Precision Fermentation Ingredients Market

Precision Fermentation Ingredients Market Size

The global precision fermentation ingredients market size is estimated to be valued at USD 2.8 billion in 2023 and is projected to reach USD 36.3 billion by 2030, recording a CAGR of 44.0% by value. Changing consumer preferences towards veganism, increasing protein consumption, and rising investments in innovations are the major factors for market growth. Substantial breakthroughs in the genetic engineering space have enabled the cost-effective and sustainable reprogramming of microorganisms (synthetic biology) through precision fermentation to create a wide range of specialized food protein constituents.

The expanding business has offered lucrative business opportunities to the players who are operating in the market segments. For instance, in May 2023, Geltor introduces CAVIANCE™, a vegan type of Il collagen polypeptide offering remarkable skin rejuvenating benefits. This innovative product stimulates six different types of collagens, exhibits potent antioxidant properties, and aids in wound healing. Other key players like MycoTechnology established a “groundbreaking” collaborative venture with Oman Investment Authority (OIA) to produce mushroom-based protein using locally cultivated dates. This joint venture will be named Vital Foods Technologies LLC. The overall Precision fermentation ingredients market is classified as a competitive market, with the top five key players, namely Geltor (US), Perfect Day, Inc. (US), The Every Co. (US), Impossible Foods Inc. (US), Motif FoodWorks, and   INC. (US) occupying 25-50% of the market share.

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Precision Fermentation Ingredients Market Dynamics

Drivers: Growing adoption of vegan as well as meat-free lifestyles

According to research conducted by The Hartman Group, the landscape of the North American precision fermentation ingredients market is poised for a transformative shift Around 40% of U.S. adults, over 90 million individuals, are ready to embrace precision fermentation products, projected to reach 132 million consumers by 2027. Younger generations are receptive due to environmental concerns and sustainability, with the second most influential factor being the positive impact on the environment. This aligns with their preference for sustainable consumption. The link between precision fermentation and sustainability, including reduced greenhouse gas emissions, natural farming, and sustainable packaging, offers innovation potential. Millennials and Gen Z are willing to pay up to 10% more for such products. This technology serves as a catalyst for a more sustainable and technologically advanced market landscape shaped by evolving consumer preferences and environmental consciousness. This trend invariably is supporting the precision fermentation ingredients market growth.

Restraints: Higher manufacturing costs associated with the production of ingredients utilizing precision fermentation ingredients

Demand for microbe-based precision fermented proteins or fats has gained momentum lately due to the increasing demand for animal-free products by the rising vegan population. In addition, precision fermentation provides several benefits: it reduces land and water usage, greenhouse gas emissions, and health problems associated with animal-based products. However, higher manufacturing costs have acted as the major restraint for the industry to scale up. Specific growth media for microorganisms, large-scale fermenters, and specialized purification processes combinedly increase the production cost exponentially. Also, the risk of yield failure or contamination is high as microorganisms need a stable and sterile environment for growth.

Opportunities: Lower production and supply chain cost

Precision fermentation is expected to become a low-cost technology generating huge opportunities in the alternative protein space. The industry will reach cost parity with most animal-derived protein molecules by 2023-25. By 2030, the cost of precision fermentation-based protein is expected to be lesser than that of animal-based counterparts. Modern food developed through this method will also pave way for a new food production system- moving from farms to fermentation tanks. This sustainable production method is expected to generate more opportunities for manufactureurs for commercially launching animal-free products.

Challenges: Customer acceptance of precision fermented based products

Though exhibiting huge scope to scale-up, precision fermentation-based outputs still have knowledge gaps. Bioavailability, allergenicity, digestibility, and bioequivalence of products are all factors that must be considered when evaluating products and ingredients. This is an essential factor if customers are switching from nutritional wholesome food products to modified food products that have some specific added proteins. Therefore, accepting precision-fermented food products is projected to be one of the challenging factors for the market. This challenge can be overcome by bringing consumer awareness regarding precision-fermented food products, which will drive the precision fermentation ingredients market growth in the coming years.

Precision Fermentation Ingredients Market Ecosystem

By end-use industries, the pharmaceuticals segment is projected to grow with the second-highest CAGR in the precision fermentation ingredients market during the forecast period.

This growth is supported by pioneering strides in biotechnology, where precision fermentation serves as a cornerstone to produce complex pharmaceutical compounds. The tailored manipulation of microorganisms enables the cost-effective synthesis of intricate APIs, propelling drug development. Moreover, this approach curtails reliance on traditional extraction methods, streamlining production, reducing environmental impact, and ensuring consistent product quality. As the pharmaceutical industry seeks efficient avenues for sustainable and regulated drug manufacturing, precision fermentation emerges as a pivotal driver in reshaping pharmaceutical landscapes.

By food & beverage application, the egg alternatives segment is projected to grow with the second-highest CAGR in the precision fermentation ingredients market during the forecast period.

The rising inclination toward vegan food has led manufacturers to introduce a variety of egg alternatives. Precision fermentation derived egg alternatives find use in baking, cooking, and food formulation. The Every Company introduced an egg protein called ClearEgg via precision fermentation in collaboration with Pressed Juicery in November 2021. In April 2021, the company increased its production capacity of egg alternatives further. In 2022, Shiru streamlined animal-free egg prototype creation using AI and machine learning. This innovative method accelerated the replication of egg properties within a plant-based framework.

By ingredient type, the whey & casein protein segment accounted for the second largest share.

The burgeoning awareness of animal-free options, veganism, and plant-based lifestyles has driven manufacturers to introduce an array of dairy-free ingredients. In the precision fermentation ingredients market, whey and casein play pivotal roles with versatile applications across industries. Companies like Modern Kitchen, based in the US, utilize precision fermentation-based whey protein from Perfect Day to produce animal-free cream cheese. Brazilian company Up Dairy specializes in precision fermentation to create dairy ingredients, with a focus on whey protein and casein. Up Dairy employs advanced technologies such as Cell Line Development, Host Strain Development, Target Molecule Selection, Bioprocess Design, and Ingredient Optimization. Formo Bio's approach to crafting animal-free cheese through precision fermentation showcases the intersection of traditional practices and innovative technology. By sourcing whey and casein from microorganisms inspired by cow DNA, they tap into both heritage and innovation, providing a sustainable alternative to traditional dairy cheese.

By microbe type, the fungi segment constitutes around one-fourth of the global demand.

Extensive research and development activities in the field of precision fermentation helped food producers in evolving the landscape of animal-free protein alternatives using microbes such as bacteria, yeast, and fungi. One advantage of utilizing fungi metabolic engineering is that their eukaryotic origin allows them to tolerate and functionally express heterologous eukaryotic proteins and enzymes, resulting in proper protein folding and post-translational modifications. Better Meat Co., a US based company, developed a process for biomass protein from the filamentous fungi Neurospora crass In February 2022, VTT Technical Research Centre of Finland developed egg white protein (ovalbumin) from fungi using precision fermentation.

North America: Precision Fermentation Ingredients Market Snapshot

North America holds the highest market share during the forecast period.

North America remained the largest market for precision fermentation ingredients due to the increasing consumer awareness, consumption of healthy food ingredients, and veganism trend etc. The landscape of North American precision fermentation ingredients market is poised for a transformative shift; around 40% of U.S. adults, over 90 million individuals, are ready to embrace precision fermentation products, projected to reach 132 million consumers by 2027 (The Hartman Group). Younger generations are receptive due to environmental concerns and sustainability, with the second most influential factor being the positive impact on the environment. This aligns with their preference for sustainable consumption. The link between precision fermentation ingredients and sustainability, including reduced greenhouse gas emissions, natural farming, and sustainable packaging, offers innovation potential. Millennials and Gen Z are willing to pay up to 10% more for such products. This technology serves as a catalyst for a more sustainable and technologically advanced market landscape shaped by evolving consumer preferences and environmental consciousness.

Precision Fermentation Ingredients Market Trends

Here are some key trends shaping the precision fermentation ingredients market:

• Growing Demand for Sustainable Ingredients: With increasing awareness about environmental sustainability and concerns over traditional agricultural practices, there's a rising demand for sustainable alternatives. Precision fermentation offers a promising solution by providing ingredients that are produced with minimal environmental impact, such as reduced land and water usage and lower greenhouse gas emissions.
• Expansion in Food and Beverage Industry: The food and beverage industry is one of the primary sectors driving the adoption of precision fermentation ingredients. Companies are incorporating these ingredients into a wide range of products, including meat substitutes, dairy alternatives, flavors, and nutritional supplements. This trend is driven by consumer preferences for healthier, plant-based options and innovative flavors.
• Technological Advancements: Advances in biotechnology, genetic engineering, and fermentation processes are driving the development of new and improved precision fermentation techniques. These advancements enable more efficient production processes, higher yields, and the customization of ingredients to meet specific requirements, such as taste, texture, and nutritional profile.
• Investment and Collaboration: The precision fermentation industry has attracted significant investment from both traditional food and beverage companies and venture capital firms. Additionally, collaborations between startups, research institutions, and established players are becoming increasingly common. These partnerships facilitate knowledge sharing, access to resources, and the development of innovative products.
• Regulatory Landscape: As precision fermentation ingredients gain traction in the market, regulatory frameworks governing their production, labeling, and safety are evolving. Regulatory agencies are working to establish clear guidelines to ensure the safety and quality of these ingredients while addressing consumer concerns and promoting transparency in labeling.
• Diversification of Applications: Precision fermentation ingredients are finding applications beyond the food and beverage industry, including in pharmaceuticals, cosmetics, and animal feed. This diversification of applications opens up new opportunities for market growth and innovation as companies explore novel uses for these ingredients.
• Consumer Awareness and Acceptance: Consumer awareness of precision fermentation and acceptance of products containing these ingredients are increasing. As more information becomes available about the benefits of precision fermentation, consumers are becoming more open to trying products made with these ingredients, further driving market demand.

Precision Fermentation Ingredients Market Share

Key players in this market include Geltor (US), Perfect Day, Inc. (US), The Every Co. (US), Impossible Foods Inc. (US), Motif FoodWorks, INC. (US), Formo (Germany), Eden Brew (Australia), Mycorena (Sweden), Change Foods (US), and MycoTechnology (US).

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Scope of the Report

Precision fermentation ingredients market Report Scope:

By Microbe

• Yeast
• Algae
• Fungi
• Bacteria

By Ingredients

• Whey & Casein Protein
• Egg White
• Collagen Protein
• Heme Protein
• Enzymes
• Others

By End Use

• Food & Beverages
• Pharmaceutical
• cosmetics & Others

By Food & Beverage Application

• Meat & seafood
• Dairy alternatives
• Egg alternatives
• Others

By Region

• North America
• Europe
• Asia Pacific
• South America
• Middle East & Africa

Precision Fermentation Ingredients Market Industry News

• In May 2023, The EVERY Company and Alpha Foods officially entered into a Joint Development Agreement with the shared objective of bringing next-generation alt-meat products to the market. This collaboration aims to leverage EVERY's trailblazing expertise in animal-free protein production and Alpha Foods' renowned chef-crafted plant-based foods to accelerate advancements in taste and texture for non-animal products.
• In March 2023, the partnership between The Hartman Group, Perfect Day, and Cargill enabled Perfect Day to gain valuable insights into consumer attitudes and preferences related to precision fermentation ingredients. This data has helped Perfect Day strengthen its position in the market, spearhead the Precision fermentation Alliance
• In October 2022, Impossible Foods' collaboration with Domino's Australia, introducing Impossible™ Beef on their pizzas, strategically expands their market presence, boosts brand exposure, and appeals to environmentally conscious consumers.

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