ÄIO produces first ton of yeast-based oil alternative, advancing toward commercial scale

ÄIO, an Estonian biotechnology company developing sustainable oils and fats through precision fermentation, has successfully produced its first ton of yeast-based oil alternative. The milestone marks a 300-fold scale-up from its laboratory capabilities and provides proof of concept that the company’s process can move beyond pilot-scale production.

The full-scale production run was completed between late 2024 and mid-2025 and represents a significant step toward ÄIO’s long-term goal of commercial manufacturing. The company’s encapsulated oil, high in proteins, fibers, and functional lipids, is designed as an eco-conscious replacement for ingredients such as palm oil, coconut oil, eggs, cocoa powder, and petroleum-derived mineral oils.

“This is not just a production milestone, it’s a validation of a dream,” commented Nemailla Bonturi, CEO & Co-founder of ÄIO. “As a scientist, I’ve been developing this fermentation process since 2013. Seeing something that I started in a small lab in Brazil now being produced at this scale in Europe is incredibly rewarding. This first ton is the first of many to come, and crucially, it proves our process can scale beyond pilot settings and validates the commercial potential we’re working toward.”

The achievement follows ÄIO’s success in securing €1 million (US$1.1 million) in funding through Estonia’s Applied Research Programme, organized by the Estonian Business and Innovation Agency. The support will help advance the company’s mission to offer sustainable alternatives in sectors under pressure to reduce environmental impact.

Palm oil cultivation alone is estimated to account for around 10% of global deforestation, while the World Wildlife Fund has linked modern food systems to a 70% decline in terrestrial biodiversity since 1970. Meanwhile, the cosmetics industry faces growing scrutiny over petrochemical-derived ingredients. Analysts suggest the EU’s microplastics ban and increasing restrictions on PFAS – so-called 'forever chemicals' – could cost the beauty industry up to €12 billion (US$13 billion).

ÄIO’s technology aims to address these challenges by transforming industrial side streams into nutrient-rich oils and fats. In food applications, the company’s product delivers umami taste and versatile texture suitable for meat alternatives, confectionery, and bakery products. In cosmetics, the oil provides nourishing properties and bioactive benefits, while replacing ingredients with environmental or health concerns.

“The fundamental economics have shifted,” Bonturi explained. “Five years ago, sustainable alternatives carried a significant price premium. Today, supply chain disruptions and regulatory pressures have created conditions where precision fermentation can achieve cost parity with conventional oils while eliminating environmental and ethical concerns. For manufacturers, ecologically conscious ingredients are no longer a ‘nice-to-have’, they’re a necessity.”

ÄIO’s next goal is to establish a commercial-scale facility capable of producing 2,000 tons annually. Pre-engineering concept work for the plant is already complete, and the company is in discussions with partners on feedstock supply, distribution, and off-take agreements.

“Scaling the production closer to commercial levels allows ÄIO to validate and optimize our production technology and its efficiency,” said Martin Mets, CFO of ÄIO. “We have already reduced our unit costs by 80% in the last years, through scale and optimization, and we expect to continue with a similar cost reduction curve for the foreseeable years. The one ton milestone highlights the great progress our team has made in realizing fermentation technology that is a feasible and cost-competitive alternative to current unsustainable sources.”

The company has already begun providing samples to manufacturers in both food and personal care sectors, generating interest from companies aiming to reduce their environmental footprint without compromising product performance.

The broader market opportunity for alternative fats and oils is significant. Analysts forecast the segment could reach US$4.5 billion by 2032, as food and cosmetics brands seek more sustainable inputs. With its first ton milestone behind it, ÄIO plans to launch a new fundraising round by late 2026 to accelerate expansion and capture growth in this fast-developing market.

“We’re now showing that the commercial viability for plant-based alternatives to traditional oils is very real,” Bonturi said. “We’re ready to bring these benefits to the world, proving that our technology can deliver sustainable alternatives at the scale needed to make a real impact on global food systems and other industrial applications across entire product categories.”