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Emerging B2B fat ingredients for the alternative proteins segment

Jamie Grippi, Senior Research Associate and Harini Venkataraman, Ph.D., Analyst
December 21, 2021

The rapid rise of alternative proteins over the past five years has been supported by novel sources, processing techniques, and a far broader range of nonanimal products on the shelf; now, innovation is extending to alternative fats. Existing fat ingredients targeting the alternative proteins segment have various origins and rely on different production methods but are united in their attempt to mimic the properties of animal-based fats in a cost-effective and scalable manner.

Driven by consumer preferences and sustainability, industry players are exploring novel ingredients and production methods that can replace all macronutrients, including fat, with nonanimal-sourced alternatives. The landscape of fat ingredient innovation is best oriented through key functional requirements. These ingredients must replicate the creaminess, aroma, and texture of animal fats. This blog explores the innovation momentum related to existing and emerging alternative fat production methods targeting the fast-growing alternative protein market.

Lux divides the innovations related to business-to-business (B2B) fat ingredients for the alternative protein market into three major categories: plant-based, fermentation-derived, and cell-based fats.

A market map depicting key innovators focused on existing and emerging fat ingredient production methods for alternative proteins, does not include an exhaustive listThe market map does not include an exhaustive list but depicts key innovators focused on existing and emerging fat ingredient production methods for alternative proteins.


Plant-based fat derived from coconut oil or palm oil sources has been the go-to ingredient for most plant-based meat analogs and alternative dairy products for several years. Established players like ADM, Bunge, Cargill, among others, dominate this landscape with their offerings related to sunflower, canola, coconut, and palm oils. Some upstream crop trait developers are looking to improve lipid content, like Calyxt, who recently announced the development of a soybean-based, palm oil alternative by partnering with an Asian food ingredient company. Recent innovations include the exploration of other plant sources like sunflower and canola oils. French startup 77 Foods, which recently emerged as the winner of Unilever's startup challenge, formulates its plant-based bacon with sunflower oil to match bacon's flavor and organoleptic properties. While the alternative meat and dairy space has witnessed unprecedented growth over the years, current products still fall short of bridging the sensory properties of their animal-based counterparts, driving the need for other fat ingredient sources and production methods.

Fermentation-derived fats

Mainly dominated by startups, the fermentation-derived fat category is gaining momentum, with companies like Nourish Ingredients and Melt&Marble raising Series A and seed funding, respectively. The ability to manipulate fermentation parameters and engineer host organisms grants developers countless pathways to develop alternative fats. Two main strategies exist for startups in the space: a synthetic biology (using a genetically modified organism, or GMO) approach that many developers use when developing a platform technology for numerous ingredients or a non-GMO approach that uses naturally occurring organisms and often targets a small number of niche products or a specific segment like dairy. Despite concerns from some consumers with respect to GMOs, engineered microorganisms offer the potential to tune the target fat production and are likely to win out in the long term due to their flexibility and mimicry of animal-derived fats. Other process considerations include the use of multiple microorganisms or singular strains, though current developers tend to focus on one strain for production.

Perfect Day is a rapidly growing startup that uses precision fermentation to manufacture dairy products. Although its focus is milk proteins, in 2019, the company announced that it would venture into milk fats to replace coconut and palm oils in plant-based products. Alternatively, Nourish Ingredients is aiming for a broader portfolio at launch. It has experimented with several microorganisms but landed on GMO oleaginous yeast like Yarrowia lipolytica for fermentation. The company claims to tailor the flavor profiles of its products to replicate the taste and mouthfeel of fats found in beef, chicken, pork, fish, milk, and cheese. Some other developers take a more specialized approach to product development, like Cultivated Biosciences, which targets a cream replacement using non-GMO oleaginous yeast using agricultural waste streams as feedstock. Global Sustainable Transformation uses a similar approach by feeding non-GMO oleaginous yeast like Cutaneotrichosporon glucose to produce yeast biomass with a high (80–90%) lipid content, as a replacement for palm and cacao oils.

Although a broader portfolio grants the opportunity to license to large food manufacturers, in the short- to medium-term, this approach can be dilutive rather than additive. While players developing niche products may see more uptake, in the long-term, companies like Nourish that aim to replicate fats across several foods will add the most value.

Cell-based fat

Cell-based meat has been in the limelight for a while now, but startups are now looking to leverage animal cell-culture to produce fat from stem cells and improve the sensory attributes of existing plant-based products. Since cell-based fat is identical to current animal sources, this category is attracting industry attention. However, the large-scale production of cell-based fat still faces technological challenges, including the development of suitable serum-free media to proliferate adipogenic cells. Companies like MeaTech claim to have developed a cost-effective, serum-free media for growing chicken fat and has recently filed a patent. The company has managed to produce 700 g of chicken fat from a single production run. Mission Barns is another startup in this space that recently announced a partnership with Silva Sausage Company to test its cell-based fat for hybrid plant-based sausages. Cell-based fats is still a niche segment but can grow in the coming years once startups can overcome scale-up and regulatory hurdles.

Given the growing momentum and emergence of startups, Lux assessed the commercialization potential of the different fat ingredient categories against four metrics that help delineate near- and long-term opportunities.

Chart showing commercialization potential of different kinds of alternative fats

Lux Take

Fermentation- and cell-based fats are chemically closer to their animal-based counterparts, enabling them to offer higher functionality and achieve sensorial parity for alternative meat and dairy products. However, plant-based ingredients offer higher consumer acceptance, faster scalability, and lower costs in the near term — especially considering the new infrastructure required for cell-based cultivation and the current lack of optimization for these pathways. The "better-for-you" movement will respond better to plant-sourced ingredients, though consumer perception toward fermentation-derived and cell-based fat ingredients is gradually improving.

Regulatory barriers, especially in stricter markets like the EU, will see plant-based options dominate, at least in the short term. Nevertheless, expect to see innovation around hybrid products containing plant-based and fermentation- or cell-based options. The demand for plant-based fat will not vanish immediately and offers a near-term path to market, though in the long run, be prepared to embrace the diversity of fat ingredients to meet consumer demands around sensorial parity and sustainability concerns.

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