One hundred twenty years ago, in 1902, Archer Daniels Midland got its start as a linseed oil business in Minneapolis.
Through the decades, ADM has become a massive global company with 41,000 employees and a presence in nearly 200 countries. ADM is known for its wide array of agricultural products. And some of the businesses ADM has entered on its own — like amino acids, sweeteners, enzymes and biofuels — have led the company into the ever growing fermentation space.
Since ADM has enormous fermentation capacities and expertise, the company is also working with innovative smaller companies. Fermentation science has made so many advancements and innovations that the best way for ADM to serve its customers is not always for the company to work solely on its own, explained Senior Vice President of Strategy and Innovation Ian Pinner.
“We can either expand our existing platform, or we can think about investing in partners or partnering with [companies] through investments to almost use that as an extension of our existing platform,” Pinner said. “And so we do both. We develop internally things that we want to make sure that we're keeping internal and developing internally, and then we'll work with partners to use them as an extension of our science and technology platform.”
ADM and alternative protein partners
Through both capital investments and partnerships, ADM has worked with several food companies that use fermentation to create and perfect their alternative protein products. In 2019, ADM invested in animal-free dairy maker Perfect Day, about a year after partnering with them to scale and commercialize Perfect Day’s animal-free dairy proteins. The company participated in fermented analog maker Nature’s Fynd’s funding round in March 2020, animal-free collagen maker Geltor’s July 2020 funding round and animal-free cheese maker New Culture’s Series A funding round in November 2021.
ADM Ventures, the company’s venture capital arm, was one of the leaders of a January 2021 funding round for fermentation derived carbon dioxide meat analog Air Protein, and co-led cultivated meat maker Believer Meats (formerly known as Future Meat Technologies) $347 million Series B round in December 2021.
ADM works with companies involved in all stages of fermentation, Pinner said. They work with companies that have already created cultures and help them scale up. They use their expertise to help startups make their technology commercially viable. The company goes through potential formulations with the ingredients that companies are creating. They help create go-to-market and distribution plans. And they keep an eye on what fermentation startups are doing that could be useful to ADM’s other customers.
Pinner said that it makes more sense for ADM to leverage its deep well of equipment, reach and expertise to help startups using fermentation — like Perfect Day, New Culture and materials company Spiber — do new things. ADM could work on developing some of these new capabilities in house, but that would be way too much of a task — especially because it takes significant investments and expertise to do a good job on some of these products created by fermentation.
“Instead of needing to build and own all of that landscape, we're able to zero in on what we think are good technologies and good management teams and then work with them,” Pinner said.
How ADM partnerships work
ADM does put a lot of funds into companies developing next-generation fermented products through its venture arm, but its work with startups goes beyond just investments. Pinner said that ADM is sometimes a scale-up partner, or helps startups figure out exactly what they need to do next.
“When we do make an investment, it's because we think the technology is a winning technology,” Pinner said. “We like the team that we're working with in the startup business, in the venture that we're talking to. And it's because a bit longer term, as the business grows, we want to become part of their strategy, and we'd like them to be part of ADM’s strategy as well.”
ADM has been both an investor and partner with animal-free dairy companies Perfect Day and New Culture.
ADM started working with Perfect Day in its earlier years, before any products using Perfect Day’s animal-free whey protein were on the market. ADM helped Perfect Day on both scaling up and application development, Pinner said.
In 2019, Perfect Day co-founder and CEO Ryan Pandya said that ADM’s scale and reputation also would help the company get to the point where it could make enough of its ingredients to get into different consumer products. With several product launches spanning categories from chocolate to milk to cream cheese, Perfect Day is at that point today.
The partnership with New Culture, which is using precision fermentation to make casein proteins for stretchy non-animal cheese, came about much more recently. In August, ADM and New Culture entered a strategic development and commercialization partnership. New Culture plans to make its animal-free mozzarella cheese available to pizzerias next year.
Pinner said ADM is working with New Culture to figure out how to expand its manufacturing capacity while helping them scale for their launch in early 2023. ADM is helping New Culture also figure out the right amount of its cheese to manufacture for the time being. Making too much can also be detrimental because if the excess cheese is not sold, there is no revenue.
“We really do help our partners think through those business models and their financial case, and then see where we can be a valuable partner for helping them grow, and at the same time helping our stakeholders,” Pinner said.
Another company ADM has worked with and invested in is fermented materials company Spiber. While Spiber is not in the food space, it uses fermentation to make polymers for cloth and building. ADM recently announced a partnership with Spiber. The fermented polymer company will use ADM’s large-scale microbial fermentation facility in Iowa to convert regeneratively farmed corn-based dextrose into Spiber’s Brewed Protein polymers.
Pinner said Spiber is an example of how ADM can work with a partner company to bring significant benefits to both, as well as help the smaller company grow.
The sustainable future
Pinner said he sees the ingredients and products that are being produced through fermentation as an “and” — another alternative to add to the options that manufacturers and consumers have to choose from when they eat.
Some companies that ADM is working with are getting to the commercialization point, and that step is going well, Pinner said. The products are high quality and are being seen as viable options.
Not only that, he said, but ingredients made through fermentation are seen as a more sustainable choice. While many companies in this space have yet do do life cycle assessments, Perfect Day has one that showed its whey protein production, compared to traditional production methods, reduces water consumption by 96% to 99%, cuts down on non-renewable energy use from 29% to 60%, and reduces greenhouse gas emissions up to 97%.
Pinner said that ADM is working hard to meet its own Strive 35 sustainability goals: Reducing total greenhouse gas emissions by 25%, energy intensity by 15%, water intensity by 10% and diverting 90% of waste from landfills by 2035. Fermentation is a lever ADM can pull to reach these goals, he said. ADM has even been looking at ways to make fermentation more sustainable, trying forms of energy like steam and investing in carbon sequestration methods.
Using ADM’s knowledge and collective muscle to work on more sustainable solutions like fermentation are ways that the company can continue to serve its customers, Pinner said. Most manufacturers have sustainability commitments they are trying to reach, and consumers are beginning to take notice of carbon footprints of the products they buy. Pinner said ADM often works with its manufacturing customers to figure out what they want in terms of sustainable options, and then they jointly come up with a way that can happen.
“Today, we believe in enduring trends,” Pinner said. “And so for ADM, that's about food security, it's about health and well being. That's about sustainability. And then we were strategically aligned to those trends. If you think about the ability for precision fermentation … [to bring the innovation] within the area of delivering on sustainability, delivering on food security and delivering on health and well being, then absolutely, you're going to continue to see innovations coming from ADM for many, many years to come.”