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Led by sales of cheddar and mozzarella, the U.S. cheese market alone was valued at $34.3 billion in 2019, and is projected to reach $45.5 billion by 2027, growing at a compound annual growth rate of 5.25%, according to Allied Market Research.
By comparison, the vegan cheese industry is tiny, measuring around $1.2 billion in size in 2019 and projected to reach $4.4 billion by 2027, per Allied's findings.
That massive gap hasn't stopped a syndicate of investors from plowing $25 million in Series A funding into New Culture, a company that sells "cow cheese, without the cow." On the contrary, its investors think the three-year-old, Bay Area-based startup can grow the market meaningfully through an animal-free mozzarella that, according to investor Steve Jurvetson, tastes, smells and stretches like milk cheese, unlike most vegan cheese, which he describes as "quite disgusting to date."
The missing ingredient, says Jurvetson, has been the casein protein of milk, which, until now, could only be had from milk. Meanwhile, New Culture says through a precision fermentation process, it is producing large amounts of casein protein. As an earlier report in VegNews better describes it, New Culture, using giant fermentation tanks, is inserting DNA sequences into microbes that effectively instruct them to express the target proteins (alpha caseins, kappa caseins and beta caseins) after feeding on a sugar solution.
The company then collects the casein -- which it blends with water, plant-based fats, vitamins and minerals -- to make mozzarella.
The end product is healthier, says Jurvetson, noting that it's both cholesterol and lactose-free. It's also far better for the environment. Indeed, it requires an estimated 56 gallons of water to produce just one ounce of dairy-based cheese. (New Culture will also require far less land use, obviously.)
Note that you won't find New Culture's mozzarella in your neighborhood grocery store -- not yet anyway. The plan is to first distribute its cheese through pizzerias around the country beginning next year.
Eventually, says New Cultures co-founder and CEO, Matt Gibson -- a New Zealander who studied genetics and microbiology and who previously founded and sold an education review site -- the company could well make yogurts, ice cream and even milk, though he stressed that, for the foreseeable future, the focus is very much on mozzarella.
New Culture's round was led by Ahren Innovation Capital and CPT Capital. Other new investors include ADM Ventures, Be8 Ventures, S2G Ventures, Marinya Capital and Future Ventures, run by Jurvetson and partner Maryanna Saenko.
Earlier backers also participated in the financing, including SOSV's IndieBio program, Bee Partners, Mayfield, Bluestein Ventures and Evolv Ventures, which is the corporate venture arm of Kraft Heinz.