Fermentation-based proteins gain momentum as Singapore bolsters research support

As investor interest in fermentation-based proteins grows worldwide, Singaporean research institutions are allocating additional resources to better assist the budding industry.

This comes after a number of international fermentation start-ups were granted regulatory license to debut in Singapore, but are instead focusing on bigger markets like the United States and the European Union.

The surge in interest for fermentation-based proteins is not just limited to investors and research institutions. Consumers are increasingly becoming aware of the potential benefits these novel food products offer. A recent survey conducted by the Singapore Food Agency (SFA) revealed that 68% of Singaporeans are open to trying fermentation-based proteins, citing environmental concerns and potential health benefits as primary motivators. This growing consumer acceptance is likely to play a crucial role in shaping the future of the industry in Singapore and beyond.

Fermentation-based proteins have generally received less financing than plant-based proteins and grown meat, but by the first half of 2024, they had outpaced the other two categories.

According to alternative protein think tank The Good Food Institute (GFI), US$398 million (S$510 million) in capital was invested in fermentation enterprises worldwide in the first half of 2024, compared to US$130 million for grown meat and US$138 million for plant-based protein. In contrast, $443 million was invested in fermentation startups in all of 2023.

According to GFI Asia-Pacific's (APAC) managing director Mirte Gosker, one factor driving the increase in investments could be that the fermentation sector is generally at an earlier stage of growth than the plant-based proteins sector, as companies are scaling up production and would require more funding to do so. Plant-based proteins, on the other hand, have been on the market far longer, she said.

While conventional fermentation methods are centuries old, modern fermentation techniques, which are often classified into two major categories: biomass fermentation and precision fermentation, are developing as a more sustainable manner of manufacturing proteins and other food components.

The environmental impact of fermentation-based proteins is another factor driving their popularity. A study published in the Journal of Cleaner Production in early 2024 found that fermentation-based proteins have a significantly lower carbon footprint compared to traditional animal-based proteins. The study estimated that producing 1 kg of fermentation-based protein emits approximately 3.5 kg of CO2 equivalent, compared to 25 kg for beef and 7 kg for chicken. This substantial reduction in greenhouse gas emissions has caught the attention of environmentally conscious consumers and policymakers alike.

Biomass fermentation start-ups, which have traditionally gotten the majority of investment, generate novel food items by cultivating protein-rich microorganisms in a bioreactor for direct ingestion.

The recently established Bezos Centre for Sustainable Protein at the National University of Singapore, which received $39 million in funding from the Bezos Earth Fund, will work to bring these products closer to commercialization while also investigating how these food ingredients can improve the taste and nutrition of other alternative proteins such as cultivated meat and plant-based meat.

However, precise fermentation technology, which uses microorganisms as "cell factories" to generate a variety of food components, is gaining popularity. According to GFI financing estimates, worldwide investments in precision fermentation start-ups totaled US$90 million in the first half of 2024, almost equaling the total funding channeled into biomass fermentation businesses in the same time (US$103 million).

According to Ms Gosker, multinational firms such as Unilever and Danone are also keen to join the precision fermentation market, highlighting the industry's potential. These corporations have a history of spending significant R&D resources to tackle bottlenecks when they feel a food technology has strong scaling potential, she noted.

Yip Hon Mun, a food-tech investor, said precise fermentation technologies are more familiar and less difficult than cultured meat, putting them considerably closer to commercialization.

There has also been an increase in US regulatory approvals since the beginning of 2024, with government support favoring precision fermentation technology in both the US and Europe, he observed.

The National Research Foundation (NRF) in Singapore invested $14.8 million in June to address significant difficulties in the precision fermentation production process and expand its scientific and technological capabilities via the establishment of a new Centre for Precision Fermentation and Sustainability.

Professor Subodh Mhaisalkar, executive director of academic research at NRF, stated, "The research will increase our talent pool in precision fermentation and better position Singapore to effectively regulate precision fermentation food products and applications, as demand is expected to rise in tandem with global food security concerns."

Ms Guo Xiuling, CEO of Temasek-backed food-tech platform Nurasa, told reporters at the official launch of its Food Tech Innovation Centre in April 2024 that precision fermentation has always been a "strategic interest" due to its potential as a platform technology capable of producing not only protein but also other important nutrients.

Overall, the market size for both forms of fermentation technology in the Asia-Pacific region, including Singapore, remains small in compared to Europe and the United States.

Ms Gosker said that there is still some catching up to do, with more consumer education required on the advantages of fermentation-derived proteins, which GFI Asia-Pacific is seeking to address.

To bridge this knowledge gap, the Singapore Food Agency has partnered with local universities to launch a series of public education initiatives. These include interactive workshops, tasting sessions, and a traveling exhibition showcasing the science behind fermentation-based proteins. The initiative, set to kick off in January 2025, aims to reach over 100,000 Singaporeans in its first year, fostering a deeper understanding and acceptance of these novel food products.

Delaying product introductions

A number of fermentation-based start-ups that have acquired regulatory approval from the Singapore Food Agency (SFA) to sell their goods here are focusing on international markets first.

Perfect Day, for example, discontinued doing business in Singapore in late 2023 and no longer sells its items there. In 2022 and 2023, the firm, which creates animal-free dairy proteins, offered its Very Dairy milk and Coolhaus ice cream manufactured from fermented whey protein at FairPrice shops. According to The Straits Times, it discontinued selling them in January 2024.

Perfect Day and AStar planned to open a collaborative R&D facility in April 2021, however the project was put on hold owing to the Covid-19 epidemic. "The opening of the joint lab is now pending Perfect Day's review of their strategic directions," an AStar spokeswoman said.

Perfect Day did not answer to ST's repeated inquiries, but media sources stated the firm was reorganizing in 2023, shifting away from its consumer-facing business and into R&D and the business-to-business sector.

Nature's Fynd, an American fermentation company that makes dairy-free products like yogurt and cream cheese using fermented fungi-based protein, had intended to construct a production plant in Singapore by 2022 or 2023 after gaining SFA certification.

Its fungal-based protein is derived from a fungi microbe that originated at Yellowstone National Park, USA. When queried about the progress of its intentions, a firm representative said that there are no updates on a local facility and that its goods have yet to be launched locally. "Singapore remains a target location for us in the future. We have concentrated our efforts on expanding our US retail presence and developing to produce new items," she said.

TurtleTree, a local biotech company with facilities in Singapore and the United States, is focusing on the US market to commercialize its sustainably produced lactoferrin, a vital element present in human milk manufactured utilizing precision fermentation.

According to CEO Fengru Lin, the business intends to seek regulatory permission in the United States before proceeding with SFA for regulatory approval here.

"Leading with US regulation allows us to capture the biggest market in the world... (but) we do see Singapore as a wonderful gateway to the rest of Asia, so it is a close second market that we are tackling," the executive said.

The Protein Brewery, a Dutch fermentation firm that gained regulatory license from SFA to market its fungal-based protein component in Singapore in March 2024, is also focusing on future development in the United States and the European Union.

In the meanwhile, it will investigate how to effectively approach the Singapore consumer market, according to a representative. Mr. Yip, who is investing in food technology, stated: "Companies have always been drawn to Singapore's favourable regulatory environment, but as they enter their next growth phase, they face challenges such as a smaller market size, limited manufacturing capacity and an underdeveloped ecosystem."

Despite these challenges, Singapore's government remains committed to positioning the city-state as a hub for food innovation in Asia. In September 2024, the Economic Development Board (EDB) announced a new S$100 million fund specifically aimed at attracting and supporting fermentation-based protein companies. The fund will provide grants for research and development, as well as incentives for companies to set up production facilities in Singapore. This move is expected to create over 1,000 high-skilled jobs in the sector over the next five years and further solidify Singapore's position as a leader in food technology innovation.

According to a 2023 assessment, one of the major constraints impeding the worldwide scaling up of fermentation technologies is a lack of enough bioreactor capacity, which is especially prominent in the Asia-Pacific area.

Singapore has one such facility, ScaleUp Bio, which basically offers contract manufacturing services to fermentation startups wishing to go from lab to pilot size. The startup, which acquired a food manufacturing license from the SFA in May, has secured deals with at least five local enterprises to commence production.

Mr James Petrie, CEO of Australia-based Nourish Ingredients, told ST that the firm chose Singapore as its Asia-Pacific center because it has a highly supportive environment, regulatory and legal assistance, and manufacturing capabilities.

The startup, which makes precise fermented fats that can be used to enhance plant-based meat and dairy products, is collaborating with ScaleUp Bio to increase production and with SFA to get regulatory clearance in Singapore.

Solar Foods, a Finnish company that received regulatory approval here in late 2022 for its fermented protein ingredient Solein, has launched a number of limited-edition products in Singapore at various food and beverage outlets, including a chocolate ice cream infused with Solein at Italian restaurant Fico. Previously, output numbers were low, but since its first commercial-scale factory opened in April 2024, production has increased.

"The facility will have a target capacity of 160 tonnes of the novel protein annually, enabling larger commercial use of Solein in the food industry," according to the company's spokesperson.

As the fermentation-based protein industry continues to evolve, experts are already looking towards the next frontier: personalized nutrition. Dr. Sarah Chen, a food scientist at Nanyang Technological University, believes that precision fermentation could pave the way for tailored nutritional solutions. "In the future, we might be able to use fermentation to produce proteins and nutrients that are specifically designed to meet an individual's unique nutritional needs," she explains. This potential for personalization could revolutionize not just the food industry, but also healthcare and preventive medicine, further underlining the transformative potential of fermentation-based proteins.