Using microbial organisms like yeast and fungi as cell factories to produce animal proteins, Pat Brown and his early team at Impossible Foods kicked off the modern precision fermentation industry.

Within a few years, Clara Foods, Geltor, and Perfect Day were using the technique to produce a variety of egg, dairy, and collagen ingredients. By the late 2010s, these first movers raised hundreds of millions of dollars and dozens of other startups followed in their footsteps.

Over-reliance on the capacity narrative

Today, recognition of the industry’s promise is mainstreaming. Environmental figures like George Monbiot are declaring that precision fermentation “may be the most important green technology ever.” Supporters are positioning it as a promising solution to the constrained supply of conventional animal products.

Given the fervor, investors, as well as the commentariat, are prodding companies to begin large-scale production ASAP. And so, the industry’s conversational spotlight has now fixed on: how do we build enough capacity to meet future demand, which could soar into the tens of millions of tonnes by 2030? A tantalizing and no doubt important question.

To get the economics right for large-volume commodity food products, the precision fermentation industry would do well to focus in on a few areas.

However, this almost singular focus on capacity is troubling. It seems to imply: the unit economics of precision fermentation are essentially solved, and all that remains is to build factories. We will eventually need lots more factories, yes.

And the precision fermentation sector should not be bashful about its pursuit of an all-out biomanufacturing industrialization, a necessary condition to outcompete animal agriculture. But we must also stay honest to the science, which says the crucial work to be done in precision fermentation for cheap animal-free alternatives is not simply building or enabling capacity, but rather designing new or radically improved production systems.

I’ll let you in on an open secret: leading scientists and technologists from the industry and academia tend to tell me – often in hushed tones, and sometimes only off the record – that the economics of food-grade precision fermentation is nowhere near competing with commodity dairy or eggs.

This problem, they warn, will not be solved by simply upscaling to larger tank volumes. At best, scaling up production to immense tank volumes will reduce costs by 35% to 40% instead of the many fold reduction needed.

Precision fermentation’s capacity craze: Have we lost the plot? by Walter Thompson originally published on TechCrunch