Conversation with Jevan Nagarajah of Better Dairy

We’ve all heard about having your cake and eating it too…what if you could savor the joys of dairy without its environmental or ethical downsides? This is what Jevan Nagarajah and his team at Better Dairy are trying to enable: “We want to transcend beyond the limitations of animal milk, and tap into a new era for milk and dairy. It’s a paradigm shift.” And they’re using precision fermentation to achieve this. To learn more, I recently sat down with Jevan.

FTW: “Tell us a bit about your background.”

JN: “I’ve had a winding path. I’m half Sri Lankan, but grew up in the Caribbean. I’ve always loved food, the flavors, the textures, the cultural implications. While I initially went into finance after university, I came to realize my passion was in food. So for the last 10 years I’ve built and scaled companies in the food space. Over the years, I developed a fascination for science alongside food. I heard about precision fermentation, which sounded like magic, and the more I learnt about it, the more mesmerized I became. Moore’s Law also applies to biotech, so I had this moment, where I asked myself: ‘Can you use fermentation to make anything you want at cost-parity?’”

FTW: “And that ‘anything’, for you, turned out to be dairy — why?”

JN: “Well, I absolutely love dairy. When I look back on my life in the Caribbean, dairy was everywhere despite there being very little dairy produced there! Globally, dairy is a $1.5 trillion industry. It’s a fundamental pillar of food.

From a nutritional angle, dairy is high in nutrients, including proteins, vitamins, and minerals. But it’s the production mechanism that creates a lot of challenges, including significant greenhouse gas emissions and other environmental issues. And the dairy industry is in reality fueled by government subsidies.

Before biotech emerged, plant-based alternatives were the only other option for environmentally or ethically-conscious consumers. With biotech you can now have the best of both worlds. Real dairy, without the problematic production mechanism of conventional dairy.”

FTW: “So you founded Better Dairy to produce dairy using precision fermentation?”

JN: “Yes. We believe that the end goal is fully functional casein micelles, which will unlock products that are poorly matched by plant-based substitutes like hard cheeses and greek yogurts. Casein is a tricky protein to fully express in a host microorganism, however we’ve worked on this for a solid five years, and we’ve validated that we can produce all four main proteins of casein (αS1, αS2, β, and κ-casein) and form the micelles.

But what we realized is that although precision fermentation is exciting, you still need to climb down a cost curve. Over time, precision fermentation will have better infrastructure and potentially even a cost advantage, but the industry is likely ~10 years away from mass-market adoption.  This has led us at Better Dairy to initially focus on key functionalities for premium dairy applications, as well as bioactive dairy proteins that can be scaled and taken to market faster, and in a more cost-effective way.”

FTW: “How far have you come, scientifically, in terms of reaching your casein goals?”

JN: “We set ourselves a high bar with our goal to achieve a fully functional casein. The great news is that we have all four caseins, and better still - they are all expressed in a single model organism strain (yeast). There is still a challenge to climb to increase casein production levels, as we knew we would reach a biological limit with yeast, so we migrated from yeast to filamentous fungi as the production host. We’re currently working with this new host to increase the expression of casein, and higher expression translates to a lower price per kilo of this protein.”

FTW: “Do you need to have the same amount of casein in your products, as conventional dairy has?”

JN: “Dairy products are made with milk, and you have a certain mix of protein, fat, and sugar contents in there. We are currently developing a sufficient or optimal ratio of casein to get the desired functionality in the end product. For example in cheese, we're optimising the amount of casein that enables the same melt, stretchiness, mouthfeel, and crumblines we all love about cheese.”

FTW: “Where and how do you see your ingredients being sold in the future?”

JN: “Animal milk is used to fuel lots of things - butter, ice cream, cheese etc, but it is also the base for infant formula, sport nutritional powders and other health products. However, animal milk is not designed for human beings by nature, which means there are certain nutritional gaps, e.g. in the form of bioactive proteins, when compared with human milk. Our precision fermentation platform can solve for such gaps by making these proteins.

What we have found really exciting in the past year is that we have been able to accelerate the development of our bioactive dairy protein portfolio, i.e. beyond caseins, because of the foundational work we did on casein. So we are now working in parallel to scale up and commercialise our bioactive protein offering, starting with a protein called osteopontin.

We see ourselves as a B2B player in the medium-long term and this is our preferential business model. In the short term, we may however develop branded or co-branded products in certain high-value market segments such as aged cheeses with casein, and sports nutrition and healthy aging products with osteopontin, and have found significant partner interest around this. Osteopontin also has immense potential to disrupt the infant formula market and reduce nutritional gaps between breast-fed and formula-fed babies, so it’s also a key application we are targeting.”

FTW: “Perfect Day and other trailblazers in the precision fermentation space emerged about a decade ago. Yet we haven’t really seen these ingredients or products going mainstream yet. Why is that?”

JN: “A lot of smart people joined the FoodTech and the future of food space 5-10 years ago, but perhaps the entire model or approach on how to bring things to market was less mature. I think we can learn a lot from adjacent deep-tech industries like pharma in how they bring new products and technologies to market. They build pipelines. It starts with having a valuable target, understanding if it’s technically feasible, and then running it through different phases, so that they figure things out over time. This pipeline approach feels appropriate in our industry too, where we don’t have a lot of control and are at times at the mercy of science.

There’s one more thing worth mentioning, and I’m not thinking about any industry peer in particular - there’s tension between how you raise investment, and how you build a company. The ‘get to market first’ approach is more for investors, rather than how to build a profitable company long-term.”

FTW: “When will we see Better Dairy’s ingredients on the market?”

JN: “In the next year, we have lots of exciting milestones. We are preparing to generate samples of our osteopontin to engage with more industry players, while also continuing to work on lowering the cost curve and making the necessary regulatory preparations. We aim to launch this bioactive protein in the market by 2026 with casein to follow by 2028. We may bring on additional ingredients into our pipeline in the meanwhile but everything we do is synergistic and catalytic in leading us to the holy grail, which is casein.”

FTW: “How much money have you raised for Better Dairy so far?”

JN: “We’ve raised £18M to date, and our last round (Series A) was £16M in early 2022. Given our progress with casein and osteopontin, we will be kicking off our next round of fundraising activities shortly.”

FTW: “What asks do you have to people reading this article?”

JN: “While we are in constant engagement with investors, there are many new funds we haven’t yet spoken to. We would love for anyone who is captivated by our vision for the future to reach us via LinkedIn or email. We are looking for long term partners for what we think is one of the most exciting opportunities within food”