Precision Fermentation Market Size, Share & Industry Analysis, By Microbe Type (Bacteria, Yeast, Algae and Fungi), By Ingredient (Egg Protein, Heme Protein, Collagen Protein, Whey and Casein Protein, Enzymes and Others), By Application (Meat and Seafood, Dairy Alternatives, Egg Alternatives, Processed Food and Beverages, Skincare and Haircare Products, and Others), By End Use (Food and Beverages, Cosmetics, and Pharmaceuticals), and Regional Forecast, 2024-2032

The global precision fermentation market size was valued at USD 2.14 billion in 2023 and is projected to grow from USD 3.03 billion in 2024 to USD 57.01 billion by 2032, exhibiting a CAGR of 44.30% during the forecast period. Europe dominated the precision fermentation market with a market share of 49.53% in 2023. Moreover, the precision fermentation market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 16.04 billion by 2032, driven by growing demand for sustainable and environment-friendly proteins in the market size.

Precision fermentation is a process that combines traditional fermentation with the latest advances in biotechnology to develop proteins, enzymes, and other molecules effectively. This synthetic method of developing the proteins used in food and beverages helps reduce reliance on land and water and lowers carbon footprint. This technology is highly suitable to meet the increasing demand for alternative proteins among consumers globally.

The demand for such products is expected to increase significantly in the future. This technology uses 74-99% less water and 77-91% less land and emits 37-87% less greenhouse gases. Hence, it is one of the most environment-friendly solutions available to manufacture alternative proteins. This technology is gradually being adopted to manufacture proteins and meet the increasing demand for sustainable food globally. 

The COVID-19 pandemic had a favorable impact on the market’s overall growth as the demand for alternative proteins and protein-based food increased significantly during that time. Investment in new startups increased significantly during the period, which helped support research and the development of new proteins for the market.  

Precision Fermentation Market Trends

Investment in Scaling Up Production to Support Market Growth

Several companies are working to scale up the production of alternative proteins using this technology. As the necessity to develop food sustainably is growing rapidly, the need to manufacture such protein on a large scale to cater to the growing demand is also rising. For instance, in March 2023, Change Foods, a company that specializes in the production of milk casein, partnered with UAE-based KEZAD Group to manufacture animal-free casein milk proteins that can replace 10,000 cows. Such investment helps to reduce reliance on animal farms and supports steps towards producing and sourcing food sustainably.   

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Precision Fermentation Market Growth Factors

Growing Demand for Environmentally Sustainable Proteins to Support Market Growth

There is a growing interest in using this technology to manufacture animal proteins. Concerns raised by environmental experts toward abrupt and unpredictable climate change, where human activities are playing a crucial role in speeding up the phenomenon of global warming, are one of the primary factors leading to the adoption of new and innovative technologies. The emission of greenhouse gases from animal farms is considered one of the primary causes of an increase in global temperature. This results in a growing urgency to reduce harmful environmental gases and adopt alternative methods to produce food. The adoption of precision formation for food production, including animal proteins, is expected to increase in the future. 

Growing Investment in Precision Fermentation to Boost Market Expansion

The shift of consumer behavior toward food and food sources has changed significantly over the past few years. The shift from animal-sourced protein toward environment-friendly sources such as meat products, which are obtained from cultured media, is growing popular among consumers. Such products have a texture and color similar to animal protein and have shown promising results compared to plant-based alternatives. Thus, there is a growing investment in such products, which is expected to expand their areas of end use in untested food categories and create growth opportunities for new market entrants.

RESTRAINING FACTORS

High Production Costs and Low Consumer Awareness Hamper Market Growth

The production cost of food using this technology is high. There is also a safety concern among consumers related to the food produced using the fermentation method. However, the production cost is expected to decrease in the future with the growing investment in technology advancement. Moreover, there is an increasing emphasis on creating awareness among consumers about the advantages of such food products.

Precision Fermentation Market Segmentation Analysis

By Microbe Type Analysis

Yeast Leads Market Due to its Wide Adoption by Manufacturers

Based on microbe type, the market can be segmented into bacteria, yeast, algae, and fungi. Yeast is the most widely used microorganism for the production of whey and milk protein, heme protein, enzymes, and other ingredients. Hence, this microbe accounts for the highest market share in the global market.

Bacteria account for the second largest market share and are widely used for the production of dairy proteins, heme proteins, and other food and beverages and pharmaceutical products. Apart from these, different strains of algae and fungi are also used in precision fermentation for end use in various industries. Commercialization of genetic engineering and fermentation processes based on microbes has been a challenge as consumers have limited knowledge about the safety of the food manufactured, which hampers the precision fermentation market growth.

By Ingredient Analysis

Production of Whey and Casein Proteins Increases Due to Their Safety

Based on ingredients, the market is segmented into egg protein, heme protein, collagen protein, whey, and casein protein, enzymes, and others. Among these, whey and casein protein accounts for the highest market share. Whey and casein protein production using novel technology is slowly gaining popularity in the market. Several companies are investing in developing advanced and functional proteins that can be generated using precision fermentation techniques. Moreover, such proteins are considered safe and categorized in the generally recognized as safe (GRAS) category in Europe. Hence, the majority of the companies in the food & beverage sector are investing in developing whey and casein proteins that suit evolving consumer preferences.

The growing popularity of animal-free protein supports the demand for alternative proteins manufactured using advanced technology. Companies such as Mycorena, MycoTechnoloy, Inc., and others are using this technology to develop proteins for manufacturing meat analogues. Hence, this segment accounts for the second largest market share in the global market. Other products such as enzymes, which are used for manufacturing fermented beverages and wines, egg protein for manufacturing eggs, and other products are also gradually being manufactured using this process.

By Application Analysis

Dairy Application Leads Market Due to Use of Different Microbe Strains to Make Milk-based Products

By application, the market is segmented into meat and seafood, dairy alternatives, egg alternatives, processed food and beverages, skincare and haircare products, and others. The dairy alternatives segment accounts for the highest market share. A wide range of dairy products, such as animal-free milk, cheese, ice cream, and others, are manufactured using different strains of yeast and bacteria.

Precision fermentation is also being used in pharmaceuticals and other food products. Different strains of microbes have been used in the production of biopharmaceuticals, leading to the adoption of this technique in the future as well.

By End Use Analysis

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Food and Beverage Sector Leads Due to Wide Adaptability of Technology in Product Manufacturing

By end use, the market is segmented into food and beverages, cosmetics, and pharmaceuticals. Among these, the food and beverage segment accounts for the highest market share. Fermentation technology has been used for food, beverage, and pharmaceutical production for a long time and is currently being used for the production of alternative proteins. The rising popularity of functional proteins derived from this technique and other advanced technology among environment-conscious consumers is one of the major factors impacting its increasing adoption in the food & beverage sector. Products, such as meat, seafood, milk, eggs, and cheese are being developed using this technology. Several vitamins that are used for making dietary supplements are derived from different strains of yeast, bacteria, fungi, and algae.

The growing demand for advanced pharmaceuticals and dietary supplements to support people’s well-being is a major factor supporting the market’s growth. Collagen derived from microbes is also becoming popular in the cosmetics sector, and it is aimed at consumers who prefer environmentally friendly raw materials in their products.

REGIONAL INSIGHTS

The market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East and Africa.

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Europe accounts for the largest market, amounting to USD 1.06 billion in 2023. Several consumers are switching from traditional animal-sourced meat to other environment-friendly and safe meat alternatives. Europe is one of the leading markets with a growing investment in identifying and manufacturing animal proteins that produce less pollution and have similar texture and taste as animal products. Germany, the U.K., and France are the leading manufacturers of proteins using precision fermentation. Several companies are also investing in scaling up their production capabilities to meet the growing demand for alternative proteins in the region.

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North America is another major market and accounts for the second largest precision fermentation market share. Animal-free dairy and cheese products are gaining popularity in the region. Changes in the consumption pattern of the country, with several consumers opting to explore new food products, is one of the major factors boosting the market’s growth in the region. 

Asia Pacific is one of the fastest-growing markets, where Singapore, Australia, China, Japan, and Thailand are adopting this process for developing proteins and enzymes with wider end uses in the food and beverage, cosmetics, and pharmaceutical sectors. The adoption of favorable policies, such as China’s 14th five-year plan in 2021 to diversify and adopt novel methods for protein production, is also supporting the growth of the market. In Australia, Singapore, Thailand, and Japan, private companies are making growing investments in developing new products using this technology.

The markets in South America and the Middle East & Africa are still in the early stages of development. Among several countries, Israel is one of the prominent ones investing in adopting this method to develop alternative proteins. The gradual awareness among consumers about the products manufactured using this method is expected to support the market’s growth in the region in the future.

List of Key Companies in Precision Fermentation Market

Increasing Investment in R&D by Key Industry Players to Improve Production Efficiency

The precision fermentation market is a fragmented market with several private players investing in the research and development of new proteins using this technology.  Some of the key players in the market are The Every Co., Perfect Day Inc., Shiru Inc., Geltor, and others. The investment in technology for food and beverage production has increased significantly over the past few years. Some plant-based food manufacturers are also using it to enhance the manufacturing of plant-based food products. Favorable regulatory policies adopted by the U.S., Israel, and Singapore are also supporting the growth of this industry. For instance, in 2021, The EVERY company and Motif FoodWorks received no-questions letters from the U.S. Food and Drug Administration for their products, which include egg protein and protein derived from yeast. Such favorable support from the government encourages startups to invest further in developing newer proteins from available microorganisms.

LIST OF KEY COMPANIES PROFILED:

• Perfect Day Inc. (U.S.)


• The Every Co. (U.S.)


• GELTOR (U.S.)


• Imagindairy Inc. (Israel)


• Shiru Inc. (U.S.)


• Impossible Foods (U.S.)


• Change Foods (U.S.)


• Vivici (Netherlands)


• Bon Vivant (France)


• Standing Ovation (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2024: Nestlé SA launched its first precision fermentation-based dairy protein powder, an animal-free and lactose-free whey isolate. The launch of this new product helped the company solidify its position in the functional nutrition space.


• February 2024: Vivici, a company formed by the joint collaboration between Fonterra and DSM-Firmenich, announced its plans to produce industrial-scale whey protein from precision fermentation. This will help the company meet the growing demand for ‘animal-free protein’ in the U.S. market.


• February 2024: Perfect Day, a U.S.-based precision fermentation product manufacturer, partnered with Unilever’s Breyers and announced its plan to launch Breyers Lactose-Free Chocolate. This product will be made of dairy protein, which is derived using this technique.


• January 2024: Imagindairy, an Israeli startup that specializes in producing proteins using precision fermentation, acquired industrial-scale production lines in Israel. This is expected to help the company manufacture proteins that can be exported to the U.S. market.


• July 2023: Unico Nutrition partnered with Perfect Day, a precision fermentation-based protein manufacturer, and launched a hybrid protein powder named APOLLO II. The new product helps to build lean muscle and support weight loss.

REPORT COVERAGE

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The report includes quantitative and qualitative insights into the market. It also offers a detailed analysis of the market size, statistics, trends, regional market forecast, and growth rate for all possible segments. This report provides various key insights on the market, an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, market dynamics, and key industry trends.

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