Formo’s Koji animal-free protein-based cheese is a hit with investors
The first products of the Berlin-based startup use Koji protein. This is a type fungal microorganism used for thousands of year in Asian cuisine, such as miso and soybean sauce. Formo says that while Koji may be an ancient ingredient, it is the first startup to have been able to use this to produce industrial quantities of dairy free cheese. Early versions of dairy-free cheese are poor imitations of the real thing. These products are made from plant proteins, but they’re laced with additives in order to make them taste like cheese. Unfortunately, this often means unhealthy, funky tasting foodstuffs with a gluey mouthfeel.
Better quality vegan cheeses do exist, but these are often made using a nut milk base, which can bump up their retail cost. Formo’s use of Koji proteins is a fresh twist in a challenging category that it hopes will cut through with consumers.
Being a fungus, Koji isn’t a plant; it’s a microorganism. These proteins can also be produced in vats, similar to brewing beer. In that time, we were the only player in the market who was able to launch profitable products at full industry scale with the second largest retailer out there, which drove a lot investor interest. “During that time, we have been the only player in the market that was able — or is able to — now launch profitable products at full industry scale with the second largest retailer out there, which drove a lot of the investor interest that we converted in the Series B.”
Dual strategy
The use of Koji as its starter protein allows Formo to sidestep having to have a novel foodstuff approved by European regulators — a process that can take years — meaning it can put its foods straight to market and start earning revenue.
While Formo calls itself a precision fermentation startup, Plewka emphasizes this “dual strategy” — explaining it started with something called “micro fermentation”, which doesn’t entail altering the genetic structure of the microorganisms involved, so there’s no requirement for regulatory clearance as novel foods.
For its first wave of cheeses, Formo is essentially just fermenting and harvesting Koji proteins. The liquid is used to make the cheese. It’s not necessary to obtain regulatory approval for the Koji-based Koji cheese, as it contains no new ingredients. But, for future products, it does intend to get into gene editing of micro-organisms so it can produce milk proteins without cows and bring a wider range of animal-free cheeses to its portfolio.
The recommended retail price for Formo’s first faux cheeses does set a slight premium compared to dairy equivalents. The company’s first products include a spreadable cream cheese curd named Frishchain (EUR2.89), and a soft brie cheese called Camembritz. But Plewka reckons the startup will be able to achieve price parity — and possibly go even further eventually — as it continues to fine-tune its technologies and scale production.
The startup spent five years of R&D to develop its production platforms so it can produce a range of different types of cheeses (feta-style and blue are the next products in its pipeline). The first two went on sale just last week, available in four SKUs (plain versions; plus herb and tomato variants for the spreadable product) at more than 2,000 REWE, BILLA and METRO stores in Germany and Austria.
While scaling as a way to squeeze costs is part of Formo’s playbook, Plewka argues that the quality of its products justifies a premium with hugely improved sustainability and animal welfare benefits compared to traditionally produced cheese.
Animal husbandry is extremely land and resource intensive, and the dairy industry has been reported to account for around 3.4% of global carbon emissions. The intensive farming practices also lead to poor animal welfare, and can result in hormones and antibiotics making their way into our food. Vegan cheeses avoid all these problems — if only they can scale the big hill of winning over consumers.
Formo says the micro fermentation-based process that’s used to produce Frischhain generates 65% fewer emissions, uses 83% less land, and requires 96% less water than dairy-based cream cheese.
There are no scary additives, either — beyond the limited ingredients list of Koji proteins, plant-based proteins, water and a little salt — so Formo can avoid accusations it’s churning out ultra processed foods (a bucket where some low quality vegan cheese products do clearly sit).
Delicious and joyful cheese?
“We want to bring delicious and joyful products to the market that are free of negative externalities and have no impact on the environment, animals, or society in general,” says Plewka. This is what we are trying to achieve. We knew that plant-based protein was not going to work in the cheese-making process. So we have turned to precision fermentation in order to create functional and bio-identical proteins for the production of real cheese.”
Plewka came to Formo via a background in food investing and a self-professed love of food. The more he studied the food industry, the more he became concerned about inefficiencies and serious problems. These ranged from animal welfare to environmental degradation and supply chain vulnerability. The startup is his bid to fix all this.
Currently, Formo is able to produce 100 tonnes of the non-dairy-based fermented Koji protein and plant protein-based cheese per month. The new funding will enable it to scale production up to 1,000 tonnes a month by early 2025, per Plewka.
The non-dairy milk base it produces can be handed over to traditional cheesemakers to turn into finished product — something Formo says it’s doing — leveraging age-old processing know-how to yield a more sustainable type of artisanal but vegan foodstuff.
With the Series B funds, Formo says it plans to expand to other European markets and beyond.
With the global cheese market valued at over $240 billion even if it can carve itself a small slice of that hefty wheel, it could make for a very tasty business so it’s easy (cheesy) to see why investors’ mouths are watering.
With the long, initial years of R&D behind it, Formo is sounding bullish over where its journey will go from here on in, suggesting it will reach net profitability sooner rather than later, despite only launching its first products a week ago. Plewka says that the early reception of Formo’s products has been “phenomenal”. There is a growing interest to commercialize this approach in order to transform the dairy sector. As novel foods, such products need regulatory approval. Regional launches will likely be years away. Solar Foods, a Finnish company, launched its novel micro-organism protein in ice creams from Asia. Plewka said that Formo wanted to use casein protein that was not derived from animals to create meltable hard cheeses for its range. (He says it would be hard to achieve meltability in a Koji based hard cheese). But, by starting with the fungus-based fermented product, it’s able to get to market, generate revenue and start building a consumer-facing brand in the meanwhile.
“The big differentiator of casein
, really, is that it delivers stretchability,” he notes. As you heat the mozzarella, it melts and creates the gooeyness that is so familiar. So this is where our products are limited in their functionality today.”
Formo’s B round is a combo of existing investors, including Elevat3 Capital, EQT Ventures, Foodlabs, Grazia Capital, Happiness Capital, Lowercarbon Capital and M Ventures, plus new investors, such as the retailer REWE Group, which is Europe’s second largest retailer (and already stocking its first products), along with Indiposa Investments, Sazaby League, Seven Ventures, The Nature Conservancy and Woodline Partners.
