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    RESEARCH | 3 POINT PERSPECTIVE | INNOVATION EDGE

    Synthetic biology in consumer goods: The next big frontier

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    Contributor: Galya Laskar

    10 Feb 2022

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    Synthetic biology ("synbio") uses genetic engineering to alter a cell’s DNA to make target molecules for manufacturing use across industries. It already plays a role in healthcare, has shown promise in energy and our Research team believes that consumer goods are the next big frontier. Our team estimates a $50-125bn market opportunity today, yet synbio’s full potential isn’t on investors’ radar.

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    Contributor: Galya Laskar

    10 Feb 2022

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    1. Synbio is more sustainable than traditional manufacturing methods

    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.

     

    Figure 1: Synthetic biology is often described as being just like the beer-making process, with the yeast cells programmed to make something else instead of beer

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    Synthetic biology process illustration

    Source: Barclays Research, Amyris, Bioethics Archive

    2. The possibilities – from a scientific perspective – are limitless

    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.

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    Figure 2: Synthetic biology can play a wide range of roles within consumer goods supply chains

    Graphic depicting six roles synthetic biology can play in consumer goods production

    Source: Barclays Research

    3. A key hurdle is capacity

    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.

    Figure 3: Total funding behind synthetic biology ventures has rapidly accelerated in recent years, from roughly $1bn in 2016 to nearly $8bn in 2020

    Bar chart showing annual funding in USD for synthetic biology ventures from 2009-2020

    Source: SynBioBeta

     

    1. McKinsey, Cultivated meat: Out of the lab, into the frying pan, 2021

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    About the expert

    Galya Laskar

    Sustainable and Thematic Research

    Galya Laskar is a Senior Analyst within Sustainable & Thematic Investing. She joined Barclays' Equity Research department in 2014, supporting coverage of the Packaged Food sector until late 2019. Since early 2020, she has published thematic reports focusing on the Consumer and Healthcare sectors. Prior to joining Barclays, Galya was a Senior Associate at a boutique TMT investment banking firm. Galya started her finance career in 2011 at Nomura where she worked in investment banking. Galya received her B.A. from the University of California, San Diego, where she majored in Urban Studies & Planning and Political Science. She received her M.B.A. from Columbia Business School.

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