Can start-ups make us love animal-free dairy?

The pairing of milk and fermentation has been around for about 9,000 years—since soon after Neolithic people domesticated milk-giving animals. By harnessing naturally occurring yeast and bacteria, ancient farmers could store milk products for days or weeks. The ready availability of nutrient-dense foods like cheese and yogurt helped power the growth of early civilizations.

These days we can just keep our dairy products in the refrigerator, but fermentation is still how we get yogurt, cheese, and sour cream.

Now a growing number of new companies say that everyone—including vegans, vegetarians, and flexitarians—should have access to dairy products made without milk from animals.

To accomplish this feat, the start-ups are again turning to fermentation. They are employing synthetic biology to borrow milk-producing genes from mammals and insert them into industrial-fermentation microbes. The modified microbes bypass the need for cows, sheep, or goats by manufacturing dairy molecules directly from sugar.

Perfect Day, founded in 2014, is the oldest and best funded of the new crop of dairy-inspired upstarts. In July it raised $300 million from investors in a third round of funding to expand production of milk proteins via fermentation. Nearly a dozen other firms have entered the field, most within the past 2 years.

The most popular molecular targets of the new companies are the milk proteins casein and whey. Other firms, such as Nourish Ingredients, are focused on fats. Change Foods and New Culture plan to produce finished cheeses from fermentation-derived ingredients. All claim their animal-free foods will be more sustainable than traditional cheeses while beating plant-based alternatives on taste and nutrition.

The first products made from fermentation-derived dairy proteins are already on the market. Perfect Day’s ingredients are featured in two brands of ice cream that consumers can buy on the firm’s website.

But experts say it will be years before supermarket shelves carry a full range of mass-produced animal-free dairy products. While start-ups have succeeded in engineering microbes to make small amounts of dairy proteins and fats in the lab, it will be difficult and expensive to scale up production. And the biggest challenge may be to mimic the vast complexity of dairy products and unlock the mysteries of why we crave them.

Fortunately, the nascent industry is attracting investors while it tries to figure it all out, says Harini Venkataraman, an analyst at the market research firm Lux Research. Many long-term investors are enthusiastic about the market for animal-free foods, a segment that includes plant-based milk and high-tech fake meat.

The large funding round for Perfect Day shows that investors believe that some companies can scale up and that their products can achieve cost parity with traditional products. However, most firms are still at the lab stage and will need more funding, plus partnerships with food or food ingredient companies, Venkataraman says.

Will consumers embrace dairy products containing ingredients developed in a laboratory? The dairy start-ups say they have reason to believe many will. After all, consumers, including meat eaters, have embraced the Impossible Burger—a beef patty simulacrum famous for its “blood” made with soy hemoglobin produced by engineered microbes.

But compared with the meat counter, the cheese case has not enjoyed the same kind of innovation. Try topping a veggie burger with vegan cheddar, or pizza with vegan mozzarella, and the result is unlikely to appeal to dairy lovers. For Change Foods founder and CEO David Bucca, the widening gap between animal-free meat and cheese looked like a business opportunity.

“Dairy is such a huge kingdom of food,” Bucca notes. “We are all addicted to cheese; it’s the final frontier of alternative protein. It’s on everything—pizzas, burgers, pasta. And people pay a premium for cheese—it’s something you can charge a little more for.”

The vegan cheeses now available in the dairy aisle are concocted from vegetable oils, nuts, and added flavorings. The products are getting better, but they still can’t replicate the taste and texture of true dairy cheese, Bucca, a vegan, argues. They don’t melt the same or have the same nutritional quality.

Making a palatable cheese alternative requires confronting questions about how we tell we’re eating dairy made from milk rather than plants. “The short answer, and the biggest part of the answer, is that we don’t know,” says Paul Breslin, a professor of nutritional sciences at Rutgers University and a faculty member at the Monell Chemical Senses Center.

Our perception that we are eating dairy foods is due to an interplay of many senses, Breslin explains. We smell the volatile molecules, feel the fats melting at different temperatures in our mouth, and taste certain amino acids in proteins.

To make animal-free dairy more like the real thing, Change Foods’ Bucca is working with Junior Te’o, a professor of microbial biotechnology at Queensland University of Technology and the firm’s head of R&D. Te’o’s lab features equipment used to scale production based on modified microbes. Bucca says that with backing from angel investors, Change Foods has already produced milk caseins and fats. Next up for the company is raising more money and making prototype cheeses.

Cheese is also at the heart of New Culture. Cofounders Matt Gibson and Inja Radman are developing a process to make casein as an ingredient for mozzarella. Casein proteins are what form the solid mass, called curds, in most forms of cheese; curd formation is normally the result of processing milk with heat and enzymes. “We see mozzarella as the queen of cheese—it really showcases all the key qualities we love about cheese,” says Radman, New Culture’s chief science officer.

“A fresh bowl of Italian mozzarella is impossible to re-create from plant sources—the softness, the mouthfeel, and moisture,” Radman explains. She says New Culture also wants to make low-moisture mozzarella—the kind used on pizza—that has the stretch, melt, and browning of dairy cheese. Since mozzarella is not aged, New Culture can iterate quickly to improve early prototypes, Radman says. In contrast, animal-free cheeses like cheddar or parmesan would be aged just like cheeses made from milk.

But successfully making large quantities of casein with fermentation microbes will require breaking new ground in synthetic biology, Radman points out. Industrial-scale fermentation is easier to accomplish when the desired genes and proteins are similar to those that already exist in the fermentation microbe. The animal genes that produce casein are very different from—or, as biologists say, heterologous to—those of yeast, bacteria, or fungi.

Another challenge is choosing which or how many types of casein to make, Radman says. “If you just look at a cow, a cow doesn’t make one casein but multiple types, and within each type there are genetic variations.”

Scientists can’t engineer a microbe to make the full variety of caseins. It may also not be obvious which ones to focus on for the best cheese. Casein protein molecules join in complex colloidal particles called micelles. That structure is what keeps the protein suspended in fluid milk.

“It’s not just the casein itself but the micelle that is crucial to dairy functionality,” Radman says. Micelles determine how the protein coagulates in cheese making and are responsible for a lot of the qualities of cheese. Just as caseins differ, the micelles they form also vary widely.

Re-creating the right casein micelle is a tall order. Another challenge is replacing the other solid ingredients—like fats—present in dairy, Radman says.

Fats give traditional dairy its distinctive taste, texture, and cooking performance. As it happens, another start-up, Nourish Ingredients, is working on engineering mammal-like fats for use in dairy alternatives and, someday, meat replacements. CEO and cofounder James Petrie previously spent 15 years at Australia’s Nuseed engineering canola plants to produce nonnative omega-3 fatty acids.

“Few people are working on fat,” Petrie notes. Developers of dairy alternatives often use coconut or palm oils to try to mimic how animal fats taste and perform in cooking. “But a lot of the time that doesn’t cut it, so we decided to take a crack at it as a start-up,” Petrie says. Nourish Ingredients is working with a team at Australia’s Commonwealth Scientific and Industrial Research Organisation to build a new suite of lipids.

Those lipids are present in milk as triglycerides—a backbone of glycerin linked to a mix of long- and short-chain fatty acids. The short-chain acids are what distinguish the flavor of dairy fats from that of plant fats. Short-chain molecules like butyric, caproic, and caprylic acids (C₄, C₆, and C₈ fatty acids, respectively) form volatile compounds we associate with dairy flavor.

A little of those flavor molecules goes a long way. Butyric acid, when cleaved from glycerin, gives a rancid flavor. And the distinct flavor of goat cheese can be traced to caproic acid. “When you smell a goat in the wild, that’s a very distinct aroma,” Petrie says.

The trick to boosting the taste of dairy alternatives is to make triglycerides with the right ratio of fatty acids, Petrie says. Nourish Ingredients is tweaking short-chain fatty acid content to create a more concentrated dairy flavor. The company can also produce dairy-like fats with lower saturated fat content by reducing the proportion of palmitic acid. Current dietary guidelines advise people to limit their consumption of saturated fats to reduce risk of heart disease.

Petrie says the company has made its versions of fermentation-derived fats in yeast and is working with customers to test them.

No one knows how easy it will be to make dairy proteins and fats at a price that can compete with those of traditional products. To get closer to cost parity, start-ups will likely work with recipes that also contain ingredients extracted from plants. Those may include proteins from peas, soybeans, or wheat, and fats and oils from coconut or canola.

When the fermentation-powered products do reach the market, they’ll have to compete with entirely plant-based products. That will be easier if they are indistinguishable in taste from animal dairy, but that’s a high bar.

The reason why dairy foods are so tasty, Monell’s Breslin says, has a lot to do with how their constituents break down into components that we can smell, feel, and taste.

In our mouths, lipases cleave triglycerides, releasing fatty acids that contribute to dairy’s specific odor. And dairy fat has a particular mouthfeel because it is partly solid and partly liquid all the time, even when chilled, Breslin notes. The fat goes through a transition in the mouth when some of the solid portion melts.

Meanwhile, peptases in the mouth chop up dairy proteins. We don’t taste large protein molecules, but when they break down, we taste amino acids, particularly glutamate and some small peptides.

A similar breakdown of proteins and fats occurs during cheese making. “The more you age a cheese, the more you chop them up,” Breslin says. Parmesan cheese is very high in naturally occurring monosodium glutamate and short-chain fatty acids. “That’s why a little sprinkle makes almost anything taste better,” he says.

Breslin suggests we can also detect other molecules in milk, like calcium and phosphate ions, which evolved to deliver needed minerals to baby mammals. The same goes for the longer oligosaccharides in milk that feed the microbiome.

“Maybe we can’t taste them, but we may register that they are there,” Breslin says. “This is in the netherworld of taste. There are all kinds of signals that go on in our mouth that communicate with our brain, with our organs. It’s an area that’s very hot in the taste world right now.”

New Culture’s Radman, who has a PhD in molecular biology, says there is a lot for synthetic biologists to learn about making dairy products. “My first reaction was complete shock and disbelief in how complex milk is, and especially dairy proteins.” Radman says New Culture’s team includes experienced food scientists to help develop its mozzarella.

Indeed, the animal-free dairy sector needs new food science, says Michael Leonard, chief technology officer of Motif FoodWorks. Motif spun off from the synthetic biology firm Ginkgo Bioworks in 2019 to make milk proteins. But the company realized it first needed to understand exactly how its newfangled ingredients will perform in a finished product.

“We want to replicate the right properties—for example, how you melt cheese for a sandwich,” Leonard says.

Motif is looking for ways to improve plant-based dairy by adding proteins made via fermentation. “You can get a product that is not light gray but white. Flavor and texture improve too,” Leonard explains. “It’s all about the structural changes that occur as casein interacts with fat, water, and other proteins.”

To dig into those structural questions, Motif is investing in research projects with food scientists at the University of Illinois and University of Chicago using some of the more than $100 million it raised from investors. For example, the scientists are investigating the physical principles of texture and flow that govern how dairy proteins improve milk, yogurt, and cheese and are using that insight to design better ingredients.

Ginkgo can help Motif’s scientists explore those design challenges by screening gene databases reflecting a wide range of biodiversity. That’s where scientists can find genes that code for proteins that might have unique functionality. “We don’t have to go to the Middle East to find a camel protein—we can produce it in the lab,” Leonard says.

As the start-ups mature, they may attract partners in the food industry that can lend food science expertise, though that doesn’t seem to be the case so far. New Culture raised $3.5 million in seed funding, including from Evolv Ventures, the venture capital arm of Kraft Heinz. But the deal does not include product collaboration.

Meanwhile, Perfect Day says it has been taking advantage of its head start on the competition by focusing on scaling production of milk proteins to truckload quantities. The company has connected to the food industry through a development agreement with the ingredient giant Archer Daniels Midland.

Perfect Day would respond to questions only by email. And the company remains mum on how its proteins will be formulated and where they will be used.

Instead, Perfect Day says its proteins will help satisfy consumers for whom dairy has been off limits. “Perfect Day’s animal-free dairy protein is vegan, soy-free, nut-free, gluten-free, and lactose-free,” Nicki Briggs, the company’s vice president of communications, says in an email.

Just like for our Neolithic ancestors, access to high-quality protein from dairy products will continue to be important to feed a growing population. But as the world’s population grows to an estimated 9.7 billion by 2050, the land and water needed to support dairy herds will become scarce.

That’s why Lux’s Venkataraman says sustainability is a major selling point for fermentation-based dairy companies, in addition to their animal welfare bona fides. “They say they can use less resources to give you what a cow would traditionally give you,” she says. For example, Change Foods claims producing its cow-free cheese will use 98% less water, use 65% less energy, and emit 84% less carbon dioxide than cheese made from milk.

But Venkataraman warns it’s not yet clear how sustainability metrics will add up when the ingredients are produced at factory scale. Basic engineering and postfermentation processing play a big role in governing exactly how much water and energy are needed per slice of animal-free cheese.

“Will we quantify that? Yes, we will measure our impact, absolutely,” Change Foods’ Bucca says. “We are building in core metrics to get the right measures from the very start, to be responsible for our outputs.”

Radman says she feels driven to reduce the environmental impact of our addiction to cheese.

“Consumption is on the increase despite the alarming effect on animals, the climate, and the planet,” she says. “We see people struggling to give up on cheese. We connect to the smells, the texture, and the giving and eating of cheese with friends and family. It’s part of our heritage. There’s something magical about cheese.”