Is lab-created milk is a threat to dairy farmers

The dairy industry, already dealing with a milk oversupply, falling prices and competition from plant-based beverages, is facing yet another challenge in the form of synthetic milk alternatives

Perfect Day Foods has developed an animal-free milk alternative, which is made in a lab from genetically modified yeast. Using biotechnology, the California-based company uses microflora to ferment sugar and create dairy protein, which it described as lactose-free, cholesterol-free and vegan — and also tasting more like dairy milk than plant-based beverages. According to Perfect Day, its production process is cleaner and saves resources compared to traditional animal-based agriculture.

 CEO Ryan Pandya wrote in a LinkedIn post his company plans to sell its lab-created dairy protein to other companies to make foods and beverages rather than manufacturing its own products.

Alternatives to dairy-based milk are popping up everywhere these days, which is clearly not good news for dairy farmers. They’ve been suffering from declining sales since 2014, plus an oversupply of milk continues to drive down prices.

The popularity of plant-based alternatives is also causing trouble for the dairy industry, as beverages made from soy, rice, almonds, oats and nuts appeal to consumers wanting more flavour and less cholesterol and fat in their diets. According to Mintel, U.S. non-dairy milk sales jumped 61% during the past five years, while dairy milk sales fell 15% from 2012 to 2017.

The situation would be grim without the debut of synthetic milk alternatives, so once Perfect Day’s ingredients and others start showing up in the marketplace, it could mean an even more serious and lasting blow to dairy milk sales.

Still, traditional dairy isn’t giving up without a fight. The industry has been waging battle on numerous fronts. It’s legally challenging the term “milk” when used by plant-based beverages and claiming that almond milk is nothing but “nut water” since there’s no cow involved. Whether it wins that argument will depend on whether the Food and Drug Administration decides to restrict use of the term “milk” on product labeling to animal-based products only.

Labelling changes might not make any difference to consumers at the retail end, plus it’s difficult to imagine products made with lab-made dairy proteins from Perfect Day or another company being called anything other than “milk.” However, this seems to be a new world where previous practices may no longer apply — particularly when new products never previously developed or imagined are hitting store shelves and dairy cases.

In some ways, the milk situation reflects the debate going on between the cattle industry and biotechnology firms regarding lab-grown meat. The respective arguments aren’t really parallel, however, since synthetic milk alternatives don’t contain ingredients sourced from animals. Lab-grown meat production requires cells taken from live animals.

Millions in investment — and potential sales — are riding on how these policy debates play out. Perfect Day recently announced it received $34.75 million in new funding, making a total of $74.7 million to date. Lab-grown meat firms have also been drawing significant funds from major investors and big food companies.

One other aspect could prove particularly influential with consumers. High-tech protein start-ups have some significant sustainability factors on their side. They use less water and land, have fewer or no animal welfare concerns and can exercise more control over production and food safety issues. The dairy and cattle industries might find this difficult to counter.

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