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INSIGHT: Precision Fermentation, a Disruptor for Fermentation-Based Feed Additive Industries?

Source: Feedindo Logo Final

11 November 2020 - Precision fermentation – the convergence of fermentation and precision biology, allowing us to program microbes to be mini biological factories to produce almost any complex organic molecule at high speed and volume – may not be a new technology, but falling prices have led to its use in an ever-growing list of applications.

According to “Rethinking Food and Agriculture 2020-2030 — The Second Domestication of Plants and Animals, the Disruption of the Cow, and the Collapse of Industrial Livestock Farming,” a late-2019 report released by RethinkX (a think tank specialising in technology led disruptions), precision fermentation will likely change human diets on a scale comparable to the agricultural revolution. And, contrary to cultured meats, precision fermentation has even more potential given that with precision fermentation you are programming microbes to make proteins – any protein.

RethinkX predicts a 70% drop in demand for cattle products by 2030 due to inexpensive precision fermentation alternatives. And even by replacing only a small percentage of beef and dairy products with precision fermentation products, conventional agriculture will likely be disrupted.

According to the report, dairy products will be affected first. It will be followed by beef before cascading to other meats and the grain farmers who supply to feed mills.

If we are to believe the report, these sectors will be replaced by precision fermentation and a new model of production called Food-as-Software.

RethinkX senior research analyst and report co-author, Catherine Tubb, describes the industrial livestock industry as one of the “oldest, largest, and most inefficient food production systems in the world”.

“We forecast that animal agriculture will be completely disrupted by these new technologies, so the animal nutrition industry will not exist in the same magnitude it does today,” she told Feedinfo.

Providing some background to this comment, Tubb pointed out that proteins provide the core functionality for many products we consume – and not just food.

“Precision fermentation started 40 years ago with the production of human insulin in place of using bovine or porcine insulin. As we have come down the cost curve we have crossed new critical thresholds of competitiveness – opening up a new set of products – through pharmaceuticals, enzymes, like the ones used in washing powder or in the production of cheese, and in many common flavours and fragrances, like rose and orange. As technology has improved and got cheaper, more recent entrants into the market have seen human based collagen for cosmetics,” she said.

Tubb added: “We estimate today that precision fermentation has fallen from around $1 million per kg of protein to under $100/kg today – and it is still falling. By 2025 we expect it will cost around $10/kg – which is when it starts being cost competitive with a range of bulk animal proteins such as whey and casein – and it will fall further to $2/kg by 2030.”

On the input cost side, Tubb said that precision fermentation currently relies on a carbohydrate (usually glucose) and admits that the technology will be susceptible to the volatility of commodity markets.

“But these inputs are 10x less than needed for traditional animal agriculture. In addition, there is a huge amount of research being done on microbes that use other inputs, like carbon dioxide, or other forms of biomatter,” she commented.

RethinkX is seeing a variety of companies offering solutions across the whole animal-based market, from Geltor making human collagen for use in cosmetics, to Perfect Day making whey protein for use in dairy products, and Clara making egg-based proteins. In addition, Bond Pet Foods is using precision fermentation to make chicken proteins for use in the pet food industry. And there are many more examples.

“Many of these companies are aware of the animal nutrition space. However, some have an explicit mission to end animal agriculture so it is likely a choice not to engage in the space,” she went on to say.

In her view, disruption will happen as companies switch to using precision fermented proteins which are cheaper, with less supply volatility, and seen by RethinkX as better for the environment.

According to RethinkX, the disruption is not just about the way we produce food, but the way we design, develop and distribute it too.

“Just as beer is produced locally, we see protein seeing a local, networked, distributed production system. Information technology will allow us to design, develop and download the ‘recipe’ and we will be able to produce them anywhere in the world. This has huge implications for the whole food system, but also trade and geopolitics, as well as across the social and environmental spaces. Mostly of course it has implications for the current centralised animal-based production system which will simply not exist in the same magnitude as it does now,” Tubb argued.

For Tubb, the feed additive sector can benefit from precision fermentation technology in the short-term, basically until mindsets start shifting and the forecasted disruption happens.

Today, fermentation technology is already widely used by the animal feed additive sector (amino acids, yeasts, enzymes…) and precision fermentation would allow for a cheaper production of such products.

“Enzymes already used in animal feed are already produced by precision fermentation so their costs could also come down,” she said to illustrate.

“We see most of the opportunity for animal feed in the short-term (before it is disrupted) as providing an opportunity to increase the types and complexity of proteins available for use,” Tubb added.

Although precision fermentation will not disrupt just animal feed but the way we produce animals, the feed additive industry today has a significant amount of fermentation knowledge.

And for Tubb, the industry needs to leverage this expertise into precision fermentation and into producing these new generation proteins. By adapting, the feed additive sector could capture a huge amount of value.

“The animal nutrition industry as we know it will be extremely different in the future,” Tubb said.