Animal-free dairy: New Culture attracts new funding; Change Foods eyes up Abu Dhabi for new plant: 'There is a massive commercial manufacturing capacity bottleneck in the industry'

03-Nov-2022 - Last updated on 04-Nov-2022 at 16:00 GMT

Change Foods (left) and New Culture (bottom right) are targeting the animal-free cheese market. Image credits: Change Foods and New Culture

Two US-based precision fermentation startups making real dairy ingredients using microbes instead of cows have announced significant developments as they gear up to launch next year in the emerging ‘animal-free dairy’ category.

San Leandro-based New Culture – which plans to launch in the foodservice market next year with animal-free mozzarella featuring casein proteins made in fermentation tanks that “melts, stretches, and bubbles just like conventional dairy cheese” - has secured a "multi-million dollar" investment from Korean food and biotech giant CJ CheilJedang.

A leading manufacturer of food ingredients from nucleic acid, lysine and tryptophan to on-trend sweetener allulose, CJ CheilJedang also owns US frozen food giant Schwan's (which makes Red Baron pizza), noted New Culture, which raised $25m in a series A round last fall.

"CJ is one of the world's leading players in food, biotech, fermentation, and pizza, all of which are core elements of the New Culture vision,” said New Culture co-founder and CEO Matt Gibson, who recently announced a recent partnership with ADM under which the ingredient giant's “production capacity for both fermentation and dairy operations will be made available to meet the demand for New Culture’s melty, stretchy cheese.”

Asked about the manufacturing set up at New Culture, he said: "We are moving ahead rapidly with our scale-up efforts but are not yet ready to share details."

Change Foods: New plant in Abu Dhabi

Palo Alto-based Change Foods, meanwhile, has just signed an agreement with KEZAD Group (which offers manufacturing, logistics, trade and distribution services) to design a dedicated commercial manufacturing plant for animal-free casein proteins in Abu Dhabi with the support of the Ministry of Economy of the UAE under the NextGen FDI initiative (designed to help high-tech businesses launch and scale from the UAE) as it gears up to launch next year.

According to chief marketing office Irina Gerry: "We are currently in the pre-development stage, finalizing facility design and as well as costs and timing for construction. Our goal is to begin the next stage in the first half of 2023."

'Having control over our manufacturing capacity is a critical component of future-proofing the business'

So why Abu Dhabi, and why build a dedicated plant? "We explored the entire gamut of options, including contract manufacturing, partnerships and a custom facility build," Gerry told FoodNavigator-USA.

"We found that given constraints on existing infrastructure, availability of suitable fermentation capacity among potential partners, and our ability to construct the facility to fit our process precisely, building of a dedicated facility made the most sense both from a financial as well as market timing perspective.

"While partnerships and contract manufacturing are absolutely a viable path to market, we found that securing our own dedicated manufacturing capacity was best aligned with our business strategy. Because we are commercializing a new-to-the-world technology, we believe that having control over our manufacturing capacity is a critical component of future-proofing the business."

"Our projections show we will be able to compete with animal-derived milk proteins on cost per kilo basis once fully scaled. When comparing the two methods it will be important to look at the total land, water, feedstock and energy requirements, as well as emissions for both, in addition to costs." Irina Gerry, CMO, Change Foods

'We are still targeting the US market as our likely initial launch'

As for the location, she said, "There is a massive commercial manufacturing capacity bottleneck in the industry and we evaluated several options, including partnerships, contract manufacturing and own manufacturing in different locations around the world. The UAE government, under NextGen FDI initiative, offered us a streamlined process to set up operations, make the right connections, and gain access to financial incentives to build our first facility in Abu Dhabi."

But she added: "While we chose to build our first commercial manufacturing facility in the UAE, we are still targeting the US market as our likely initial launch, a decision driven largely by the favorable regulatory environment, size of market and target consumer acceptance."

That said, she explained, "We also believe that APAC region, and the UAE in particular, will be a strong contender for early market expansion, pending regulatory approvals."

Change Foods is also in the final stages of closing a bridge funding round, said the firm, which closed a $12m seed extension round earlier this year, and has signed collaboration agreements with two leading food companies: Upfield (which owns plant-based cheese brand Violife and the former Unilever spreads portfolio) and Sigma (which sells cheese, yogurt, and other foods in the US, Latin America and Europe).

The business model: Consumer brands first, then later ingredients

Both New Culture and Change Foods plan to launch their own, branded consumer products in the first instance, although they anticipate supplying animal-free dairy ingredients on a b2b basis to other companies further down the line.

"While our strategy is not set in stone," said Gerry, "it is still our intention to introduce Change branded products to market initially, because we believe that introducing consumers to a novel category of animal-free cheese in a holistic way is best.

"When consumers experience food, they don’t just think about protein or a specific ingredient. They buy an entire experience, which consists of product, packaging, price, placement and brand. Food is an emotional and experiential category. We believe the best way to make sure we are engaging our target consumer in the most direct way is to design each of these elements as part of the overall experience, not simply an ingredient in isolation. As the market matures and our production volume increases, a B2B ingredient supply model would make a lot of sense."

As for the competitive set, founder and CEO David Bucca told is in a recent interview: “The whole pie is growing. Dairy and cheese alone is just a huge market, so to think that we're going to be eating away at each other's demand is silly; there's just so much room for everyone to be successful and to scale and produce products and get to market with really strong brands.”

Animal-free dairy

While it has its detractors, using precision fermentation to make ‘real’ dairy ingredients without cows, argue evangelists, offers the best of both worlds: the nutrition and functionality of dairy ingredients without the ethical and environmental drawbacks of industrialized animal agriculture.

There is no formal definition of ‘animal-free’ dairy, but it typically refers to products made with whey, casein, or dairy fats that are produced without cows, either via genetically engineered microbes such as yeast or fungi that feed on sugars in fermentation tanks; or via genetically engineered crops such as soybeans, corn or peas.

The final proteins are already familiar to the food industry (Perfect Day’s animal-free whey protein, which is expressed by a genetically engineered strain of filamentous fungus, for example, is "identical to commercially available bovine-produced β-lactoglobulin” according to its GRAS determination).

Interested in plotting the future dairy... without cows?

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MORNING SESSION: Sustainable Sourcing for Colors, Flavors, and Sweeteners; and plotting a future for dairy… without cows (11am- 12.45pm Central time, Tues November 15)

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PANEL: Biosynthesis: Fermentation and the future of flavors, colors and sweeteners Does it always make sense to extract flavors, colors, sweeteners and other food ingredients from plants if you can produce them more efficiently - and more sustainably – via microbial fermentation, ‘cell-free’ approaches or plant cell culture?

Dr Joshua Britton, founder and CEO, Debut Biotech
Nusqe Spanton, founder and CEO, Provectus Algae
Dr David Welch, CSO and co-founder, Synthesis Capital
Ricky Cassini, CEO and co-founder, Michroma
Dr Erin Marasco, global biology lead, Cargill
MODERATOR: Elaine Watson, senior editor, FoodNavigator-USA

PANEL: Dairy 2.0: Plant-based milks now account for more than 15% of the fluid milk market, while plant-based cheese, creamers, yogurts and ice cream continue to gain traction. So where is the market going next, where’s the white space in the category, and what is the potential of a new wave of ‘animal-free dairy’ products made with real milk proteins and fats, minus the cows?