Biotechnology-Based Ingredients: The Future of Food Innovation

According to a McKinsey survey, biotechnology-derived ingredients could play a crucial role in the future of food and are beginning to enter the market. Over the past five years, $4 billion has been invested in developing new ingredients, ranging from mycelium-based proteins to animal-free eggs.

Non-Animal Proteins: A Sustainable Alternative

These ingredients are produced through fermentation, creating proteins and fats that function like conventional animal-based proteins but are animal-free and potentially more sustainable.

New ingredients hold the potential to decarbonize the food system, enhance regional and global food security, and meet growing consumer demand from flexitarians. However, since these products are relatively new, there is limited insight into how consumers perceive them.

To better understand the market potential for these ingredients, we conducted a survey of over 1,500 consumers. The results indicate that most consumers are open to trying the tested ingredients, with more than half willing to pay a premium for them.

Findings suggest that, to further drive consumer adoption, brands, retailers, startups, and investors should focus on category development and highlight specific product attributes on packaging labels.

A Brief Overview of New Ingredients

New ingredients such as animal-free dairy, cultured proteins, and mycelium-based proteins could play a significant role in the future of food, thanks to their potential to secure and decarbonize food systems.

Over the past five years, there has been an increase in investment capital and regulatory approvals. While commercial products remain limited, several consumer packaged goods (CPG) companies and startups have already launched their first products containing new ingredients in the United States.

These ingredients are fermented—either through precision fermentation, where microorganisms are genetically programmed to produce specific compounds, or through biomass fermentation, where microorganisms are cultivated and harvested whole.

Since they are grown in bioreactors, fermented ingredients could have lower emissions than traditional animal-based proteins and could be produced even in regions that are not traditionally agriculturally productive.

Despite their potential impact, industry leaders have limited insight into consumer appetite for these ingredients.

Consumer Perception of New Proteins

For our consumer research, we identified and tested 12 different ingredients, grouping them into three key categories:

1. Animal-Free Bioidentical Products
2. Includes dairy proteins, collagen, and eggs
3. Biologically identical to animal proteins, produced via precision fermentation
4. Biomass Proteins
5. Includes prebiotics, postbiotics, microbial, fermented, and gas-fed proteins
6. Derived from microorganisms, often new to human consumption
7. Fungal Proteins
8. Includes nutritional fungal proteins, mycelium protein, and mycoproteins
9. Derived from fungi, often in the form of edible single-cell organisms

We also benchmarked plant-based proteins (such as almond, oat, chickpea, soy, pea, and barley) but did not focus on them in this study, as they are already established in the market.

Consumers Are Open to Trying New Ingredients

A majority of consumers (49% to 67%) expressed openness to trying foods or beverages containing new ingredients, driven by the perception that these ingredients could:

• Improve traditional foods
• Be healthier
• Have equal or better taste
• Be sustainable

On average, 28% of respondents were more likely to try a new ingredient if it made a product healthier. Gen Z (18+) ranked health benefits as the most important factor, while older generations prioritized taste.

We also tested ingredient descriptions that could be used on product labels to see which ones attracted consumers the most. We found that:

• Familiar terminology and well-understood nutritional claims (e.g., “a good or complete source of protein”) were the most persuasive.
• Sustainability messaging (e.g., “sustainably produced”) was also highly compelling.
• Vegetarian and vegan labeling was well understood but did not significantly drive product trials.
• Technical language about production methods (e.g., “bioengineered” or “biotechnology-based”) was less understood and did not encourage trials.

Interestingly, 44% of respondents were not interested in trying any of the new ingredients explored in this survey. The biggest barriers included:

• Lack of awareness
• Uncertainty about production methods (“How is it made?”)
• Concerns about taste, naturalness, and price

Higher-income consumers (earning over $100,000 per year) were more skeptical about potential long-term health effects (33%).

Meal Occasions Drive Consumer Willingness to Try New Foods

Consumers are more willing to try new foods at certain meal times, with greater openness during lunch and on-the-go snacking.

They are less likely to try new ingredients at dinner, a trend observed in recent years as meat analogs have struggled to meet consumer expectations.

As food innovators develop new products, brands may want to focus on:

• Snacks, lunch, and breakfast items
• Avoiding proteins designed as dinner “centerpieces”

Willingness to Pay More for New Ingredients

Approximately 50% of consumers indicated they were willing to pay a premium for foods with new ingredients.

Notably, over 20% of respondents said they would pay up to four times more for products featuring a new ingredient.

Consumer willingness to pay varied more by product type and retail channel than by ingredient type. Beverages, snacks, and burgers had the highest willingness to pay, compared to ice cream, egg sandwiches, and cookies.

Is "Sustainably Made" the New "Plant-Based"?

As plant-based sales have declined over the past two years, some retailers have sought new innovations to attract consumers.

We tested various category names that could be used on store shelves. The most appealing terms were:

1. “Sustainably Made”
2. “Consciously Made”

By contrast, terms like "fermented" and "mushroom-based" were less likely to drive consumer adoption, suggesting that further education may be needed for these categories.

Key Takeaways for the Food Industry

Many of the new ingredients explored in this study have not yet reached mass commercialization. As the industry matures, brands, retailers, startups, and investors have the opportunity to shape this emerging category by focusing on:

1. Consumer Education

• Less than half of consumers are aware of new ingredients.
• The biggest barrier to adoption is uncertainty about production methods.
• Industry leaders should invest in consumer education as these ingredients enter the market.
• Trusted recommendations from doctors, nutritionists, or friends/family significantly increase trial rates.

2. Health, Taste, and Sustainability

• Consumers expect new proteins to be healthier than conventional animal-based options.
• Some new ingredients closely mimic the taste of traditional foods, which could help drive adoption.

3. Innovation and Product Positioning

• Focusing on breakfast, lunch, and snack applications may increase adoption.
• Pairing familiar terms (e.g., “a good source of protein”) with emerging sustainability messaging (e.g., “sustainably made”) may drive more consumer interest.

4. Willingness to Pay

• Consumers are willing to pay more, but product category matters more than ingredient type.
• Startups and CPG brands can leverage insights from consumer perception to drive sustainable food innovation.

By understanding consumer attitudes, biotech startups, brands, and CPG companies can shape this emerging market and contribute to a more sustainable and resilient food system.