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How biotechnology is developing novel ingredients of the future

Fermented ingredients have the potential to change the food sector at a more rapid pace than once thought, a report by global management consultancy McKinsey suggests.

According to McKinsey’s latest insights regarding the role of biotechnology in food, this specific sub-sector of ingredients can significantly impact the food landscape.

Fermented novel proteins – those that undergo a controlled microbial process in a laboratory – present a $100 to 150 billion opportunity in food production. If realised, this could result in biotech-based ingredients making up around 4% of total protein production by 2050.

At present, predictions cannot identify exactly how to bridge the $50 billion bracket, as the variation exists because of climate policies and the rate of technological development.

Consumers are increasingly interested in trying novel protein ingredients. According to 2024 McKinsey research, Novel proteins: Consumer appetite for sustainably made ingredients, while awareness is at an early stage, interest shows promise.

Depending on the specific ingredient, between 49 and 67% of consumers are interested in trying food and drinks containing novel ingredients. Snacks and lunchtime foods are prime eating occasions for consumers to try novel ingredients.

Reaching the next growth phase

However, despite the multi-billion-dollar growth potential, according to McKinsey’s data, new business models are required to realise their potential. Scalability is necessary to achieve widespread adoption of global food fermentation technology.

Currently, most novel ingredient producers’ costs are an order of magnitude higher than traditional protein production prices. These sit within a range of $2 to $15 per kg.

To lower price points for novel protein developers, McKinsey’s insights suggest that the food industry needs to adopt economies of scale. Fermented novel ingredient producers must also invest over $250 billion over the next 25 years to grow manufacturing capacity levels.

Due to the level of development needed, McKinsey anticipates that venture capital is unlikely to be sufficient. However, in a chicken-and-egg-like scenario, project finance and growth equity insiders are unlikely to commit to plough cash injections into novel protein until the sector reaches its technological and commercial goals.

With the $150 billion tag as an attractive prospect, fermentation producers, leading food companies, and wealth funds have invested $4 billion into precision and biomass fermentation over the past five years.

Novel protein ingredient developers want to take a sizable share of the global and growing $3 trillion protein market, which is set to hit the $35 trillion mark by 2050.

Globally, the food industry is experiencing various large-scale problems, including rising feed prices, climate change volatility, and disease. According to the United Nations, by 2050, the global population is expected to grow to $9.8 billion.

Collectively, these issues prove a formidable obstacle for animal agriculturists trying to balance meeting agricultural production volumes with offering nutritious foodstuffs for the world’s growing population.

Adopting the bioprocessing approach to make novel ingredients in the food space enables agriculturists to address these problems. Fermentation occurs in a manufactured lab-based sector via bioreactors, allowing novel ingredient production to undergo a controlled and modular process.

With the possibility of being built wherever there is demand, fermentation also eases the production process for ingredient developers, providing location flexibility and limiting the detrimental and unpredictable effects of weather, disease-related problems, and unexpected supply chain issues.

Technology and process drives development potential

Despite the growth potential for novel protein ingredients, developers handling the technology and associated processes underpinning it need to enhance their current capabilities.

McKinsey uncovered three core areas vital to creating and growing a new food ecosystem in its latest insights.

Firstly, novel ingredient companies need to work on making process improvements and redesigning bioreactors to drive improvements in yield results. Focusing on the novel ingredient production process is also anticipated to lower bioreactor and production costs and reduce unit costs by around 50%.

McKinsey also states that upgrading formulation and food design can enable brands to tap into innovation effectively, with manufacturers working on developing better taste, texture, and protein fortification characteristics. Novel fats are one area manufacturers are exploring to improve mouthfeel and add savoury flavours, while providing alternative ingredients to unappealing ones like palm oil.

Precision fermentation methods enable producers to achieve specific tastes, textures or nutrition specifications by utilising individual protein ingredients. Developers can switch out typical products like gums and methylcellulose for novel protein ingredients.

“Leaders can continue building creative mechanisms to balance capital, risk, and returns,” McKinsey states, as the sector grows and faces these challenges.

With a focus on creating novel protein ingredients to help secure the future of food by investing now, the report adds, “they may have a chance to build the supply chain of the future”.