General

Introduction

Sun Bear is developing an alternative to palm oil produced through precision fermentation

What’s the big problem they’re tackling?

Palm oil has a unique profile: the higher level of saturated fatty acids offers a high melting point (semi-solid at room temperature) and high smoke point. These features make it ideal for various applications, ranging from food to cosmetics and biofuel.

Despite these unique characteristics, palm oil has drawbacks that are driving several industries to look for alternatives. Since palm oil requires the climate typical of tropical rainforests, plantations are created at the cost of massive deforestation, altering habitats and resulting in vast carbon emissions. Also, its supply chain is complex and often brings about volatile prices.

Not only major food producers have already chosen to adopt alternatives to palm oil, but the sector will get a boost from new regulations, e.g. the recent EU ban on products linked to deforestation.

What’s the actual product and what does the company look like in 5-10 years?

Sun Bear will produce a palm oil equivalent by using precision fermentation. They can change the enzymes to modify the expression of the different chains of triglycerides, thereby obtaining different types of oils.

They can tweak their they oil and sell it to different market participants, or make it exactly the same as palm oil and sell it as a commodity.

To go forward, the first step is to increase the yield. Sun Bear will start changing the oil profile once they can produce the right amount. Once this has been commercially validated through pilot projects and collaborations with larger food manufacturers, Sun Bear will be a leading company in the production of alternative palm oil.

On a longer time frame (>5 years), Sun Bear could use its expertise to produce a range of oleaginous products, expanding their products range beyond palm oil.

Why is their solution such a game changer?

Sun Bear is working to bring the product to price parity with palm oil, and it could even reach a price point 20% belowthe current market price.

As of now, and as in most precision fermentation startups, 80% of the total costs is feedstock. So if they are able to change the feedstock to cheaper sources, it might make massive economic improvements.

Key advantages:

• Secret pathway (confidential).

• Production partnership.

• Potentially differentiated feedstock.

• Potential downstream uses for manufacturing byproducts.

How important is this for the world?

Alternatives to palm oil address two key issues: deforestation and carbon-intensive supply chains. We simply can’t afford the current levels of palm oil production.