Inside the brave new world of novel proteins

Within its sterile premises and inside giant fermentation tanks, microbes swimming in a nutrient-rich broth make different types of proteins. For instance, a milk protein that can be used to make ice-cream or cheese. A dairy ingredient made without raising dairy cattle, without using a drop of milk, or even a single animal cell.

The consequences can be earth-altering. Specific proteins can now be factory-made without raising livestock. This can reduce greenhouse gas emissions, free up land used for grazing and grow crops to feed animals. The microbial production system—known as precision fermentation—can be a hedge against climate emergencies, besides cutting down future pandemic risks. Also, the inherent violence associated with animal farms—from injecting cattle with hormones for more milk to cruelties in the meat supply chain— can be avoided, to an extent.

Precision fermentation is now widely used to produce insulin, a life-saving drug for diabetics, in a lab and not from pig’s pancreases. Likewise, rennet, an enzyme required to make hard cheese, is now manufactured using fermentation, and not from stomach linings of young nursing calves, which were once butchered in large numbers.

In 2016, US-based Impossible Foods used the technology to synthesize a heme protein (leghemoglobin) which gives meat its distinctive flavour and colour. The final product was a plant-based ground beef burger. The technology is now used to produce a range of products: from lactoferrin, a key component of human breast milk, to animal-origin-free (AOF) spider silk and collagen (the primary building block of skin and bones) for use in cosmetics.

The R2 facility makes a variety of proteins used in the pharmaceuticals, cosmetics, and food industry as a contract manufacturer. Internally, it is called R2 since it was the second production facility of Richcore Lifesciences, a biotech company set up in 2005. In 2020, Hyderabad-based drugmaker Laurus Labs purchased a majority stake in Richcore for ₹247 crore. The new entity is known as Laurus Bio.

“About four years ago, we started getting calls from the San Francisco Bay Area (in US), Israel and Europe, seeking our expertise in biomanufacturing, to make proteins and molecules which are animal-free or found in limited quantities in nature (such as natural flavors and fragrances)," said Rajesh Krishnamurthy, executive director and CEO of Laurus Bio.

“The sector is growing rapidly. Today, R2 is the world’s first CDMO (contract development and manufacturing organization) plant dedicated to novel proteins. We are servicing 40 customers from across the world," Krishnamurthy added.

To cater to the growing demand, Laurus Bio is now developing a new facility in Mysore, Karnataka, with a fermentation capacity of two million litres, 10 times the size of R2.

New age brewery

In the precision fermentation process, single cell organisms—a bacteria, microalgae or a fungi—are made to produce a protein by giving it coded instructions. A microbe, say a yeast, is engineered by inserting the genetic code of a milk protein, one that can be used to make an ice-cream. To produce more and more of this desired protein, the microbe is doused in a nutrient rich broth where it happily does what it is told.

Traditional fermentation methods use live bacterial culture to make curd from milk. But precision fermentation teaches a microbe how to make a protein by using a genetic code—also known as the recombinant DNA technology. After the microbes make enough quantities of proteins in fermentation tanks, the two are separated. The final product is AOF milk or egg-white protein powder, free of any genetically modified organisms (GMO).

Globally, 136 companies are focused on fermentation technologies, said a 2022 state of the industry report by the Good Food Institute (GFI), a Washington-headquartered think tank promoting alternative proteins. Additionally, another 100 businesses, including giants like Nestle and Unilever, have a vertical in alternative protein fermentation. Overall, fermentation companies raised $842 million in 2022, taking the total investments in the sector to $3.7 billion between 2013 and 2022.

According to GFI’s India office, more than 100 companies, many among them young startups, are working on alternative proteins. This includes plant-based, cultivated meat, and fermentation-derived proteins. Large brands like Tata Consumer Products, ITC and Licious, a meat and seafood delivery company, have also jumped into the fray.

Designer food

Currently, food ingredients made using precision fermentation are expensive. For instance, it costs about 20 to 30 times more to make an egg-white protein via fermentation, compared to eggs sourced from a poultry farm. The industry is hoping to reach price-parity with farm produced ingredients in the not-so-distant future, as the technology is fine-tuned and breakthrough innovations lower production costs.

Perfect Day, a US-based dairy startup, received regulatory approval for a milk protein in 2019. Since then, it has launched four consumer brands serving ice cream, cream cheese, and milk. Last year, it acquired an Indian biotech firm and revealed its plans to invest ₹957 crore to scale up production and export of animal-free milk proteins from India.

So far, Perfect Day is the only company to receive an approval from India’s food safety regulator to manufacture animal-free milk proteins made using genetic engineering technology. For India, which has long delayed approval of GMO technology in food crops, it marks a crucial inflection point.

Within India, Surat-based dairy startup Zero Cow Factory raised $4 million in a seed funding round in April. It is aiming to produce the world’s first A2 milk protein—which is easily digestible compared to regular milk—using bioengineering. Another Bengaluru-based startup, Phyx44, working on similar lines, raised $1.2 million in a seed round in November last year.

“For decades, precision fermentation was used to make pharma ingredients that were sold at a premium. There was no need to innovate to reduce cost. But with increasing use of this technology in the food and nutrition space, we are likely to witness a new wave of cost reducing innovations," said Sohil Kapadia, co-founder at Zero Cow.

Currently, fermentation-derived milk proteins are about 10 times more expensive than animal source proteins.

Replacing commoditized products like milk or poultry is not going to be easy, said an industry insider who did not want to be named. “Today, a startup flaunts a lab-made egg protein (albumin) and receive millions in funding. At this moment, it cannot compete with farm grown proteins. But that does not mean we turn our back to a technology and the promise it holds," the person said.

“Big food is waiting by the ringside. They will be the first to jump in and acquire these food-biotech startups when the technology to produce mass market proteins becomes viable," the person quoted above added.

For now, novel proteins like lactoferrin (LF) found in human breast milk—also known as a ‘miracle molecule’ for its immunity boosting benefits—are already commercially viable. Singapore based startup TurtleTree plans to release a product named LF+ later this year, which it claims can ‘nutritionally enhance every single food product’.

Another example is a molecule developed by Amai Proteins, an Israeli startup, which is 4,000 times sweeter than sugar, but does not have any of sugar’s negative health effects. Amai claims that its ‘designer’ sweet proteins can sharply reduce the amount of sugar used by food and beverage companies.

The market is ready to pay a steep price for these products. A back-of-the-envelope calculation suggests that Amai can sell its sweet protein for ₹200,000 a kg and still compete with regular sugar. And it can charge a premium over this, for offering a nutritionally superior product.

Meat @ $1,000/kg

However, the cost and technology challenges are magnified for cultivated or lab-grown meat, compared to novel proteins developed through precision fermentation. Cultivated meats are made from muscle or fat stem cells collected from animals, be it chicken, beef, or seafood. These cells are next grown in bioreactors. The bioreactors mimic the growing conditions inside an animal’s body. The cells are fed a culture media (some components of which are precision fermentation derived), which supplies nutrients like amino acids, glucose, vitamins, and other growth factors. Cultured meat, by definition, is not animal origin free.

But it promises the same environment and cruelty-free benefits of precision fermentation, explained Chandana Tekkatte, science and technology specialist at GFI India.

So far, only Singapore has approved the world’s first cultivated meat product for commercial sale. Developed by the California-based startup Eat Just, which was founded in 2011 and raised $465 million till date, its chicken nuggets are now sold at a handful of fine dining restaurants.

In India, several early-stage startups, such as Neat Meatt and Clear Meat, are working to develop cultivated meat. MyoWorks, a Mumbai-based startup, is developing a scaffolding which mimics real tissue environments for growing cultured meat, while Pune-based Klevermeat is trying its hand at cultivated seafood.

As of now, cultured meat is prohibitively expensive to grow, because of high cost of growth factors which supplies nutrients to cells. For instance, cultured beef costs anywhere between $800-$1,000 per kg at a lab-scale production facility. Yet, the industry is hoping to reach price parity with conventional meat in less than a decade.

“In the Indian context, cultured meat is facing two challenges. On the regulatory side, we are far behind countries like Singapore. And the risk capital available for research and development is low," said Subramani Ramachandrappa, who co-founded Richcore Lifesciences, and set up Fermbox Bio, a food-tech company with operations in Bengaluru and the US, earlier this year.

“India should embrace the opportunity biomanufacturing offers and not miss the bus. We have a clear cost advantage in terms of talent and manufacturing capabilities," Ramachandrappa added. Fermbox is now setting up a large scale (40,000 litre) CDMO facility, which cultivated meat startups can use to scale up production.

Microbial feast

Apart from precision fermentation, biomass fermentation is yet another technology where microbes are fermented using greenhouse gas as energy source. The microbe multiplies in fermentation tanks, wolfing down a pollutant like methane, and turning itself into a protein. Unlike precision fermentation, the process does not involve genetic engineering. The final product is a flour-like protein powder with a meaty flavour.

String Bio, a Bengaluru based startup, identified a bacteria strain which thrives on methane—a greenhouse gas and a major source of emissions in the livestock industry—to make proteins which can be used in both human and animal nutrition products. Last July, it raised $20 million from investors. String Bio is now setting up a commercial scale manufacturing facility at Tumkur, Karnataka.

“Our goal is to make sustainability market relevant. Which means it must be easy for consumers to transition from existing products to sustainable solutions. At a commercial scale, we can offer our proteins at the same price point as farm grown proteins," said Ezhil Subbian, CEO and co-founder of String Bio.

Will consumers be repulsed by the thought of eating microbes as a protein source? May be not, since many are paying a premium for products like probiotic yogurt, teeming with active bacteria, for better gut health.

“Like the invention of farming, farm-free food (made from microbial fermentation) could catalyze entirely new diets, which could one day become as familiar as bread and cheese," wrote George Monbiot, environment writer and columnist at The Guardian, in a new book titled Regenesis: feeding the world without devouring the planet.

But Monbiot also added a caveat to the promise that fermentation holds: to be watchful of the danger of large food companies capturing this ‘revolution’ and replicating the fault lines of existing food systems, one where big business dominates supply chains and nutritional outcomes for the vast majority of the world’s population.

If the fermentation hype does come to fruition, there will be another pressing question to mull over. What will become of millions of small farmers across the global south, dependent on rearing livestock for a living?