What’s the key to better vegan cheese? Microbreweries, one startup says

Last week, I overheard someone in a pizza shop ask if a particular slice was vegetarian or vegan. Presumably they wanted to know if the pizza had vegan cheese, and when told it was so, they changed the order.

Vegan cheese is widely considered a poor simulacrum of the dairy version. The key missing ingredient is casein, a protein from mammalian milk that gives cheese its structure and helps it melt.

Now, a startup called AuX Labs is claiming it can make casein without the cow, which will enable vegan cheese that tastes and feels like the real thing. “Melt and stretch are non-negotiables,” Ted Jin, co-founder and CEO of AuX Labs, told TechCrunch.

AuX is using bioreactors to make casein, but it isn’t the first to do so. Still, the startup hopes its cheese can be produced just as cheaply as with dairy thanks to its secret weapon: Struggling microbreweries.

In recent years, microbreweries have fallen on hard times. The industry grew dramatically over the last couple decades to nearly 10,000 microbreweries in the U.S. alone. But since the COVID pandemic, fewer Americans are drinking alcohol, according to Gallup.

“I don’t want to disparage their existing business because I’m a big supporter of them as well,” Jin said, adding that “there is a lot of excess capacity in the system.”

AuX says it has developed its microbial strains and its fermentation process with microbreweries in mind. Both sides benefit: Brewers get another business line to help support their operations, and AuX gets access to fermenters without having to pony up capital.

“When we talk about finding capital to build new infrastructure for fermentation and brewing proteins, I think the answer is there already,” said Jin, who previously worked at Proctor and Gamble. “The challenge is how to use that capacity.”

To commercialize its cheese product, AuX has raised $4 million, the company exclusively told TechCrunch. The round was led by NYA Ventures and Nàdarra Ventures, and saw participation from Bluestein Ventures, Builders VC, Congruent Ventures, and Verdex Capital.

Today, AuX works with breweries to ensure the product meets its standards, but eventually, Jin sees a world where AuX sells kits, complete with microbes and detailed instructions, that allow the breweries to operate more independently. 

The result would be a fleet of facilities producing casein that’s “biologically identical to the one found from animal protein,” Jin said. The main difference would be the environmental impact: Producing dairy-free casein would require significantly less land and water, and around 90% lower greenhouse gas emissions.

The market for cheese is worth about $165 billion today, according to Mordor Intelligence, and casein is also used in many other parts of the food system as a stabilizer and emulsifier.

Jin says AuX’s platform can make more than just the one protein, though he wouldn’t disclose the company’s future plans. Chances are it will be in food, though. “Maybe it sounds corny, but I just want to build a better food system for my kids,” Jin said.