New Zealand has many elements needed to play a serious role in global fermentation markets with Hawke’s Bay positioned to be part of this. Now the region, with partners from across New Zealand, is investigating what more is required to achieve a national approach and strategy.
It has the potential to be a gamechanger for Hawke’s Bay, and exactly aligns with the vision that drove the development of Foodeast Haumako – to be a leading catalyser of commercially successful food innovation.
In Hastings on Thursday [September 11], the first Foodeast Haumako Fermentation for Future Food Summit brought together panellists and an audience from science, industry, investment and government, to examine how to catch up with – and surpass – the rest of the world in this fast-moving field. The event complemented a study commissioned by Hawke’s Bay REDA (Regional Economic Development Agency) into the national ecosystem and the case for a national strategy, and Hawke’s Bay’s potential to contribute to this space, with findings due shortly.
The global food challenge
Novel fermentation is one of the keys in the quest to solve the global food challenge: that by 2050 up to 70 per cent more food than today will be required, and traditional agriculture alone cannot provide that. By producing proteins, fats, enzymes and bioactives through microbial processes, fermentation offers a way to reduce sole reliance on traditional farm systems, add new functionality, and lessen pressure on land, water and climate.
Fermentation is as old as bread and beer, but its modern application is far broader. Novel fermentation uses microbes (yeasts, fungi, bacteria) to create proteins, fats, and other valuable compounds. Precision fermentation takes this further by programming microbes to produce specific, well-characterised ingredients. These can replicate known properties – for example, egg proteins that whip, foam and bind – or enable entirely new ones.
Global examples illustrate the shift from concept to commercial reality. A US company has developed animal-free egg proteins via precision fermentation, some already recognised as safe by the US Food and Drug Administration and used in commercial foods. An Australian start-up has demonstrated how tiny inclusions of precision-fermented fats (under one per cent) can transform the taste and aroma of plant-based foods.
Summit panellists were clear that novel fermentation is not about replacing New Zealand’s primary industries. Instead, they are about complementing them – adding new value streams, improving resilience, and creating hybrid products that combine traditional strengths with new functionality.
Fermentation-derived ingredients can enhance the taste, texture or nutrition of existing foods, and reduce waste by valorising side-streams (eg food waste). There is also strong interest in the potential in new categories, such as health and personal care.
Advantages and gaps to address
Hawke’s Bay already brings several natural and structural advantages:
- Feedstocks: abundant horticultural, forestry and food and beverage manufacturing side-streams that could be used as fermentation media, provided processes are designed for year-round utilisation (rather than being tied to seasonal produce).
- Food reputation: international recognition through its already successful horticulture and food manufacturing businesses for quality and safety that carries weight with both investors and end-markets.
- Innovation ecosystem: a growing cluster of agritech and food start-ups (including in the fermentation space), supported by Foodeast Haumako.
- Microbial diversity: like the rest of New Zealand, the potential to access unique fungi and microbes.
These strengths give the region a base from which to support national efforts, but there are challenges. Across the summit sessions, five requirements consistently surfaced:
- Regulatory clarity and speed. Approval of new ingredients under Food Standards Australia New Zealand (FSANZ) is slow and costly, typically taking 12 to 15 months once an application is accepted and requiring substantial resources. Participants noted that this is a major barrier compared with Singapore or the US.
- Access to scale. New Zealand has predominately laboratory with some pilot capacity of up to 1000L at Callaghan Innovation and others. Internationally competitive development requires start-up accessible 500 to 10,000L fermenters. Without this, start-ups must go offshore for trials and scale-up.
- Capital. Early-stage funds (up to $2m) can often be raised locally, but the $2m to $5m investment stage is a gap where many ventures stall. International funding above that mid-stage is available, subject to proof of scale, clear IP, and evidence of buyer demand.
- Specialist skills. Beyond scientists, the industry needs trained operators, process engineers, regulatory specialists and commercial managers. Without them, scaling technologies beyond the lab is slow and costly.
- Business-to-business collaboration. Ingredient innovators are not food manufacturers, and most food manufacturers are not ingredient developers. Without closer coordination, there is a risk of developing ‘ingredients in search of a use’, while manufacturers are left looking for an ingredient or an answer to a problem that is not available.
Collaboration between innovators and manufacturers was described as the ‘hinge’ on which success will turn. Fermentation can produce a vast range of ingredients, but the critical factor is matching them to specific problems. A manufacturer might need an emulsifier that performs under acidic conditions, fats that carry aroma at trace inclusion, proteins that address health and nutrition needs, or bioactives with proven effects in personal care.
What if we don’t?
The risks of inaction by New Zealand were equally clear. Regulatory inertia and high costs may push companies currently in the start-up phase offshore. Lack of pilot commercialisation-scale facilities means innovators must travel or relocate to conduct trials. Without more capital depth, start-ups will continue to sell IP early or move overseas to access funds. Skills will also drain abroad if opportunities are not created locally.
International examples provide helpful lessons on how (and how not) to proceed. Singapore has a national strategy, fast regulatory pathways and a clear commitment to food innovation but hadn’t been perfect, while Nova Scotia has pivoted from a collapsed forestry industry to more than 40 fermentation companies. Australia had learned hard lessons about mismatched infrastructure and location. The lesson for New Zealand: learn quickly, take on the lessons from the successes and failures of other countries, act decisively, and play to our strengths.
Foodeast Haumako chief executive Michael Bassett-Foss says the next steps include reviewing the coming REDA report, and engaging with leaders across the sector to strengthen alignment and explore opportunities for a national strategy.
Thank you Nexia New Zealand
The summit was part-sponsored by Nexia New Zealand, a long-standing advisory and accounting services business. Their involvement demonstrates that credibility and momentum in new industries depend on broad partnerships spanning research, business, finance and government.