Table of Contents—

Executive summary
Fermentation-enabled proteins year at-a-glance

6
6

Section 1: Introduction
The definition and role of fermentation in the context of alternative proteins

8
9

Section 2: Commercial landscape12
Overview
12
A note on Covid-19
12
Figure 1: A conceptual landscape of fermentation-derived and fermentation-enabled
products
13
Figure 2: Mind map of fermentation in the alternative protein industry
14
Table 1: Types of companies included in report scope
14
Fermentation for alternative protein end products
15
Figure 3: Number of companies by type of fermentation
15
Table 2: Companies focused on fermentation for animal-free meat, eggs, and dairy (orderedby year founded)
16
Figure 4: Number of fermentation-enabled alternative protein companies (2013–2020) 20
Fermentation initiatives for animal-free meat, eggs, and dairy
21
Figure 5: Companies with fermentation initiatives for animal-free meat, eggs, and dairy 21
Figure 6. Geographic distribution of fermentation-enabled alternative protein companies,by headquarters
22
Section 3: Products
Consumer product categories: Fermentation allows for a huge diversity of products
Ground meat
Whole-cut meats
Eggs and egg replacements
Dairy
Box 1: Fermentation-enabled milk proteins come to market
Gelatin
Seafood
Fats and oils
Pet food
The role of incumbents in enzyme solutions and scaling
Emerging B2B companies as suppliers and service providers for the alternative protein
industry

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24
24
24
25
25
25
25
26
27
27
27
28
29

Section 4: Investments
Overview
Figure 7: 2020 investment overview
Figure 8: Annual alternative protein investment backdrop (2010-2020)
Figure 9: Annual investment in fermentation companies (2013-2020)
Box 2: Data collection methodology
Figure 10: Deal type summary statistics (2013–2020)
Figure 11: 2020 key funding rounds
Box 3: A case study in liquidity events
Table 3: Most active investors in 2020
Figure 12: Funding models by deal count

31
31
32
33
33
34
35
35
36
37
38

Section 5: Science and technology
Key areas for science and technology development
Figure 13: A visual overview of the technology value chain for fermentation
Box 4: Prospects for scaling and cost reduction
Box 5: From the tank to the field: Plants as an expression platform
GFI’s research grant program
Fermenting oat proteins
Fermenting flavor bases

40
40
41
42
44
45
45
45

Section 6: Government and regulation
Regulatory updates
Box 6: Trade association facilitating regulation negotiation in Brazil
Labeling and nomenclature
Government support

47
47
47
48
50

Section 7: Conclusion and forecast
Forecast
Broader commercialization
Hybrid products
Figure 14: A spectrum of hybrid fermentation-enabled products
Scaling and expansion
Geographical diversification
Expert predictions

53
54
54
54
54
55
55
55

Acknowledgements

57

State of the Industry Report | Fermentation

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The Good Food Institute is a 501(c)3 nonprofit organization developing theroadmap for a sustainable, secure, and just protein supply. We identify the mosteffective solutions, mobilize resources and talent, and empower partners acrossthe food system to make alternative proteins accessible, affordable, and delicious.
This report, as well as all of GFI’s research, data, and insights, is made possible bygifts and grants from our global family of donors.

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State of the Industry Report | Fermentation

5

Executive summary—

GFI is pleased to offer this report as a snapshot of major 2020 developments in fermentation
as an enabling technology for the alternative protein industry. Fermentation will be a key
component in the shift toward alternative proteins, and this report provides an overview of thecompanies, technologies, and investments driving this sector of the industry.

Fermentation-enabled proteins year at a glanceCommercial landscape. The commercial landscape expanded
substantially in 2020:● Thirteen startups dedicated to the use of fermentation foralternative proteins launched, along with new suppliers focused on
fermentation-enabled alternative protein ingredients.
● Activity in precision fermentation increased, with nine of the 13 newcompanies focused on precision fermentation, three on biomass (anarea with significant activity in 2019), and one on traditional
fermentation.
● Fifty-one known companies are now dedicated tofermentation-enabled alternative proteins, an increase of 16
percent from 2019, and more than 30 others have a business line inalternative protein fermentation.
Products. 2020 saw the introduction of the first dairy product madethrough precision fermentation. Perfect Day’s commercial ice creamlaunches, including CPG brand Brave Robot, represent the first time
consumers have been able to buy precision-fermentation-enabledanimal-free dairy made with real milk proteins.
Investments. Investment in fermentation technology skyrocketed in 2020.
Fermentation companies raised $587 million, a greater than twofold
increase from 2019 that represents 57 percent of all-time sector funding.
Science and technology. Alternative protein companies launched new R&D
centers and production facilities, and GFI’s research grant program funded
several studies on fermented oat proteins and fermented flavor bases foralternative proteins.
Government and regulation. Governments around the world recognized
the potential of fermentation technologies in the development ofsustainable protein and rewarded multiple companies with grant funding in
2020. Perfect Day announced a collaboration with Singapore’s Agency of
Science, Technology and Research (A*STAR) to build a research anddevelopment center.

State of the Industry Report | Fermentation

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State of the Industry Report | Fermentation

7

Section 1: Introduction—

In 2020, fermentation joined plant-based and cultivated proteins as the third technologicalpillar of the alternative protein revolution. Although fermentation has been used to make foodand beverages for millennia—everything from beer to kimchi—2020 was a major inflection
point in its range of applications and possibilities for use in the agrifood industry.
Combining the indigenous wisdom of traditional food fermentation, the lessons of scalelearned from biofuels, the precision pioneered by biopharmaceuticals, and the breakout
success of the plant-based meat industry, fermentation has emerged as a powerful
technological platform for taking alternative protein products to the next level.
More than 80 percent of the companies devoted to fermentation-enabled alternative proteins
fermentation applications have formed in just the past five years. But the industry’s nascency
belies powerful potential, which has prompted many entrepreneurs, investors, scientists,
governments, and industry media outlets to take notice. In November 2020, the World
Economic Forum flagged fermentation as a key global innovation area:

Fermentation presents an opportunity to fundamentally change theway the world eats and improve global human and environmental
health and the economy.
In October 2020, GFI held the first international conference focused exclusively on the role offermentation in alternative proteins. The GFI 2020 Symposium on Fermentation attracted
more than 3,000 registrants across 50 countries. Attendees included investors, academics,
students, startup CEOs, celebrity chefs, and leaders from the world’s largest meat, food, andbeverage companies. Recordings from the symposium sessions are available on GFI’s YouTube
channel. In September 2020, GFI Consultancy, GFI’s strategic partner in mainland China, held
the first Chinese conference on fermentation and cultivated meat. The invitation-only eventdrew 80 scientists, investors, food companies, and policymakers to discuss the fermentation
sector’s role in alternative proteins and the Chinese food industry.
In 2020, fermentation-enabled alternative proteins emerged as a cohesive industry,comprising companies with a shared mission, common language, and record-breaking amountof venture capital investment. This report gives the rundown of major happenings in thefermentation-enabled alternative protein industry in 2020.

State of the Industry Report | Fermentation

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“Microbial fermentation has been used for years in the food industry
to produce ingredients such as enzymes and in the biopharma
industry to produce vaccines and drugs. This same technology is
now being applied to the alternative protein industry to enable a newgeneration of ingredients and products with enhanced sensory andfunctional attributes. I believe fermentation will be central to the
future of alternative proteins, and a lot of the industry growth overthe next 10 years will be the result of innovations in this segment.
Industry leaders appear to believe so too, with companies like AB
InBev, DuPont, and Danone making notable investments in thespace. ”—Caroline Bushnell, director of corporate engagement at The
Good Food Institute

The definition and role of fermentation in the context of alternative
proteins
Fermentation in the alternative protein industry refers to cultivating microbial organisms forthe purpose of processing a foodstuff or food ingredient; obtaining more of the organism itself
as a primary source of protein; or deriving specialized ingredients, such as flavorings, enzymes,
proteins, and fats, for incorporation into plant-based products or cultivated meat.
The alternative protein industry uses fermentation in three primary ways:
1) Traditional fermentation has been used for thousands of years to produce items suchas bread and beer. It uses intact live microorganisms to modulate and process
plant-derived ingredients, resulting in products with unique flavor and nutritional
profiles and modified texture.
2) Biomass fermentation leverages the fast growth and high protein content of many
microorganisms to efficiently produce large quantities of protein. This biomass serves
as either the predominant ingredient of a food product or one of several primary
ingredients in a blend.
3) Precision fermentation uses specially designed microbial hosts as “cell factories” forproducing specific functional ingredients. These ingredients are powerful enablers ofimproved sensory characteristics and functional attributes of plant-based products or
cultivated meat.

State of the Industry Report | Fermentation

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For more background on fermentation, its definitions, and its applications, check out
GFI’s fermentation page.

Harnessing Microbial Hosts as Cell Factories session from the GFI 2020 Symposium on Fermentation. The panelists are (clockwise from topleft) Monica Watrous (managing editor of Food Business News), Ranjan Patnaik (chief technology officer of Clara Foods), Michael Leonard(chief technology officer of Motif FoodWorks), and Tim Geistlinger (chief science officer of Perfect Day).

State of the Industry Report | Fermentation

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State of the Industry Report | Fermentation

11

Section 2: Commercial landscape—Across the supply chain, fermentation as an enabling technology for alternative proteins is
drawing increased interest. At least 51 companies focus primarily on fermentation foralternative protein applications (Table 2). As interest in alternative proteins has grown in thepast several years, many additional companies, including life science, pharmaceutical,
nutrition, agricultural, and big food companies, have diversified and created business initiatives
in the alternative protein industry (Figure 5).

Overview
2020 saw rapid growth in the commercial landscape of fermentation-enabled alternative
protein:● Thirteen dedicated startups launched in the fermentation-enabled alternative protein
space, including Chunk, Imagindairy, and Fybraworks Foods. See Table 2 for the full list.
● While 2019 was a breakout year for biomass startups (eight of 14 startups), 2020 saw asurge in precision fermentation activity, with nine of the 13 new companies focused on
precision fermentation, three on biomass, and one on traditional fermentation.
● Fifty-one known companies are now dedicated to some of the newest and mostpromising applications for fermentation—creating proteins, lipids, and functional
ingredients for plant-based products and cultivated meat. See Table 2 for the full list.
● More than 30 known companies have a business line in fermentation-enabledalternative protein, including Richcore, Shiru, and Arbiom. See Figure 5 for the full list.

A note on Covid-19“2020 was a year of reckoning. Our demand for meat has pushed our
natural environment beyond the limit of what can be safely sustained.
Covid-19 showed us how resilient we can be when faced with adversity,
but it also highlighted the terrible issues affecting our food system—while
many people were going hungry, our paralyzed supply chain dealt withsurplus livestock in unthinkable ways. In people’s minds, meatalternatives have become a necessity, not just simply an added choice,and fermentation science is poised to enable the next generation ofalternative proteins to enter the market.”—Abril Estrada, Wild Earth

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The full story of fermentation-enabled meat, eggs, and dairy in 2020 cannot be told without
accounting for the effects of Covid-19:● The pandemic, particularly in its early days, affected the ability of scientists to conduct
bench research by limiting both lab time and sourcing of important reagents.
● Timelines for scientific milestones were extended.
● Go-to-market strategies were thrown into uncertainty as the food system underwent
massive shifts.
● Key-input supply, production-space access, and product distribution experienced
interruptions.
Despite these constraints, companies continued to meaningfully advance both R&D andcommercialization efforts. The industry’s impressive 2020 funding totals, profiled in theforthcoming investments section, signal growth and opportunity. As the full story of Covid-19’s
impact on the industry continues to unfold, GFI remains confident that modernizing meatproduction with alternative proteins is an important step toward avoiding future pandemics.
While fermentation initiatives are generally divided into products of traditional fermentation,
biomass, and functional ingredients (produced via precision fermentation), the line between
biomass and functional ingredients is not always clear. Some biomass products also impart
special functionality to the end product, and some functional ingredients make up a significant
portion of an end product’s mass. These proteins, as well as fats and other compounds, arebest considered along a spectrum. Figure 2, an inexhaustive “mind map” of the fermentation
sector as it relates to alternative proteins, highlights this landscape of possibilities forfermentation-enabled proteins.

Figure 1: A conceptual landscape of fermentation-derived andfermentation-enabled productsState of the Industry Report | Fermentation

13

Figure 2: Mind map of fermentation in the alternative protein industry

A visual representation of the landscape of fermentation in alternative proteins. Source: GFI.

The following graphics provide an overview of companies working in fermentation-enabledalternative protein as either their core function (Table 2) or a broader business initiative (Figure5). All company references are purely illustrative, and while intended to be comprehensive,these lists are not exhaustive. Rather, they offer a snapshot of the range of companies andtechnology applications for fermentation. Because of fermentation technology’s broad uses,
Table 1 sets parameters for inclusion in this section and in Section 4 on investments.

State of the Industry Report | Fermentation

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Table 1: Types of companies included in report scope
Included●●●

Microbes (bacteria, microalgae, protists,and single-cell fungi) to produce ediblebiomass or functional ingredients forplant-based meat, eggs, and dairy, as
well as functional ingredients for meat
cultivation (such as growth factors).
Mycelium to produce edible biomass orfunctional ingredients for plant-based
meat, eggs, and dairy.
Fermentation to produce pet food (which
is highly relevant to human foodapplications).

Not included
●
●
●

●
●
●
●
●
●

Fermentation to produce food ingredients that are notreplacements for meat, eggs, or dairy (such as
sweeteners and protein powders).
Fermentation to produce food items other than forhumans or pets.
Fermentation to produce molecules for other non-foodapplications (such as biofertilizer, farmed animal feed,aquaculture feed, chemicals, biofuel, cosmetics, andbiologics).
Large corporations with R&D that is not publicly
disclosed, as well as startup companies in “stealthmode.”
Nut-based and other fermented cheese and butter (suchas Miyoko’s), which are covered in GFI’s state of theindustry report on plant-based meat, eggs, and dairy.
Tempeh and other traditional fermented foods, such as
sourdough or kimchi.
Mushrooms (the fruiting bodies of some fungi).
Macroalgae (such as kelp, seaweed, dulse, and sea
vegetables).
Nonprofit organizations and academic research labs.

Note: Companies with current applications of fermentation
technology for alternative proteins and lipids as part of abroader business are included in Figure 5 but not in investment
calculations.

Fermentation for alternative protein end products
Of the 51 companies focused primarily on fermentation for alternative protein applications, 21
are biomass companies, 23 are precision fermentation companies, and seven are traditional
fermentation companies.
Figure 3: Number of companies by type of fermentation

These 51 companies use diverse production platforms, organisms, and feedstocks to deliver
protein, fat, and functional elements—such as structure and texture—for a broad set ofanimal-free meat, egg, and dairy products as shown in Table 2.

State of the Industry Report | Fermentation

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Table 2: Companies focused on fermentation for animal-free meat,
eggs, and dairy (alphabetically ordered)
Total
disclosed
Founders
funding($M)

Company

Brief description

Technolog
Locationy categoryYearfounded

3F BioMycoprotein production
process for meat alternatives
and protein ingredients

Biomass

Glasgow,
Scotland, UK

Craig Johnson,$9.22 David Ritchie, Jim
Laird

2015

Afineur“Cultured protein” forplant-based foods

Traditional

New York, NY,USA

Camille$0.22 Delebecque,Sophie Deterre

2014

Air Protein

Food-grade protein from CO2

Biomass

Berkeley, CA,USA$32.11 Lisa Dyson

2019

AlgamaPlatform for microalgae-based
plant-based foods andingredients (including egg,
seafood, meat, and dairy
replacements)

Biomass

Paris, France$9.59

Alvyn Severien,Gaëtan Gohin

2016

AquaCultured
Foods

Whole-cut seafood analogues

Biomass

Chicago, IL,
USA–

Anne Palermo,
Brittany Chibe

2020

2019

Ilana Taub, Michael
Minch-Dixon

2020

Atlast Food Co.

Mycelium-based whole-cut
meats (starting with bacon)

Biomass

Green Island,
NY, USA

Eben Bayer, Steve
Lomnes, Russell
Hazen,$7.00
Gavin McIntyre,
Andy Bass, Alex
CarltonBolder Foods

Combined fermentation andplant-based technologies tocreate biomimicked dairy
products

Biomass

Brussels,
Belgium–

Bond Pet Foods

Microbially produced animal
proteins for pet foodPrecision

Boulder, CO,
USARich Kelleman,$2.0 Pernilla Turner
Audibert

2015

BrevelMicroalgae cultivation using
internal illumination ofcultures by sunlighttransported via optical fibers

Biomass

IsraelIdo Golan,
Undisclos
Yonatan Golan
ed

2016

Change Foods

Protein and fat production fordairy (starting with cheese)

Precision

San Francisco,
CA, USA$2.1 David Bucca

2019

Chunk

Whole-cut meat analogues
processed with solid-state
fermentation

Traditional Tel Aviv, Israel

–

2020

State of the Industry Report | Fermentation

Amos Golan

16

CirceFermentation of dairy
triglycerides and synthetic
polymers (spinout of the Wyss
Institute)

Precision

Boston, MA,
USA

Shannon Nangle,
Not
Marika Ziesack,profiled
Kevin McDonoughClara Foods

Egg proteins throughfermentation

Precision

San Francisco,
CA, USA$71.80Precision

Lausanne,
Switzerland

Not Tomas Turner,
profiled Denis Joly

Final Foods

Whey proteins for cheese
produced by yeast in
open-source bioreactor

Precision

Santa Clara,
CA, USA

Foods Myco
Mizoram

Mycelium-derived meatproducts

Biomass

Aizawl, India

Formo

Microbial fermentation to
produce milk proteins for dairy
products

Precision

Berlin,Germany$4.43

Precision

Wageningen,
Netherlands

Edgar Suarez$0.60 Garcia, Corjan vanden Berg

2019

$0.08

Chenfeng Lu, David
Liu

2020

CultivatedMicrobial fermentation todevelop alternatives to dairy
products

Egg replacement ingredientFumi Ingredients through microbial
fermentation

Arturo Elizondo,
David Anchel

2020

2014

2020

Julian Ramirez,
Marco Graziano,
Barbara Dunn

2020

Not
Henry Saingura
profiled

2019

RaffaelWohlgensinger

2019

–

Fybraworks
Foods

Mycelium as an expression
platform for animal muscle
proteins for meat alternatives

Precision

Minneapolis,
MN, USA

Harmony

Infant formula using humanmilk proteins produced via
fermentation

Precision

Boston, MA,
USA

Not
Wendel Afonsoprofiled

2020

Helaina

Infant formula using humanmilk proteins produced via
yeast

Precision

New York, NY,USA$4.41 Laura Katz

2020

Precision

Israel$2.35

Eyal Afergan, Tamir
Tuller

2020–

Horacio Acerbo,
Martín Blasco,
Lucas Gago,
Sebastián Taito,
Miguel Neumann

2019

Development of milk proteins

Imagindairy Ltd. with AI platform andfermentation

Kernel Mycofood

Decentralized production of
mycoprotein

Biomass

Buenos Aires,
Argentina

Kinoko-Tech

Mycelium-derived meatproducts

Biomass

Rehovot, Israel

Meati (formerly
Emergy Foods)

Whole-muscle meats madefrom mycelium, including
steak, chicken, and fish

Biomass

Boulder, CO,USA

State of the Industry Report | Fermentation

Daria Feldman,
Undisclos
Hadar Shohat,ed
Jasmin Ravid

2019ffJustin Whiteley,
Tyler Huggins

2016$33.0017

The
Mediterranean
Food Lab

Novel methods inspired bytraditional fermentation
technologies to produce
plant-based products andimprove the sensory qualities
of a wide range of plant-based
meat and other foods

Traditional Tel Aviv, Israel$0.12

B.Z. Goldberg,
Omer Ben Gal

2019

More Foods

Meats utilizing yeast proteins

Biomass

Tel Aviv, Israel–

Leonardo Marcovitz

2019

Motif FoodWorks

Functional ingredients forplant-based foods

Precision

Boston, MA,USA$117.50 Jonathan McIntyre

2018

Mushlabs

Mycelium-based ingredientsfor meat alternatives

Biomass

Berlin,Germany$11.94 Mazen Rizk

2018

Mycorena

Fungi-based protein for foodapplications (Swedish
meatballs) using industrial
side streams

Biomass

Gothenburg,
Sweden$1.78 Ramkumar Nair

2017

MycoTechnology

Fungi-based bitter blocker
ingredient and protein

Aurora, CO,
Traditional
USA

Alan Hahn, Brooks
J. Kelly, James P.
$81.67
Langan, Peter
Lubar

2013

Mycovation

Meat analogues frommycelium

Biomass

Singapore

Nature’s Fynd

Edible protein throughcultivation of extremophileorganisms through liquid airinterface fermentation

Biomass

Chicago, IL,USA

New Culture

Casein for cheese production(starting with mozzarella)Precision

San Francisco,
CA, USA

NextFerm

Novel active ingredients(whey-like protein) from
non-GMO yeast fermentation

Precision

NourishIngredients

Fermentation-derived fats formeat, dairy, and fishalternatives

novacca–

2020

Thomas Jonas,$158.00 Matthew Strongin,
Mark Kozubal

2014

$8.70

Inja Radman, Matt
Gibson2018

Yokneam,Israel

$5.00

Boaz Noy,
Tzafra Cohen

2013

Precision

Brisbane,
Australia–

Ben Leita, James
Petrie2019

Milk proteins using
fermentation platform

PrecisionNivå, DenmarkNot
profiled

Perfect Day

Milk proteins using
fermentation platform

Precision

Berkeley, CA,USA$361.48

2018
Perumal Gandhi,
Ryan Pandya

2014

PLANETARIANS

Fermentation of plant-based
Palo Alto, CA,
meats from sunflower cakes to TraditionalUSA
improve functionality

Aleh
Manchuliantsau,$0.90
Anastasia
Tkacheva

2017

Prime Roots

Meat analogues made frommycoprotein$18.54

State of the Industry Report | Fermentation

Traditional

San Francisco,
CA, USA

Joshua Nixon,
Kimberlie Le

2017

18

Provenance Bio

Development of synbio tools
for use in creating animal
proteins (working on collagenfor cultivated meat)

Precision

San Francisco,
CA, USA

Pura

Mycoprotein production andfermentation to enhanceplant-based foods

Biomass

Inarzo, Italy–

Stefano Babbini

2019

Quorn

Pioneering mycoprotein meatalternatives

Biomass

Stokesley,
England, UK–

Lord Rank

1985

RemilkFermentation-derived dairy
molecules

Precision

Tel Aviv, Israel$11.32

Aviv Wolff, Ori
Cohavi2019

Solar Foods

Electrolysis-enabled novel
protein under Solein brand forfood ingredients, plant-based
meat, and cultivated meat

Biomass

Helsinki,
Finland

Pasi Vainikka,$26.10 Juha-Pekka
Pitkänen

2017

Sophie’s
BioNutrients

Microalgae R&D to create
proteins for plant-based meatand dairy

Biomass

Singapore

Eugene Wang, Kirin$1.17 Tsuei, Barnabas
Chan

2013

The Protein
Brewery

Fungi-based protein to replacemeat under the Fermotein
brand and fungi-produced egg
proteins

Biomass

Breda,
Netherlands$25.87 Wim de Laat

2019

Those Vegan
Cowboys

Production of recombinantcasein to make vegan cheese(from the founders of The
Vegetarian Butcher)

Precision

Flanders,
Belgium–

Triton Algae
Innovations

Production of heme and othermeat-like compounds frommicroalgae for plant-based
meat applications

Precision

San Diego, CA,USA$5.00 Miller Tran

2013

Wild EarthFermentation-derived pet food Traditional

Berkeley, CA,USA$15.55 Ryan Bethencourt

2017

Yeap

Meat analogues made fromyeast

Ashdod, Israel

Didiber Toubia,
Jonathan Goshen,
Dominik Grabinski

2020

Biomass

Michalyn Andrews,
Zev Gartner, John
Undisclosed
Dueber, Christian
Ewton

–

Jaap Korteweg,
Niko Koffeman

2020

2020

Notes: The investment data from this section, sourced from GFI’s PitchBook analysis—the methodology we profile in
the investments section—reflects industry developments through December 31, 2020. “Total disclosed funding($M)” refers to invested capital as defined in “Box 2: Data collection methodology.” A dash under this column
heading indicates that the company in the corresponding row is not associated with any disclosed funding rounds in
PitchBook. “Undisclosed” means that the company has raised an investment round, but the amount is undisclosed
in PitchBook and thus not included in the funding totals. Finally, “Not profiled” means that the company itself is not
yet covered by PitchBook, and thus the company’s financing activity is unknown.

State of the Industry Report | Fermentation

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Figure 4: Number of companies in fermentation-enabled alternative
proteins (2013–2020)

Source: GFI company database.

“[In 2020] large consumer product companies became believers in
the long-term market draw of alternative proteins, driving both a
new wave of startup companies and robust venture funding. Thishas converted the industry from a technology-driven push to amarket-induced draw, a more sustainable and financeable model.”—Mark Warner, Warner Advisors

State of the Industry Report | Fermentation20

Fermentation initiatives for animal-free meat, eggs, and dairy
More than 30 companies have a commercial initiative in fermentation-enabled alternative
proteins. These companies have diverse focuses within the technology value chain, and somecompanies, such as Superbrewed Food (formerly White Dog Labs) and Tnuva, are working
across value chain categories. Others are specializing in the following key value chain
segments, also represented in Figure 5, all of which are important to advancing fermentation
as an alternative protein technology:● Target metabolite identification and selection.
● Microbial strain development.
● Feedstock discovery and optimization.
● Bioprocessing design and manufacturing.
● End product and ingredient commercialization.

Figure 5: Companies with fermentation initiatives for animal-freemeat, eggs, and dairy

You can learn more about these companies in the GFI company database. Are we missing
something? Let GFI know by filling out our company database edits form.

State of the Industry Report | Fermentation

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The fermentation industry spans the globe. Companies involved in fermentation for alternative
protein applications operate in at least 16 countries. The largest concentration of companies isin the United States with 23, followed by Israel with nine. Of the 13 companies formed in 2020,
six are in the United States, and the rest are in Belgium, Israel, Switzerland, and Singapore.

Figure 6. Geographic distribution of fermentation-enabled alternative
protein companies by headquarters

Are we missing something? Did we get something wrong? We’d appreciate your feedback via thisform.

State of the Industry Report | Fermentation

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State of the Industry Report | Fermentation

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Section 3: Products—

Culinarians, ingredient companies, and food manufacturers increasingly recognize thepotential of targeted fermentation to endow foods with unique flavor, texture, and nutritional
attributes. Along with advances in biotechnology, data analysis, and industrial design, thispotential has established fermentation as an indispensable platform for innovations in bothingredients and primary protein production. And 2020 saw the development and launch ofmore alternative protein products created with this technology, including several industry firsts
detailed in this section.

Consumer product categories: Fermentation allows for a huge diversityof products
In 2020, companies advanced applications of fermentation technology to produce groundmeat products, whole-cut meats, eggs, milk, cheese, gelatin, seafood, fats, oils, pet food, andmore. Fermentation is also enhancing plant-based products across all these categories.
Ground meat
●

●

●

●

●
●

Sweden’s Mycorena soft-launched their line of fungal protein Swedish meatballs in
local stores. Other companies, such as 3F Bio, are also developing fungi protein
products.
Planterra, a plant-based meat subsidiary of the world’s largest meat producer, JBS,
introduced their first line of products under the brand OZO, which features pea and riceprotein fermented with shiitake mycelia from MycoTechnology. Planterra launched an
online store for OZO and gained significant distribution at large grocers, such as
Safeway and Kroger.
Impossible Foods, which uses precision fermentation to produce their signature
leghemoglobin ingredient, rapidly expanded their U.S. retail distribution and added
distribution in Singapore and Hong Kong.
Better Nature, which makes animal-free meats from tempeh, announced their new
Better Burger, made through traditional fermentation, at the GFI 2020 Symposium on
Fermentation.
Noma debuted a carryout fermentation-enabled quinoa tempeh burger.
Fermentation pioneer Quorn rolled out their mycoprotein-powered chicken in U.S.
restaurant chain Hooters in one of the first major foodservice launches of animal-freechicken.

Outside tempeh and other fermented foods that are not intended to fully mimic the sensory
properties of animal products, ground products make up the bulk of fermentation-enabledofferings widely available to consumers. However, additional product formats are launchingwith increasing frequency.

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Whole-cut meats
Fermentation presents opportunities for enhanced texture in whole-cut products without the
extrusion on which plant-based products have traditionally depended. Creating animal-freewhole cuts and cutlets is a massive market opportunity, as whole-cut products (such as fillets,bone-in cuts, and ham) are the highest-margin and most desirable segment of the $1.7
trillion global meat market. 2020 brought major developments in whole-cut products:● Colorado-based Meati Foods launched their line of whole-cut steak and chicken
products made through submerged fermentation at a Colorado restaurant.
● Atlast Food Co., which produces whole-cut meats, introduced their brand MyBacon.
Atlast also offers private labeling and announced in December that they had presold allplanned capacity through 2023.
● In March, Prime Roots, which deploys mycoprotein to create a variety of products for
direct-to-consumer sale, sold out their soft-launch inventory within hours. By the endof 2020, Prime Roots had launched animal-free bacon, chicken, pork, and beef
products in their online store.
Eggs and egg replacements
A small crop of companies has emerged to crack animal-free eggs by using fermentation to
produce their functional components in a better way.
● Noblegen introduced “the egg,” a protist-derived, powdered whole-egg replacement, inearly 2020.
● Also early in the year, Clara Foods announced the forthcoming launch of theirfermentation-enabled egg whites, as well as a partnership with Ingredion to sell theworld’s first animal-free pepsin enzyme.
Dairy
Fermentation also holds disruptive potential for dairy products. 2020 saw several notablefermentation-powered dairy developments:● Tofurky sister company Moocho launched a line of dairy-free cheese shreds poweredby fermented cultures and fava bean protein.
● Perfect Day commercially debuted animal-free ice cream using their recombinant whey
protein, including a retail launch and introductions at multiple ice cream chains.

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Box 1: Fermentation-enabled milk proteins come to market
Precision fermentation had a significant market test in 2020 with the launch of
several products containing Perfect Day’s fermentation-enabled milk proteins.
Perfect Day, formed in 2014 by Isha Datar of New Harvest and New Harvest
community members Ryan Pandya and Perumal Gandhi, is the first company tobring to market real milk proteins—whey—for food applications using microbes
rather than mammary glands. In early 2020, Perfect Day partnered with San
Francisco ice cream producer Smitten to sell animal-free ice cream—the first suchanimal-free dairy ice cream on the market—on Smitten’s local and regional
direct-to-consumer platform. Later in the year, Perfect Day inked deals with ice
cream chains N!CK’S and Graeter’s to further expand the company’s reach. Perfect
Day also spun out The Urgent Company, which started a new animal-free ice creambrand, Brave Robot. Launches like these will enable a new generation of
biomimicking animal-free cheese, ice cream, yogurt, and butter. Other companies,
including New Culture, Change Foods, Cultivated, and Formo, recently emerged tocreate dairy proteins and fats that will usher in a wave of plant-based,
precision-fermentation-enabled dairy.

Perfect Day’s animal-free ice cream made in partnership with Smitten. | Image credit: Perfect Day

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GelatinGelatin is partially degraded collagen protein, traditionally derived from animal connective
tissue as a byproduct of meat rendering. Because of its gelling properties, gelatin is used inmany food and cosmetic applications. 2020 brought these notable developments:● Jellatech formed to commercialize fermentation-enabled jellyfish collagen for food andcosmetic applications.
● Geltor closed a $91.3 million Series B funding round after they developed aplant-based, fully biocompatible human elastin for the skincare market.
Seafood
One of the least developed areas of alternative proteins is plant-based seafood. Quorn’s
fishless fingers are the only widely available fermentation-enabled seafood product.
Fermentation, particularly with microalgae, may hold the key to unlocking this category. 2020
was marked by great promise:● Odontella, which makes a structured salmon analogue using seaweed and microalgae,announced two contracts with food retailers for at least 500,000 servings.
● Meati posted an Instagram teaser on World Oceans Day: a mycelium-based flaky fish ina basket of fish and chips.
● 3F Bio announced a prototype mycoprotein tuna steak produced via a 3D printer madeby Natural Machines.
● Good Catch, which uses microalgal omega-3 oil in their plant-based tuna, expanded
distribution in the United States and extended it to Europe.
See GFI’s white paper An Ocean of Opportunity to learn more about the potential ofseafood alternatives.
Fats and oils
Fats are key contributors to the sensory experience of eating meat, egg, and dairy products. By
using microbial fermentation, companies can produce a wide array of fats—including fats thatare critical to the nutrition, sensory characteristics, or functionality of animal products but
challenging to source from the plant kingdom. The most notable on-market example ismicroalgae cultivation to produce algal omega-3 fatty acids, such as EPA and DHA, which are
not produced by terrestrial plants. Companies such as Algarithm, DSM, iWi, and Corbion
produce algal- or fungal-derived omega-3s. The category enjoyed breakthrough investment
success in 2020:●

C16 Biosciences, which uses microorganisms with altered lipid synthesis pathways to
produce desirable fats, announced $20 million in Series A funding from backers
including Bill Gates-led Breakthrough Energy Ventures.

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Pet foodPet food is a promising application for fermentation due to fermentation’s ability to create
proteins that are scarce in plants but desirable for animal-free pet foods. Pet food is not only a$30 billion market but the cause of about 25%–30% of the environmental impact of eating
meat in the United States. Human-food producers can also leverage research and technology
developed for pet food applications. 2020 saw significant developments infermentation-enabled pet food:● Wild Earth, a pet food and dog treat company, expanded their products to the Indian
market.
● Bond Pet Food, which uses microbes to produce specific animal muscle proteins,introduced their first product: a high-protein dog treat produced with a novel strain ofyeast.

“2020 saw the blossoming of fermentation as the third pillar ofalternative proteins due to a number of converging factors globally.
The technology and the boundless potential of microbes became
more widely understood and democratized, fermentation
investments hit record heights, multiple startups emerged in various
countries and categories, and alternative proteins continued to
rapidly rise in prominence in the broader market. Many are looking
towards future technologies for improved performance and to help
solve for the limitations of existing products experienced by theflexitarian consumer.”—David Bucca, Change Foods

The role of incumbents in enzyme solutions and scaling
Incumbents in the B2B fermentation industry include manufacturers of food processing
enzymes, flavoring ingredients, vitamins, and live microorganisms for fermented foods such as
cheese, yogurt, and preserved meat. These companies, which include Cargill, DuPont, AB
Enzymes, Biocatalysts, Novozymes, Kerry, ADM, DSM, Amano, and Ajinomoto, have deep
expertise in enzyme development, strain development, and large-scale manufacturing. While
the alternative protein industry is not a major fraction of their business, many of thesecompanies recognize the growing importance of this new application area and are developing
novel solutions accordingly:

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●
●

Novozymes expanded their marketing of enzymes for improving flavor andfunctionality of plant proteins.
DSM launched a portfolio of enzyme solutions targeting plant-based dairy productdevelopers.

Emerging B2B companies as suppliers and service providers for thealternative protein industry
The majority of B2B companies using fermentation for alternative protein products position
themselves as ingredient suppliers that empower B2C companies to improve their branded
products. Scale, cost, and functionality are these companies’ core drivers for differentiation
and adding value to the alternative protein ecosystem. 2020 saw several developments in theB2B supplier and service subsector:● Producing natural, microbe-derived flavoring solutions and bulk proteins for use in
consumer-facing products.
○ MycoTechnology’s pea and rice protein fermented by shiitake mycelia launched
in OZO brand plant-based meat by Planterra, a JBS subsidiary.
○ UK retailer Marks & Spencer announced a vegan range that uses 3F Bio’s
mycoprotein.
○ Ginkgo Bioworks spinoff Motif FoodWorks invested in expanded
manufacturing capacity in advance of commercial-scale production of theirfirst product, which adds meaty flavor to beef alternatives.
● Leveraging biotechnology to produce genuine animal proteins in microbial or mycelial
hosts.
○ Geltor completed a Series B funding round in July worth $91.3 million and in
November announced a new Ingredients-as-a-Service platform, adding thefirst biocompatible human elastin, Elastapure, to their product portfolio.
● Providing services and technology development for B2B or B2C fermentationcompanies.
○ Culture Biosciences piloted a new high-throughput mammalian cell versionof their bioreactors-on-demand service with three customers in the summer andfall.
● Providing fungal solutions for cultivated meat structure.
○ Novel Farms formed to add biocompatible domains to fungi to create better
scaffolds for structured cultured meat products.

Are we missing something? Did we get something wrong? We’d appreciate your feedback via thisform.

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State of the Industry Report | Fermentation

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Section 4: Investments—

Overview
Fermentation has rapidly become a robust part of the alternative protein investment
landscape. In 2020, fermentation companies raised $587 million, a twofold increase from2019 that accounted for 19 percent of overall funding in the alternative protein sector andrepresents 57 percent of all-time funding for fermentation companies.
The fermentation segment further matured and diversified in 2020:● Perfect Day extended their Series C funding round to $300 million.
● MycoTechnology won a $1 million nondilutive prize in Syngenta’s Radicle Protein
Challenge.
● In addition to an $80 million Series B round in March, Nature’s Fynd closed a $45
million venture debt round in December.
● Air Protein, Meati Foods, Prime Roots, Remilk, Solar Foods, The Protein Brewery, andMushlabs all raised Series A rounds of $10 million or higher. These seven rounds
represent a 75 percent increase in number of Series A rounds from 2019.
While 2020 was a record year for fermentation investment, significant additional investmentsfrom public and private funders are needed to support R&D innovation, accelerate thederisking and commercialization of promising technologies, and scale up production capacity.
Of particular need are nondilutive investment methods, such as debt financing, grants,
guarantees, purchase commitments, equipment and facility leasing, and other financing
vehicles tailored to infrastructure and R&D expansion. Another undersupported area iscontract capacity, a critical need for fermentation startups looking to scale rapidly.
For more information on fermentation investment white spaces and ideas for solutions, pleaseview GFI’s Advancing Solutions webpage.

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Table 3: 2020 investment overview
Total invested capital

Largest investment

Unique investors$587 million(57% of all-time investment,
up 109% from 2019)$1 billion (2013–2020)$300 million(Perfect Day)

80 new(up 45% from 2019)

Series A/A1/A2 fundraisingroundsSeries B fundraisingroundsSeries C/C1 fundraisingrounds7 new
19 total (2015–2020)

1 new
3 total (2017–2020)

1 new
3 total (2017–2020)

259 total (2013–2020)

Invested capital deals

Liquidity events

28 new
102 total (2013–2020)

0 new$1.49 billion total(Quorn, 2003–2017)

Source: GFI analysis of PitchBook data.
Note: Data has not been reviewed by PitchBook analysts. Total invested capital includes deals with undisclosed dates and thus may not
match the sum of annual invested capital figures in this report.
See Box 2 for GFI’s data collection methodology and definitions of “invested capital” and “liquidity events.”

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Figure 7: Annual alternative protein investment backdrop (2010–2020)

Source: GFI analysis of PitchBook data.
Note: Data has not been reviewed by PitchBook analysts.

Figure 8: Annual investment in fermentation companies (2013–2020)

Source: GFI analysis of PitchBook data.
Note: Data has not been reviewed by PitchBook analysts.

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Box 2: Data collection methodology
GFI conducted an analysis of fermentation companies worldwide using data from
PitchBook. Our analysis uses a list we custom built in PitchBook of companies
focused primarily on fermentation-enabled meat, egg, or dairy products orproviding services to those who produce them. Our analysis excludes the many
companies involved in fermentation but not as their core business (Figure 5) andcompanies using fermentation other than to create or enable alternative meat, egg,
and dairy products. PitchBook profiled 44 fermentation companies, of which 34
have disclosed deals. Of these 34 companies, 32 have deals with publicly disclosed
amounts. Because these aggregate calculations include only companies with deals
and deal sizes disclosed to PitchBook, they are conservative estimates. For
example, $1 billion total invested capital raised excludes 27 deals (from a total of102) with undisclosed or unavailable amounts. This means at least 26 percent ofdeals in this industry are not represented.
For the purposes of this report, invested capital / investment comprises accelerator
and incubator funding, angel funding, seed funding, equity and productcrowdfunding, early-stage venture capital, late-stage venture capital, private equity
growth/expansion, capitalization, corporate venture, joint venture, convertible debt,
and general debt completed deals. Liquidity events comprises mergers,
acquisitions, reverse mergers, buyouts, leveraged buyouts, and IPOs, while otherfinancing comprises subsequent public share offerings and private investment inpublic equity. We do not include capital raised through a SPAC IPO until the entity
has merged with or acquired a target company. Please note that the figures
published in this report may differ from prior figures published by GFI as we
continually improve our dataset.

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Table 4: Deal type summary statistics (2013–2020)
Deal typeMedianMinimum

Maximum

Count

Seed

$2M

$1M

$7M

21

Series A/A1/A2

$14M

$3M

$90M

19

Series B

$42M

$40M

$80M

3

Series C/C1

$23M

$7M

$300M

3

Source: GFI analysis of PitchBook data.
Note: Data has not been reviewed by PitchBook analysts. These figures represent summary statistics of invested capital rounds withdisclosed deal amounts. Deal count includes rounds with undisclosed amounts. Due to their limited number and size, this table excludes
angel, corporate, and Series 1 rounds. It also excludes uncategorized rounds.

Figure 9: 2020 key funding rounds

Source: GFI analysis of PitchBook data. Data has not been reviewed by PitchBook analysts.

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Box 3: A case study in liquidity events
The alternative protein fermentation sector is too young for us to expect manyliquidity events, such as IPOs or acquisitions that drive the venture capital
investment model. However, Quorn, the mycoprotein pioneer founded decades
before most other mycoprotein companies, provides a promising case study. Rank
Hovis McDougall (RHM), a UK-based food company, began research and theregulatory approval process for their products in the 1960s. But not until 1985 was
the brand Quorn (named after a British village) first marketed via a joint venture
between RHM and Imperial Chemical Industries (ICI).
Quorn first sold at Sainsbury’s in the United Kingdom in the form of savory pies.
Other parts of Europe followed and finally North America in 2002. As one of thefirst alternative protein market entrants, Quorn enjoyed market dominance andcommercial success. In 1993, Quorn was spun off by ICI, which had acquired all of
RHM’s shares, to AstraZeneca. In 2003, Montagu Private Equity bought Quorn for$116 million before selling it two years later to Premier Foods for $315 million. In
2011, other private equity investors acquired Quorn before Monde Nissin, aPhilippines-based food company, ultimately acquired it for $726 million in 2017.
Notably, Quorn has also successfully secured large tranches of debt financing,including a $147 million debt refinancing, a 113 million GBP note, and a 10 million
GBP revolving credit line from CitiGroup Global Markets and HSBC Bank in March
2019 per PitchBook. We expect other fermentation companies to experienceliquidity events within years, not decades.

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Table 5: Most active investors in 2020
2020
deal
count

Portfolio companies(number ofinvestment rounds
participated in)Investor

Investor type

Headquarters

CPT Capital

Venture capital

London, United
Kingdom3

Motif FoodWorks (1)3F Bio (1)Better Dairy (1)Clara Foods (1)Formo (1)
New Culture (1)Perfect Day (1)Remilk (1)Solar Foods (1)

SOSV / IndieBio

Venture capital

Princeton, NJ, USA

3

New Culture (3)Planetarians (3)Prime Roots (3)Clara Foods (2)Perfect Day (1)ADM Ventures

Corporate venture
capitalLugano, Switzerland

2

Nature’s Fynd (2)Air Protein (1)Perfect Day (1)Happiness Capital

Corporate venture
capitalHong Kong, SAR,
China

2

Mushlabs (2)Better Dairy (1)Formo (1)ProVeg Incubator

Accelerator/incubat Berlin, Germanyor2Remilk (2)Formo (1)Mushlabs (1)Temasek Holdings

Sovereign wealthfundSingapore2

Perfect Day (3)Sophie’s Bionutrients (1)Social Starts

Venture capital

San Francisco, CA,USA

2

Meati Foods (2)Mushlabs (1)Stray Dog Capital

Venture capital

Leawood, KS, USA

2

Atlast Foods (1)Better Dairy (1)Wild Earth (1)Unovis AssetManagement

Venture capital

New York, NY, USA

2

Atlast Foods (1)Meati Foods (1)The Protein Brewery (1)Kishore Ganji*

Angel (individual)

2

Helaina (1)New Culture (1)Maya Hari*

Angel (individual)

2

Change Foods (2)Michal Klar*

Angel (individual)

2

Change Foods (2)State of the Industry Report | Fermentation

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Simon Newstead*Angel (individual)

2

Change Foods (2)Tom Crago*

Angel (individual)

2

Change Foods (2)*Indicates funders that made disclosed investments in fermentation-enabled meat, eggs, anddairy for the first time in 2020.
Source: GFI analysis of PitchBook data. Data has not been reviewed by PitchBook analysts. “Most active investors” includes those who
made two or more investments during the calendar year.

Figure 10: Funding models by deal countAre we missing something? Did we get something wrong? We’d appreciate your feedback via thisform.

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State of the Industry Report | Fermentation

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Section 5: Science and technology—

Despite microbial fermentation’s long history in food and industrial biotechnology, tremendous
potential for innovation remains. The vast biological diversity of microbial species, coupledwith virtually limitless capabilities in biological synthesis, translates to massive opportunities
for novel alternative protein solutions to emerge from fermentation-based approaches.
Opportunities to advance fermentation can be segmented into five key areas spanning thevalue chain: target selection and design, strain development, feedstock optimization,
bioprocess design, and end-product formulation and manufacturing.
For a comprehensive view of the state of the science in fermentation-enabled meat,
eggs, and dairy—including a deep dive into each component of the value chain—checkout GFI’s science of fermentation page.

Key areas for science and technology development
In 2020, GFI launched the Advancing Solutions repository of solutions and innovation
priorities for alternative proteins, providing analysis on opportunities and challenges infermentation. Our menu of alternative protein insights and opportunities for businesses,
investors, nonprofits, academic researchers, and governments is based on interviews withmore than 150 experts throughout the alternative protein value chain, including scientists,
investors, entrepreneurs, and consultants.
Identified below are the key innovation priorities for fermentation-powered alternative
proteins:● Increased titers and yields of target molecules and protein biomass.
● Strain engineering to allow for the use of less expensive feedstocks.
● Safety studies and genetic tools for more microbes to enable more innovation by
expanding the selection of host strains.
● Bioreactor innovation to create equipment that is optimized for food-grade
fermentation.
● Downstream processing innovation, such as cell harvesting and target molecule
purification, which must become less costly and easier to scale, as capacity is a majorbottleneck.
● Characterization and analytical tools for inputs, as current methods areresource-intensive and slow.
● Co-product valorization using side streams from traditional crop harvesting andprocessing fractions and upcycling spent media and other co-products fromfermentation processes.
● Feedstock consistency and cost reduction. Shipping costs are currently high unlessproduction is co-located with feedstock sources, which raises concerns about foodState of the Industry Report | Fermentation40

●

safety and regulation around inputs such as agricultural side streams. Meanwhilealternative feedstocks remain highly inconsistent.
Alternative substrates that are less expensive, more sustainable, and widely available inorder to reach mass commercialization.

Figure 11: A visual overview of the technology value chain for fermentation

Source: GFI.

Below are some of the most needed solutions that emerged during the Advancing Solutions
surveys:● Comprehensive microbial screening to identify new protein-production candidatestrains.
● Biosynthetic pathway discovery for fermentation-produced molecules.
● Producing animal-like fats through microbial fermentation.
● Fat production and encapsulation within oleaginous yeast.
● Biological and enzymatic processing methods for plant proteins.
2020 also saw significant research and development updates:●●●

TurtleTree Labs spun out TurtleTree Scientific and partnered with a major filamentous
fungi company to produce growth factors. Although announced in 2021, the partnershipdeveloped in 2020.
The search for suitable microbial strains broadened to include the anaerobic realm,
which opens the door to repurposing large-scale ethanol production infrastructure thatis not suitable for aerobic fermentation. White Dog Labs (Superbrewed Food) purchased
an ethanol plant with plans to convert it for aquaculture feed production.
Quorn opened the new Fermentation Development Centre to accelerate their protein
research.

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●

3F Bio opened a pilot-scale facility to generate operational data to support theircommercial scaleup and advance their fundamental bench-scale R&D work.
To dig deeper into the most pressing challenges and greatest white spaces infermentation-enabled alternative proteins, check out GFI’s Advancing Solutions
insights:○ Innovation priorities. Overview of commercial white spaces, research gaps,
technological needs, and investment priorities at each stage of the value chain.
○ Solutions database. Frequently updated database of ideas for new startups,commercial ventures and products, research projects, ecosystem support, andinvestment opportunities.

Box 4: Prospects for scaling and cost reduction
Traditional and biomass fermentation processes offer well-established examples ofscalability and cost reduction suitable for alternative protein applications. Further
innovation to reduce costs is certainly possible for these platforms and will be
important for widespread deployment in low- and middle-income countries, but
precedent for economic viability and true industrial scale already exists. However,precision fermentation will require additional scaling and cost reduction to
manifest its potential in the alternative protein industry. Some applications ofprecision fermentation in this industry are already profitable, but others pose costchallenges.
Which price points are achievable for products of precision fermentation, and how
quickly? The answer depends on multiple factors, but there is reason to believethat products created via precision fermentation can achieve price parity withcomparable conventional animal products through a combination of approaches:
1) Increasing scale. Economies of scale dictate that costs decrease as scale
increases up to an asymptote where the marginal production cost is equal tothe cost of the inputs.
2) Improving volumetric productivity. Volumetric productivity is the amount ofdesired product that can be produced in a given volume in a given period,and increasing this will improve capital utilization and lower unit costs.

State of the Industry Report | Fermentation423) Prolonging continuous bioprocessing. Because of the power of exponential
growth within cell culture platforms, fermentation processes operate mostefficiently and productively at their peak volume and density.
4) Decreasing inclusion levels in final products. Alternative protein products
benefit from highly functional fermentation-enabled ingredients, even at
low inclusion levels. Developing ingredients that impart the desired
functionality at lower volumes will enable companies to create end products
at higher volumes and lower prices.
5) Relaxing purification stringency. Many applications of functional proteins infood may not require the same level of purity as active proteins, such as
enzymes. Purification composes a substantial fraction of the overall
production cost for many recombinant proteins, so relaxing purification
requirements will significantly reduce cost.
See more insights.

“Consumers are driving the demand for nonanimal sources ofprotein. Food brands will naturally respond to meet consumer needs
but can only do so with a ready supply of high-quality ingredients.
The benefits of both biomass and precision fermentation unlock theopportunity to make better products and to do so at a scale toreplace the animal using regionally grown, sustainable ingredients.”—Jim Laird, CEO of 3F Bio

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Box 5: From the tank to the field: Plants as an expression
platform
While most recombinant protein production uses precision fermentation in
microbial hosts, crop plants can also serve as hosts for production of high-value
target molecules. Plants engineered to produce ingredients of interest can begrown and harvested inexpensively and at large scale through traditional
agricultural systems, which may require less infrastructure and therefore lesscapital expense than fermentation systems. Upon harvest, downstream purification
proceeds much as it would if the host were microbial. Introduction of high-value
ingredients into edible plants also opens the door to less-intensive downstream
purification if the crop itself can be used as an ingredient with built-in enhanced
functionality.
Target molecules for expression in plants might include heme proteins or growth
factors for cultivated meat production, such as those pursued by Core Biogenesis
and ORF Genetics. At least 11 publicly announced companies are now working on
this approach, including Tiamat Sciences, Alpine Roads, Mozza, ORF, Core
Biogenesis, Moolec Science, Greenovation Protein, Fantastic Farms, BioBetter,
InVitria, and Genius Foods. This expression platform will continue to shift both costand production paradigms and unlock further innovation in recombinant proteins.

Ramen with mycelium-based steak from Meati Foods. | Image credit: Meati Foods

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GFI’s research grant program
While GFI’s competitive research grant program has historically focused on plant-based andcultivated protein technologies, our 2021 request for proposals includes microbial
fermentation as a third eligible technological platform. GFI also supports white spacecollaborations and provides small-scale exploratory grants for research infermentation-enabled alternative protein, in addition to aggregating a database of third-party
research funding opportunities that are relevant to alternative proteins.
Fermenting oat proteins
Research highlight: Mari-Liis Tammik, research scientist at TFTAK (Center ofFood and Fermentation Technologies) in Estonia, led a project exploring
fermented oat protein for use in plant-based meat. Oat protein has an
excellent amino acid profile and low allergenicity, and this work enables
further research on fermentation of a wide variety of cereal grains to improvetheir nutritional profiles and sensory attributes. Specifically, fermented oats
are used in this project as a novel constituent in plant-based meat. The
research began with identifying starter cultures to improve nutritional andorganoleptic properties of oat protein. It then developed oat-based meat forcomparison with conventional meat and other non-oat plant-based meat.

Fermenting flavor bases
Research highlight: BZ Goldberg, CEO and R&D director at The Mediterranean
Food Lab in Israel, is leading a project to explore the potential of traditional
and adapted multiphase fermentation technologies to develop new meatflavors from plant ingredients. These flavors can be added to plant-based
meat products. The research develops production protocols for elevating andaccentuating beneficial organoleptic factors in flavor-rich ingredients. This
work will enable plant-based ingredients to emulate the flavor profile ofconventional meat. It will help expand the types of plant-based ingredientsthat address critical culinary functions of animal-based meat and other animal
proteins. In November, The Mediterranean Food Lab became one of threewinners of the EIT Food Accelerator Network program.

Check out our research grants page to explore grant opportunities (at GFI andelsewhere!) and meet the scientists leading open-access fermentation
research for applications in meat, eggs, and dairy.

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Section 6: Government and regulation—

Regulatory updates
Both microbial fermentation as a processing method and ingredients derived from microbial
cultures have a long history of use in the food industry—precision fermentation to create therennet used in most animal-based cheese products, for example. Given this history,well-established regulatory systems to ensure the safety of innovations in this platform arealready in place in most jurisdictions. However, each regulatory agency and frameworkpresents its own nuances and idiosyncrasies.
In November, the Singapore Food Agency (SFA) updated a year-old guidance document on
novel-food safety assessments. The guidance provides little new detail as to which standards
manufacturers must satisfy to obtain approval of their products. As it stands, the SFA strongly
encourages companies interested in selling alternative protein products in Singapore tocontact the regulatory body early in the R&D and commercialization planning process.
According to the SFA, the framework set forth in the guidance document steered the SFA’s
approval of Impossible’s soy leghemoglobin in August and Triton Algae’s Chlamydomonas
reinhardtii algae in November 2019.
Multiple companies have already obtained “no questions” letters from the FDA for purified
fermentation-derived ingredients, meaning the FDA does not object to the companies’ viewthat their ingredients are “generally recognized as safe” (GRAS).
● Nature’s Fynd (formerly Sustainable Bioproducts) filed a GRAS notice with the FDA in
January 2020; the FDA’s response is pending.
● In March 2020, Perfect Day received a no questions letter from the FDA in response to
their GRAS notice for beta-lactoglobulin, the major protein in whey.
In December 2020, Impossible Foods received approval for their heme from the regulatory
agency Food Standards Australia New Zealand; the approval became final in February 2021,
opening up another large market.

Box 6: Trade association facilitating regulation negotiation in
BrazilGFI Brazil, along with 29 companies in the alternative protein market (products,
ingredients, and investors), launched a trade association in late 2020 to help

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facilitate negotiations between the industry and the government. In December
2020, the Brazilian Ministry of Agriculture hosted a workshop to discuss a new
regulatory framework for alternative proteins, including plant-based andfermentation-enabled proteins. GFI Brazil helped organize the event and supplied
presenters. The workshop attracted more than 300 attendees and vast media
coverage.

The Brazilian Ministry of Agriculture hosted a workshop on alternative protein regulatory frameworks in December 2020.
Panelists included (clockwise from top left) Hugo Caruso from DIPOV/MAPA (Division of Vegetable Products of the Ministryof Agriculture), Alexandre Novachi from ABIA (Brazilian Food Industry Association), Gus Guadagnini, managing director of
GFI Brazil, Dr. Caroline Mellinger from Embrapa (Brazilian Agricultural Research Corporation), and Igor Castro from ABIR
(Brazilian Association of Refrigerated Drinks) | Image source: GFI Brazil.

Labeling and nomenclature
Labeling of fermentation-enabled and plant-based products remains contentious in somemarkets. In October 2020, the European Parliament rejected a bill that would have prohibitedthe use of meat terminology like “sausage” or “burger” on labels for products not derived froman animal carcass. The Parliament did, however, pass a similar ban which introduced further
restrictions on the labelling of plant-based dairy. While dairy terms such as “milk” and“yoghurt” are already banned under EU law, these new restrictions would ban any ”evocation”
of the concept of dairy, even when used with a clear modifier such as “alternative” or “style.”
EU member states and the European Parliament are still negotiating whether this ban is going
to become law.

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Outside governmental prescription, the advanced fermentation sector—companies producing
animal-free dairy, eggs, and other novel proteins—has not yet aligned on standard terminology
for products or ingredients derived from precision fermentation, although there is an
acknowledged need for nomenclature studies. Several leading companies in the precision
fermentation sector are working together to identify appropriate nomenclature. Currently,
several distinct terms are in use:
For ingredients:●●●

The ingredients disclosure on labels for Smitten ice cream, which is made withingredients from Perfect Day, uses “non-animal whey protein isolate.” This parallels“non-animal rennet,” a widely accepted term used by cheese manufacturers to refer torennet made via precision fermentation. Smitten’s packaging also includes a dairy
allergy warning.
Perfect Day uses the term “microflora” for the microbial hosts and “flora-derived
protein” for the animal-free dairy proteins in marketing materials. Unlike probiotic
products that also use the term “flora,” Perfect Day’s products do not contain live
cultures.
Clara Foods, a food technology company making eggs and other animal-based proteinsusing precision fermentation, plans to describe their products as “animal-free.”For products:●●

Brave Robot, which also uses ingredients from Perfect Day, describes their ice cream
as “animal-free dairy.”
Change Foods, a company making dairy products enabled by precision fermentation,
also describes their products as “animal-free dairy.”In the biomass fermentation sector, companies are using various terms to describe products
and ingredients:● Quorn coined the term “mycoprotein” to describe their fungal-derived protein
ingredient, but another term may work equally well or better for this type of biomass.
Note that as a settlement term of a class action suit, the company has since modified
their packaging in the United States. The allergen warning now reads: “Mycoprotein is amold (member of the fungi family). There have been rare cases of allergic reactions to
products that contain mycoprotein” (even though fungal food allergies are much lesscommon than soy allergies).
● MycoTechnology and other companies that use mycelium from species such as
Lentinula edodes, whose fruiting bodies are consumed as shiitake mushrooms, may beable to use “mushroom protein,” “mushroom extract,” or similar terms.

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Government support
Fermentation is a paradigm-changing innovation. It can unlock new high-value uses for
low-value agro-industrial byproducts, affordably nourish the world’s growing population, andhelp ensure protein sovereignty and security (unlike slaughterhouse closures during apandemic). Thus, it is not surprising that some governments have taken an active hand insupporting companies in the space.
The United States, the European Union, Israel, and Singapore are among the first governments
to provide support for the sector. 2020 brought several developments:● Meati Foods (formerly Emergy Foods) received an equity investment from the U.S.
Department of Energy via the incubator arm of Argonne National Laboratory.
● Mycorena received a 50,000-euro grant from the European Commission, the executive
branch of the European Union, to help fast-track their product to market.
● 3F Bio, alongside a consortium of other companies, received a 17-million-euro grantfrom the EU Horizon 2020 program to develop a zero-waste biorefinery to produce
food-grade protein from low-cost, sustainable feedstocks. The project, called
PLENITUDE, brings together 3F Bio, a bioethanol biorefinery, Bridge2Food, Mosa Meat(a cultivated meat company), Wageningen University, International Flavors &Fragrances, Alcogroup SA, and others.
● EIT Food Accelerator Network (funded by a European Commission Horizon 2020 grant)
announced their 2020 cohort, which included Mycorena and The Mediterranean Food
Lab, as well as several cultivated meat and plant-based meat, egg, and dairy
companies.
● San Francisco’s Perfect Day announced that they would collaborate with Singapore’s
Agency of Science, Technology and Research (A*STAR) to build a research anddevelopment center.
● The EU Smart Protein project published a new fermentation-related research study
led by University College Cork. The project is a $10.5 million initiative of the European
Union to support the alternative protein industry and includes support for
fermentation (fungi and side-stream conversion).

Nacho cheese sauce from Perfect Day. | Image credit: Perfect Day

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Section 7: Conclusion and forecast—

2020 was a landmark year for fermentation, which emerged as a pillar of the alternative
protein industry. Alongside plant-based proteins and cultivated meat, fermentation will help us
sustainably feed a global population of nearly 10 billion by 2050. Because of its vast potential
in technical and product development innovation, fermentation is well positioned to exceed thesensory, nutritional, environmental, social, market, and functional paradigms of status quo
proteins in today’s food system.
Fermentation is not just valuable in its own right, offering competitive prices, unparalleledfunctionality and scalability, and validated mechanisms for establishing and ensuring safety; italso stands to revolutionize the entire alternative protein industry, with spillover applications inplant-based products and cultivated meat. Fermentation can enable a new generation ofproteins, fats, and other functional ingredients that combine with plant-based and cultivatedcomponents to create biomimicking whole-cut meats, egg replacements, animal-free dairy
proteins, seafood products, and more.
The alternative protein industry has barely scratched the surface of the potential for
fermentation-based approaches, and both consumers and existing players in the sector are
eager for the innovative products and solutions that fermentation can provide. GFI looks
forward to supporting the innovators in this sector as they drive the transformation of our foodsystem into one that is more sustainable, secure, and just.

Doris Lee, general manager of GFI Consultancy, speaks at the first fermentation and cultivated meat conference in China.

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Forecast
Broader commercialization
We expect 2021 to be another unprecedented year of research and development
breakthroughs in fermentation, fueled by a record-setting amount of industry fundraising.
Fermentation-enabled alternative proteins are entering the proof of concept stage, withpioneering products starting to reach customers. Early adopters will provide evidence of
product-market fit and help producers refine their product formulations, marketing mixes, anddistribution strategies.
Global changemakers are taking notice; Bill Gates noted that alternative protein innovation will
be a core part of fighting climate change in an appearance on CBS News’ 60 Minutes in
February 2021. In addition to mentioning several plant-based meat manufacturers, Gates
singled out Nature’s Fynd as a company doing earth-saving innovation. Gates is an investor in
Nature’s Fynd and other alternative protein companies because he believes in their climate
mitigation potential.
Hybrid products
We also anticipate that hybrid products containing multiple types of protein will play anincreasingly significant role in alternative protein product launches. We have already seen
activity in this area; Back of the Yard Algae Sciences announced a microalgal heme ingredientfor plant-based meat in early 2021, potentially enabling other companies to unlock the“bloodiness” that the Impossible Burger pioneered. Over the next few years, many products
will not rely solely on fermentation-derived proteins but will include plant and animal cellcomponents, just as Impossible Foods’ beef derives from a mixture of plant and microbial
sources, with the fermentation-derived ingredients providing significant sensory benefits.
Companies operating at the intersection of the three alternative protein categories will enable
a new wave of paradigm-shifting meat, egg, and dairy products and ingredients that meet
consumer expectations for taste, price, functionality, versatility, and variety.

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Figure 12: A spectrum of hybrid fermentation-enabled products

Scaling and expansion
As these products enter the market and demonstrate consumer traction, industry activity islikely to accelerate. The substantial cash inflows in 2020 will fuel capital expenditures for
production facilities and expand the size of skilled science and engineering teams, enablingindustrial bioprocesses to grow in scale, companies to develop new products, feedstocks todiversify, and more companies to emerge. All this activity will improve the end products’ quality
and price, driving further adoption.
Geographical diversification
Historically, the United States and Europe have served as major innovation hubs for industrial
biotechnology and fermentation, particularly from a technology development standpoint.
Lately, Asia and Latin America have increasingly positioned themselves as leaders inmanufacturing capacity and fermentation infrastructure. With the advent of new research toolsthat decrease the cost of R&D, innovation is likely to come increasingly from regions that havenot traditionally led biotechnology developments. These regions will be able to couple
upstream strain and feedstock improvements with the operational expertise required for swift
integration into large-scale manufacturing environments, potentially accelerating the iterative
innovation cycle and path toward cost reduction. Governmental investment is an “X factor”
that could rapidly accelerate industry growth as we have seen with Israel and Singapore.

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Expert predictions
Looking to the year ahead, we asked a group of industry experts for their predictions of what’s
next in fermentation for alternative proteins.
The whole space for fermentation and alternative proteins is about to break wide open. We’re on
the cusp of seeing more possibilities emerge than ever before when it comes to improving taste
and nutrition. That means the benefits for CPG companies and consumers in the plant-based
food space will begin to materialize at a faster and faster pace. The companies that can keep up
with this pace—and that have the scientific skill along with access to a broad range of strains andproteins to create these benefits—will come out on top.
—Michael Leonard, Motif FoodWorks
I believe fermentation will take center stage not just when it comes to alternatives to meat, butalso for food ingredients and products beyond protein. Functional ingredients, nutrients mainly
derived from animals, and old fermentation products with new applications (e.g., enzymes) willfind their way into our everyday foods.
—Abril Estrada, Wild Earth
We will see better products as a wider number of brands increase the pace of innovation. To
underpin this, it is essential that we see an increase in supply capacity. If we believe in the
projection of 25%–30% CAGR, then for fermentation to even maintain its share of the market,
there is a need for a 10x+ increase in capacity by 2030. We will also see governments increase
their level of investment in non-animal protein sources. This will accelerate trends such as the
Spanish government’s investment in Ethicameat, Singapore’s “30 by 30 vision,” and the EU’scommitment to bio-based industries.
—Jim Laird, 3F Bio

The forecasted demand for alternative proteins requires significantly more fermentation
capacity than exists today, representing a state-of-readiness bottleneck. While this has thepotential to prompt large companies and governmental entities to fund expanded capacity,
identification and emphasis on the shortfall is critical to prompting the required action.
—Mark Warner, Warner Advisors

Solid-state fermentation will emerge as a new modality to create structured proteins and wholecuts of meat analogs that are not possible through liquid fermentation.
—Eben Bayer, CEO of Ecovative and Atlast Food Co.

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Acknowledgments—

Authors
Nate Crosser
Startup Growth Specialist, The Good Food Institute (former)
Entrepreneur in Residence, Blue Horizon Corporation
We’d like to thank Emma Ignaszewski, Liz Specht, Blake Byrne, Zak Weston, Alicia Crawford,
Sharyn Murray, Elizabeth Derbes, Nicole Manu, Mirte Gosker-Kneepkens, Bruce Friedrich, Aviv
Oren, Nir Goldstein, Felipe Barbosa Krelling, Alex Holst, Susan Halteman, Sheila Voss, SarahDavid, Jessica Almy, Caroline Bushnell, Brooke Mays, Gavin McIntyre, Isabelle Adams, andothers who contributed to this report.
We are grateful to the following industry experts for their perspectives: Eben Bayer, David
Bucca, Abril Estrada, Jim Laird, and Mark Warner.
Cover image courtesy of Atlast Food Co.
© 2021 The Good Food Institute. All rights reserved.
Permission is granted, free of charge, to use this work for educational purposes.

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