In a recent post looking into the future of fermentation in food and agriculture, I laid out the basics of different types of fermentation techniques, including precision fermentation. I used a simplified version of the diagram below to break down how the combination of synthetic biology and fermentation processes is creating new ways of producing complex organic molecules, ranging from proteins to fats, minerals, vitamins, and more.
Now, I want to unpack each stage of the “equation” and take a closer look at the challenges and opportunities in applying and scaling precision fermentation in food and ag.
As with many complex challenges, problem solving in precision fermentation starts with deciding on the end objective: the molecule you want to produce. In the synbio world, this is called the target compound. Target compounds can be almost any complex organic molecule of interest with applications in food, medicine, materials, and more.
Most precision fermentation startups in the market today are producing alternatives to animal-derived ingredients, like the proteins found in milk and eggs. But the scope for innovation is much broader than this. For example, startups like Eclipse are using precision fermentation to make proteins that are normally only synthesized by humans. The ability to produce human-equivalent compounds might then pave the way for new possibilities in medicine and personalized nutrition.
Precision fermentation could also be used to make compounds that can’t be found naturally anymore (e.g., molecules synthesized by extinct animals and plants) or that perhaps don’t exist yet (e.g., new medicines and drugs).
Microbes are the workhorses of precision fermentation. Today, the industry largely relies on two particular microbes to serve as their biofactories: yeast and e.coli. Because they are well studied and understood, yeast and e.coli are relatively fast and cheap to work with.
But, they aren’t necessarily the most optimal hosts to use for every commercial use case. Different microbes will be better suited to synthesizing different compounds, achieving higher yield expressions, withstanding different environmental conditions and stresses, and working with different feedstocks. There are many millions–if not billions or trillions–of microbes out there, so the opportunity for optimizing and upgrading the biofactories in use today is massive.
The opportunity here is analogous to the approach that Vow, one of our portfolio companies, is taking with cellular agriculture: while 97% of meat consumed today comes from 0.02% animal species, Vow is exploring the other 99.98% of species in a quest to deliver the best possible culinary experiences. Similarly, there's scope in precision fermentation for companies to apply deep science and tech to build and mine libraries of species and strains, with the ultimate goal of tapping into the full potential of microbial diversity.
Genetic engineering is the toolkit which enables manipulation of the microbe so that it produces the target compound of interest. When the target compounds are proteins, genetic code can be inserted directly into the microbe’s DNA so that it will synthesize the protein. In the case of non-protein molecules (e.g., fats and vitamins), however, the microbes cannot be directly encoded to make the target compound. Instead, they must be coded to make various different enzymes that, when put together, provide the biosynthetic pathway to make the target compound. This is incredibly complex science and requires an understanding of which biosynthetic pathways can lead to target compound synthesis, and ultimately, which pathways are compatible and most efficient in which microbial hosts.
Getting this right is important, as the genetic engineering of the host microbe ultimately determines the efficiency of the “biofactory.” While rapid advancements in the fields of computational biology and genomics are unearthing more precision fermentation unlock codes, meeting commercially viable timelines within economically practical constraints still remains a big challenge. Innovators who can provide these “biology as a service” layers could play an important role in the growth of the industry.
The feedstock is the fuel that keeps the microbial biofactories running. Up to now, the feedstock most widely used to supply microbes with the energy they need to grow is some form of refined glucose, or sugar. The reliance on refined sugar, however, presents two challenges: (i) the sustainability considerations associated with primary crop production; and (ii) the costs of sourcing and transporting large volumes to support manufacturing at scale.
As the industry matures, I believe we can expect to see innovations in feedstock, such as circular-economy solutions including industrial and post-consumer waste streams. Given microbes can feed on a range of energy sources, I also expect to see solutions for growing microbes directly on greenhouse gasses (e.g., CO2).
Physical infrastructure is also required to bring together the engineered microbes and feedstock in an environment that allows the microbes to grow and multiply. Specific infrastructure needs vary from one application of precision fermentation to the next, depending on the type of feedstock used (e.g., solid-state vs gaseous) and the environmental conditions required to support different microbes (e.g., anaerobic vs aerobic).
This infrastructure–typically steel fermentation tanks and bioreactors–is a key bottleneck to achieving scale today. There simply isn’t enough fit-for-purpose infrastructure available to support commercial production for applications in food and agriculture, and it can be expensive to build. One estimate suggests that of the 61 million liters of fermentation capacity offered by contract manufacturers today, only about 2 million liters (3%) is available and compatible with downstream processing needs for applications in food.
Again, we can expect to see business model innovation here. Culture Biosciences, for example, is taking an “infrastructure as a platform” approach to support early manufacturing scale up of precision fermentation. Other opportunities for capacity at scale could come from shared infrastructure (e.g., through public-private partnerships) or even re-purposing stranded assets from other industries (e.g., ethanol production).
While my dive into the details of precision fermentation has highlighted several unresolved challenges and open questions, I also see plenty of opportunity for innovation. We’re seeing startups make exciting developments in all areas of the precision fermentation tech stack today, and this is still likely just the beginning. It’s clear that advancements across science, technology, and business models in different areas of the precision fermentation “equation” will have follow-on implications for what’s possible elsewhere, and there’s good reason to be bullish about the future of the industry.
We’ve highlighted a few of the companies forging new possibilities in precision fermentation, but if you know of any that we may have missed–let us know!
Tenacious Ventures Management Pty Ltd (CAR 001275760), Tenacious Ventures Management Partnership, LP (CAR 001298484), Tenacious Ventures Fund II Management Partnership, LP (CAR 001298483), and Tenacious Ventures Fund II Staple Co Pty Ltd (CAR 001298487) are Corporate Authorised Representatives of Sandford Capital Pty Ltd (ABN 82 600 590 887), Australian Financial Services Licence No 461981, and are authorised to provide advisory and dealing in connection with investments to wholesale clients only.