Calculating the true cost of water for the Consumer Staples sector
Analysis from Barclays Research suggests Consumer Staples companies and investors should focus on the direct and indirect expenses of water-related risks.
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RESEARCH | 3 POINT PERSPECTIVE | INNOVATION EDGE
Synthetic biology in consumer goods: The next big frontier
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Synbio is not new; it’s how insulin and even cheese have been made for decades. But against a backdrop of heightened ESG focus among consumers, corporations and investors, synthetic biology has the potential to be very effective in replacing carbon-heavy manufacturing methods at scale.
Since synthetic biology processes are based on coaxing plant, animal or microbe cells to effectively turn into “cell factories,” (see Figure 1), they do not require the same resources and raw inputs that traditional manufacturing processes may require. As a result, synbio manufacturing likely has dramatically lower greenhouse gas emissions, and uses less land and water. Furthermore, to the extent that synbio manufacturing processes can use renewable energy and renewable inputs (if not waste product), they could well be carbon-neutral or carbon-negative.
Analysis from Barclays Research suggests Consumer Staples companies and investors should focus on the direct and indirect expenses of water-related risks.
Source: Barclays Research, Amyris, Bioethics Archive
The more researchers learn about genomics, the more they can program DNA; much like software engineers can program computers. This translates to a wide range of roles that synthetic biology can play in consumer goods production (see Figure 2).
On one end of the spectrum is the path of least resistance: manufacturing existing ingredients, albeit in a more sustainable way. At the other end of the spectrum, synthetic biology can be used to create entirely new molecules that do not exist in nature.
Source: Barclays Research
Synbio processes often occur in bioreactors and fermenters, for which there is limited capacity across the industry. Consulting firm McKinsey estimates that for the cell-based meat market alone, the industry would need 220-440mm liters of fermentation capacity to reach a $25bn market size by 2030. To put that into perspective, the pharma industry’s current cell-culture capacity is estimated to be between 10-20mm liters.1 Increasing capacity is an expensive endeavor and key questions are 1) who will fund it? and 2) who will build it?
Our Research analysts believe synthetic biology is still in its nascent stages, but its adoption by various industries is poised to accelerate. Total funding behind synthetic biology ventures has rapidly accelerated in recent years, and this momentum, along with consumer demand for more sustainable products, ultimately supports our Research team’s view that synbio is poised to play a bigger role in consumer supply chains over time.
About the expert
Galya Laskar
Sustainable and Thematic Research