Alt-Protein Producer Clara Foods Partners With AB InBev Venture Arm ZX Ventures
Anheuser-Busch InBev’s global investment and innovation group ZX Ventures yesterday announced an R&D partnership with animal-free protein maker Clara Foods. The hope is that by utilizing A-B’s fermentation expertise the two can work together to establish new technologies producing Clara’s proteins at large scale, a strategy A-B hopes to also implement at other fermentation-focused companies.
While Clara CEO Arturo Elizondo confirmed there were “financial components” of the partnership, both parties declined to disclose any details or if ZX was an equity shareholder in Clara.
To scale its fermentation processes, Clara will work with BioBrew, ZX Venture’s new fermentation-focused technology group founded earlier this year. Led by Patrick O’Riordan, a founding partner of ZX Ventures in 2015, BioBrew was formed out of A-B’s interest in finding new avenues for growth to apply the company’s core fermentation technology that would bring value “not only to the business, but to our stakeholders and essentially broader society,” through sustainable ingredient production solutions.
“We always say that the solution is out there somewhere, it just needs to find the right partners,” he said. “So we always make an attempt before we try and reinvent something ourselves to go out and say, ‘Who is working on this, and who has developed some solutions in this space?’ Our partnership philosophy is very much around reciprocity.”
The partnership was years in the making, as Elizondo and O’Riordan first connected in 2015, when a newly formed Clara was participating in venture capital firm SOSV’s IndieBio accelerator program. They two said they stayed in touch, hoping to find an opportunity to work together around their common interest in fermentation and sustainable food and beverage production.
“Not only did we have a meeting of minds in terms of shared passions and dreams, but also a meeting of technologies where we could actually really start looking at how we can scale this up and make it economically viable,” O’Riordan said.
Clara uses precision fermentation to engineer and manufacture animal-free proteins from microorganisms, similar to processes used by other synthetic biology startups like Perfect Day. After five years of R&D and several funding rounds, including investment from global ingredient supplier Ingredion, the company last year launched its first commercial product, pig-free pepsin, which is being used in digestive health supplements. Now, it’s focused on chicken-free egg proteins, launching a soluble egg protein for use in beverages later this year, followed by an egg replacement. As it rolls out these products to the market, the company must ramp up its production and supply, adapting its processes to a larger fermenter.
Making fermented products such as this on a larger scale and at an affordable price point has been a major hurdle for widestream adoption of animal-free protein products in the industry, O’Riordan said, and it’s here where ZX believes its knowledge can be of assistance.
“To compete within this space, scale is going to become fundamentally important, to not only to produce these ingredients of the scale to which they can have a meaningful contribution to food, but also be able to compete with conventional products out there as well,” he said.
Elizondo described Clara’s production facilities as essentially “big breweries” that use yeast to convert sugar into protein in a fashion similar to how brewers use the ingredient to make beer. However, unlike growing a brewery where it’s a matter of purchasing larger tanks, scaling production is not as “plug and play,” O’Riordan said. While the “sensibilities” between the two processes are similar, the production itself differs. For example, while oxygen is an important part of Clara’s precision fermentation process, it’s excluded from the brewing because it can spoil the beer, he said. Still O’Riordan said he expects that A-B’s similar equipment, experience with yeast and feedstock and ingredient purification systems will be able to be leveraged by Clara.
With the help of A-B, Clara aims to make its products widely accessible to food and beverage manufacturers and, in turn, consumers, with the goal to eventually undercut the animal protein market.
“I really don’t like the fact that the more sustainable options tend to be a lot more expensive than their counterparts,” Elizondo said. “Our target is to be a penny cheaper than what the current animal incumbents are. So that way, it’s not just for people who want products that are vegan or sustainable, but actually, who just want good, tasty, safe and sustainable food, but not have to pay more for it.”
While A-B is not currently manufacturing Clara’s proteins, Elizondo said that is “definitely the intent” of the partnership once the companies “answer the question of the true scalability of this technology.” O’Riordan said the companies have not solidified details of their plans once the technology has been established, but if they do build out a “scaled platform” he said they would likely be “helping them as well to commercialize the product.”
A-B also helped launch ingredient supplier EverGrain earlier this year, which upcycles the beer giant’s spent grain to produce sustainable protein and fiber-rich barley ingredients. The company plans to continue its move into food partnerships, O’Riordan said, with BioBrew focused on partnerships with companies producing alternative and sustainable proteins. He said he sees BioBrew eventually establishing a platform across several continents as it works toward its goal of making sustainable food more accessible.
“We’re at an exciting inflection point. With all of these technologies coming together, I think our future food systems will look different than what they are today,” he said. “I think the entire system is going to evolve and I think these technologies are very promising for the future of sustainability.”
