By Tony Seba and Catherine Tubb
At the heart of our work at RethinkX are cost curves. Much more than a visual tool for understanding the exponential fall in costs, they are a roadmap to explaining how disruption happens.
In the case of Precision Fermentation (PF), each step down the cost curve has opened up the cost competitiveness for new sets of products, from pharmaceuticals (like insulin[1]), enzymes, flavors and fragrances, to cosmetics, materials, food and much more. We talk about some of these products and companies in our blog “Precision fermentation is nothing new and it’s here to stay.”
Today, the cost of protein made by PF is less than $100/kg down from $1,000,000/kg in the year 2000. This is cost-competitive with proteins in cosmetics, and some in materials and food.
As PF falls in cost, more opportunities for new products that are cost-competitive with those existing in the market emerge. Each industry is segmented and fragmented, with a vast array of products meaning a greater number of opportunities for market entry.
One example of segmentation within an industry is for dairy. Within dairy, there is a variety of products including milk, cheese, yoghurt, butter and ice cream. Going a step further, the cheese market can be further segmented. Cheese products range in use from crackers to pizza to cheesecake, all the way to the gourmet products you may find on a cheeseboard. For each individual product, there is a critical threshold in the cost of production, where it becomes more economically advantageous to produce the milk proteins needed via PF and then build up the product at the macronutrient level from the individual proteins, along with the fats and carbohydrates. The more expensive the product and the smaller the protein content as percent of the final product, the sooner PF becomes cost-competitive.
Understanding how PF products enter the market and subsequently gain market share is vital to understanding how this disruption happens.
We see four major market opportunities opening up now.
- Human proteins for human consumption
- Proteins that are too expensive to extract
- Proteins from extinct plants and animals
- Proteins that do not exist in nature – novel proteins
Human proteins for human consumption
There are a number of human analogues already commercially available–human insulin, collagen, milk proteins and antibodies. The reason is simple–human proteins are better suited for human use. Just as human insulin works better for diabetics than bovine or porcine insulin, human collagen is better in cosmetics and human milk proteins would be superior to cow milk proteins in baby formula.
Proteins that are too expensive to extract
Many molecules are simply too scarce in nature to find or farm economically, or they require excessive processing to extract. It’s not just proteins. Many companies already produce plant natural products (PNPs) like natural vanilla, orange flavoring (valencene), sweeteners (non-bitter stevia, thaumatin), rose oil, vitamins, indigo and cannabinoids directly from microorganisms more cheaply than from macroorganisms. Soon we will be producing many more. Australian scientists, for example, recently identified and replicated a protein in platypus milk that has unique antibacterial properties.[2] In the modern food production system, the data file containing that platypus protein could be uploaded, together with instructions for processing it (software) and produced anywhere in the world.
Proteins from extinct plants and animals
The same process could be used by engineers to replicate proteins from extinct plants and animals. Developing leather or meat from mammoths, giant moa or Atlantic gray whales will, therefore, be possible. In fact, steaks and leathers of any size, shape or thickness derived from any organism will soon be achievable. We may find that the “best” leather does not come from cows, but could instead come from something like jellyfish.[3] It could even be specially designed to have the optimal strength, flexibility or colour for the particular market! These technologies could even be used to save animals from extinction. Pembient aims to do just that by using PF and cellular technology to make rhino horn, a common target of poachers. Rhino horn is made of keratin, the same family of protein as we find in hair, skin, nails and hooves.[4]
Proteins that do not exist in nature
We have the technology to design proteins that have never existed before–whether it comes as an enhancement on a known protein or something completely unseen but designed for purpose. Proteins dictate functionality, which means that the possibilities for the capabilities of new products, particularly in foods and materials, are virtually endless. A group at MIT, for example, has already developed a discovery platform that has generated millions of proteins that are not found in nature.[5] Compare this with the dearth of unique proteins on our table. Today, 75% of the world’s food is generated from just 12 plants and five animals.[6] With custom proteins, food (as well as cosmetics, biologics and materials) can be designed according to what we need them to do and will no longer be limited by the constraints of nature.
This protein design has been where companies like Geltor have excelled. While their proteins are based on collagen from animals, adjustments and modifications can be made to optimize their proteins for performance.[7] For example, Geltor now offers their ingredients-as-a-service™ platform which develops “tailored ingredients for products“ with the ability to design “nutritional and functional properties such as texture and amino acid profiles”
The possibilities are infinite
These are four of the key areas of the market where PF products have the edge – and they are areas where we will see PF products enter first. They are the spaces where the efficiency benefits and value of the products made with PF make the disruption of the food industry inevitable.
A key part of the disruption of food is that the possibilities introduced by PF are endless. The protein world is infinite – it’s so big we still don’t know just how many proteins there are! PF will give as access to any and all of these proteins, and the properties they have.
The prospect is exciting. We don’t need to constrain humanity to the few proteins from plants and animals that were first domesticated ten thousand years ago. We’re now experiencing the second domestication of plants and animals, which has opened up an immense possibility space for innovators and entrepreneurs to create new products, services and business models that were inconceivable just ten or twenty years ago. We will explore more market opportunities in future posts.
[1] See previous post here.
[2] Green, A. (2018, March 15). Saving Lives with Platypus Milk. CSIRO. Retrieved from here.
[3] “Clean Meat” by Paul Shapiro was covered in a jellyfish collagen derived leather please see here.
[4] Datar, I. (2015, November 17). Pembient: Rhino Horns Without Poaching. New Harvest. Retrieved from here.
[5] Trafton, A. (2018, May 21). Chemists Synthesize Millions of Proteins Not Found in Nature. MIT News Office. Retrieved from here.
[6] Food And Agriculture Organization. (2004) Building on Gender, Agrobiodiversity and Local Knowledge: What is Happening to Agrobiodiversity. Retrieved from here.
[7] Geltor biodesign proteins for use in the cosmetics, beauty and (soon) nutrition spaces.
