Perfect Day in talks with food industry partners to commercialize animal-free dairy ingredients

Like fellow Bay area start-up Geltor​​​, Perfect Day is one of a new breed of companies in the ‘cellular agriculture’ business – using genetically engineered yeasts that have been ‘programmed’ to produce proteins or other ingredients found in plants or animals - on an industrial scale, without raising animals, and with less impact on the environment.

As to the company's business model, co-founder and CEO Ryan Pandya told FoodNavigator-USA: “We had originally planned to develop our own consumer products first (eg. Perfect Day milk), but as we’ve been honing our go-to-market strategy, we’ve talked to so many brands that are interested in working with the ingredients we are developing, that it became clear that a b2b strategy made more sense, as we can impact every aisle of the grocery store, not just fresh dairy. ​

“Some brands we’re talking to are interested in creating a fluid milk brand, some are interested in other fresh dairy products and some are interested in using the proteins in products you wouldn’t even think of as dairy products.   ​

“We’re fielding interest from some of the most well-known food and dairy companies in the world.​

“We’re generating a whole new supply of cost-effective animal-free dairy protein into the food industry and we’re actively working with partners to scale up our process and we’re in talks with numerous food companies that want to work with us, so we should have more information on that and on our funding to share publicly in 2018.”​

A goldilocks product?​

Perfect Day dairy proteins are cleaner, greener and kinder than those produced via industrialized animal farming, claimed Pandya, but they also represent a new supply of vegan proteins that deliver the unique functionality and nutrition of dairy so that formulators do not have to compromise.

“They have all the benefits of dairy without any downside. I honestly think that in five years I don’t know why anyone would use plant-based proteins in certain products anymore. Dairy proteins have the best amino acid profile and the best nutrition, so it’s a goldilocks product really.”​

He added: “We’ve had interest from manufacturers that want to create vegan products but feel that plant proteins lack the taste, nutrition and functionality of dairy, and from manufacturers who are currently using dairy but who wish it was more on-trend in terms of consumers moving away from animal products and looking for more sustainable foods.​

"The other great thing about dairy proteins is that they are already known to the food industry, so we’re not creating a totally new product.​

“We’re both vegans and we come at this from a vegan perspective ​[many vegans have found dairy the hardest thing to give up] and we wanted more nutritious, cleaner label vegan products that are not held together with a bunch of starches and gums and stablizers, and from all the vegans that we talked with, this totally meets their expectations. It’s vegan because there are no animals involved in the process whatsoever.”​

He added: “We’ve brought in folks with more than 15 years’ experience in the dairy industry as well as protein ingredient experts and we now have a team of 25 people. We’ve also expanded our ​[pilot] facilities here to 17,000 sq feet here in Berkeley. The commercial scale facility will also be in America, but the location will depend on the scale partner that we end up signing on, as we want to leverage existing infrastructure and scale up super-fast.”​

"We’re both vegans and we come at this from a vegan perspective ​[there are lots of vegans out there that have found dairy the hardest thing to give up] and we wanted more nutritious, cleaner label vegan products that are not held together with a bunch of starches and gums and stablizers, and from all the vegans that we talked with, this totally meets their expectations. ​

"It’s vegan because there are no animals involved in the process whatsoever.”​

Ryan Pandya, co-founder, Perfect Day​

The production process

So how are the proteins produced?

In a nutshell, Perfect Day takes food grade yeast, and adds DNA sequences (which can be 3D printed using synthetic biology techniques) which effectively instruct that yeast to produce the proteins found in milk – predominantly casein, but also lactoglobulin and lactoalbumin, the two proteins that form the bulk of whey protein in milk. It then throws them into big fermentation tanks with corn sugar and other nutrients to feed on and sits back while they get to work.

When the microbes have done their work at the bio-refinery, Perfect Day’s dairy proteins -  which have the same organoleptic properties as their animal-based counterparters - are harvested via a mechanical process and can be used in everything from ice cream to branded fluid milk, protein powders and shakes, yogurt, pizza and any other product containing dairy proteins, said Pandya.

“We are able to create all the major dairy proteins and the great thing is that we are developing them on an individual basis, so we can create blends with interesting and novel functionality.”​

The dairy industry is excited by this technology, not threatened by it​

If milk proteins from yeast sound a bit well, ‘unnatural,’ you can have a conversation about how natural, humane, or sustainable it is to raise millions of cows as milk machines, he said.

But Perfect Day isn’t on a mission to bring down the dairy industry, stressed Pandya, who noted that some of the world’s biggest dairy companies have also invested in plant-based milks such as almond and soymilk, and that the dairy industry sees Perfect Day's technology as an opportunity, not a threat.

The GMO factor​​

As for the ‘GMO factor,’ which has created PR problems for several pioneers in the synthetic biology arena, Pandya is confident that by being transparent about the process and its environmental and ethical benefits, and engaging with NGOs at an early stage – Perfect Day will be able to avoid ‘Frankenmilk’ headlines.

“GM technology can ultimately help us provide a safer and more sustainable food supply, especially when it comes to proteins, but we are committed to transparency about what our products are, and how they are made.”​

Perfect Day’s dairy proteins are technically non-GMO products in that they do not contain​​ any GMOs (none of the yeast used to manufacture the proteins is present in the final product), and would not need labeling according to the federal GMO labeling bill that President Obama signed in 2016.

That said, as GMOs are used in the production process, the proteins would probably not meet the standards laid out by the Non-GMO Project for its seal.

REGULATION AND LABELING:​ So what is the regulatory status of Perfect Day’s ingredients, and how might they be labeled?

It’s new territory, acknowledges co-founder Ryan Pandya - who has been in conversations with the FDA almost from day one and is working on a GRAS determination for the ingredients - but it’s actually not as complicated as you might think, given that Perfect Day is making ‘dairy’ proteins (albeit using a different process) that are well understood and widely consumed.

As for the term ‘milk,’ a term that has a standard of identity, discussions are ongoing, but the FDA’s primary concern is that labeling is not misleading, he contends.

“Consumers demand and deserve transparency so we want to make sure that it’s clear that it’s dairy protein, but that it is animal free, and therefore suitable for vegans.”​

From a safety perspective, meanwhile, raw unpasteurized cow’s milk can carry bacteria such as Salmonella, E. coli, and Listeria, which are responsible for causing numerous foodborne illnesses, something Perfect Day does not have to deal with.