets, production technologies, and companies behind them. However, there is one category of products that consistently garners the most attention and appears to be the most promising: dairy proteins made by precision fermentation.
Dairy products—mostly whey, but also casein—have been a popular choice for startups in the novel food space for a number of reasons-all of which we laid out in Rethinking Food and Agriculture in 2019.
Fundamentally, dairy proteins are functional proteins that bring unique characteristics like whipping and foaming, while also improving nutrition, taste and texture. They are the reason that milk can be made into dairy products like cheese, yogurt, or ice cream, and can also be added to other foods to improve their quality.
The dairy industry is massive by volume—some 550 million metric tons of milk produced per year— but the protein component of milk is actually very small, only about 3.3%. The bulk is mostly water (87%), plus some fat and sugar.
Not only is this a more manageable target for producers, but our previous research into the disruption of the dairy industry shows that novel producers going after that 3.3% will cause the entire incumbent industry to collapse thanks to the thin margins, price volatility and reliance on government subsidies and lobby support.
This is attractive to novel food producers because they can use a technology like precision fermentation (PF) to make these dairy proteins, without the cows or any of the inefficiencies that come with the entire dairy supply chain.
And the cost of doing so is coming down quickly. PF is not a new technology and the cost has been falling precipitously for the past 40 years. The first products on the market were pharmaceuticals from the 1980s because at the time, PF was still relatively expensive and pharmaceuticals are high-value products. But the cost has since fallen dramatically, opening up possibilities for its use across a variety of different industries - particularly in supplements and food production through the 1990s and early 2000s. In the past 10 years or so, the cost of PF has fallen further and the capabilities have improved to the point where it can be used far more widely—including directly in food.
In 2019, we projected that PF protein would hit cost parity with casein and whey around 2024-2025. Cost parity with dairy proteins is within reach, as evidenced by the recent regulatory approvals, the growing number of PF dairy products trialled commercially and available for sale, and the active participation of established dairy industry players.
Initially perceived as a major barrier to the adoption of precision fermentation, regulatory approval of three separate PF dairy proteins—whey (beta lactoglobulin), lactoferrin and casein—has significantly accelerated the industry’s progress.
Perfect Day (U.S) has achieved regulatory approval for their whey protein in the United States and India.
Remilk (Israel) has achieved regulatory approval for their whey protein in the United States, Canada and Israel
Imagindairy (Israel) has achieved regulatory approval for their whey protein in the United States
Vivici (Netherlands) has achieved regulatory approval for their whey protein in the United States
TurtleTree (Singapore) has achieved regulatory approval for their lactoferrin protein in the United States
New Culture (USA) has achieved regulatory approval for their casein protein in the United States
Regulatory approval has paved the way for real progress to be made in the space, and over the past few years we have seen several commercial products on the market. Perfect Day, a California-based PF whey producer has led the charge in the United States. They launched a large collection of B2C dairy products under a variety of different brands and collaborations including cream cheese, ice cream, whey protein powder, and milk.
They also sold their B2B whey protein as ingredients for inclusion in other companies' products, and the companies they have worked with are impressive. The major multinational food companies that have trialled products using PF proteins produced by Perfect Day, include Mars (CO2COA), General Mills (Bold Cultr), Unilever (Breyers) and Bel Group (Nurishh), which have combined revenues exceeding $115 billion per year.
It is not just Perfect Day that builds the case for PF dairy proteins. Recently, multiple “Big Dairy” companies—major players from the dairy industry around the world—have not only invested in PF, but have started doing it themselves.
Nestlé, the third largest dairy company in the world, uses PF to produce whey protein for their Orgain brand protein powder labelled ‘Better Whey’.
Fonterra, the world’s biggest dairy exporter, founded a startup with dsm-firmenich called Vivici that, within one year, commercialized PF whey protein as a B2B ingredient.
Leprino Foods, the largest producer of mozzarella cheese in the world, has struck a deal with startup Fooditive to gain the exclusive right to scale-up, produce and commercialize their PF casein protein using Leprino’s existing infrastructure and distribution channels. This includes 85% of the U.S. pizza market, plus foodservice and packaged foods.
Danone, the fourth largest dairy company in the world, has partnered with biotech, manufacturing and banking companies to create a platform to help scale up PF both for their own products and for other startup companies in France.
FrieslandCampina Ingredients, a subsidiary of the eighth largest dairy company in the world, is working with startup Triblebar Bio to scale up PF lactoferrin production to distribute through their established lactoferrin channels.
Norco, Australia’s largest and oldest milk co-op, founded a startup with CSIRO called Eden Brew that will produce PF casein and whey proteins for processing into dairy products using Norco’s production facilities.
The progress made in the animal-free dairy industry has been very exciting, and more is certainly to come. Here are some examples of the many companies that have commercial precision fermentation-produced dairy proteins on the horizon:
New Culture (U.S) has regulatory approval in the US, and is expected to release a mozzarella for pizza, featuring their casein protein, in 2024.
Helaina (U.S) is producing human lactoferrin for infant and adult nutrition applications
De Novo Foodlabs (U.S) is producing lactoferrin
Bon Vivant (France) is producing whey and casein
Daisy Lab (New Zealand) is producing whey
The disruption of food and agriculture by PF may start with dairy, but it certainly won’t end there. Companies around the world are already using PF to produce food and cosmetics ingredients, food processing enzymes, sweeteners, pigments, pharmaceuticals and more.
For a look at all the commercially available products made via precision fermentation, check out our Periodic Table of Precision Fermentation.
