Precision fermentation: The future of food

• Author:
• Author name

  Quantumrun Foresight
• March 10, 2025

Insight summary

Precision fermentation is changing food production by using microorganisms to create animal-free proteins that replicate the taste and function of traditional dairy, eggs, and fats. While it offers a more sustainable alternative to livestock farming, challenges like high costs and limited production capacity may slow widespread adoption. As governments update regulations and businesses adjust supply chains, this shift could impact consumer choices, food labeling, and the future of agriculture.

Precision fermentation context

Precision fermentation uses genetically engineered microorganisms to produce animal-free proteins and other ingredients. Unlike traditional fermentation, which relies on naturally occurring microbial activity, precision fermentation inserts specific genetic sequences into microbes, enabling them to create complex organic compounds identical to those found in animal-based products. This method is already used to produce rennet for cheesemaking, along with vitamins and natural sweeteners such as stevia. With growing concerns about the environmental impact of animal agriculture, companies are increasingly turning to precision fermentation to create sustainable alternatives to dairy, eggs, and even animal fats.

According to publishing company Research Dive, the global precision fermentation market is projected to grow at a compound annual growth rate of 40.5 percent from 2022 to 2031, with North America expected to lead in profitability. Dairy remains the dominant subsector, with companies such as New Culture and Formo using precision fermentation to produce casein and other milk proteins that replicate the taste and texture of conventional cheese. Perfect Day, a US-based food technology company, received regulatory approval for its animal-free whey protein in 2019 and has since expanded into ice cream and other dairy products. Meanwhile, The EVERY Company has developed egg proteins derived from precision fermentation to meet the growing demand for functional egg replacements in baking and food manufacturing.

Despite its potential, precision fermentation faces challenges related to scalability and cost. Many existing facilities were designed for pharmaceutical production and are not optimized for large-scale food manufacturing, making it difficult for startups to achieve cost parity with traditional ingredients. Contract manufacturing facilities tailored to food production remain limited, forcing companies to compete for access and driving up production costs. However, initiatives like the Precision Fermentation Alliance, formed in 2023, aim to accelerate industry growth through collaboration, research, and regulatory advocacy.

Disruptive impact

Precision fermentation may change how people access and consume food, particularly for those with dietary restrictions or ethical concerns. As more companies develop animal-free dairy, eggs, and fats, consumers may have more options that match the taste and function of traditional products without relying on livestock. This shift could make specialized diets, such as lactose-free or vegan, easier to maintain without sacrificing familiar flavors. However, precision fermentation-derived foods are still costly, and affordability may determine how widely they are adopted over time.

Businesses in the food industry may face significant shifts in supply chains and consumer expectations. Large food manufacturers that rely on animal-based ingredients may need to adjust their sourcing strategies as alternative proteins become more widely available. Additionally, restaurants and grocery stores may have to navigate changing consumer preferences, balancing demand for traditional and animal-free products. Companies investing in precision fermentation may also explore partnerships with plant-based brands to create hybrid products that combine fermentation-derived proteins with plant ingredients for improved taste and texture.

Meanwhile, governments may need to rethink agricultural policies and trade regulations as precision fermentation disrupts traditional food production. Subsidies for livestock and dairy farming could be reconsidered if demand for animal products declines. Additionally, food safety and labeling laws may have to be updated to address consumer transparency concerns regarding fermentation-derived proteins. Countries investing in precision fermentation research and infrastructure may also gain an economic advantage by leading in alternative protein exports and reducing reliance on resource-heavy livestock industries.

Implications of precision fermentation

Wider implications of precision fermentation may include: 

• The food industry shifting towards ingredient licensing agreements, allowing small food brands to incorporate precision fermentation-derived proteins without developing them in-house.
• Farmers diversifying into new agricultural models, such as growing feedstocks for microbial fermentation instead of raising livestock.
• Governments creating new food labeling regulations to clarify whether precision fermentation products should be classified as dairy, meat, or a separate category.
• Traditional dairy and egg industries experiencing a workforce shift, with some jobs transitioning from farming to biotechnology and fermentation-related roles.
• Countries investing in domestic fermentation infrastructure to reduce dependence on imported animal-based proteins and strengthen food security.
• Large food corporations acquiring precision fermentation startups to secure patents on animal-free proteins and maintain control over emerging markets.
• Religious and cultural institutions debating the acceptability of precision fermentation-derived dairy and meat alternatives for dietary laws and traditions.
• The energy sector seeing increased demand for alternative power sources as fermentation facilities require stable and efficient electricity for continuous production.
• Precision fermentation products influencing consumer behavior by encouraging new meal preparation habits, such as blending animal-free proteins with traditional ingredients.
• Researchers exploring ways to optimize microbial strains for higher yields, leading to competition among biotech firms for the most efficient fermentation processes.

Questions to consider

• How could precision fermentation change how you choose and buy food in the future?
• What industries beyond food production might be affected by the rise of animal-free proteins?