Molecular Farming – Is the Juice Worth the Squeeze?
Bluestein’s Take
To transform the food system, we look to where we want the food industry to be in the next 10-20 years, and we enable that future through our investments today. Our ideal future includes a more sustainable food system that is less reliant on animal agriculture given its impact on animal welfare, our environment (deforestation, biodiversity loss, and water pollution) as well as individual and public health (foodborne illness, antibiotic overuse, and inflammation). Several of our current portfolio companies are working toward that future already (see: Meati, New Culture, and Jellatech).
Conventionally produced meat and dairy products are massive contributors to climate change, and negatively impact animal welfare and human health. A wave of animal-free food production technologies has recently emerged to replace our reliance on livestock farming. These innovative methods not only enable the creation of alternative meat and dairy products but also have the potential to increase the availability and use of ingredients like low-calorie sweeteners and healthy fats – critical to fulfilling the growing consumer demand for healthier products.
One technology that has the potential to lead this wave of alt-food production is molecular farming. Molecular farming leverages plants as bioreactors to produce food ingredients. This approach sidesteps the challenges and costs associated with scaling large steel bioreactors, but it contends with a different set of regulatory and technical roadblocks. Because of this, most molecular farming companies are still years away from bringing a product to market.
We’re most excited about startups in this space that are working toward producing price-competitive animal proteins and expanding the use of molecular farming into emerging categories like natural low-calorie sweeteners, healthy fats, and novel ingredients. Ideally, these companies will be able to utilize existing farm infrastructure and fit into established downstream agricultural processes.
What is Molecular Farming?
Molecular farming harnesses plants to synthesize food ingredients. This technology produces new molecules by employing genetic engineering to convert plants into single-use biodegradable bioreactors.* Plants can be fine-tuned to synthesize various food components like proteins, fats, and carbohydrates. These ingredients made in plants are identical to their conventionally produced counterparts. A good analogy is the similarity between lab-grown diamonds and mined diamonds. Both have the same exact qualities despite different origins. Similarly, gelatin produced in a plant via molecular farming has the same structure and functionality as gelatin from cows – without the associated environmental and ethical concerns.
*Curious to learn more? In the Appendix, we’ve included a primer on plant genetic engineering.
An Overview of Alternative Ingredient Production Technologies
Before we dive deeper into molecular farming, it’s important to understand how the technology fits into the broader alternative ingredient landscape. Recently, there has been an explosion of bioreactor-based technologies focused on enabling the next generation of food ingredient production. Startups in the emerging alt-ingredient space choose from five core technologies: plant-based, cultivated meat, biomass fermentation, precision fermentation, and molecular farming (see Figure 1). Plant-based foods are made from processed beans and grains and attempt to mimic the texture and nutrition of animal products. Cultivated meat and biomass fermentation turn whole-cell products into meat alternatives, while precision fermentation harnesses the power of microbes and fungi to manufacture individual food ingredients.
Figure 1: An overview of the current alternative ingredient landscape and how each technology stacks up against conventional production methods like animal agriculture.
Bioreactors can now accommodate a wide range of cell types and produce a diverse array of food products. However, food production in steel reactors is expensive and difficult to scale. High-growth startups relying on these systems face challenges in securing adequate tank capacity amid a general shortage of purpose-built equipment. Even when reactor space is secured, the tanks are operationally complex and capital-intensive. The process of translating robust cell growth from the benchtop scale to the 100,000L scale can take years.1 To date, the bioreactor-based solution that has come closest to cost parity is biomass fermentation, which involves the cultivation of fast-growing fungal mycelium on economical feedstocks. While mycelium products have great taste and texture, they aren’t perfect analogs to meat and dairy. Technologies like precision fermentation and cultivated meat have the promise of replicating meat and dairy products with higher fidelity, but more work needs to be done to scale the respective technologies to produce viable, cost-effective alternatives.
How Molecular Farming Stacks Up
Molecular farming is the newest technology and offers several potential advantages over bioreactor-based food production on cost and scalability. Compared to precision fermentation, molecular farming eliminates the need for complex growth conditions and costly bioreactor facilities, instead capitalizing on existing farm infrastructure and the efficient and predictable production of row crops. Per kilogram of ingredient produced, growing plants can be much cheaper than operating bioreactors, so molecular farming could lead the coming wave of alt-ingredients if it’s less expensive and less operationally complex than bioreactor-based methods to scale.
There are additional benefits of molecular farming, including:
Better Ingredient Performance: Some ingredients we get from animals have qualities that are hard to recreate with fermentation-based technologies. The ways in which certain molecules are constructed and shaped can have big impacts on attributes such as an ingredient’s solubility in water, or chewiness. Like animals, plants have complex cellular machinery which makes it easier for them to produce these intricate ingredients.
Longer Shelf Stability: Molecular farming can be used to synthesize food ingredients in dry textures like grains and beans. These parts of the crop are easily harvested and can be stored dry for long periods of time without the molecules inside deteriorating. This attribute becomes particularly valuable in mitigating potential supply chain disruptions and increasing the geographical availability of ingredients such as animal proteins. By facilitating better storage and distribution, molecular farming can contribute to enhancing the resilience and accessibility of animal protein sources globally.
Why We Need Molecular Farming Now
Consumers are increasingly prioritizing sustainability, considering the health implications of meat and dairy consumption, and thus turning to plant-based options including alternative milks, cheeses, and meats. Despite their rising popularity, most plant-based options today do not fully meet the taste and texture, nutrition, and price point of animal products. On a functional level, animal-derived ingredients also serve as vital foaming, gelling, emulsification, and flavor additives that are challenging to duplicate in animal-free formulations. Molecular farming has the potential to provide consumers access to products that are cost-competitive and functionally equivalent to animal proteins without the ethical, health, and environmental concerns of animal agriculture.
At the same time, modern consumers are growing wary of the negative health implications linked to the consumption of sugar and saturated fats. This heightened awareness is fueling the demand for healthier sugar and fat alternatives. In response, most major food and beverage corporations have recognized this shift and committed to reducing these components in their products. However, the challenge remains in finding suitable replacements for these ingredients. Many existing low-calorie sweeteners and healthy fats come from natural sources that are difficult to farm effectively. Molecular farming has the potential to make these scarce and costly ingredients more accessible, and therefore more widely used in food products. We're excited about the potential of this technology to provide consumers with greater access to products featuring natural calorie-free sweeteners like thaumatin (a potent sweet-tasting protein found at low levels in tropical plants), along with healthy fats like omega-3s.
Industry Headwinds
While we’re excited about the potential of the industry, most molecular farming companies are still 3-4 years away from bringing a product to market. What stands in the way of widespread adoption? Outlined below are the three major roadblocks: 1) high cost of production; 2) challenges in ingredient extraction; and 3) regulatory concerns.
High Cost of Production: To reach mass adoption, molecular farming must be price-competitive with commodity ingredients. For example, one analysis found that producing thaumatin in field-grown spinach would cost $318 per kilogram of protein.2 Thaumatin is incredibly sweet, around 3,500 times sweeter than sugar. This means that even if it costs $318 per kilogram, it could end up being more cost-effective than regular sugar in practical use because recipes require much smaller quantities of thaumatin due to its intense sweetness. While this exorbitant cost of production may be acceptable for rare ingredients used in low amounts, it is far too high for molecular farming to be cost-competitive in commodity ingredients. Commodity sugar, for example, is readily available for less than $2 per kilogram, making it an unsuitable ingredient for molecular farming given the low price point. The two levers that can be utilized to drive down production costs include boosting yields and reducing the cost of ingredient extraction from the plant material.*
*Curious to learn more? In the Appendix, we’ve included an overview of each strategy.
Challenges in Ingredient Extraction: It is unlikely that yield improvements alone will be able to sufficiently reduce production costs. Over three-quarters of these costs are tied to the extraction and subsequent processing steps needed to isolate ingredients once they've been generated by plants. In the thaumatin study cited above, ingredient extraction and purification made up 81% ($258/kg) of the total production cost. Not to mention, this data was from an ingredient and host plant (spinach) that were chosen specifically for ease of extraction!
We have seen that even if the ingredient is present at high levels in host plants, the high cost of extraction will prohibit production at competitive prices. One additional factor complicating downstream processing is concern from US regulators about the potential to introduce unwanted allergens into the food supply (see: Regulatory Concerns below). This may add additional costs and complexity to the extraction process in the future as startups may be forced to produce highly purified versions of ingredients to avoid allergens. It remains to be seen whether the downstream processing for molecular farming can be done in a safe and cost-effective manner at scale. This core technical challenge to molecular farming is low-hanging fruit ripe for disruptive innovation.Regulatory Concerns: US regulators have expressed concerns about the potential for molecular farming to inadvertently introduce allergens into the food system.3 Imagine a future where dairy proteins are synthesized in soybeans. If the soybeans are processed to yield dairy proteins and soybean oil, the oil may contain some residual dairy allergens. In this way, molecular farming might create a perilous and confusing landscape for those with serious food allergies.
Outside of allergens, molecular farming companies face several other regulatory hurdles. The regulation of genetically modified (GM) crops continues to be a highly politicized global issue, resulting in a lengthy approval process in both the US and EU. In the EU, the process entails rigorous scientific evaluation by the European Food Safety Authority (EFSA) and subsequent voting by the 27 EU member states to authorize cultivation. In addition to GM crops, food ingredients made by any type of GM organism continue to face headwinds in gaining EU regulatory approval. For example, the plant-based meat company Impossible Foods applied for EFSA approval of leghemoglobin produced in GM yeast in 2019 but has yet to receive the green light as of September 2023, though it has been cleared in the US.
Bad Weather & Yield Variability: Adverse weather such as extreme heat, drought, wind damage, or too much rainfall — exacerbated by climate change — can be detrimental to molecular farming insofar as it can hinder crop development, create intra-batch variability, or wipe out an entire harvest. The potential for intra-batch variability also contributes to uncertainty around yield in field-grown crops. If these field crops are also being utilized for another purpose like seed oil or animal feed, startups should be wary of whether the yield is affected since it’s unlikely farmers will compromise on their yields to produce the proteins.
Market Segments
To better assess opportunities within the molecular farming landscape, we’ve created a market map that breaks down startups by product type.
Dairy and Alternative Meat Proteins: Approximately 57% of the world's greenhouse gas emissions associated with food production can be attributed to animal-based foods.4 The detrimental impact of dairy and meat production on the environment is widely acknowledged, prompting numerous startups to address this issue through alternative production methods and ingredients. Most companies in molecular farming are dedicated to developing environmentally friendly protein sources.
Growth Factors for Cellular Agriculture: In Europe, many molecular farming companies are focused on producing growth factors that can be used to grow cell-based meat as a strategic measure to bypass the stringent GM ingredient regulations set by the EU. Growth factors for mammalian cell cultures are not intended for direct consumption, which exempts them from undergoing the same rigorous risk assessment by The European Food Safety Authority.
Sweeteners / Other: The increasing consumer demand to cut sugar in food products has sparked a surge in startups making high-potency sweeteners and sweet proteins. These compounds are frequently limited in their natural plant sources, but molecular farming offers a viable solution to boost their abundance. Companies in this segment are also exploring applications in healthy fats, flavors, fragrances, cosmetics, vaccines, and therapeutics.
While most molecular farming companies today primarily focus on alternative dairy and meat production, we’re excited about the other ingredient categories, such as sweeteners, preservatives, and healthy fats. We’re also intrigued by novel ingredients that offer unique functionalities absent in animal-based products, such as designer ingredients that could lead to stretchier cheese, more easily digestible fiber, airier mayonnaise, and low-glycemic cookies. These new ingredients could potentially command higher prices and serve as a good starting point for the technology to enter the market.
What Success in Molecular Farming Looks Like
To evaluate opportunities in the space, we consider whether the solution:
Enables scalable production at attractive unit economics.
Hits on the triumvirate – taste, functionality, and price.
Has defensible IP and/or relationships while minimizing regulatory risks.
Contributes to a net positive impact on environmental and animal welfare.
Successful solutions must be differentiated, delicious, and price competitive to be demanded and adopted by consumers. They will help to reduce our reliance on animal agriculture and make our food system healthier. By addressing these key aspects, molecular farming holds the potential to revolutionize the way we produce food, leading us toward a healthier and more sustainable future – though not without challenges.
What’s Next
This is an exciting space that we’ll be watching closely as more resources, innovative technology, and positive regulation emerge to enable new solutions. At Bluestein, we’re excited to back the next generation of founders transforming our food system. If you’re a founder, operator, investor, or just passionate about the food industry, we’d love to hear from you. You can reach us at info@bluesteinventures.com.
A big thank you to our MBA intern Jorman Heflin for his deep analysis on this space!
Appendix:
A Primer on Plant Protein Production
The two main methods to express recombinant proteins (molecular farming) in plants are stable nuclear transformation and transient expression. Stable nuclear transformation is a method used to create genetically modified organism (GMO) crops. This process entails stable integration of the foreign DNA into the genome of the host plant's cells. Once integrated, numerous seeds can be produced cost-effectively and planted in the field. This approach capitalizes on the existing infrastructure available on farms worldwide, such as tractors, irrigation systems, and fertilizers.
In transient expression, the genetic material carrying the gene that encodes the target ingredient is introduced into the host plant's nucleus for a limited period, typically lasting a few days to weeks. The foreign DNA is not integrated into the plant's genome; instead, it exists as an extrachromosomal element, often in the form of a plasmid. The introduction of genetic material can be accomplished through methods like vacuum infiltration or injection of the underside of the leaf. A few days later, the plant begins producing the desired protein. Transient expression is commonly conducted in controlled environments like greenhouses, with tobacco being the most frequently utilized plant for this purpose.
These two approaches to recombinant protein expression in plants offer distinct advantages and can be selected based on the specific needs and goals of protein production, considering factors such as scalability, infrastructure utilization, and control over gene expression.
Strategies to Make Molecularly Farmed Ingredients Cost-Competitive
Raise Yields: Plant-based expression systems typically yield recombinant proteins in the range of 0.5-7g per kg of biomass, which is lower than yeast-based systems that achieve around 25g/L and mycelial expression systems that can reach more than 120g/L.5 This disparity in yield can be attributed to the larger size of plant cells (big vacuoles), and their more complex genetic regulation, which results in relatively less efficient and more intricate protein-making machinery. Today, there are many scientists working to increase plant yields. Some areas we are monitoring include inducible expression systems, viral vectors, plastid engineering, localized protein expression, gene stacking, high-throughput screening, and enhanced post-translational stability.
Cheapen Downstream Processing: The downstream processing that leads to ingredient isolation regularly accounts for ~75% of the total cost of production. In general, plant biomass is high in fibers like cellulose and lignin which make it difficult to extract the target ingredient from the plant material. Different ingredients also exhibit diverse stability profiles across pH and temperature ranges, making extraction a somewhat bespoke process depending on the ingredient produced and the type of plant it is synthesized in. A typical extraction process involves harvesting, grinding, precipitation, pressing, filtration, and sometimes chromatography. To lower expenses, startups are collaborating with ingredient buyers to explore whether slightly less pure protein ingredients can replicate the performance of pure protein isolates. Successful outcomes could pave the way for more prevalent options like protein + fiber combinations and interesting blends of plant and animal proteins.
We are tracking several technical advancements aimed at cutting extraction expenses. These include using crops like lettuce or algae, which naturally have lower protein and fiber levels – making target protein extraction easier. Additionally, postharvest milking, and co-expression or fusion with sequences encoding extraction-friendly domains are both on our radar to help streamline the process.
Sources
Scaling reactor volumes can take years. In larger tanks, cells undergo more shear stress, experience wider temperature and pressure fluctuations, and encounter varying nutrient and oxygen levels. They must also maintain sufficient stability to endure more rounds of cell division before harvest.
Functional Food Proteins with Microbial Expression Systems - Virtual Event | Ginkgo Bioworks