Israel seeks to create R&D fermentation hub to maintain food tech edge

Israel Innovation Authority issues call for proposals budgeted at NIS 50 million to build local R&D infrastracture for production of alternative proteins

Sharon Wrobel is a tech reporter for The Times of Israel.

An Israeli food tech startup makes cow-free milk for commercial use by manufacturers in traditionally dairy-based products including cheeses, yogurt, and ice cream. (Remilk)
An Israeli food tech startup makes cow-free milk for commercial use by manufacturers in traditionally dairy-based products including cheeses, yogurt, and ice cream. (Remilk)

Israel is seeking to build an R&D hub for cutting-edge fermentation technology of microorganisms, such as yeast or fungi, to eventually produce alternative proteins on a larger scale and uphold the country’s edge in the field.

The Israel Innovation Authority has announced a call for proposals to establish a new infrastructure to build R&D facilities that use precision fermentation technology for the development of alternative proteins. Total budget for all approved proposals will be up to NIS 50 million ($14 million).

Fermentation, long used to produce beer, is also being employed to exploit the alchemist abilities of microorganisms such as bacteria and fungi. Precision fermentation uses microbes as “cell factories” for producing specific proteins, enzymes, flavoring agents, vitamins, pigments and fats. These can be used to produce everything from meat and seafood alternatives to milk, ice cream, butter, cheese and products such as gelatin.

“We hope that this infrastructure for precision fermentation of microorganisms for food purposes will help maintain the strength of the Israeli ecosystem and accelerate development of startups and companies working toward scale-up solutions in this field,” said Dror Bin, CEO of the Israel Innovation Authority.

The IIA said that the R&D fermentation infrastructure aims to increase production volumes, and to allow for “technical economic viability experiments for the first time in Israel.” The production of larger batches will enable startups to conduct consumer testing, and help them obtain regulatory food certifications for the nutrients manufactured using fermentation technologies. The process is hoped to pave the way for the establishment of local manufacturing plants, the IIA said.

Specifically, the IAA’s call is for building an R&D fermentation infrastructure to produce volumes of 10 to 20,000 liters of nutrients. The R&D center, which will include relevant equipment and skilled personnel, will be used by Israeli food startups and academic research institutions.

The alternative proteins sector includes plant-based substitutes for meat, dairy, and egg, cultivated dairy, meat and seafood made from cells, and various fermentation processes and products. Among the categories of alternative proteins, the IIA has selected fermented proteins to have the highest market growth potential and the greatest ability for multiple companies to take advantage of shared R&D facilities.

Israeli startup Chunk Foods uses fermentation technology to create alterative protein meat-like products (Courtesy)

Israeli companies are leading the world in food tech investments in the plant-based alternative proteins sector, and come second only to the US in funds invested in the alternative protein industry as a whole, according to the Good Food Institute (GFI) Israel, a nonprofit organization that seeks to promote research and innovation in food tech.

The global alternative protein sector drew $1.75 billion in the first half of 2022, with $320 million invested in blue-and-white alternative protein startups and companies, accounting for 18% of the total. In fermented proteins, Israel is second place to the US, taking 38% of global investment in this field with $152 million in investments, and is also second place in the world in the number of fermentation startups with 12 firms.

At the same time, though, Israel lacks some of the supporting infrastructure for the local industry in the form of multidisciplinary research centers, technology transfer programs (from university labs to industry), research grants and training, and specific innovation hubs for fermentation tech startups.

Already looking elsewhere, Israeli food tech startup Remilk, a developer of cultured milk and dairy, in April announced plans to open the “world’s largest” facility for the production of cow-free milk in Denmark. Founded in 2019, the startup produces milk proteins via a yeast-based fermentation process that renders them “chemically identical” to those present in cow-produced milk and dairy products.

“Israel has marked the food tech industry, which could yield 55,000 high-paying jobs to the economy by the year 2030, as an R&D priority,” said Bin.

Over the past decade, the IIA has allocated NIS 230 million in grants for the food tech industry, with over NIS 140 million spent on alternative proteins.

Bin noted that about “90% of this support has been allocated since the beginning of 2020 – further testimony to the growth of this ecosystem in Israel.”

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