Dive Brief:
- Precision fermentation ingredient maker Perfect Day completed the acquisition of India’s Sterling Biotech Limited, the sixth-largest manufacturer of gelatin in the world. Perfect Day was the winning bidder for the company, which was sold at a bankruptcy auction for 638 crore rupees ($78.1 million), according to The Economic Times.
- Perfect Day’s animal-free whey proteins also received approval from India’s Food Safety and Standards Authority, opening the door to an additional market for its ingredients.
- Perfect Day, which has sold animal-free dairy protein ingredients through precision fermentation in the U.S. since 2019, recently has been branching out into other areas of the food biotech realm. In September, the company launched nth Bio, its enterprise biology arm that helps startups get established with tech and scale up.
Dive Insight:
While Perfect Day has had a banner year with big new products and initiatives, this acquisition represents the company’s biggest leap forward yet. Sterling Biotech doubles the company’s production capacity, with four state-of-the-art manufacturing assets featuring robust fermentation capabilities.
With its new assets in India, Perfect Day will not only expand its footprint but also the products in its portfolio. Sterling Biotech made pharmaceutical-grade gelatin — used to make capsules — and dicalcium phosphate — a calcium supplement also used in time-release pills and as an anti-caking agent in food. Perfect Day plans to continue serving existing Sterling Biotech customers and will keep all of the employees of the former company.
“This strategic acquisition stands to vastly expand our ability to make and sell protein while leveraging our robust technology platform across new ingredient opportunities,” Ryan Pandya, CEO and co-founder of Perfect Day, said in a written statement.
The Sterling Biotech acquisition gives Perfect Day an opportunity to make and sell more animal-free dairy protein and also to slide into other ingredients made through precision fermentation. After all, precision fermentation — a process in which common microbes, such as yeasts, are modified to produce substances identical to those made by other animals and plants when fermented — can be used for a variety of ingredients. Other companies use the method to make egg proteins, fats and rare sweeteners.
Since gelatin is made from collagen proteins derived from animals, the acquisition gives Perfect Day a key opportunity to get into the animal-free gelatin market. Not only does Perfect Day have the precision fermentation expertise and the equipment, but it now also owns a large piece of the global gelatin market. If the company decides to pursue the ingredient, it has interested clients who can help with pilot tests and also build larger demand.
Broadening animal-free dairy products to a new market is also a huge deal. India is the world’s largest milk producer, responsible for 22% of global production, according to the Food and Agricultural Organization of the United Nations. The South Asian nation is also the world’s largest consumer of milk, so the market is ripe for products made in a new way.
Despite the approval, it will take time for Perfect Day’s dairy proteins to get into CPG products in India. It can take food companies a year or more to develop and manufacture new items. However, Perfect Day said, in the interim the company plans to export the animal-free protein made in India to other markets.
