Precision fermentation may be a food tech term that doesn’t put a pleasant taste in your mouth, but advances in the technology have investors increasingly ordering it from the menu and giving compliments to the chef.
This technology — brewing food inside huge fermentation chambers — is not new. (If you are a beer connoisseur, you get it — the precision fermentation technique is similar.) It can conjure foods of all kinds, from dairy and honey to meat alternatives.
What has people in the sector so excited is that this technology could create better-quality, more cost-effective proteins than their animal-based counterparts. The ultimate plan? Reduce dependency on animals as one of our main food sources.
Agencies and organizations with knowledge about our food supply chain are saying that “food production must double by 2050” to meet the demand of the world’s population, which is expected to reach nearly 10 billion people. The bummer is they don’t believe there are enough animals to meet that demand, and alternative supplies need to be created.
Independent think tank RethinkX forecasts that “production volumes of the U.S. beef and dairy industries and their suppliers will decline by more than 50% by 2030 and by nearly 90% by 2035.” Some good news is the organization expects alternatives, including those created by precision fermentation, to cost between 50% and 80% less than the animal products they aim to replace.
It doesn’t stop there. RethinkX believes precision fermentation technology will yield many environmental benefits, including using less land, feedstock and water resources.
Who is raising funds
Investors are excited by the prospects as well. The Good Food Institute, which looks at alternative protein innovation, reported that companies in this sector raised $911 million in venture capital dollars in the first quarter of this year, with fermentation companies pulling in $290 million of that.
To date, fermentation-derived meat, seafood, egg and dairy companies have raised over $3 billion since GFI started tracking these investments in 2010. (It’s important to note that there are two kinds of fermentation — precision and biomass — and GFI’s numbers didn’t break them out.)
Looking year over year, GFI noted fermentation companies focused on alternative proteins raised $1.7 billion in investments in 2021, triple the amount infused into companies in 2020.
We’ve been heavily covering investments in this sector, so let’s take a look at how some of these companies are leveraging precision fermentation.