27 Feb 2019 — Fonterra, the world’s largest dairy exporter, has made its first foray into alternative proteins by being among the US$90 million Series A financing round for Motif Ingredients. While dairy nutrition will remain the core focus for the New Zealand-headquartered company, the minority stake move comes as part of a plan to “future proof their co-op for generations to come.”
“Fonterra’s stake in Motif will help us be part of the emerging next-generation fermentation-produced nutrition sector,” says Judith Swales, Head of Fonterra’s Global Consumer and Foodservice business.
Other investors in the Ginkgo Bioworks food ingredients spin-off, which was launched yesterday, are Breakthrough Energy Ventures, Louis Dreyfus Companies (LDC), Viking Global Investors, as well as Gingko itself. Motif has been started to “provide next-generation alternative proteins to global food companies.”
“As a global merchant and processor of agricultural goods, LDC is very conscious of the need to include new and disruptive solutions to the challenge of sustainably feeding a growing world population,” Ian McIntosh, LDC CEO tells FoodIngredientsFirst. The company’s business strategy, which looks to the long-term future of LDC, thus incorporates both their efforts to ensure fair and sustainable agriculture, as well as looking at food innovation as part of the solution.
“This investment is a demonstration of that strategy in action. And we will continue to seek opportunities in this space,” McIntosh adds.
Motif expects to “leverage biotechnology to create novel solutions for foods that provide consumers with greater choices, without compromising taste or nutrition.” Motif has been established by Ginkgo Bioworks, one of the world’s leading organism companies. Using a process similar to how insulin, vitamins and beer are made, Motif’s team of biotech experts will harness state-of-the-art genetic science and fermentation technology to re-create and sell animal proteins and food ingredients, including those similar to dairy ingredients.
Jonathan McIntyre, formerly Head of R&D at Indigo Agriculture and former SVP of R&D at PepsiCo, will lead Motif as CEO and Motif will be headquartered at Ginkgo’s Boston Seaport facility.
Swales says Fonterra’s move is part of the co-operative’s commitment to its farmer-owners to stay at the forefront of innovation to understand and meet the changing preferences of consumers. While financial terms have not been disclosed, Fonterra’s investment represents a minority stake in the business.
“Farmers expect their co-op to get the most value from every drop of their milk and also keep an eye on tomorrow to futureproof their co-op for generations to come,” Swales explains.
“Dairy nutrition will always be at our core, but we also want to explore how we can capture more value from new types of nutrition,” she adds.
“The complementary nutrition category – where plant, insect, algae and fermentation-produced nutrition co-exist alongside animal proteins, including cows’ milk – is fast evolving. It’s not a case of either/or, but both,” stresses Swales.
“There will be two billion mouths to feed by 2050 and there simply will not be enough food to go around by using today’s methods alone.” A combination of traditional and complementary nutrition sources will be required to meet the world’s increasing need for food, especially protein, she notes.
“Consumers around the world will continue to want natural, grass-fed dairy as a premium source of nutrition. At the same time, we recognize that no two consumers are the same. As diets and preferences continue to evolve, we want to be there, providing people with choices.”
Jonathan McIntyre, P.h.D, Motif Ingredients’ CEO, says: “Through biotechnology and fermentation, Motif will propel the next food revolution with affordable, sustainable and accessible ingredients that meet the standards of chefs, food developers and visionary brands.”
Motif will engineer dozens of proteins derived from dairy, egg and meat without compromising the functionality, taste and nutrition of animal-based ingredients.
“Sustainability and accessible nutrition are among the biggest challenges facing the food industry today. Consumers are demanding mindful food options, but there’s a reigning myth that healthy and plant-based foods must come at a higher price, or cannot taste or function like the animal-based foods they aim to replicate,” McIntyre continues.
Biotechnology is indispensable for catalyzing the next generation of foods. Vital food ingredients, including vitamins, amino acids, enzymes, and flavors, are made through fermentation with genetically engineered yeasts and bacteria. Identifying and developing new fermented ingredients – particularly new proteins – that are historically derived from animals requires deep technical resources and experience.
With Ginkgo, Motif will accelerate the R&D process for manufacturing new ingredients at a price, taste and quality in line with what is already available at an everyday food market. Crucially, food companies will be able to outsource this costly and time-intensive R&D process to Motif as a trusted and innovative supplier, while dedicating more time and resources to bringing products and new brands to consumers.
“Innovative or disruptive solutions are vital in responding to changing consumer demand and to addressing the challenge of feeding a growing world population sustainably, says Kristen Eshak Weldon, Head of Food Innovation & Downstream Strategy at LDC.
“In this sense, we are excited to partner with Motif, convinced that its next-generation ingredients will play a vital role,” she adds.
“Innovation covers a multitude of areas across our organization, from digital transformation to new product development from existing processes,” Eshak Weldon tells FoodIngredientsFirst. “If we take food innovation in particular, our focus includes plant-based alternative proteins and disruptive ingredients, specialized grains and plants with enhanced nutritional benefits and sustainable, innovative aquaculture production systems and technologies.”
“Investment in new or emerging areas of expertise, and start-ups requires both a thorough analysis of the potential business case and a good understanding of the potential adoption by the target market. There is a higher risk, but also a higher reward in case of success,” Eshak Weldon explains.
Motif is the second start-up to launch from Ginkgo’s breakthrough platform for biological engineering. The first, Joyn Bio was launched in September 2017 in a joint venture by Ginkgo and Leaps by Bayer to focus on achieving more sustainable agricultural practices.
Consumer demand for plant-based foods, such as meat substitutes or non-dairy milk, continues to gain momentum thanks to a growing awareness of and appreciation for the health and sustainability benefits of plant-based diet options.
Food companies are rapidly innovating to keep up with demand, though obstacles remain to create alternative products that maintain the taste, health profile and integrity of their animal-based counterparts.
Earlier this month we shared the thoughts of a venture capital investor who is eyeing plant-based opportunities amid a golden age in food technology development.
By Elizabeth Green
To contact our editorial team please email us at editorial@cnsmedia.com
If you found this article valuable, you may wish to receive our newsletters.
Subscribe now to receive the latest news directly into your inbox.