A biotechnology startup turning sawdust into food just took a massive leap forward. Tallinn-based ÄIO secured a €1.2 million grant to scale its fermentation process, promising a sustainable alternative to palm oil and animal fats using wood by-products. This funding aims to move their unique “red yeast” technology from the laboratory to industrial factories.
Validating the fermentation process
The fresh capital comes from Enterprise Estonia to support a project called FERM-OIL. This initiative has a total budget of €2.3 million. The goal is validation of industrial-scale production.
ÄIO has spent years developing a way to brew lipids like beer. They use a specific “red yeast” microbe. This microbe eats industrial side-streams like sawdust or agricultural waste and converts them into edible fats.
The company needs to prove this works outside the lab. The new grant allows them to run tests on industrial manufacturing lines. This is a crucial step for any food tech company.
Scaling up is often the hardest part of food innovation. Known as the “valley of death” for startups, many fail to translate beaker results to giant steel tanks. FERM-OIL is designed specifically to bridge this gap.
Red yeast fermentation biotechnology laboratory glass container
Closing the alternative fat gap
The plant-based food sector has a major problem. While companies have perfected alternative proteins, they still rely on unsustainable fats. Most use coconut oil, palm oil, or animal fats to get the right taste.
Palm oil drives deforestation in tropical regions. Animal fats have high carbon footprints. ÄIO offers a solution that does not require farmland or animals.
Dr. Mary-Liis Kütt is the Chief Innovation Officer at ÄIO. She notes that their “Flavoured Fat” already performs well in prototypes. It can replace cocoa powder or brown sugar. It also adds a silky texture to soups and sauces.
The industry desperately needs these sustainable lipids. Here is why ÄIO stands out in the market:
- Local Sourcing: They use locally available wood and agricultural waste.
- Supply Chain: Production is not affected by seasons or climate change.
- Health: The fats are rich in antioxidants and healthy fatty acids.
- Taste: The yeast biomass provides a natural umami flavor.
Assessing safety and regulation
The next three years are critical for the Estonian team. They must generate robust safety data for regulators. This is required to sell the product in Europe.
The European Commission requires a “novel food dossier” for new ingredients. This is a thick file of scientific proof showing the food is safe to eat. The grant covers the costs of these expensive safety studies.
ÄIO aims to reach Technology Readiness Level 6 (TRL6). This engineering term means the technology has been demonstrated in a relevant environment. It proves the system is ready for the real world.
The company plans to build a facility capable of producing 4,000 tonnes of fat per year. This commercial plant would serve food manufacturers across the continent.
From sawdust to supermarket
This €1.2 million grant adds to their momentum. ÄIO previously raised €6.8 million in seed funding. They also secured support from the Environmental Investment Centre and EU programs.
Nemailla Bonturi is the co-founder and CEO of ÄIO. She believes fermentation is the key to a stable food system. It allows the creation of nutritious fats without fragile global supply chains.
The project will also test the fats in real food products. The team will work with bakery and beverage companies. They want to see how the fat behaves in cookies, drinks, and savory snacks.
Consumer acceptance is the final hurdle. The company needs to ensure people enjoy the taste of wood-derived fats. Early tests suggest the umami notes are a hit with taste testers.
We are witnessing a shift in how humanity produces calories. ÄIO is proving that we can make delicious food from forestry waste. It is a bold step toward a future where our food system heals the planet rather than hurting it.
