A fermented yeast-based palm oil alternative is gearing up for a 2023 launch in Europe

Palm oil is a controversial ingredient. Its reputation has been tarnished in recent years due to links to deforestation in biodiversity-rich regions and the conversion of carbon-rich peat soils.

Yet the global palm oil market remains strong. In 2021, its value was estimated at $50.6 billion and is expected to reach $65.5 billion by 2027.

Palm oil is the most consumed vegetable oil in the world. And being neutral in color and flavor, the ingredient is a favorite among food manufacturers.

What if there was a substitute oil that could replace the disputed ingredient in food formulation, but without any impact on deforestation, biodiversity loss or climate change?

The British start-up Clean Food Group is working to develop just that.

A bioequivalent to palm oil

Christopher Chuck, professor of bioprocess engineering in the Department of Chemical Engineering at the University of Bath, has been working on a yeast-based alternative to palm oil for eight years.

In the first quarter of 2022, the relevant intellectual property was acquired by Clean Food Group, of which Professor Chuck is the group’s technical advisor.

“Our dependence on palm oil has a high environmental cost”, said Professor Chuck.

“We have worked for many years to create robust alternatives to palm oil that give us a real chance to reduce the impact of a range of products that until now have only been possible with palm oil and the deforestation and pollution and emissions that come with that.”

The start-up’s own palm oil is bioequivalent to the real thing in terms of nutritional composition and fatty acids.

“It is neutral in taste and color – as with palm oil, its natural color is orange/red but can be rendered colorless by a simple refining process”, explained Alex Neves, CEO of Clean Food Group. “It works the same way as palm oil.”

How is clean palm oil produced?

Clean Food Group’s Palm Oil Substitute is made from lab-grown yeast.

The start-up has developed a proprietary yeast strain, which Neves says evolved, using a “natural process”, from a strain of yeast commonly found on the surface of grapes used in organic winemaking.

“Our yeast strain was developed over eight years by Professor Chuck using a natural process called ‘directed evolution’, which is a non-genetically modified process similar in many ways to plant breeding,” he told FoodNavigator.

Using food-safe waste as a raw material and renewable energy as an energy source, Clean Food Group leverages fermentation technology to grow yeast in tanks similar to those used in the brewing industry.

“In fact, rather than producing our oil in a laboratory, we will be producing our oil in a food factory very similar to a brewery, using very similar equipment,” Neves explained.

“We then extract the oil from the yeast much like palm oil is extracted from the palm for use in products or for further processing into palm oil-derived ingredients.”

Once in the market, the start-up said its palm oil alternative will be able to be used in all product applications where palm oil is currently used.

Marketing challenges

Key challenges facing Clean Food Group include achieving scale, price parity and regulatory approval.

Price parity with palm oil – or being within an acceptable range of price parity – is possible, the CEO suggested, and is “directly related to scale”.

From a regulatory point of view, the start-up is initially focusing on the European market where its ingredient is considered a Novel Food.

“Our oil is considered a Novel Food because although it is bio-equivalent to palm oil, our yeast-based oil was not sold in the UK or European area until 1997.

“We are currently working on the preparation of our Novel Foods dossier which we plan to submit by the end of 2022.”

That said, the startup is able to sell its palm oil alternative ingredients to the cosmetics and personal care industries without going through Novel Foods’ regulatory pathways, as those industries are regulated separately.

Funding and next steps

With a submission for regulatory approval slated for the end of the year, the start-up plans to have its palm oil ingredients on the market in 2023.

“We are currently in consultation with our regulatory consultant regarding how our ingredients will appear on packaging as part of our preparation for Novel Foods,” Neves revealed. “It is likely that as a bulk oil it will appear as ‘yeast oil’.”

Agronomy focused on cellular agriculture has led Clean Food Group’s funding rounds to date, including its recently completed £1.65 million (€1.97) seed round. Agronomics holds a 35% stake in the company.

Other early investors include SEED Innovations Limited and venture capitalists.

Clean Food Group feels “well positioned” to take the next step on the road to commercializing its palm oil alternative, the CEO said.

“In addition to our acquisition of the palm oil alternative technology intellectual property and our collaboration with the University of Bath to scale the technology, we will invest in obtaining regulatory approval for our ingredients. alternatives to palm oil in several markets.

“We will also invest in the development of a large-scale pilot plant that will allow us to form meaningful collaborations with business partners and demonstrate our alternatives to palm oil with finished products.”