Unilever enters ‘animal-free dairy’ arena via Breyers brand in tie up with Perfect Day

CPG giant Unilever has teamed up with Perfect Day to launch a lactose-free chocolate frozen dairy dessert under the Breyers brand, using whey protein made in fermentation tanks by microbes, rather than cows.

The ‘animal-free frozen dairy dessert,’ which will be available nationwide starting this month, follows a limited edition launch by Nestlé (‘Better Whey’) under the Orgain brand featuring whey protein (beta-lactoglobulin) from fermentation.

“[This is a] hallmark example of how our second decade is focused on driving growth through collaboration with leading companies that share our mission of a kinder, greener tomorrow,” said Perfect Day CEO TM Narayan, who took the helm in January following the departure of founders Ryan Pandya and Perumal Gandhi.

A spokeswoman told AgFunderNews: “This launch is significant because it marks the first multinational ice cream and frozen dessert brand to offer an indulgence with our whey protein from fermentation. It’s available at retailers nationwide, with an MSRP for a 48-ounce tub ranging from $4 to $8.”

Why it matters

The performance of these will be watched closely as large CPG companies—who have tested the water with niche/custom ‘animal-free dairy’ brands such as CO2COA (Mars), Cowabunga (Nestlé) and Bold Cultr (General Mills) with mixed results—explore how consumers respond to the concept on larger, more familiar brands.

Perfect Day, which has raised almost $900 million from backers including Temasek and Horizons Ventures since it was founded in 2014, is also under intense pressure to deliver.

It recently sold its consumer brands (Brave Robot, Coolhaus, Modern Kitchen, California Performance Co) for an undisclosed sum and laid off 15% of its workforce in a bid to focus on its B2B business as it forges partnerships with large CPG companies. It is currently finalizing a pre-Series E round of up to $90 million.

While the Nestlé/Orgain product features the term ‘fermented whey isolate’ on the front of pack and ‘whey protein isolate from fermentation’ on the back, the Unilever/Breyers product uses the term ‘animal-free dairy’ on the front-of-pack, a phrase that Perfect Day has been moving away from after research suggested some consumers believed it meant plant-based or allergen-friendly.

What is ‘animal-free’ dairy?

There is no formal definition of ‘animal-free’ dairy. But it typically refers to products made with ‘real’ dairy ingredients such as whey and casein proteins that are produced without cows, either via genetically engineered microbes or genetically engineered crops such as soybeans, corn, or peas.

Using synthetic biology, firms in this space use DNA sequences like pieces of computer code to program or instruct plants or organisms such as fungi and yeast to express animal proteins.

Making dairy products without cows, argue animal-free dairy advocates, offers the best of both worlds: more sustainable and ethical products that don’t involve industrialized animal agriculture, but still deliver the nutrition and functionality of ‘real’ dairy such as melty, stretchy cheese, which is hard to make with plant proteins.

Key players in dairy via precision fermentation include US-based Perfect Day, New Culture and Change Foods; Israel-based Imagindairy and Remilk; Germany-based Formo; Belgium-based Those Vegan Cowboys; France-based Bon Vivant and Standing Ovation; The Netherlands-based Vivici; Australia-based Eden Brew; India-based Zero Cow Factory; Spain-based Real Deal Milk; UK-based Better Dairy, and South Africa-based De Novo Foodlabs.

Scaling up animal-free dairy via fermentation​

The challenge for many of these startups has been scaling up at a time when venture funds are reluctant to fund capex projects and banks are unwilling to back projects without greater market validation.

Perfect Day has been working with co-manufacturers but says it is working on building in-house capacity. Remilk hit pause on plans to build a large-scale precision fermentation facility in Denmark and has instead been ramping up production of beta-lactoglobulin with a contract manufacturer in western Europe.

Imagindairy recently acquired industrial-scale precision fermentation production lines at an undisclosed location “in close proximity to Israel” and says it expects products containing its animal-free whey protein to launch in the US this year. Vivici, meanwhile, says it can already supply commercial quantities of beta-lactoglobulin just a year after it was formed by Fonterra and DSM-Firmenich.

Speaking to AgFunderNews earlier this month, Bon Vivant cofounder Stéphane Mac Millan said large CPG companies were looking to reduce their carbon footprint but claimed that basic economics would ultimately drive demand for dairy proteins from fermentation.

“Demand for dairy is growing and milk production is falling, so I’m very confident that there will be a market for this.”

To those querying the economics of precision fermentation to make dairy proteins, Perfect Day cofounder Ryan Pandya told AgFunderNews last year: “We’re able to produce whey at a cost that was thought impossible 10 years ago, and we’re still only scratching the surface of what the biology is capable of.

“For precision fermentation more generally, the grams per liter that these organisms are making continues to be nowhere near the biological maximum, and then things like continuous processes will potentially help improve the economics even more.”