How Perfect Day's partnership with ADM could change the dairy industry
- Perfect Day, a startup that produces casein and whey through microbial fermentation to create animal-free dairy, teamed up with industry titan Archer Daniels Midland Co (ADM) to scale and commercialize the production of their vegan proteins, according to Food Navigator.
- Through the partnership, Perfect Day and ADM will be the first companies to produce dairy proteins through fermentation and introduce this new category of ingredient to the food industry on an industrial scale. Both companies plan to begin supplying animal-free dairy proteins to the food industry in 2019.
- "This gives ADM an opportunity to enter the dairy protein market with a unique new microfloa-based product that is vegan, lactose-free and more sustainable, but packs the nutrition and functionality of animal protein," Perfect Day co-founder and CEO Ryan Pandya told Food Navigator.
This partnership between Perfect Day and ADM comes at a critical time when there is ongoing debate around the definition of the word "milk." This past spring, FDA Commissioner Scott Gottlieb said the agency might restrict makers of plant-based beverages from using the word "milk" on product labeling. In place of that all-encompassing term, there are talks of using terminology like "plant-based beverage" or "fortified beverage."
However, Perfect Day’s casein and whey proteins that can be used to make traditional dairy products are none of those things. These companies will be producing animal-free dairy proteins. Thanks to the 3D printed strands of cow DNA that are used in the fermentation process, this vegan soy-free, gluten-free lactose-free, animal-free alternative to conventional dairy has a similar taste and nutrition profile of dairy proteins. But the only catch is how the product gets classified.
"We’re doing a lot of work this year to figure out the right ways to talk about this that minimize any confusion that people have," Pandya told Food Navigator. "People think it’s dairy and people think it’s non-dairy, and in reality it’s a little bit of both."
This could be good news for the brand though because it spans both categories, meaning that there could be a better chance of it taking a foothold in the market — particularly in the free-from category. Sales of "free-from" foods are expected to grow 15%, or $1.4 billion, between 2017 and 2022 — with the U.S. as the largest global growth market, according to Euromonitor data. In large part, this has to do with product perception since about 84% of American consumers of free-from products said they believe such products are more natural and less processed, while about 43% said free-from foods are healthier, according to Mintel.
If Perfect Day is able to find a way to compete in this category, they may benefit greatly as consumers are generally willing to pay more for products that they consider natural and transparent. However, if Perfect Day chooses to compete directly with dairy, the company will likely need to lower prices. Dairy industry analyst Matt Gould told the co-founders in 2016 that would mean bringing the price down to about $2.50 per pound — a steep drop from where they sit currently.
Still, there is no question that the market is demanding more alternatives to conventional milk. Earlier this year, Perfect Day raised $24.7 million in Series A funding and this newest partnership only displays the reach that they are hoping to gain to serve the market an innovative alternative to plant- and animal-based protein.
The partnership's success will depend on how consumers respond when these lab-produced products hit general retailers' shelves. To make these products popular, the companies will need to convince consumers that these animal-free dairy products are something they can eat — and should, if they want an environmentally friendly, clean alternative to dairy.
- FoodNavigator Perfect Day partners with ADM to commercialize animal-free dairy proteins
- Food Business News Perfect Day, ADM partner to supply animal-free dairy proteins