- Ingredion signed an agreement to become the exclusive global commercialization partner for Amyris’ sugar reduction technology that includes its fermented Rebaudioside M, the companies said in a statement. Unlike other companies that struggle to extract Reb M from stevia leaves, Amyris' ingredient is made from the fermentation of specially crafted yeast and sugar cane.
- As part of the deal, Ingredion will take a minority ownership stake in the Amyris Brazilian manufacturing facility currently under construction. The two companies also will enter into an R&D agreement to create and advance the development of sustainably sourced, zero-calorie, nature-based sweeteners and potentially other types of fermentation-based food ingredients.
- With consumers looking to curtail their sugar intake, ingredient suppliers have targeted bulking up their alternative sweetener offerings for CPGs to incorporate into their products. Ingredion has identified sugar reduction and specialty sweeteners as one of its core growth areas.
For a company that has targeted expanding its sugar alternative portfolio, Ingredion has wasted little time growing its presence under the leadership of President and CEO Jim Zallie. Last year, Ingredion acquired a controlling stake in stevia pioneer PureCircle, turning it overnight into a global stevia leader.
The deal with Amyris further expands Ingredion's sugar reduction portfolio and complements its PureCircle stevia product line.
"Adding a fermented Reb M product to our existing PureCircle sugar reduction portfolio now provides Ingredion with the most comprehensive trifecta of leaf extract and bioconverted stevia and fermented Reb M in the world," Zallie told analysts earlier this week. "This enables us to meet the growing needs of a global customer base that is looking now for ways to reduce sugar without compromising taste."
The $100 million value of the transaction includes $75 million for the exclusive license to sell and market Reb M from fermentation plus a contribution for a participation in the Brazil manufacturing joint venture. Additionally, Amyris will earn a profit share from Reb M sales, the companies said.
The partnership will allow Ingredion and Amyris to tap into the strengths of both companies. Amyris will bring its synthetic biology technology platform to develop, scale and produce fermentation-based products. For its part, Ingredion will bring its global reach and customer connections along with its formulation capabilities to accelerate the availability and adoption of the sweetener with food and beverage companies. The deal is expected to close before July.
Amyris said its Reb M sweetener is made using yeast and sugar cane. The sweetest part of the stevia plant, Reb M also may be extracted from it, but Amyris has said the process used to grab the molecule is more costly than its fermentation methods and in many cases involves the use of petrochemicals or high-fructose corn syrup.
Reb M also is difficult to extract from stevia, the company said, and ends up as a blend of the different stevia molecules with a lot of impurities, causing an unpleasant aftertaste that has long haunted the alternative sweetener.
Now, Ingredion has access to two different ways to make the coveted sweetener. It also helps strengthen its position as a go-to provider of steviol glycosides, one of which is Reb M.
Fermentation, long associated with the making of beer, wine and bread, has seen an explosion of growth in the food space thanks to interest from companies like Amyris. Fermentation had been associated with alternative protein company Quorn since it was founded in 1985.
Through the first seven months of 2020 alone, a total of $435 million was invested in fermentation companies — more than 2019 altogether, according to a report published in September by the Good Food Institute. At the time of the report, 44 fermentation companies focused on alternative proteins. Almost half of them launched between 2019 and the first seven months of 2020.
Today, the food space today is inundated with companies using fermentation. Perfect Day uses the process for its animal-free dairy proteins. Nature's Fynd is working to create a variety of products from a fungal bacteria found living in harsh environmental conditions in Yellowstone National Park. And Air Protein's biomass fermentation helps turn proteins that can be produced out of carbon dioxide into an actual edible item.
While Ingredion opted to enter into a partnership with Amyris rather than an acquisition, the transaction indicated both parties expect to work together well into the future. Ingredion and Amyris will be able to tap into the expertise they gather in growing the market for fermented Reb M sweetener to develop sustainably sourced, zero-calorie, nature-based sweeteners as well as other types of fermentation-based food ingredients.