While many venture capitalists and strategic CPGs have paused investments in many food-technologies that make bold promises but have limited scale or consumer acceptance, one niche continues to attract attention: fermentation-derived ingredients.
While using fermentation to make food is not new – it has been around for millennia – there is a renewed interest in precision fermentation, which converts microbes into tiny factories to produce specific food molecules, and biomass fermentation, which cultivates microorganisms as a primary protein source.
The appeal for investors – and food innovators – lies in the technologies’ ability to create high-value ingredients where demand outstrips natural supply or where manufacturers face mounting pressures to find more sustainable, ethical or resilient alternatives.
For example, the Make America Healthy Again movement has turbo-charged the transition from synthetic to natural dyes at a much faster pace than conventional agriculture-based pigments can be produced. Likewise, climate change is compromising consistent supply of key commodity crops, including cocoa and coffee – driving up prices so that finished products are not as accessible to consumers. In addition, rising consumer concern about animal welfare and the environmental toll of animal-based ingredient production is pushing some manufacturers to explore more ethical and sustainable alternatives.
In response, startups using engineered yeast, fungi and other microorganisms to produce pigments, proteins, cocoa, coffee and even hydrocolloids are raising fresh capital, meeting new regulatory milestones and securing partnerships on the premise they can overcome cost, stability and supply chain challenges that limit their natural counterparts.
The state of fermentation and cultivated ingredients: Where are we now?
This story is part of a larger collection of stories focused on the state of alternative agriculture and ingredient production across categories – from coffee and cocoa to meat and seafood. We explore tech breakthroughs, commercial applications and regulatory updates, as well as stubborn challenges and how stakeholders are addressing them.
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A colorful future for fermentation derived ingredients
Food colors have emerged as one of the clearest examples of how fermentation is moving from concepts to commercial opportunity.
With manufacturers scrambling to replace synthetic dyes at the behest of HHS Secretary Robert F Kennedy, Jr, startups producing pigments through fermentation are attracting fresh investment, clearing regulatory hurdles and winning awards on the promise of delivering more consistent and cost-effective alternatives to colors derived from fruits, vegetables and other natural sources.
Among the companies moving fermented colors forward – and attracting investors – is Israeli-based Phytolon, which secured $23.6 million in Series B funding late last month to commercialize its natural food colors in the US.
The biotech company’s proprietary, fermentation-based process ‘spontaenously’ releases betalain pigments, which in nature are responsible for the vibrant hues in beetroot and cactus fruit, from yeast cells to create cell- and DNA-free pure natural colors that are water soluble and stable in a wide pH range and when exposed to heat and light.
The round included funds from existing investors, including Millennium Foodtech, NextGen Nutrition, Colorcon Ventures and Yossi Ackerman, as well as from an undisclosed strategic investor. It builds on $4.1 million raised in the fall of 2020 and a $14.5 million raise announced in July 2022.
The news follows the company’s successful petition of FDA to list its beetroot red as a color additive exempt from certification, although the effective data has not yet been established.
Copenhagen-based Chromologics also recently raised $8 million to commercialize its precision-fermented food colors. The round announced last fall was led by existing backers Novo Holdings and Danish state fund EIFO as well as new investors Döhler Ventures, Collateral Good Ventures and Synergetic.
The funds were earmarked to support its regulatory submissions to FDA and EFSA for its bio-based food dye Natu.Red and for scaling production.
FDA also approved Fermentalg’s Galdieria Blue for use in foods and drinks in May 2025. Fermentalg’s Galdieria Blue proclaims to be the first phycocyanin obtained by fermentation – allowing it to offer a stable natural blue color and act as an antioxidant for a nutritional boost.
The biotech startup Michroma also caught industry leaders’ attention earlier this year when it won the Global Food Tech Award Americas heat, announced at Future Food-Tech in San Francisco, for its fermentation of filamentous fungi to create high-performing natural colors.
Fermentation offers stable supply solution
The same promises of greater consistency, scalability and independence from traditional agricultural supply chains that are attracting investors and strategic partners to fermented food colors is also drawing their interest in proteins.
Fermentation companies are increasingly positioning themselves as suppliers of functional ingredients that can help manufacturers reduce reliance on animal-derived proteins without sacrificing performance.
The technology also can alleviate supply chain volatility often found in animal-based supply chains, as in the case of Every Company, which makes functional egg proteins produced via precision fermentation and recently struck a deal with the global pharmaceutical company Huvepharma to quadruple the production capacity for its flagship ingredient OvoPro.
The deal, announced June 15, follows a period of rapid growth for Every, which said in the first four months of 2026 it secured annual orders worth 550% of its total volume in 2025.
Every’s egg protein delivers the functional binding and protein-enriching benefits many manufacturers want, but with greater stability and easier shipping and storage. It is shelf stable for up to 24 months, does not require cold-chain storage and “offers favorable inclusion economics due to its high purity,” according to the company.
By comparison, avian flu outbreaks and other challenges have severely diminished conventional egg supply in recent years and caused prices to spike before eventually – although potentially only temporarily – falling back.
Finnish food-tech startup Solar Foods also recently teamed with Ambrosia Collective to bring its air-derived, single-cell protein to the US after securing a key US patent this spring.
Earlier this month, Ambrosia Collective launched Planta Powered by Solein as a high-protein alternative to whey and traditional plant-based options. The push comes amid a whey shortage that is driving up costs and delaying production of products across categories.
Because Solein is made from microorganisms that “eat” hydrogen and replicate in small amounts of water and minerals, it can be made in places where conventional protein production is not possible – including where land is limited, weather is volatile or there are other agricultural constraints.
Protein power: Fermentation offers ethical alternatives
Protein producers leveraging fermentation also are gaining investor attention and market traction as ethical alternatives to animal-based products and for sugar reduction.
Among them are Oshi, formerly Plantish, which recently netted $3 million in funding for its 3D-printed, whole-cut fish alternatives, which use fermentation produced mycoprotein sourced from The Better Meat Co.
Cultivated meat startup SuperMeat also secured $6 million in financing, announced last month, as part of a larger $10 million raise. The investment brings its total funding to date to $24.5 million and will support its commercialization, which it is targeting in first in Switzerland.
Other companies using fermentation to produce specialty proteins also are gaining investments.
Among them are startup Melazyme, which secured $2 million in seed funding last month to support scale-up and commercialization of the sweet protein brazzein within food and melanin for use in other industries.
MycoTechnology also is using fermentation to create sweet proteins that can help manufacturers advance sugar reduction. The company’s latest innovation, Zukora has self-affirmed GRAS status and is commercially available in the US at scale. Derived from Hungarian honey truffles, Zukora is gut friendly and offers a clean-tasting sweetness, according to the company, which will showcase the ingredient at IFT FIRST in Chicago in July.
CPG strategics are beginning to bet on fermentation
Several large CPG manufacturers are engaging earlier with startups using fermentation to create essential ingredients as a way to reinforce supply chains – especially for ingredients that face constraints due to climate change or natural limitations.
Last week, Mondelēz announced Akarso Bio, which creates a fermentation-derived prebioitic nanofiber with hydrocolloid properties and clean label benefits, as part of its CoLab Tech 2026 cohort.
Akarso Bio’s platform also “naturally stimulates GLP-1” production, allowing CPG companies that use it to create products that keep consumers fuller for longer. As a fiber, it also supports gut and metabolic health, which are challenges for some consumers taking GLP-1 drugs for weight management, according to the startup.
Nestlé also is investing in fermentation through a partnership with biotech startup Helaina announced this month. Details on the partnership are scant, but it centers on Helaina’s use of precision fermentation to make a bio-identical version of human lactoferrin – a functional protein typically found in human breast milk.
Takeaways
While these advancements cut across categories and applications, they all underscore the potential for fermentation to transform the food system at a time when supply constraints and consumer concerns about sourcing are intensifying.
While some regulatory hurdles remain, depending on the ingredient and use, and scaling is still in early stages, the uptick in regulatory approval and strategic investment by CPG companies and other investors suggest the technology could quickly move beyond the lab.
As that happens, fermentation’s next chapter likely will focus less on technological novelty and more on its ability to solve stubborn challenges that threaten production and CPG companies’ bottom lines.
