French startup Verley targets high-value dairy applications with beta-lactoglobulin, progressing towards large-scale production and commercialization in 2024.
French precision fermentation startup Verley is advancing its production capabilities, focusing on the dairy protein beta-lactoglobulin (BLG) with the aim of utilizing 200,000-liter fermentation tanks through a co-manufacturer. This move is part of their strategic plan as they prepare for commercial sales anticipated next year.
Rather than competing directly in the commodity whey protein market, Verley is uniquely positioning itself by targeting higher-value applications. Their focus is on showcasing the enhanced functionality of purified BLG, which can outperform traditional dairy proteins in specific contexts such as low-viscosity protein shots and high-protein yogurts.
In an insightful discussion at the Future Food-Tech summit in London, co-founder and CEO Stéphane Mac Millan outlined the pressing challenges facing their scale-up process. The immediate concerns are not about improving fermentation yields, which he suggests are already satisfactory, but rather about optimizing downstream processing and ensuring consistent results at larger scales. Converting interest from potential customers into actual sales is another pivotal step as they approach market entry.
Market Positioning and Functional Benefits
During the summit, Mac Millan emphasized the distinct advantages of beta-lactoglobulin. Unlike whey protein concentrate or isolate, which are derived from the entire whey protein spectrum, BLG offers a higher purity level that can enhance its functionalities. For instance, Verley has demonstrated the capability to pack 25 grams of protein into just 100 ml of a protein shot while maintaining low viscosity and excellent solubility. By contrast, conventional dairy proteins have limitations in terms of concentration and texture.
In another noteworthy application, the firm has successfully developed a micro-particulated BLG that can achieve protein levels of 13% in UHT drinkable yogurts without compromising texture and taste. These advancements signal not only the versatility of their product but also its potential to revolutionize various segments in the food and beverage industry.
Scalability and Economic Viability
Verley is currently making strides in scaling up production towards the desired 200,000-liter fermentation volume, with expectations to finalize this process in the coming months in preparation for commercialization.
When discussing production metrics, Mac Millan indicated that the company has made significant strides in areas such as titer, yield, and productivity. He noted that the current focus has shifted towards the downstream processing (DSP) phase, which involves the purification of the produced protein. Optimizing this phase is crucial as each step involved in purification could lead to product loss. Verley aims to extract close to 100% of the protein produced, which underscores their commitment to efficiency and quality control.
Competitive Pricing Strategy
In terms of pricing, Verley's BLG is competitively aligned with existing market rates for similar high-purity products. Mac Millan pointed out that Arla, a notable competitor, sells its BLG extracted from milk at prices exceeding $40 per kg, which Verley matches. As they scale up production and refine their processes, there's potential for their prices to decrease, although they stress that their competitive edge isn't purely about pricing but rather the added value their product provides.
Insights on Market Dynamics and Regulatory Pathways
Verley is strategically focusing its market efforts in North America, Europe, and the Gulf Cooperation Council (GCC) region, with plans to expand to Asia in the future. They recently secured a Generally Recognized as Safe (GRAS) designation in the U.S., with regulatory submissions for Canada pending and hopes for approval in Europe through the novel foods process in the next two to three years.
On consumer recognition of beta-lactoglobulin, Mac Millan observed a shift in the market dynamics. He noted the presence of BLG on food labels in protein shots in the U.S. and significant companies like Hilmar Ingredients highlighting the benefits of BLG in their products. This trend indicates growing acceptance and recognition of BLG among consumers and industry players alike.
Adapting to the Investment Landscape
Mac Millan also discussed the evolving investment landscape for precision fermentation companies, noting that the days of exuberant funding are behind given the current market conditions. Companies need to demonstrate a solid market demand for their products, have consumer interest validated through samples and agree on their commercial viability, and prove their ability to produce at scale. This entails not merely showcasing the capability to produce small batches but ensuring that they can replicate quality outputs in larger volumes.
Verley currently collaborates with co-manufacturers as part of its expansion approach but is considering the prospect of developing its own facilities. This shift could enable them to better align these operations with their technology and production requirements. However, Mac Millan stressed that financing large-scale facilities is more feasible once the technology is proven and the market established, allowing for debt financing options rather than dependence on venture capital alone.
The startup successfully raised €32 million ($36 million) in their recent funding round, with designating milestones such as the ability to produce and sell their products at scale. Having established regulatory approvals, marketing strategies, and patent protections, the focus for Verley now lies in ensuring their technology translates into a commercial success as they prepare for their industry launch.
Further reading:
Vivici bags $14.4m EIC funding to scale precision-fermented dairy proteins
