Scaling up the food industry will be difficult and expensive because, currently, there is nowhere near enough existing capacity to service the demand for all of animal agriculture. But it can be done.

The speed of scale-up is one of the biggest unknowns as most of the companies in this sector are start-ups. The scale-up speed will depend largely on capital investment as the options available for companies looking to scale up now include building their own facilities from scratch, repurposing old fermentation capacity from other industries or using a contract manufacturer with available production room.

As with most technologies, the cost of marginal production depends largely on the cumulative experience the industry has with producing the relevant technology. This relationship is expressed as the experience curve. Essentially, every doubling in the cumulative number of units of a given technology reduces the cost of producing one additional unit by a given percentage.

The scale-up of technologies will, therefore, help drive costs lower. Currently, large-scale Precision Fermentation (PF) means production on the scale of grams to a few kilograms. This disruption will ultimately require millions of tons of production. Some of the biggest fermentation tanks used today are bigger than 100,000 liters, but those used for PF are in the region of 5,000 liters (the largest are for enzymes). This production is optimized for the current biological standards. However, we expect further improvements in these processes as the technologies improve.

Unfortunately not all existing infrastructure can be converted for use in food both because there is variation in fermentation processes and therefore equipment, and also because a lot of it is very old. Capacitor keeps track of suitable available fermentation capacity on a global scale.

The upshot of this is that significantly more manufacturing capacity will have to be built as the disruption of food and agriculture takes place and more companies are looking to scale up. This construction is not just up to individual food production companies, however, increased investment into those companies will certainly help. Regions looking to accelerate the disruption can fund, provide financing for and/or construct fermentation facilities to increase available manufacturing capacity in their region. Manufacturing companies may also consider building fermentation infrastructure to eventually be used in contract manufacturing partnerships.

Explore the evidence...

• The economics of modern food technologies are such that the disruption will play out regardless of the actions taken by decision-makers in any single country, but these decision-makers do have the power to speed up or slow down adoption of the new technologies. We believe the opportunities for businesses and investors to create wealth, for consumers to buy cheaper, healthier food, and for policymakers to enable extraordinary economic, health, social and environmental benefits mean each group will embrace these technologies far quicker than the current mainstream narrative suggests. Read more about this on p64 of our Rethinking Food and Agriculture report.
• Modern food products are here now—this technology has existed for 40 years. These products have gone through an incredible cost curve. We are already eating cheese, chocolate and proteins made using PF. If the cost curve continues the way it has for the last few decades, the cost of PF will be cheaper than the cow by 2024/2025. Watch RethinkX co-founder Tony Seba discuss the disruption of precision fermentation.
• The scale-up speed will depend on capital investment, and the ability to repurpose and capture current infrastructure and talent (such as from bioethanol or beer producers). The speed of scale-up is one of the biggest unknowns as most of the companies in this sector are startups. Read more about this under 'scale-up', on p 64 on cost methodology from our Rethinking Food & Agriculture report

Witness the transformation

We are on the cusp of the deepest, fastest, most consequential disruption in food and agricultural production since the first domestication of plants and animals 10,000 years ago. The disruption is inevitable, and companies will scale-up as the cost of modern foods drops. The cost of modern proteins will be five times cheaper than existing animal proteins by 2030 and 10 times cheaper by 2035. Eventually it will be nearly as cheap as sugar. 

Learn more about the disruption and transformation of the food & agriculture sector.

Published on: 12/07/23