Brands to solve the alternative protein challenge

NutritionInvestor speaks to trailblazers in Chile, the Netherlands, India, and the US working hard to bring to market a new generation of sustainably produced proteins, from cultivated meat to AI-driven ingredients

By Murielle Gonzalez

“Food always has been driven by technology.” The words of David Lee, the chief financial officer at plant-based burger brand Impossible Foods, set the tone of this report. “Bread and apple pie, for example, have more technology, engineering and R&D in them that you can possibly imagine!” he says. So, what’s new in this arena? Today, the brands making waves in the market, and luring investors into their business, are using technology for making food products at a whole new level, leading to outcomes never seen before.

The latest multimillion-dollar funding rounds for microflora-based dairy company Perfect Day, cell-based milk producer TurtleTree Labs, AI-driven protein manufacturer Protera, and cell-based meat start-ups Shiok Meat and Mosa Meat are prime examples of the novel approaches in the alternative protein space, and signal that investors’ interest for these new propositions is high.

These challenger brands are attractive because they address the sustainability challenge: the pressing need for manufacturing processes to produce food in ways that deliver a twofold goal: nutrition for an ever-growing global population and protection for the world’s ecosystem.

Businesses in the plant-based space have been in pole position for some time now, but that is changing. “We’re seeing innovation in two areas”, says Nick Cooney, managing partner of venture capital firm Lever VC, referring to food from cultivated cells and new technologies.

Cooney, who co-founded The Good Food Institute in 2015, created Lever VC in 2018 as a global venture capital fund dedicated to making early-stage investments in the alternative protein space. The fund is focused on meat, egg and dairy products made from plants or cultivated cells.

“Companies are working on cell-cultivated meat but with a new approach to the methodology that they feel will make them more likely to succeed more quickly,” says Cooney, adding these start-ups are pioneering the use of new technology. “Companies are incorporating certain machine learning techniques, advanced biologic mapping, novel bioreactor designs, and so on.”

Lever VC led the pre-seed round for TurtleTree Labs, a Singaporean start-up making milk from cells. “There’s a lot to like [in this brand], but I’ll highlight two things in particular,” says Cooney. “One is the first-mover advantage they have in the cell-cultivated milk space, as distinguished from companies like Perfect Day, which are expressing milk proteins from fermentation, which itself is a great approach and fits well for a number of applications.”

Cooney argues that first-mover advantage also means that other operators in the field are keen to connect and work with the company.

The second highlight, Cooney says, is the fact that TurtleTree Labs is simultaneously addressing both the massive dairy sector and the smaller, but still large and very high-value infant formula and human breast milk markets. The latter is used for infants in intensive care units, ICUs.

For Cooney, TurtleTree has a reasonable shot of getting to a price point that will allow the company to compete in that market, given some advantageous differences when compared with cell cultivated meat production.

New food-tech for sustainability

The second wave of innovation, Cooney says, is the application of biotechnology in the manufacturing process. He recognises that companies are applying cell cultivation and fermentation, among other techniques, to novel areas of animal protein that have not previously been used.

“When you think of how wide the universe of animal protein is, and how many different ways it’s used, you can get a sense of how much opportunity there still is for more innovation in this sector,” says Cooney.

Perfect Day, an animal-free dairy start-up, is a testament to these trends. Based in California, Perfect Day is pioneering the use of microflora fermentation to produce dairy proteins, including casein and whey.

Whey and casein are proteins typically extracted from cow’s milk, but the start-up produces these proteins from flora instead of animals and makes ice cream and cheese products with them.

Perfect Day closed a $300 million Series C round last week with investments from CPP Investments and existing investor Temasek.

New technology is being used as a means to address the sustainability challenge: plant- and cell-based proteins bypass the animal and thus companies reduce the carbon footprint of manufacturing processes.

But is it sustainable to make meat in a lab? Cooney says the question of sustainability is relative. He argues that compared with the most carbon-friendly and energy-friendly basic plant crops, cell cultivated or fermented meat or dairy are not as sustainable, but they are more sustainable compared with the conventional meat and dairy production that relies on raising animals.

“In practice, as these brands come on the market, they will have very big benefits in terms of reducing greenhouse gas emissions, land use, water use, and pollution, not to mention benefits to animal welfare and human health,” says Cooney.

The breakthrough technology that Chilean start-up Protera has developed to produce protein for food application is a pioneer in the food-tech space.

Next page: Protera, the AI-driven protein manufacturer