The Squeeze, Eased: LiDestri, Fermentum take precision fermentation to the next capacity level

Back when, we observed in The Digest: “The predictable result of a tsunami of new companies formed and no new manufacturing at scale built? The fermentation Squeeze.” It arrived, and it’s been rough.

Good news has arrived from upstate New York that LiDestri Foods and Fermentum, Inc.have revealed a joint venture and a 500,000 liter capacity, available now, for precision fermentation on a contract basis. It’s years earlier than this kind of scale had been imagined — and comes on the heels of breakthroughs at FermWorx and Liberation Labs at solving a critical shortage of high-end fermentation services that has severaly impacted growth prospects for industries dependent on precision fermentation, especially in the emerging world of fermented food ingredients.

The problem has been capital lacking expertise and expertise lacking capital — and both types have been lacking equipment. In particular, there’s been the problem of downstream processing. Let’s look at that.

The facilities

The Rochester, New York site is operational, available immediately, and provides everything from lab to pilot and commercial scale fermentation with six 70,000 liter tanks already installed on site. With three 30,000 liter units also available in a 10,000 square foot facility (with up to 40,000 square feet available for expansion) total capacity is over the half million liter mark. Comes with a 400 liter seed tank and microlab.

And what about DSP, you ask?

Dowstream processing, or DSP. As three letter acronyms go in industrial biotechnology, right up there with OMG. In the Fermentum case, there is core DSP in the existing facilities. For example, nano filtrartion that’s sized to 

250 gallons per minute, and there’s work underway with customers who need crystallization, some of whom will bring in their own equpment on skids.  But let’s not kid ourselves — downstream processing can be highly specific to the process. One size fits all can work for T-shirts, not for industrial biotechnology.

As Chris Guske and Mark Warner observed in The Digest in 2021:

Fermentors, if properly designed, are fairly flexible pieces of equipment and adaptable to many different fermentation scenarios. DSP (downstream processing) is often process specific and a controlling factor, except in the case of limited DSP processes (whole cell or cell-free). While pilot plants can often maintain a high level of flexibility, this needs to be sacrificed with increasing scale because of the cost of larger equipment. Hence, while a CMO may be able to handle the fermentation requirements, it may be inadequately equipped to provide the requisite DSP, often requiring significant capital investment to complete the process or requiring the use of another third party.

Fior that reason, we’ll point not only to the LiDestri name and the available equipment. LiDestri is providing Fermentum Inc. 8.5 million USD in lease and construction financing as part of the collaboration. 

LiDestri is well kniow, as the nation’s premier private label and food contract manufacturer; not so well known is that the company developed a half-million liters of fermentatino capacity at its operating facilities in the Eastman business park complex in Rochester, New York. Better news still, the company has developed a vision  of applying that capacity to break the precision fermetation bottleneck.

The fermentation squeeze backstory

Chris Guske and Mark Warner added in their landmark 2021 survey of the space:

“There are storm clouds on the horizon and those of us actively entrenched in scale-up and manufacturing for Industrial Biotech see the coming apocalypse…and it will likely not be pretty…Over the last couple of decades, VCs have been showering money on start-ups, which seem to be multiplying like rabbits…entrepreneurs can hold up flasks, proudly showcasing their products, declaring commercial readiness. But there is a problem. We are seeing more start-up companies “dressed up with nowhere to go.” How dire it this situation? It is definitely getting worse at the wrong time.”

Liberation has been making incredible progress. Like Vikings of old, raiding capital (or, is that raising?) when no one else could do it. Breaking ground last month on a 600,000 liter precision fermetation facility in Indiana. But more is needed. And, “Greenfield facilities are not cheap to build. Most VCs are more focused on developing technology…and then exiting at high multipliers,” as Warner and Guske observed two years ago.

Greenfields have been hard to finance. Brownfields have been few and far between. Manus Bio purchased the old NutraSweet plant in Augusta, GA. Danimer Scientific purchased the former Martek/DSM/Alltech facility in Lexington, KY. (DS is rumored to be at full capacity and looking to expand: this will be greatly facilitated by DS’s acquisition by a SPAC [Special Purpose Acquisition Corporation], allowing immediate access to capital for expansion activities.) Corbion snapped up the Solazyme/TerraVia facility in Peoria.

The Fermentum backstory

Fermentum became well-known several years ago because of the high profiles of founders such as Joel Stone and Ally LaTournelle and because it was among the first, if not the first, to signal solutions to the growing fermentation squeeze. Frankly, the company was passed by, in publicly known milestones, emerging players such as FermWorx and especially Liberation Labs in recent years. Then, serendipity appeared, as a series of relationships brought LiDestri and its capacity together with Fermentum and its purpose. In a few weeks, a JV was born. LiDestri is known for vision, but it’s been moving at speeds not often seen in corporate circles.

Oh, Rochester

We would be remiss in not mentioning how apt the location in Rochester is. Now, you probably known the town better for the boom years of Kodak, Xerox and Bausch & Lomb — a showcase of mid-20th century American innovation. But why is Rochester there in the first place? Fermentation and industrial biotechnology, my friend — though, of the old school type. Think Genesee beer. Why was the area a hotspot for the American beer industry. In part, proximity to immigrants with beer-making skills and ambitions, part access to Eastern markets. But at the end of the day, it was access to Genesee valley wheat, hops and corn, and the milling industries powered by the Genesee River’s hydro capacity.

And, don’t think for a minute that corn was introduced by some European entrepreneur in days gone by. How did this native Mexican plant make it to the Genesee Valley? Credit the tribes of the Iroquois Confederacy. Credit the Seneca tribe, who planted corn along the eastern bank of the Genesee. Credit the Seneca Trail down to the Carolina. And the bison whose thousand years of migration created the trail. Or, the grass they followed. Or the soil microbes the grass followed. Which brings us back to microbiology, and to you. So, credit yourself. The circular economy, turns out, is not a creature of the 21st century. It was there 30,000 years ago, before people even entered into the picture.

Reaction from the stakeholders

Co-founder and former chairman Joel Stone observed, “This collaboration offers an exciting future for Fermentum who has been known as the trailblazer for identifying the need for fermentation capacity to support the growth of industrial biotechnology. As a Board member and previous acting CTO and Board Chair the biggest thanks goes to Phillip Johansen and the Fermentum team for their persistence through the past years to stay focused on finding a path forward with our Vision for a facility in Rochester, New York. Having the innovation, manufacturing leadership, and financial strength of LiDestri including the personal involvement of Giovanni speaks for itself regarding the future of fermentation in the development of future foods. We are all looking forward to developing Rochester as a fermentation hub of the future for industrial biotechnology.”

“We could not have hoped for a better, more capable partner,” noted Phillip Johansen, Chief Commercial Officer at Fermentum.

“This is a natural fit,” explains Giovanni LiDestri, Chairman of LiDestri Foods (www.lidestrifoodanddrink.com). “We have always been about innovation, and our track record of delivering for customers, including leading national brands, will help support the precision fermentation industry, which needs to execute at scale to produce cost competitive animal free proteins as well as non-fossil fuel based consumer products. The resulting products and foods have a much smaller carbon footprint, which will help slow climate change.I innovation is in LiDestri’s DNA, and their unsurpassed resources, ability to execute, as well as national reach, packaging, distribution and import/export abilities will provide the precision fermentation industry the ability to get out of the lab, and compete in the marketplace at scale.”

More on the story