Can Precision Proteins Change How and What We Eat?

FoodShot Global, a New York-based accelerator focused initially on soil health and now on precision proteins, describes precision proteins as those that are “more precisely attuned to human and planetary health, better aligns global and regional supply and demand, increases accessibility, and decreases waste and environmental damage.”. In protein manufacture, we are seeing a convergence of technologies from different industries including biopharmaceuticals, brewing, flavor and ingredient manufacturing, food processing, and industrial biotechnology. This convergence is accelerating new methods of protein product set to compete, and then beat, conventional production methods in the next two to three years.

Source: Foodshots Global

This market is attractive to private investors as the size of the opportunity is impressive. Barclays estimates the alternative meat market will grow from 1% of the global market share in 2019 to 10% in 2029 worth $140 billion. AT Kearney predicts up to 60% of meat could be alternative proteins by 2040, with cultivated meat comprising 35% and plant-based meat reaching 25%.

We are seeing a multiply effect of drivers:

• Production cost for fermented proteins is dropping logarithmically, from over $1000/kg two years ago to under $100/kg today.
• Consumers are increasingly willing to buy alternative meats. Among millennials, 79% consumer meat alternatives, 30% eat meat alternatives daily, and 50% consume alternatives on a weekly basis.
• Covid-19 has highlighted how dysfunctional traditional protein supply chains have become, while giving alternative proteins an opportunity to gather market share with more supply chain agility, better shelf-life, and direct-to-consumer models.

We are seeing a convergence of technologies:

• Precision biotechnology can now design proteins, fats, vitamins, or any other ingredient, by design and selection of microbes to produce these products.
• Rapid genomic sequencing is making available the blueprints for manufacturing foods without using an animal or organism.
• Additive manufacturing and new production techniques are being used for protein to create a distributed network of production, reducing supply chain costs, and to enable personalisation of protein products; you will get a personal print out of protein to suit your nutritional needs and taste preferences.

Business Models

There are a number of technical and scientific hurdles which need to be overcome. Broadly there are three categories proteins are being optimized in;

1. Production
2. Processing
3. Personalization

I have previously covered the innovation in product and production techniques in this analysis, looking at the different business models being applied to plant and cultivated (or cell-based) meats. Precision proteins are more likely to be made using cultivation or fermentation techniques than plant-derived alternatives, as manufacturing costs will soon be less, and there can be greater control over design and personalization.

There are some technical hurdles, such as biological scaffolding to grow cell-based proteins into recognizable products. These hurdles are being solved using technology from the biopharmaceutical industry, with companies as Matrix Meat, Tantti Labs and Prellis Biologics coming to the fore.

One innovator trying to exploit the value of purpose designed proteins in Geltor. The company has developed an ingredients-as-a-service platform, where it can make proteins according to specific functionality or as an identical replacement to animal derived proteins. Its first product is a manufactured collagen to replace the animal derived products often used in cosmetics. The company raised $91.3 million in a Series B round from investors including CPT Capital, WTT Investment, Cultivian Sandbox, SOSV, iSelect, GELITA, Archer Daniels Midland, Blue Horizon, RIT Capital Partners, Humboldt Fund, and Pegasus Tech Ventures.

Another approach is to engineer plants to grow more functional proteins for use in the food industry. Phytoform Labs, a UK-based developer of techniques to explore the genetic potential of plants, is looking to use gene editing techniques to create a lupin product with improved functionality.

Opportunities will be significant in processing and personalization of the new food categories enabled by precision protein production methods. Design of flavors and ingredients, salts and sweeteners, will define the taste and texture of these products. In this category, innovators range from Motif Foodworks, the Ginkgo Bioworks spin out, which is looking to culture animal fats to be included in plant-based products to improve the taste and texture. Separately, companies such as Joywell Foods, recently backed in a $6.9 million Series A by Evolv Ventures, Khosla Ventures, SOSV, Alumni Ventures, Piva Capital, Hemisphere Ventures, Mehta Ventures, Plug and Play Tech Center, and Indie Bio, are looking to develop plant-based sweeteners derived from natural proteins

Competition

As the second wave of innovation in the protein space arrives, there are a number of flavor, ingredient, and food processing corporates looking to capitalize on the entirely new food category being created, as well as investors seeking opportunities in the space.

• DuPont Nutrition and Biosciences rolled out a new food and beverage brand, Danisco Planit, to focus on protein alternatives.
• DSM is looking to become a key ingredient supplier to new protein products, bundling products such as masks for ‘beany’ flavors, umami boosters, and mouthfeel improving ingredients in order to sell to new protein product developers.
• Givaudan, which founded the innovation hub Mista in San Francisco to get access to new food ingredient innovations, recently announced its new strategy to expand the portfolio through acquisition of flavors supporting health while meeting ethical expectations.
• FTW Ventures, a San Francisco-based investor in food companies, raised $4 million to invest in 15-20 early stage and pre-seed companies working in ‘bioscience, IoT, advance materials, also personalized nutrition’.

To compete with the new protein products already in the market, meat companies and service providers are both investing in a new wave of alternative proteins and launching their own products.

• Cargill announced it plans to introduce plant-based patty and ground products. This continues the company’s work with Puris to provide pea proteins. The company has also invested in cell-based proteins, including Aleph Farms and the Memphis Meats Series B, alongside investment in the animal protein space.
• Tyson Foods have placed a number of bets on new protein manufacturing techniques, including Memphis Meat, Future Meat Technologies, MycoTechnology and Beyond Meat. The company also released a hybrid plant and animal-based product in 2019 which was half pea and half angus beef protein. The company recently promoted Dean Banks to CEO, who has a technology background, notably with Google X, as a signal of its intent to engage with innovation.
• Nutreco’s recent partnership with Mosa Meat will aim to develop a growth medium for cultivated meat producers which can enable cost-competitive production. It’s an interesting example of an animal feed company exploring the idea of becoming a feedstock company for the new protein space.

Keep an eye out for…

An increasing focus on personalized nutrition and predictive health analytics, such as Nutrigenomix and Personalised Co., alongside distributed manufacturing developers can give consumers easy access to a new wave of food form factor and taste innovation.