Caitong: Accelerating the Industrialization of Microbial Protein, "Big Food" Concept Promotes Industry Development

Caitong released a research report stating that the industrialized production of microbial protein is accelerating, and commercial applications are expected to land faster. With high protein content, a variety of amino acids, and dietary fiber, it caters to the growing consumer demand for health. In terms of applications, it is accelerating in the areas of food additives, food seasonings, etc., to increase the diversity of food supply. Currently, commercialization is still in its early stages, with consumer-driven applications driving the adoption of different scenarios to create "explosive" products; while companies leveraging large-scale cooperation on the B end have advantages. Key points of Caitong are as follows: Microbial protein: Industrialization is accelerating with broad prospects According to Boston Consulting, the production volume of alternative protein is expected to reach 97 million tons (approximately $290 billion) by 2035, accounting for 11% of the total protein. Among them, microbial protein (protein produced through microbial fermentation processes) has reached price parity with traditional proteins. According to GFI, the median cost of mycoprotein is $4.3/kg, making it competitive compared to beef and pork ($6-15/kg). With scale effects, improvements in fermentation processes, optimization of strain development, utilization of agricultural waste or by-products, there is still room for cost reduction. The industrialized production of businesses is accelerating, and commercial applications are expected to land faster. According to Boston Consulting, global microbial protein production is expected to reach 22 million tons by 2035 (CAGR of 111% from 2025 to 2030), accounting for 23% of the total alternative protein market. Catalyst for development: Efficient, clean, safe, healthy, and diverse food On the supply side, microbial proteins are effective substitutes for soybean meal, fish meal, whey, and other protein sources, enhancing China's protein self-sufficiency. Production efficiency is significantly higher than that of animal and plant proteins. The production process has lower dependence on land and water resources, with much lower carbon emissions compared to traditional livestock farming. For example, each kilogram of Quorn mycoprotein emits 98.4% less CO2 per kilogram of minced beef, occupies 97.6% less land, and uses 97% less water resources. On the demand side, with high protein content, a variety of amino acids, and dietary fiber, it meets the growing health demands of consumers. Regarding applications, it is accelerating in landing in various food sectors such as feed proteins, meat substitutes, dairy products, healthy snacks, baked goods, beverages, functional foods, food additives, food seasonings, etc., to enhance the diversity of food supply. Policies: "Great Food" concept driving industry development In 2022, General Secretary Xi proposed the concept of "Great Food," emphasizing obtaining calories and proteins from microbes. By 2025, the "14th Five-Year Plan" recommendations for the first time identified biomanufacturing as a "new economic growth point," with multiple policies supporting the application of microbial proteins in animal feed and food consumption, which is expected to drive industry development. Since 2023, the overall approval process for microbial proteins has accelerated, with yeast protein approved in November 2023, and Venetian sickle cell protein as a new food ingredient approved in November 2025. Industrial development stage: Accelerating industrial production and commercial applications Industrial production: Built on technological barriers. Companies with patented reserves in strain development technology, industrial fermentation experience and technology accumulation, and continuous improvement in process optimization have advantages. Commercial applications: Improving consumer awareness through product, marketing, and channel dimensions. Currently, commercialization is in its early stages, continuously optimizing product designs, enhancing and improving taste, flavor, and texture; marketing products effectively; consumer-driven applications driving the adoption of different scenarios to create "explosive" products; companies leveraging large-scale cooperation on the B end have advantages in rapid scaling. Investment Recommendation Recommend focusing on: 1) Angel Yeast Co., Ltd., a fermentation leader with first-mover advantages in production capacity, channels, and products in the yeast protein business, with a current capacity of 11,000 tons and 32,000 tons under construction. 2) Jiangxi Fushine Pharmaceutical, with reserves in strain and fermentation capacity, accelerating product development and channel expansion, with 1,200 tons of mycoprotein capacity and 20,000 tons under construction. 3) Tianjin Ringpu Bio-Technology, gradually developing the B-end channels in the mycoprotein industry, with 60,000 tons of capacity under construction. Risk Warning: Technological developments below expectations, lower-than-expected penetration of alternative proteins, food safety risks.