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Synthesized dairy: The race to produce lab-grown milk

Startups are experimenting with reproducing proteins found in animal milk in the lab to reduce the need for farm-grown livestock.

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Quantumrun Foresight
September 14, 2022

Insight summary

Synthesized dairy, created in labs through complex techniques, is transforming the dairy market by offering animal-free milk and cheese alternatives. Despite production challenges and high costs, these products are gaining traction due to rising consumer demand for ethical and environmentally friendly options. This shift is leading to significant changes in farming practices, consumer choices, and global food industry dynamics.

Synthesized dairy context

Synthesized dairy is not new; however, the rapid growth of technology has made synthesized dairy more affordable and accessible to produce and consume. Many startups are continuously experimenting with cow’s milk replacements or imitations. Organizations are trying to reproduce the main components of casein (curds) and whey, components that are in cheese and yogurt. Additionally, researchers are trying to replicate dairy’s natural texture and temperature resistance for vegan cheese.

Scientists characterize reproducing dairy in labs as a “biotechnological challenge.” The process is complex, expensive, and time-consuming. It’s often carried out by providing microorganisms with a genetic code that allows them to produce natural milk proteins through a precise fermentation technique, but doing so on a commercial scale is challenging.

Despite these challenges, companies are highly motivated to grow dairy in labs. The global dairy alternatives market, which encompasses a range of food and beverage products used as substitutes for animal-derived milk and milk-based products, has shown notable growth since 2021, according to Precedence Research. Estimated at USD $24.93 billion in 2022, the global dairy alternatives market is projected to exceed USD $75.03 billion by 2032, with an anticipated compound annual growth rate of 11.7 percent from 2023 to 2032.

Disruptive impact

In 2019, a Silicon Valley-based startup, Perfect Day, successfully reproduced casein and whey in cow’s milk by developing a microflora through fermentation. The company’s product is similar to cow’s milk protein. The protein content of regular milk is approximately 3.3 percent, with 82 percent casein and 18 percent whey. Water, fat, and carbohydrates are the other vital components. Perfect Day is now selling its synthesized milk products across 5,000 stores in the US. However, the price remains too high for average consumers, with a 550ml ice cream tub costing nearly $10 dollars USD.

However, the success of Perfect Day has motivated other companies to follow suit. For example, another startup, New Culture, is experimenting with mozzarella cheese using fermented protein-based milk. The company said that while there have been developments, scaling up remains challenging because of the slow progress in pilot tests. Not surprisingly, major food manufacturers like Nestle and Danone are buying synthesized dairy startups to lead the research in this lucrative area.

Lab-grown dairy may become more widespread by 2030 once the technology allows cheaper synthesized milk and cheese. However, some scientists caution that the development of these alternative proteins should not mimic those of heavily processed junk food and that vitamins like B12 and calcium should still be present even in synthesized dairy.

Implications of synthesized dairy

Wider implications of synthesized dairy may include:

Governments enacting international regulations on the composition and production of synthesized dairy, ensuring essential nutrients are included, thus safeguarding public health.

Ethical consumers increasingly favoring synthesized dairy over traditional products, reflecting a shift in purchasing patterns driven by animal welfare concerns.

A transition in commercial farming towards lab-grown dairy, significantly reducing reliance on livestock and subsequently diminishing agricultural carbon emissions.

Synthesized dairy becoming more affordable, enabling its use as a tool to alleviate malnutrition in less affluent regions, improving global health outcomes.

Heightened investment in the research and development of synthesized dairy, leading to the expansion of specialized labs and increased employment opportunities for scientists.

Dairy farmers diversifying their business models to include plant-based alternatives, mitigating the economic impact of declining traditional dairy demand.

Consumer preference for plant-based diets influencing fast food and restaurant menus, leading to a wider variety of dairy-free options.

Enhanced focus on sustainable packaging for dairy alternatives, reducing plastic waste and contributing to environmental conservation efforts.

Technological advancements in dairy alternative processing, leading to improved texture and taste, thus increasing consumer acceptance.

Political debates intensifying around subsidies and support for traditional dairy farming versus emerging synthesized dairy industries, affecting agricultural policy.