A Cell Based Tech Breakdown of Archer Daniels Midland ($ADM)
- ADM is one of the world’s largest suppliers of plant based protein ingredients.
- ADM is adding to their plant based protein portfolio with investments in cell based companies totaling an estimated $30-50 million.
- The company is also innovating their internal product line to meet the growing demand of plant based proteins that more closely resemble meat.
- ADM plans to continue investing in and co-develop proteins synthesized through cellular fermentation.
- Our Prediction: Since ADM already has the infrastructure and agility to incorporate cellular fermentation, it makes sense for them to continue investing in emerging cell based tech. This may allow them to assess where the market is, learn about new technology, and later incorporate it internally. We don’t see their own use cases coming to market within the next year.
ADM Snapshot: Archer Daniels Midland, headquartered in Chicago, Illinois, is a global agricultural processor and food ingredient provider + distributor. ADM participates in two critical components of the agricultural lifecycle including producing and selling products that farmers use (e.g. animal nutrition) and processing and selling ingredients that food processors use (e.g. oilseed and milled wheat).
ADM already has a deep understanding of cellular fermentation and scalability. This is arguably their ticket into cell based technology and is the basis of their investment in Perfect Day. ADM has a dedicated venture capital fund, which has participated in four investments in the cell based tech space that are publicly available:
- Geltor: ADM investment undisclosed. The total amount raised was $18.2 million (Series A). The investment round was led by private venture capital firm, Cultivian Sandbox Ventures and additional investors included Gelita, Cavallo Ventures and Box Group.
- Perfect Day: ADM investment undisclosed. The total amount raised was $34.8 million (Series B). Temasek and Horizon Ventures were the other investors. This investment also included a joint development agreement between ADM and Perfect Day to work together to optimize and scale up the production of the animal-free dairy proteins using fermentation in microflora.
- Sustainable Bioproducts: ADM investment undisclosed. The total amount raised was $33 million (Series A). Additional investors included 1955 Capital, Breakthrough Energy Ventures, Danone Manifesto Ventures (the venture investing arm of Danone), Lauder Partners, and the Liebelson family office.
- Cultivian Sandbox Ventures Fund III: ADM Investment undisclosed. The total amount raised was $135 million. The $135 million fund invests in food and agriculture technology companies such as those addressing the increasing demand for protein. Additional investors include Corteva Agriscience, Ecolab, Elanco, Griffith Foods, GROWMARK, Koch Ag Energy Solutions, R.D. Offutt Company, Smithfield Foods, and Sumitomo Chemical America.
ADM rough estimated total investments are between $30-50 million. This represents 0.13-0.21% of their total market cap of $23.84 billion.
Based on Investments to Date: ADM is certainly focused on adding companies synthesizing cell derived proteins through fermentation to their portfolio. According to a 2018 article with Fortune, Victoria de la Huerga (Vice President of ADM Ventures), ADM already has the fermentation infrastructure in place and are producing a number of ingredients like amino acids. ADM currently has no investment in cell based (lab grown) meats.
Our prediction is that ADM will continue to invest in and co-develop proteins synthesized through cellular fermentation. These proteins can be integrated into their current manufacturing and distribution pipelines to be sold to food processors or direct to consumer. As a leader in plant based protein (particularly soy) since 1902 ADM seems to be adapting to establish market territory for plant based proteins that resemble meat. At the international trade fair for the meat industry (IFFA), ADM showcased a variety of soy protein products meant to replicate popular meat dishes such as chicken nuggets and pulled pork (no cellular fermentation).
Since direct-to-consumer is not in ADM’s current business model purview, it’s uncertain what they plan to do with these developments. Similar to other developments in the WILD Flavors and Specialty Ingredients family at ADM, [at this point] we must assume they will seek food service partners who will sell to consumers.
10K: ArcherDanielsMidlandCompany_10K_20190219
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Disclosures:
- Cell Based Tech has no business relationship with any company mentioned in this article.
- Cell Based Tech is not a registered financial adviser, and this is not financial advice. Please conduct your own due diligence and consult a financial adviser before making investment decisions.
