NSW innovator opens door to one of the richest new industries for Australia

Environmentalist George Monbiot said that precision fermentation, “may be the most important green technology ever”. The possibility of...
March 22, 2024 Commentary
NSW innovator opens door to one of the richest new industries for Australia

Environmentalist George Monbiot said that precision fermentation, “may be the most important green technology ever”. The possibility of Australia playing a leading role in the use of that technology in the food industry has taken a major leap forward with a series of recent announcements from Orange-based precision fermentation company Cauldron Ferm.  

It’s a technology that Cauldron Ferm’s founder and CEO, Michelle Stansfield, thinks will become essential in the coming decades. She told The Australian Business Review, “We firmly believe that there will be a scarcity of protein in the next 20 years and we hope to provide, the industry hopes to provide, credible alternatives.” 

Michelle Stansfield has barely been out of the news over the past few years. Not only has she been one of the most successful entrepreneurs for raising investor funding—$10.5m last year and a further $9.5m this year, taking the company’s total seed and series A funding to $20m—Cauldron Ferm has just announced plans to build Asia-Pacific’s largest network of precision fermentation facilities in regional Australia, leveraging the country’s raw materials while providing jobs. Hot on the heels of that announcement comes the approval from the Office of the Gene Technology Regulatory for Cauldron Ferm’s use of its engineered yeast compound to test volumes of precision fermented product at a scale needed to prove commercial viability. 

“Cauldron is the first in Australia to hold a license of this nature at the 10,000-litre scale which unlocks production that all of our local synbio tech companies need to scale,” said Stansfield. 

The term ‘precision fermentation’ might be relatively new to the food industry in general but the technology itself isn’t and has been used successfully for decades to produce insulin to treat diabetes and in the cheese-making industry, for the manufacture of non-animal rennet (since its development by Pfizer in 1990). 

According to the Precision Fermentation Alliance (PFA) and Food Fermentation Europe (FFE), “precision fermentation combines the process of traditional fermentation with the latest advances in biotechnology to efficiently produce a compound of interest, such as a protein, flavour molecule, vitamin, pigment, or fat.” In short, limitless volumes of a protein or fat, currently sourced from animal products, could be ‘brewed’ at a fraction of the cost and environmental impact of existing production methods. 

Take lactoferrin for example: a milk protein, also found in human breast milk, that is used worldwide in products as diverse as baby foods and formula, cosmetic formulas, processed cheese, some yoghurts, chewing gum, animal feed supplements and pet care products. But more significant than its widespread use is lactoferrin’s function. It acts as a natural antimicrobial for bio-preservation of food, extending shelf life, ensuring safety and improving health outcomes by acting against agents implicated in life-threatening diseases such as cancer, hepatitis, respiratory infections, and foodborne diseases in infants, children, and adults. Despite its broad applicability, worldwide production of lactoferrin is only 500 tonnes per year with a widely fluctuating cost to industry users of between US$1,000 and US$5,000 per kilo.  

Shiobhan Coster, founder and CEO of QLD-based start-up Eclipse, predicts that her company’s annual revenues from precision fermented lactoferrin alone could easily reach $90m within three to four years.  

Michelle Stansfield is even more bullish. With support from Phil Morle’s Main Sequence investment company, new investment from SOSV and Q-Tel, and collaboration with CSIRO, Stansfield hopes to tap into a global synthetic biology market predicted to reach $430b by 2040 with Australia’s share of the market for food ingredients worth an estimated $19b and 31,200 new jobs (according to CSIRO’s National Synthetic Biology Roadmap), she told Forbes Australia, “We need to build the brewing industry again, worldwide, to be able to keep up with people’s requirement for proteins.” 

Already, Cauldon Ferm is working closely with two Australian companies in the food production area. Nourish Ingredients is engineering new speciality food lipids (fats) comparable to those found in animal products and currently utilised in multiple food manufacturing processes. Eden Brew is developing animal-free dairy products using proteins, such as whey protein, produced by precision fermentation. 

Many of the dairy-derived products currently being developed by precision fermentation will likely enter the food chain via high-value ‘nutraceuticals’ (elements of food supplementation with significant medical or health benefits) and trickle down into products like ice cream, pizza cheese and cheese slices, coffee-creamer, and plant-based milks to give dairy milk-like nutritional credentials and mouth feel to the already growing alternative milk offerings. 

Eden Brew’s first foray into the retail sector will be ice cream and, subject to FSANZ submission and regulatory approval, could be in the market by 2025. The shared optimism for this burgeoning new industry is reflected in Norco’s investment in the technology. Australia’s largest dairy co-op of 200 plus farmers is a 20% shareholder in Eden Brew. 

Stansfield admits that her company is at the very small leading edge of the industry, suggesting that we need 180 times what’s currently available to keep up with opportunity and growing demand. Refreshingly, she is open, collaborative and passionate about building the sector for the benefit of all, not just her own business, and sees Cauldron Ferm as an example of the building block needed to advance Australia’s leadership.  

Currently, dedicated precision fermentation facilities that produce commercially scalable volumes cost anywhere between US$100m and US$300m to build. Stansfield’s model is not only significantly cheaper but also, as a co-manufacturing facility, takes the burden away from a start-up company to raise funds for infrastructure development, “Our disruptive hyper-fermentation technology allows us to build a facility for US$25 million and to stand up multiple facilities very quickly,” she told Qantas Magazine. Furthermore, the technology unlocks a significant decrease in the cost of goods for her customers, being 30-50 per cent cheaper than traditional batch fermentation. 

Stansfield adds that Cauldron Ferm will work with any company wanting to use its vats for their microbes. It currently provides the only co-manufacturing facility for precision fermentation in Australia, although at least one other Australian manufacturer in the industry, Jan Pacas’ Sydney-based All-G Foods, has been working with precision fermenter Liberation Labs in the United States. All-G recently announced its partnership with the Australian Institute for Bioengineering and Nanotechnology at Queensland University of Technology to develop high value lactoferrin in conjunction with Australia’s Food and Beverage Accelerator (FaBa). All-G’s Pacas told Food & Drink Business, “This technology offers Australia a unique market opportunity in an emerging industry with the potential for a substantial commercial impact, especially the ability to supply the Asia-Pacific region.” 

Cauldron Ferm’s recent regulatory approval from the Office of the Gene Technology Regulator gives it the go-ahead to use its engineered biological yeast formulation with optimised functionality to grow customers’ specific proteins or fats at a test volume of up to 10,000 litre batches, proving the viability of between 100,000 and 500,000 litre commercially scaled volumes at a later date. 

This is an important foundational step for one of Australia’s newest food industries.  

This development is not a new project or R&D experiment, it is a pathway to market success for Australia’s precision fermentation food companies who have needed access to larger facilities. This has not only opened the door for Australian food ingredient manufacturers, but also opened the door for Australia to exploit brand-new industry growth and become a world leader in the precision fermentation field. 

Food ingredients made from precision fermentation might be new now, but they will become the norm around the world for dairy derivatives, cheeses, and foods that could use animal fats to improve performance and behaviour, like plant-based meats. Cauldron Ferm has enabled the path forward for ingredients made from precision fermentation to be used in food production, competitively priced with their animal-based counterparts and, therefore, meet future protein demand in a much more environmentally sustainable way.  

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