In photos: biotech start-ups challenge dairy industry

Long gone are the days when the supermarket milk aisle offered only skimmed or semi-skimmed. Today, there is far more to choose from — hemp milk, pea milk, even potato milk. They are all part of the quest to find a dairy-free alternative to milk that tastes as good, but has a lower environmental impact.

And, now, a whole new cohort of players is entering the race. Instead of using plant-based ingredients, these companies are trying to replicate cow’s milk itself — but in the lab, and without using any cows.

Start-ups from Silicon Valley to Singapore are working on lab-grown, or “animal-free” milk. It involves a process known as “precision fermentation”. Companies take yeast or other micro-organisms and insert genetic code into them that replicates part of a cow’s DNA. The micro-organisms are then fed sugars and brewed so that they multiply.

It is a process similar to brewing beer but, because of the genetic code inserted, the result is milk protein. The pharmaceutical industry has been using precision fermentation for decades to make products such as enzymes and insulin and, in the past few years, the food industry has also become interested in the technology.

The biggest company in this emerging sector is Perfect Day, based in the US. It was the first to commercialise the protein and currently sells animal-free ice-cream, protein powder and spreadable cheese to partner businesses in the US, as well as marketing its own ice-cream brand, Brave Robot. The coffee chain Starbucks trialled Perfect Day’s milk in some of its outlets last year.

So far, only the US, Singapore and Hong Kong have given regulatory approval. The EU and the UK are yet to approve lab-grown dairy for human consumption, so some European start-ups are focusing on selling to the US or Asian market first, while others are expecting local regulators to have given the green light by the time they come to market. The EU’s approval process for “novel foods” usually takes 18 months once a company submits a product, although no European companies have done so yet.

One of the European cohort is London-based Better Dairy. Once its research and development phase is completed, the company plans to produce cheese from its laboratory in east London — an unassuming office building kitted out with fermentation vats.

“Sustainability and animal welfare are the main two drivers behind animal-free dairy,” says Jevan Nagarajah, chief executive of Better Dairy. “Dairy is unsustainably produced. Cows are living and breathing, they’re not just there to produce milk, so that means they’re not the most efficient converter of energy.” 

Others in the industry make the same point. “We’re completely cutting cows from the supply chain, which means we’re entirely cutting methane, as well as making savings on the land and water resources required for cows,” says Kara ten Hoevel, of Berlin-based Formo, which is working on lab-made ricotta and mozzarella.

A study by Perfect Day suggests that lab-produced dairy products produce 91-97 per cent fewer greenhouse emissions than conventional dairy.

So what does the dairy industry think? John Torrance, who has a 1,200-acre farm and a herd of 700 dairy cows in south-east England, reckons there is no need to use labs to solve the sustainability problems in the industry.

“Over the last two years, we’ve dropped our carbon footprint by 3,000 tonnes,” he says, “by improving efficiency and by buying in byproducts from the brewing and fruit juice industries to feed our cattle on.” 

Torrance is also supplementing his cows’ diet with seaweed, which reduces the amount of methane they produce, and using DNA sampling to select the female calves that will produce most milk — which means fewer emissions per litre. The British dairy industry is aiming to hit net zero emissions by 2040, Torrance says.

Some arguments for lab-grown dairy focus on the possibility of freeing up land used by cows for lower-emission crops, or plants that better promote biodiversity. However, Torrance says cows can help increase biodiversity, too. “Dairy and muck and the byproducts from cows allow insects to breed, and the biodiversity of birds and songbirds on our farm is massive,” he says.

He is frustrated by the argument that lab-grown dairy is healthier because it does not contain growth hormones — an argument often put forward by the industry. “We haven’t been able to use hormones in milk production ever,” he says. Hormone use is banned in the EU, UK and other big markets — though it is permitted in the US.

Overall, Torrance says he is not too concerned about the threat from lab-grown dairy. “Are people going to be able to afford it?” he asks. “I think one thing we’ve noticed this year, with things going up in price, is that people are going back to dairy and meat as a good, affordable source for a balanced diet.”

Price remains a sticky issue for the lab-grown industry. Perfect Day says that a 414ml tub of its Brave Robot ice cream costs $4.49, which is comparable to premium conventional products. Some of Perfect Day’s partners, however, charge at least double that.

“The biggest issues at the moment are on scalability and price,” says María Mascaraque, a food market analyst at research company Euromonitor. Companies do not yet have manufacturing processes that can produce at scale, so the price remains high.

“But there is a lot of investment going into improving the technology, partnering with fermentation companies and getting the gene editing tools scalable, too,” says Mascaraque. Bigger food companies are getting interested in the space as well, she says — which could help drive the price down. Nestlé and Danone have put money into lab-grown dairy start-ups.

The other hurdle, Mascaraque says, is consumer acceptance, because it is hard to communicate to people that the product does not come from animals, yet is almost identical to conventional dairy. The industry is pushing to call its products “animal-free” rather than “lab-grown” to help with consumer messaging.

If work can be done on the branding, Mascaraque thinks the industry can bring critical sustainability wins. “I do see a lot of potential in this technology — we are not going to be able to feed the population with the current resources that we have,” she says.

“At some point, this will just be more efficient,” says Better Dairy’s Nagarajah. “And, at that point, why wouldn’t you use it if it’s more efficient? If you look 20 years from now, I think this is going to be everywhere.”