Recently, the Good Food Institute dubbed fermentation as the third pillar of the alternative protein industry, alongside plant-based and culture-based alternatives, and its prediction has proved prophetic. As the plant-based space continues to burgeon worldwide, companies are releasing fermented cultures at a rapid clip in order to create new products with improved taste and texture profiles.

Recently, Chr. Hansen revamped its FreshQ range to improve the shelf life and reduce the waste associated with the production of its fermented dairy enzymes. As part of the overhaul, the company introduced a new line for plant-based yogurt, or vegurt. But the Danish ingredients producer is not alone in this space. New Culture Foods is employing fermentation to develop dairy proteins for use in cheese making. Perfect Day, which is considering an IPO, focuses on fermented dairy proteins and has partnered with Archer Daniels Midland Co (ADM) as it works to commercialize its vegan proteins at scale.

With so many companies focused on developing fermented protein alternatives for use in dairy, it’s no surprise, that many experts consider this sub-category within plant-based alternatives to be poised for the next boom. In 2020, sales of plant-based items grew 27% to total $7 billion, according to data from SPINS, the Good Food Institute and the Plant based Foods Association. Within this explosive growth, plant-based dairy specifically saw enormous increases.

Plant-based egg products saw the largest sales increases, jumping 168%, which is nearly 10 times the growth rate of conventional eggs during the same time period. Plant-based yogurt sales soared 20%, topping the growth rate of traditional yogurt by sevenfold. Plant-based cheese grew at twice the rate of conventional dairy, registering 42% in sales increases over the year.

While not all of these gains were due to products using fermentation in the development of their proteins, this technique is one that is increasing in popularity. During the first nine months of 2020, a report from the Good Food Institute revealed that of the $1.5 billion invested in alternative proteins, $435 million of that was sent directly to companies focused on fermentation. Of the 44 companies that are pursuing fermentation ingredients for plant-based product development, 21 of them appeared between 2019 and 2021.

For all the novelty surrounding the entrance of fermentation into the plant-based space, it is not a new technique. For centuries, fermentation has allowed for the development and preservation of food, but its appearance as a foundation for modern ingredient development has expanded the opportunity for potential applications for fermentation. Dairy, is only one area in which this technique is applicable. However, it is one that is growing in popularity and has attracted the attention of both shoppers and CPG titans, prompting manufactures to look closely at this space and consider fermentation as an option to offer consumers a tasty alternative to animal-derived products.