Precision Fermentation: Revolutionizing Sustainable Alternative Protein Production

As a coming-of-age technology, precision fermentation uses microbes such as yeast, algae, fungi, and bacteria to develop animal-free, high-value alternative ingredients, such as vitamins, fats, proteins, enzymes, and natural pigments. The growing popularity of the veganism trend and the demand for animal-free alternatives have paved the path for the precision fermentation ingredients market. The research-driven startups and manufacturers are investing heavily in products like milk protein, animal fats, collagen, honey, lobster, egg whites, etc. Aimed for mass commercialization, the alternative protein products derived from precision fermentation are targeted towards the younger demographic seeking sustainable, climate-friendly foods. According to MarketsandMarkets, the global precision fermentation ingredients market is estimated to be valued at USD 2,821.5 million in 2023 and is projected to reach USD 36,300.9 million by 2030, recording a CAGR of 44.0%.

Growing adoption of vegan and meat-free lifestyles

To fulfill the requirements of vegan consumers, manufacturers introduce various plant-based products, which incorporate animal-free ingredients from various sources like plants and microbes, thereby boosting the precision fermentation ingredients market. Precision fermentation is gaining attention in the food industry as it helps produce plant-based products or cultivated meat. According to the Good Food Institute, precision fermentation accounts for about 44% of the total number of fermentation companies focusing on precision fermentation technology to manufacture animal-free products. Companies employ this technology to create alternative items and ingredients with natural and nutritious profiles similar to conventional protein products. An example is the Impossible Burger from Impossible Foods US, which imitates the taste of beef burgers and is gaining popularity in the vegan community.

Growing adoption of vegan and meat-free lifestyles has witnessed a substantial upsurge driven by continued investments in alternative protein sources. The global plant-based meat and seafood market was projected to grow from USD 2.8 billion in 2017 to USD 6.1 billion in 2022-a 118% growth through the industry estimates and GFI analysis. Investment in cultured, fermentation-based, and plant-based proteins have almost touched the USD 3 billion, USD 4 billion, and USD 8 billion levels, respectively, by 2022. Industry predictions suggest significant expansion, with forecasts ranging from USD 90 billion to USD 1.1 trillion by 2040.

Source: Fermenting the Future: The Growing Opportunity for Products Made with Precision Fermentation, “The Hartman Group”

Increasing demand for nutritional food and beverages to drive whey & casein growth

Whey and casein proteins stand out due to their premium protein content, improved digestibility, and balanced amino acid profiles. Increased preference for animal-free options, veganism, and plant-based nutrition have pushed manufacturers to develop innovative products that include dairy-free cheese and plant-based sports nutrition offerings catering to sustainable meatless alternatives. Formo Bio sources whey and casein from microorganisms inspired by cow DNA to craft animal-free cheese through precision fermentation. Brazilian company Up Dairy specializes in precision fermentation to create dairy ingredients, with a focus on whey protein and casein. It employs advanced technologies such as Cell Line Development, Host Strain Development, Target Molecule Selection, Bioprocess Design, and Ingredient Optimization.

By microbe, yeast strains are set to lead the market due to varied applications

Yeast strains are used as “cell factories” to create a specific high-purity ingredient through precision fermentation. Companies such as Change Foods, Melt&Marble, Perfect Day, and Imagindairy use yeast to develop ingredients that have dairy and meat-alternative applications. The US-based startup, C16 Biosciences, has genetically modified microorganisms (yeast) to create palmitic acid, the key ingredient of palm oil. They are also vital for precision fermentation-based sustainable fat sources. Melt & Marble launched non-animal fat that emulated beef fat’s profile, which offers taste parity for conventional products. The firm had gained many patents concerning improvement on some strains of fungi with regard to enhancing fatty acid and protein production.

North America exhibits the highest demand for agricultural inoculants globally

As the largest market globally, the North American precision fermentation ingredients market is poised for a transformative shift. Reports by The Hartman Group indicate that about 40% of adults in the US will be willing to buy precision fermentation products, up to nearly 90 million. That can reach 132 million by 2027. The younger generation, from millennials to Gen Z, are willing to pay up to 10% more for those products. Sustainability initiatives, including cutting greenhouse gas emissions, natural farming, and sustainable packaging, are believed to be innovation opportunities. The US is expected to enjoy strong growth potential given extensive funding from investors, growing government support, and the rising consumer adoption of vegetarian, vegan, and flexitarian diets.

Market Ecosystem

The precision fermentation ingredients market landscape is characterized by strategic investments, strong research and development activities, and continuous product launches. Key players include Geltor, Perfect Day, The EVERY Co., Impossible Foods Inc., Motif FoodWorks, Imagindairy, Shiru Inc., Formo, Eden Brew, and Change Foods. The leading companies are investing heavily in R&D to develop cutting-edge formulations. They are aggressively looking to achieve economies of scale, mass commercialize their new product offerings, and utilize market demand through different distribution channels. One of the biggest developments for 2023 was the formation of the Precision Fermentation Alliance by nine companies for coordination in regard to comprehensive regulatory engagement.