How are innovators scaling?
Scaling new technologies
Biomaterial innovators are taking varied approaches to scaling their technologies.
Increasingly we are seeing partnerships being forged across the supply chain, as companies look to leverage existing industry knowledge and facilities in order to help them to achieve scale faster.
History shows us the time involved in scaling material innovation. The trajectory for scaling biomaterial innovations will also be measured in years and decades, not months.
There is understandable frustration at the length of time it is taking some innovators to make it to market and significantly scale their technologies. Part of this, as touched on previously, is due to the unhelpful hype generated by the media, but innovators themselves have also commonly been overconfident on timelines.
However, it’s important to see this in a bigger context - these new innovations are still exceptionally young. It will take them decades to reach the economies of scale enjoyed by our current incumbent materials. The timeline above demonstrates this point - it’s taken Lycra over 60 years to reach the market penetration it has today. It also had a decade of development, based on existing polymer knowledge, before it began to be commercialized. Rayon is another example - its R&D journey was over 50 years before it came to market. Compared to these examples it’s easy to see that these new materials are still very early in their journey.
Looking to, and learning from, other industries
Early entrants into the biomaterial space were marked by their approach of trying to vertically integrate as much as possible. And whilst this has the benefit of capturing maximum value, many are now realizing that a lot can be gained from partnering smartly and learning from those already operating at scale.
Industrial Fermentation
Fermentation at scale is not new. Aside from its obvious use in our foods and drinks, the technology is already used in pharma, beauty and industrial biotech at global volumes. One of the key success stories of precision fermentation at scale is the production of insulin (which accounts for over 90% of the market).
Multiple innovators are turning to established industry players, such as ADM and Evonik, to access their knowledge and infrastructure.
Indoor Farming
While scaling production of mycelium into sheets for materials is new, many are looking to analogous industries to see what techniques and equipment can be repurposed.
For example mushroom farming unsurprisingly provides useful models and facilities that can either be learnt from, or adapted, to grow these new materials.
Existing Know How
Increasingly innovators are realizing that they can go faster by tapping into existing infrastructure and know-how. A key example of this is tanning expertise and facilities.
While the majority of these new alternative ‘leathers’ may not need conventional tanning chemistry, the depth of transformative knowledge, access to key machinery, and relationships with brands is an important driver for partnering with a tannery.
Scaling fermentation-based technologies
A key consideration when working with living organisms is the choice of feedstock. When developing a more sustainable material this input can carry significant impact. For example, plant-based feedstocks such as sugar (a primary choice) may be grown on land which could be used for food production, they may also be the product of a GMO crop.
Spiber’s current primary feedstocks are sugarcane-derived sucrose and corn-derived glucose. The company understands the long-term imperative to move to more sustainable nutrient sources for their organisms. Spiber has a goal to “use 100% non-edible feedstocks” (see Spiber’s 2022 Sustainability Impact Report for more) and is working on several fronts to achieve this in an incremental way. This will ensure that the production of Brewed Protein™ can scale responsibly.
Spiber currently produces its Brewed Protein™ at its pilot plant in Thailand. The feedstock for the organisms used there is sugarcane. As a near-term measure to be as responsible as possible in their sourcing, Spiber’s feedstock is Bonsucro certified. However, the company recognizes that this sugarcane has the potential to be a food crop and has plans to move away from its use via its ‘Biosphere Circular’ project (see later slide).
In 2020 Spiber announced a partnership with ADM, to open the company’s first plant in the USA. Once the facility comes online the feedstock for the organism there will be derived from corn, as it is the predominant local crop for sugar. However, from the beginning of production, some of the corn will be grown using regenerative agricultural practices, with the aim to have 100% of corn grown using these methods within 5 years. Any emission reductions, and soil carbon sequestration, will be calculated using Field to Market’s platform, and Spiber is pursuing ISCC certification.
Spiber is also working towards future solutions to make its process as circular as possible. Its ‘Biosphere Circular’ project aims to utilize waste streams (such as bagasses or end of use textiles) as feedstocks for fermentation. The process will focus on “materials and products that can be broken down into nutrients and used as feedstock for fermentation, including cellulose-based materials (whichcan be broken down into glucose) such as cotton, linen, and rayon fibers, and protein-based items (which can be broken down into amino acids) such as wool, silk, and Brewed Protein™ fibers.” (Spiber Sustainability & Impact Report, 2022, p. 16)
One of the more mature companies in this space, Spiber is taking a staged approach to sustainability and circularity. It recognizes both are difficult to achieve in one hit while actively developing and scaling a technology. Most start-ups have turned to well-studied model organisms that use sugar as a feedstock, and know that it will take time to transition to alternatives.
Planning and implementing the feedstock transition in incremental steps, as the company grows, allows for a long-term sustainable material and company in all senses (including economically).
Spiber should also be commended for the proactive and transparent approach they’re taking to their feedstock and wider sustainability work. Many in this space avoid talking about feedstock. Spiber has taken the lead in being honest about where they are now, and their plans for the future.
Many start-ups fail to prioritize their understanding of the industry they aim to enter. A notable exception to this is UK-based Colorifix.
The start-up, which ferments dyes for textiles, early on sought to discern where it fits in the textile supply chain. Based on this knowledge it took the decision to situate its fermentation directly within dye facilities. The benefits are twofold - it offers environmental and economic savings.
Speaking on the subject of embedding themselves in dye facilities, the company’s Co-Founder & CEO, Orr Yarkoni has spoken to the multiple networks they have had to understand; “The challenge for us is navigating what are really complicated networks; from the metabolic engineering networks to the specs and requirements of textiles and fabrics, to the entire logistics of this enormous industry.” (speaking at Biofabricate Summit 2022)
Originally the company thought about decoupling their production (making the pigment off-site and then turning it into a powder) but realized that when you do that you lose all of the water that went into fermentation and you’re losing the power of biology to do the subsequent steps of fixing the dye onto the fabrics. They have also discovered that because fermentation equipment is not dissimilar to dye equipment (water, heat and pressure) that it's relatively easy to train existing dye technicians to run the fermentation. A final key step taken by the start-up is that they have developed their own bioreactors to run their fermentation.
The reason for this is that most bioreactors have been developed for use in pharma, which makes them a) very expensive and b) over-engineered for the purposes of consumer biotech. Being significantly cheaper to manufacture Colorifix plans to make the reactors available for sale to other innovators - providing an additional future revenue stream for the company.
All innovators, both established and new entrants, can better situate themselves for success by fully understanding the industry they’re entering and where they fit in a larger supply chain. One key way to support start-ups on their journey is to help educate them (especially if the team is largely from scientific backgrounds) about your supply chain and where they might fit.
Where an innovator fits within a supply chain may be different for each technology. Colorifix has situated itself within the dye house, but has added an additional step of fermentation there. Others may be further vertically integrated and only drop in at the design and product manufacture stage. Regardless of where they fit, it’s vital for these new companies to understand the implications for their business and processes.
USA based LanzaTech, is one of the more mature companies in the space (founded in 2005). It has been on an almost 15 year journey to scale their technology. The approach it has taken is to co-locate its process with its feedstock: carbon emissions. This has benefits from both an environmental and economic perspective.
The company also worked to de-risk its technology from early on, aiming to smooth the transition to commercial-scale production.
LanzaTech’s main focus in scaling up its production has been co-locating its facilities next to its feedstock supply, for example adjacent to steel mills. This means it is able to divert the emissions from the mill's production to process and directly feed it to its microbes.
The company has also discovered through co-location where it can tap into existing supply chains, facilities and equipment, and subsequently what it needs to invent or build itself. Similar to Colorifix, LanzaTech had to do deep technical development on bioreactor operations. So while the company may be first and foremost viewed as a biotech company, much of its expertise also lies in engineering and process development.
It has taken LanzaTech 13 years to get to their current scale, equal to over 100,000 operating hours in various pilot facilities, to fully test and hone its process for commercial production. The company started this process at the b ench scale. As early as possible, it fed real world feedstocks to its organism in the lab, testing compatibility and to mitigate potential issues.
LanzaTech recognized early-on the benefits of co-location. Not only from a cost perspective, but also from an environmental one: shipping gas around the world would not improve anyone’s carbon footprint.
Additionally, by de-risking from the beginning of the technology’s development, it actively worked to make its move from lab to pilot, to commercial scale, as smooth as possible. For most processes the lab is often the most ideal set of conditions, but they can be hard to replicate at scale - so it’s key to start emulating that as early as possible to avoid later issues.
The founding team of Checkerspot brought with them a wealth of previous knowledge from their time at early synbio startup Solazyme. Their prior experience impressed upon them the value of developing a feedback loop from the lab right through to the end consumer.
As a result, the Californian start-up that ferments microalgae to produce algal oils for multiple applications, launched a DTC (direct to consumer) brand; WNDR Alpine. WNDR uses Checkerspot’s AlgalCast technology in the construction of its skis and snowboards. This venture has enabled Checkerspot to rapidly learn how their technology performs in product, and then take this back to the lab as they continue to work on improving their materials.
At the 2022 Biofabricate summit, co-founder and CEO, Charles Dimmler spoke to the importance of engaging with the end consumer:
“Our consumer engagement provides us the ability to have directionality in product development, it allows us to connect with consumers in a really intimate way to understand where the needs are in the market and how to make products, but then to really rapidly go back to biology, to chemistry, to fabrication to deliver a solution. It is not about the consumer sales, that’s a means to an end, our core competency is the innovation platform.”
As well as providing this direct feedback loop, its brand has helped the start-up to gain larger partnerships within a slow moving industry (winter sports equipment). Checkerspot knew they had a material that could outperform its petrochemical counterparts, but it proved an uphill battle getting it into existing products that have been made the same way for decades. So rather than continue to push on signing partnerships, the start-up put its own product out as a proof of concept to strengthen their position in those conversations. They proved out their materials, not with the primary goal of generating revenue, but as a means to secure deals with larger established brands.
For many start-ups creating a DTC brand is not primarily about revenue (which is an added bonus especially when raising investment) but rather used as a test bed for quick iteration and gaining unfiltered consumer feedback on the performance of their material in product.
As Checkerspot’s CEO puts it: “[WNDR] wasn’t developed out of ambition, it was developed out of necessity, and we learned from a past life the value of going all the way in a vertically integrated fashion to consumer engagement, even really surprising [in] unexpected ways like capital formation, like in partnering.” (Charles Dimmler speaking at the 2022 Biofabricate summit)
This uncovers the drivers as to why a start-up might take on the expensive and seemingly ambitious goal of creating a DTC brand. In understanding their ‘why’, you can test if there are ways you could deliver some of those learnings through your partnership.
Scaling mycelium-based technologies
In August of 2022, MycoWorks broke ground on a new 150,000 sq/ft production plant in South Carolina, USA. Once the facility starts producing at scale (slated for the end of 2023) it will have the capacity to produce several million square feet of ReishiTM per year. But for a start-up that has prioritized ‘artisanal quality’, how will it maintain that when producing in these volumes?
Certainly MycoWork’s narrative around craft and luxury is, in part, a play to capture the greatest value possible, while also differentiating it from their competitors in the space. That said, how does a company develop a manufacturing process that can simultaneously produce at vast scale for impact, whilst retaining a material that feels artisanal in quality?
MycoWorks’s process for growing its mycelium sheets is perhaps one of the most complex. The company has various patents detailing their work on directing the growth of mycelium hyphae in order to be able to create unique structures and properties. How do you translate such a technical biological approach, and ensure consistent quality for a ‘natural’ material intended for the luxury market?
To help them with scale-up, the company hired Doug Hardesty as Chief Manufacturing Officer. Doug joined MycoWorks with over 25 years experience and has led manufacturing scale-up for 15% of the Fortune 100. Hiring smartly is one of the key tools start-ups can use - leaning on tried and tested industry experience, which is vital when developing new plants.
“Innovative mechanization, standardization of work flows, and a restructuring of traditional manufacturing leadership practices are the recipe for creating small batch, artisanal quality at a very large scale.”
(Doug Hardesty)
By hiring someone with extensive industry scale-up experience, MycoWorks is aiming to ensure that the company’s focus on quality is not lost as it scales up its production of ReishiTM. While no one has scaled a process exactly like MycoWork’s before, having someone who has built out facilities for over 25 years puts the start-up in the best position to succeed.
It will be interesting to see how the approach of small batch manufacture of such a novel biological material will play out at scale. And how the tunability of ReishiTM fairs as it is produced in their new facility.
Many start-ups decide that they do not want to vertically integrate all of their processes with the vast outlay it can take to build full scale commercial facilities. Accordingly, they seek to find CMOs (contract manufacturing organizations) that can take on parts of their process at scale.
One example of a company whose end goal is to work with a CMO for their mycelium products is Ecovative. In order to do this, it has learnt that while it doesn't want to build a commercial plant, it does need to build a pilot one in order to prove out its process before a CMO is willing to partner with them.
When, and more crucially how, to transfer production to a CMO is key for a start-up to decide. In Ecovative’s case its pilot facility has been instrumental in this process:
“What we’ve found in our journey is that we can’t outsource what we’re doing easily to a CMO. We’re inventing a lot of new technology, we try and use as much off the shelf technology as possible. So a lot of the stuff here is right out of existing indoor mushroom farms, and we’ve signed partnerships with these mushroom farms to grow these materials at scale, but first we know we’ve got to do it ourselves, we know we’ve got to prove the integration of all these components and when this facility comes online it will be the completion of this vision.” (Eben Bayer, Co-Founder & CEO, speaking at the Biofabricate Summit 2022)
In addition to being more capital efficient by not building commercial plants, partnering with CMOs has the added benefit for Ecovative of local production:
“It’s also a step towards a world where the materials we need are produced — actually grown — nearby where they’ll actually be used, instead of shipped over massive distances.”
The company has already proved out this model of piloting and then transferring to a CMO for its AtLast mycelium ‘bacon’ alternative. It plans to repeat the process for its Forager ‘hides’, as well as partnering in other areas of the process such as tanning through its relationship with ECCO leather.
Finding the right CMO can save a start-up time and money. But there is likely still a need for the more technical companies in this space to prove out their production process at least at pilot scale, largely due to the use of new techniques and equipment needed.
Ecovative has already proved that this journey to scale works with their AtLast ‘bacon’, when they partnered with Canadian mushroom farm, Whitecrest in 2022. Using Whitecrest’s adapted mushroom farm, it is able to produce 3 million pounds of mycelium a year in a footprint of less than an acre.
Thus demonstrating not only that transferring a mycelium growth process to a CMO is possible, but that it has the added benefit of adapting existing infrastructure and allowing for a smaller footprint on the land than traditional agriculture.
As well as finding a CMO, some start-ups are partnering on other aspects of their development to enable them to move faster. A prime example of this is Bolt Threads, who has partnerships throughout its process. The company is working with Ginkgo Bioworks on the improvement of its mycelium strains, it’s working with Mycelium Materials Europe (MME) to produce its sheets of MyloTM , and established a partnership with Heller Leder for tanning in 2019.
This extensive partnering is a marked move away from the early approach of start-ups in the space who chose to try and develop everything in house in order to capture maximum value. Many are now realizing that they will get there faster, and ultimately likely to be more successful, if they work with those already with deep experience in duplicative parts of the supply chain.
Two of the key Bolt Threads partnerships exist at the bookends of its process. The first is its partnership with Ginkgo Bioworks, who has positioned itself as the go-to US-based partner for the development and optimization of organisms. Bolt Threads announced this expansion of their work together in October 2022, having previously partnered to improve the sustainability, efficiency and cost effectiveness of Bolt Threads' b-silk™ protein manufacturing process. The companies are now working together to improve the growth rate and lower the cost of Mylo’s mycelium strain. This relationship allows both companies to focus on their core competencies, reducing focus pull for Bolt and allowing them to problem solve faster and probably cheaper than they could internally.
At the other end of Mylo’s production, Bolt has partnered with German tannery Heller Leder. This partnership is primarily focused on developing tanning and finishing processes for Bolt’s MyloTM material. Again, this allows the start-up to tap into centuries of experience and scaled production lines. And while de novo chemistry may be required to effectively ‘tan’ mycelium, these new chemistries can be tried out on industry standard equipment.
It is interesting to note that the press release announcing this strategic partnership included an agreement not to talk negatively about one another’s industry. This signals a growing maturity in a field that has seen founders coming from outside the leather industry initially using divisive language to demonize the very industry they now collaborate with.
Teaming up with the right partners can be instrumental to a start-ups success and how quickly they can overcome challenges. Increasingly we are seeing a willingness from start-ups to collaborate earlier across their technology. Newer start-ups are approaching things differently, and even the more established start-ups, such as Bolt Threads, are actively seeking partnerships to augment their capabilities.
When new materials entail so many complexities around de novo science, it makes sense to work with established industry experts where you can to lessen the time it takes to solve some of the key challenges.
Working with supply chains
Firstly, establish when is the right time to introduce a startup to your key supply chain partner/s. A material innovation will need to have met key performance metrics and be ready to deliver consistent quality, in sufficient initial quantities, in order to be trialed by a supply chain partner.
Start by exposing the innovator to your partner, ideally with a visit, so all parties can figure out how best to work together. It's in everyone's interest to build a close collaborative relationship and brands can play a pivotal role here in supporting both the innovator and supply chain partner. Don’t just make an introduction and expect them to get on with it.
Some innovators lack understanding around the limitations of an existing manufacturing process to bend to their needs. Help them comprehend the reality of working with commercial scale manufacturing, including the implications of down-time or adjustments to your partners production lines. Be aware when supporting the transition of a material from pilot to commercial scale that it may still require further development as it encounters new challenges with a partner’s SOPs or specific equipment.
• Help innovator understand where and how they fit in your supply chain
• Understand from the innovator what is the realistic timeline is for that integration
• Introduce innovator to supply chain partner once the base material specification has been met
• Help supply chain partner understand the potential long-term value of integrating this innovation
• Appoint a relationship manager to support innovator and supply chain partner throughout project
• Help supply chain partner understand iterative nature of innovation and time to supply them at scale
Consortia
In addition to bringing in supply chain partners, it may make sense to partner with other brands to further support a material innovation to reach the market and scale faster. A consortia of brands can help spread the risk on both the brand and innovator side. The upside for startups is to reassure investors of market demand with potential off-take agreements, and for brands the first mover advantage securing access to materials that will initially be supply constrained.
CMOs and JVs
Among the considerations of teams aiming to scale technologies as fast as possible are decisions around what assets to buy and build internally vs seeking out manufacturing partners with existing expertise and infrastructure. Companies may turn to contract manufacturing organizations (CMOs) to scale part of the process, or they may form joint ventures (JVs) to combine expertise and accelerate a path to market additionally accessing an established distribution channel.
With some novel material innovations, such as mycelium production, there may not be a fully analogous manufacturing system to transfer production to. This will leave a startup no option but to build their own facility. Even where there is the potential for a process to be transferred to a (CMO), a material innovator will likely need to build and prove out its whole process first via its own pilot scale facility.
Modern Meadow partnered with Limonta on a joint venture (JV) to create ‘BioFabbrica’ to optimize their material and access industrial capacity with an established sales channel. Spiber partnered with ADM to expand production of their Brewed Protein™ materials in the USA, accessing industrial production capacity and an established agricultural supply chain.
The case against partnering up on manufacturing may be around protection of IP, especially in instances where an innovator has chosen to protect a process with trade secrets rather than patents. The downside of fully owning and operating production is greater capital expense and slower scaling, since building each built typically takes 18-24 months before being operational.
Global fermentation capacity - demand outstrips supply
What would our manufacturing and agricultural systems look like if everyone using fermentation-based technologies scaled globally tomorrow? Do we have the fermentation capacity and infrastructure in place to facilitate a switch? The short answer is no.
There is a distinct lack of global fermentation capacity. Some estimates suggest of the current 61 million liters of operating capacity, approximately 10 million liters is unreserved. And it’s not just next generation materials that will be vying for these facilities, alternative food proteins and beauty will also be competing for production.
Projects like the website Capacitor, are aiming to help innovators with this issue by listing available biomanufacturing facilities around the world. However, one of the key trends they’re seeing is a lack of facilities that meet the requirements of those searching for capacity. Bench and pilot scale is fairly well served, but the most commonly used filter is ‘Size of Bioreactors’ and more than half are looking for reactors larger than 20,000 liters (which represent less than 20% of facilities featured).
This is a key investment gap for new materials. Money has flowed into the beginning of the funnel (the companies developing the science and materials) but there is a need for further investment on the scale-up side to increase capacity allowing for real impact.
Spiber Sustainability Impact Report 2022. 2023. Spiber
Algae products specialist TerraVia goes bankrupt. 2017. Chemical & Engineering News
Are Mushrooms the Future of Alternative Leather? 2022. The New York Times
MycoWorks Announces Expanded Executive Team. 2020. Cision Newswire
Fine Mycelium™ - A New Language. 2021. MycoWorks
A New Vertical Farm Will Grow 3 Million Pounds of Mycelium a Year for Fungi-Based Bacon. 2022. Singularity Hub
Strategic partnership for research, development and production of the novel material Mylo. 2019. Heller Leder
Commercial fermentation: Opportunities and bottlenecks webinar. 2022. The Good Food Institute
State of Global Fermentation Capacity Report. 2023. Capacitor
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