🌿 Friday's Climate Infra Brief: WeWork for Biomanufacturing

Can we productize food production? Can we build WeWork but for biomanufacturing?

Food is costing more, and investing in climate-friendly food systems has cost probably even more, because the unit economics don’t compete. Beyond Meat couldn’t make a burger cheaper than Tyson. Bowery couldn’t grow lettuce cheaper than California. AppHarvest burned $792 million and still couldn’t hit commodity pricing on tomatoes. These companies needed consumers to pay a green premium, and consumers wouldn’t.

But the structural forces driving food prices up have gotten worse. Fertilizer is up 15–43% yoy. 61% of the US is in some kind of drought. The Iran conflict is keeping fuel costs high. Extreme weather events, energy costs, and geopolitical fragmentation are saying cheap food aren’t coming back. The demand for sustainable food production should be real and growing. Maybe the question is how to “productize” it, turn new food production into something financeable.

Start with the 3 questions project finance always asks: Is the unit repeatable? Is the revenue contractable? Is the capex predictable per unit of output? Companies say yes to all three look less like expensive alternatives to commodity ag and more like manufacturing platforms with contracted revenue.

That points us toward biomanufacturing. Precision fermentation and engineered biology have been around for years. The good news is ML is compressing the R&D cycle, strain selection and bioreactor optimization that used to take months now takes weeks. The bad news is the same old, scaling production from 10 liters to 10,000 liters is super high risk, and raising capital to attempt it is even harder. But without scale, you can’t hit your cost curve. Every new biomanufacturing company faces the same brutal question: how do you bridge from pilot to commercial ($100M) at the lowest cost of capital?

So why not build shared biomanufacturing infrastructure? The iFAB consortium in Illinois is an interesting experiment. It is an $81 million effort backed by the Department of Commerce and the state of Illinois, brokering access to ADM and Primient’s existing large scale fermentation capacity for food-grade startups. Their thesis is straightforward: expecting every startup to build its own fermentation plant is untenable. BioMADE, a DoD-backed consortium, is building pilot-scale facilities in California and Iowa with the same logic.

Pharma is the obvious precedent. CDMOs, contract development and manufacturing organizations, are a $25 billion-plus industry. Lonza, Samsung Biologics, Fujifilm Diosynth: these are shared biomanufacturing at massive scale. Samsung alone runs 604,000 liters of capacity serving 17 of the top 20 pharma companies. It works because pharma products are high-value enough to support premium tolling fees, and the regulatory framework actually standardizes facility design in ways that help multi-tenancy.

Can the same model work for food ingredients? The data center analogy is tempting, but shared compute works because a byte is a byte. Biology isn’t that clean. Every organism has different fermentation conditions, contamination profiles, downstream processing. Switching tenants means cleaning, reconfiguring, revalidating. That’s real cost and real downtime. But maybe you don’t need full fungibility. You just need enough standardization at the most expensive step. Fermentation vessels are the capex heavy part, and a 10,000L bioreactor doesn’t care whether it’s growing yeast for protein or fungi for collagen. Leave the downstream processing to tenant-specific. From an investor’s perspective, the most compelling thing about shared infrastructure is shared FOAK risk. For a Series A company trying to raise, the easiest way to answer the “can you actually scale 100x?” question is: we rented time at an existing facility, ran full production cycles for 6 months, and we’re ready to build our own. That de-risks the tech by magnitude. You’re not asking an investor to bet on growing an organism at a scale that’s never been tested. One close example is Michroma ferments fungi to produce natural food colorants for food manufacturers, high-value, B2B, stable demand as the FDA phases out synthetic dyes. But building their own fermentation plant costs $200 million. So they partnered with CJ CheilJedang, one of the world’s largest fermentation companies (you know them if you eat kimchi), to produce at commercial scale.

What’s smart about iFAB is also that it isn’t building greenfield, but leveraging existing facilities at companies that have run fermentation for decades. I honestly do not know whether food ingredient margins can support the coordination overhead and whether the startup tenant credits can support financing for such shared facilities yet.

This is all half-baked thinking, a detour from this week’s Fervo massive headline and more data center talks, maybe a few years early for where the biomanufacturing industry actually is. But S2G just closed a fresh billion dollars, and if anyone wants to build shared infrastructure for the next generation of food systems, you know where to find them :)