Why China is the Solution to the Protein Fermentation Bottleneck
Rapid and cost-effective scaling up of capacity for alternative protein production is currently a restraining factor for the growth of the alternative protein industry. Scaling up is fraught with challenges and uncertainties, as the conditions used in shake flasks or laboratory fermentations may not be suitable or most efficient for large-scale cultivation. Different scale-up routes will require different capital investments and set-up times. If we look at the macro data for biomanufacturing, there is an urgent need to increase biomanufacturing capacity globally to support the development of this industry.
Culture Biosciences highlights that the global bioreactor operating capacity is 61 million liters, with only 10 million liters available and a mere 2 million liters meeting food-grade standards. The collaboration between the Good Food Institute and Integration Consulting further reveals that the existing capacity of approximately 16 million liters, distributed among 48 producers and 41 food-exclusive Contract Manufacturing Organizations (CMOs), could extend to around 40 million liters when including a broader spectrum of CMOs. Nevertheless, the projected demand for microbial fermentation-derived products, estimated at 15 million tons by 2030, far outpaces the current capacities, underscoring the imperative for significant growth and innovation to bridge this substantial gap and cater to the escalating need.
Countries worldwide are intensifying their efforts to address challenges and promote the progress of the bioeconomy. Notably, the U.S. White House has taken a proactive step by issuing an Executive Order focused on Advancing Biotechnology and Biomanufacturing Innovation to establish a sustainable, secure, and safe American bioeconomy. The order underscores the importance of advancing scale-up production science and streamlining commercialization barriers, aiming to accelerate the introduction of pioneering technologies and products into the market.
China is well-positioned for bio-manufacturing
China's potential in bio-manufacturing is grounded in its realistic strengths.
In 2022, China released the 14th Five-Year Bioeconomy Development Plan, proposing to “develop synthetic biology technology, explore and develop new types of food such as "artificial protein", realize iterative upgrading of the food industry, and reduce the pressure brought by traditional farming on environmental resources.” Many more countries have noticed this trend and introduced certain policies to support biomanufacturing.
China has a history of fermented food consumption, and the bio-fermentation industry is also built on its large-scale production capacity. After the 1960s, China’s fermentation industry grew rapidly. Examples include the amino acid industry represented by sodium glutamate, the organic acid industry represented by citric acid, and the enzyme preparation industry represented by amylase. Together with the starch sugar industry and the yeast industry, a fairly large-scale fermentation industry system has been formed in China. During the "13th Five-Year Plan" period, the output of main products of the bio-fermentation industry increased from 26.26 million tons in 2016 to 31.41 million tons in 2020; the export volume increased from about 4.29 million tons in 2016 to about 5.27 million tons in 2019. This indicates a significant growth in production during this period, highlighting the expansion and development of the bio-fermentation industry in China.
Scaling up fermentation production in China can be advantageous for several reasons, including:
World's Largest Bio-manufacturing House: China has emerged as the world's largest biomanufacturing house, with established facilities and a rapidly growing biotechnology industry. According to the "2022 White Paper for Industrial Biotechnology in China", the total amount of fermented products in China ranks first in the world, and the output of fermented products such as amino acids, vitamins, and organic acids also leads the world. In the field of separation and purification, the domestic chemical industry has a solid foundation, which can help enterprises reduce costs and improve efficiency in the process of product purification.
Learning from Pharma CDMO Model: China's booming pharmaceutical contract development and manufacturing organization (CDMO) industry provides valuable insights for fermentation scale-up. The global CDMO industry is still in a period of rapid development. The global CDMO market size has increased from US$39.4 billion in 2017 to US$63.2 billion in 2021, and is expected to reach US$124.3 billion by 2025. The size of China's CDMO market has grown from 13.2 billion RMB (1.8 billion USD based on latest exchange rates as of September 2023 ) in 2017 to 47.3 billion RMB (6.5 billion USD) in 2021, with a compound annual growth rate of 37.7%, twice the compound growth rate of 18.5% for global CDMOs in the same period, and is expected to reach 157.1 billion RMB (21.6 billion USD) by 2025. China's CDMO market share in the global market has increased from 5% in 2017 to 13% in 2021, and it is expected to account for about 20% of the global market by 2025. Companies can learn from the successful model of outsourcing production to CDMOs in the pharmaceutical sector and apply similar strategies to fermentation-based product production. This includes leveraging the expertise, infrastructure, and regulatory compliance of specialized fermentation CDMOs to efficiently and cost-effectively scale up production.
Skilled and Affordable Workforce: China has a large pool of skilled professionals in biotechnology, bio-engineering, and related fields. These professionals possess the necessary expertise in fermentation processes, quality control, and regulatory compliance. Access to a skilled workforce supports a smooth scale-up process and enables companies to leverage the knowledge and talent available in China.
Market Opportunities: China's domestic market presents significant opportunities for fermentation-based products. The country's large population, shifting consumer preferences, and increasing demand for sustainable and alternative food sources create a favorable market environment. Scaling up fermentation production in China allows companies to cater to this vast market, tap into the growing demand, and potentially gain a competitive edge.
Government Policies: The Chinese government explicitly supports the long-term development of the biotechnology and biomanufacturing industries in the 14th Five-Year Bioeconomy Development Plan. The government's commitment to promoting innovation and technology development provides a conducive environment for fermentation scale-up.
By leveraging China's status as the world's largest biomanufacturing house, utilizing established facilities, learning from the pharma CDMO model, accessing a skilled affordable workforce, capitalizing on market opportunities, and benefiting from supportive government policies, fermentation scale-up in China becomes an attractive proposition. Companies can take advantage of the existing infrastructure, resources, and expertise to accelerate the growth of their fermentation-based production and capitalize on the market potential in China and beyond.
Learn more and download our full report on protein fermentation in China at www.daofoods.com/fermentation