Sustainability/Analysis/ Fermentation tech could help feed the planet. But can it scale? It's increasingly catching VCs attention. By Freya Pratty 19 July 2022 \Sustainability How startups can usher in the circular economy By Sifted 21 February 2023 Sustainability/Analysis/ Fermentation tech could help feed the planet. But can it scale? It's increasingly catching VCs attention. By Freya Pratty 19 July 2022 Fermentation technology, where enzymes and microorganisms are used to produce proteins and other ingredients, is increasingly catching investor attention — with VCs backing lab-produced milk, eggs and cheese. But the industry is facing hurdles in its quest to scale. Eric Archambeau, cofounder of Astanor Ventures and specialist in food innovation, explains. What environmental benefit will fermentation tech bring to the food sector? The current agrifood system isn’t equipped to match the future demand for protein. Fermentation tech offers a viable solution to the pending food and climate crisis. Different types of fermentation offer powerful and flexible processes to produce sustainable and functional replacements for meats, milk, cheese, eggs and more. Fermentation tech can not only enable the efficient production of proteins, it can also be used to produce improved functional ingredients like alternative fat or alternative colours that make other animal-free proteins (ie plant based) more appealing or nutritional. It can help also reduce food waste because some companies will use it as feedstock for fermentation. Inventors and investors are paying increasing attention to the sector. Investments in fermentation-enabled alternative proteins alone topped $1.7bn in 2021, nearly three times the amount invested in 2020. What stage are these companies at? The market has seen a huge swell in new products and innovations. Companies are producing some delicious and nutritious options, and while some companies picked up more funding or achieved more milestones than others, clear market leaders are yet to be determined. The market winners will be those companies that not only develop the best products but also successfully master the industrial scale up of their technology. To create a significant change in the food system, products need to be affordable and widely available. In order to be cost competitive with conventional products, fermentation tech needs to be ramped up from lab to pilot to ultimately industrial scale. What’s holding the industry back? There simply isn’t the global bioreactor capacity to scale the production to meet the projected demand of all of these promising solutions. About 95% of global fermentation capacity is designed for non-food products (much of it is built for products like pharmaceuticals or energy). And in the 5% that is enabled for food products, the vast majority is already contracted through long-term contracts. In large part, these fermentation-driven startups are basing their business plans on production capacity that does not yet exist. Therefore, we also need to focus on innovative technologies that unlock production capacity. How are companies tackling the problem? There are two main approaches to tackling the problem. First, make the existing capacity more efficient. There are various newcomers focused on increasing the efficiency of existing facilities via smart sensors and software. Second, design the production facilities of the future. Some companies that are actively working on new technologies to build the future of fermentation include Solaris Biotech, Planetary, POW.bio, Solar Biotech and Ark Biotech. Freya Pratty is a reporter at Sifted. She tweets from @FPratty and writes our sustainability-focused newsletter — you can sign up here. Related Articles The Sifted guide to Cop26 By Alex Oscroft Click here to read more From batteries to the ‘Tesla of boats’: 10 green energy startups to watch In partnership with British Embassy Stockholm & Embassy of Sweden in London Click here to read more Meet the startups in Y Combinator’s latest intake By Connor Bilboe Click here to read more Climeworks’ $650m raise signals carbon removal’s mainstream arrival By Freya Pratty Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?