Novonesis believes in harnessing the power of nature, and the company is investing millions of dollars into its West Allis facility to do just that.
Officially formed earlier this year through a merger of Danish companies Chr. Hansen and Novozymes, Novonesis specializes in fermentation. Through the fermentation process, Novonesis develops and manufactures cultures, enzymes and probiotics for a variety of foods, confectionery goods, beverages, dietary supplements, animal feed, plant protection and more.
These products, known as biosolutions, are used in more than 30 different industries and offer an all-natural solution to everyday tasks like storing food and doing laundry.
The core of Novonesis’ business, its food and health biosolutions, began nearly 150 years ago when Danish scientist Christian Ditlev Ammentorp Hansen began using an enzyme called rennet to improve the process of manufacturing cheese. Rennet allows milk to coagulate.
“In many ways, we were born global,” said Theis Bacher, vice president of food and beverage, North America at Novonesis. “Our enzyme, used for making cheese, was highly perishable. We had factories in Europe, but shipping to many parts of the world would take six to eight weeks. So, more than 140 years ago, we started building factories all over the world and established a global footprint and that is today a tremendous competitive advantage for us.”
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Theis Bacher
Credit: Valerie Hill[/caption]
“We’re a major player in the world’s food ecosystem. It’s probably 2 (billion) to 3 billion people that on a daily basis consume a yogurt or eat another product that use our biosolutions.”
Chr. Hansen opened its West Allis facility in 1929. The facility became the company’s North American headquarters and was expanded to double its capacity in 1978.
“If you follow the cheese trail, it just makes sense,” said Keith Grover, head of Novonesis’ West Allis and Madison plants. “Christian Hansen was developing rennet extraction. He had a very strong product and thought globally – more so than any other entrepreneur. Wisconsin became America’s Dairyland, so he followed that trail.”
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Keith Grover
Credit: Valerie Hill[/caption]
“I envision down the road, there’ll be even more applications for enzymes. People could use them for vector targeting disease, that could be something coming down the line.”
Since the West Allis plant opened 95 years ago, Chr. Hansen, and now Novonesis, have continued to invest millions of dollars at the site (located at 9015 W. Maple St.), which has become a critical part of the company’s operations.
In 2021, Chr. Hansen completed a $25 million, 20,000-square-foot expansion project on the west side of its campus. That expansion added fermentation capacity and warehouse space.
Then, in 2023, the company began phase two of the expansion project: a two-story, 81,000-square-foot addition. This $35 million investment involved construction of a two-story building to the east of the existing facility. The space houses a 27,000-square-foot freezer – set at a frigid minus 67 degrees Fahrenheit – for product storage and space for future labs.
Finally, in May, the newly formed entity Novonesis submitted plans for a third phase of the project, which includes construction of a two-story, 50,000-square-foot building to house new fermentation equipment.
Including that phase of expansion, which will be completed next year, $165 million will have been invested in the West Allis facility within the past five years.
“There are more investments coming. There’s another roughly $100 million flowing to just this site alone,” said Bacher. “We are investing in Milwaukee more than in any other of our global sites because of the people here. They have a very high skill level, and there is good access to raw materials.”
The latest expansion to Novonesis’ fermentation facility will be finished by fall 2026. It will double the company’s production capacity and become the largest fermentation site of lactic bacteria in the world.
Grover estimates Novonesis’ workforce, which includes 460 people in metro Milwaukee, will grow between 10% and 15% following the expansion.
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A robot is in the process of completing dilutions plating in the bacteria phage lab at Novonesis’ West Allis facility.[/caption]
‘A major player in the world’s food ecosystem’
Novonesis has an annual revenue of approximately 3.7 billion euros (equal to $4.1 billion USD), including the equivalent of about $1.4 billion driven by its food and health biosolutions category.
The company’s growth – and the continued need for investment to boost production – can be directly linked to an increase in consumer demand for products that contain cultures, enzymes and probiotics, according to Bacher.
“There has been a lot of market growth for several of the fermented product categories we are in,” said Bacher. “Pizza, peperoni, cheese, yogurt ... all these products are seeing healthy market growth and that, of course, benefits us.”
In the U.S., annual dairy consumption hit an all-time high of 12.4 pounds per person in 2021, according to data from the USDA Economic Research Service. This continued a 50-year growth trend for the industry.
“We’re a major player in the world’s food ecosystem,” said Bacher. “It’s probably 2 (billion) to 3 billion people that on a daily basis consume a yogurt or eat another product that use our biosolutions.”
For the first half of 2024, Novonesis reported 8% organic sales growth in its food and beverage business, largely driven by sales of fresh dairy and cheese.
Novonesis’ catalogue of cultures – including live bacteria, yeasts and molds used in food production – and enzymes specifically target dairy and cheese manufacturers. The use of different cultures and enzymes can change everything from texture and flavor to thickness and color.
Novonesis leans heavily on its library of 40,000 ready-to-use bacterial strains to create custom solutions for its customers.
“You can change the bacteria in unlimited ways,” said Bacher. “That’s why, when you go to France, there are 3,000 kinds of cheese. The main difference is the culture you add. That is what decides if a cheese is a mozzarella or a cheddar. It changes the whole profile.”
The greatest challenge modern cheesemakers face is everyday viruses that attack the enzymes used in their products, said Theis. To combat these viruses, Novonesis has created more robust bacterial strains that allow them to withstand any attacks.
“We have a library of over 40,000 bacterial strains, which is probably the largest in the world,” said Julien Biolley, director of marketing and business development, North America at Novonesis. “We try to look at the genes of each of these strains to understand the differences and potential so when a manufacturer comes to us with a challenge, we can look to see if we have something we can leverage.”
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Julien Biolley[/caption]
“We try to look at the genes of each of these strains to understand the differences and potential so when a manufacturer comes to us with a challenge, we can look to see if we have something we can leverage.”
To further catalyze growth, Novonesis has branched into new industries, including bioenergy, household care, plant health and more. In total, the company serves 30 different industries.
In addition to its food and health biosolutions, Novonesis operates a planetary health biosolutions segment.
The company’s mission is to use good bacteria to find sustainable solutions for customers. From promoting healthier soil and animal welfare to lowering emissions, Novonesis claims a biosolution can be found for just about any modern problem.
“I think that we actually bring the technology to a lot of different industries,” said Biolley. “Take the insulin industry, now it’s all made by fermentation. Think about agriculture, a lot of pest control and herbicides are chemical products today. We are looking at if we can create any biology solutions to replace all these chemicals.”
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Inside the West Allis plant
Novonesis’ West Allis facility serves as the North American hub for the company’s food division following the merger between Chr. Hansen and Novozymes.
The site is capable of producing more than 140 different bacterial cultures. Only about 60 of those cultures are manufactured on a regular basis. Because the plant makes food biosolutions for the entirety of North America, it isn’t specialized to one segment of that division. However, the site does manufacture a large quantity of cultures that are later used to make Italian cheeses like mozzarella.
The process of creating a bacterial culture begins in one of six fermenters housed within the West Allis plant. Fermentation, or the process of breaking down a microorganism like bacteria or yeast into a simpler substance, typically takes about eight hours in one of the tanks. Some batches of bacteria can take several days to ferment. Sugar, carbon and a source of nitrogen are all necessary components for fermentation.
Following fermentation, the bacteria is concentrated as it is separated from the water used in the fermentation tanks. The bacteria then pass through a machine that shapes them into frozen pellets – a final product Grover likens to the frozen treat Dippin’ Dots. A single bag of frozen pellets contains enough bacteria to make 10,000 pounds of cheese.
Those pellets, created using liquid nitrogen, are stored in a freezer that’s kept at 67 degrees below zero. That’s nearly as cold as it gets at the top of Mount Everest. The pellets are removed as needed as cultures are produced, using a mix of five
components.
Novonesis has several other plants in Wisconsin, including, in metro Milwaukee, a plant on the city’s northwest side used to make biosolutions for farm animals, and a plant in New Berlin that makes enzymes and agricultural products and includes warehouse space, along with plants in DeForest and Wausau that both makes probiotics.
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Focus on innovation
Because a large portion of Novonesis’ biosolutions are used within the food and beverage industry, the research and development process can sometimes take years. The company’s products must follow strict federal guidelines for human consumption.
“On the culture side, if we need a new innovation, it will typically take between one and two years to get a finished product,” said Biolley. “When it comes to enzymes, the wait can be a lot longer. It can take up to 10 years sometimes.”
Since the innovation process can take years, Novonesis tries to be proactive and predict future trends the food market will follow. This way, the company can jump-start potential innovations instead of waiting for a client to approach them with a problem.
About 10% of the company’s revenue is used for research and development and more than 800 Ph.D. scientists work at Novonesis developing new biosolutions.
Innovation has always been a priority for both Chr. Hansen and Novozymes. Prior to the merger, Chr. Hansen created a bacterial culture that extends the shelf life of yogurt from 21 days to about 90 days. The culture prevents the growth of yeast and mold naturally.
A separate enzyme created by Chr. Hansen extends the shelf life of bread products by several weeks.
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Keith Grover (left) and Theis Bacher stand in the company’s new sub-zero freezer, which will double Novonesis’ capacity.[/caption]
Following the merger, innovation at Novonesis has continued at a rapid pace. In the first half of 2024 alone, Novonesis launched eight new biosolutions within its food and beverage segment. Company leaders say this rapid pace of innovation would not be possible without the merger between Chr. Hansen and Novozymes.
“We recently launched lipase enzymes, which is a great example of something we couldn’t have achieved without the common strengths of the two companies,” said Jacob Paulsen, executive vice president of food and beverage biosolutions at Novonesis during the company’s quarter two earnings call. “That is one solution for the cheese industry. We are working on plenty of solutions within the plant-based space and across (food) and beverage. A number of things are already in action with customers.”
Another new product recently brought to market by Novonesis is a lineup of three strains of yeast that allow manufacturers to brew non-alcoholic beer without sacrificing quality or taste.
It’s common for manufacturers to make non-alcoholic beer by brewing a full-strength product and then removing the alcohol, later mixing in additional flavoring. Novonesis’ SmartBev NEER technology transforms wort flavors directly into beer flavors without producing alcohol.
Novonesis is also at the forefront of precision fermentation, which is the process of creating proteins through a fermentation process instead of in the field.
What’s more, thanks to funding by the Bill & Melinda Gates Foundation, Novonesis is part of a global consortium that’s researching how to convert carbon dioxide into protein for human food.
“This could have profound effects on the economics of the products made (through fermentation), as well as give us a way of using (carbon dioxide), and therefore reducing climate change,” said Bill Gates, the former CEO of Microsoft, during a global science summit held earlier this year. “These acetate-based approaches can drive the food system into a much better regime.”
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Each black dot on the petri dish represents an area where bacteria are growing. A single bacteria colony can have billions of organisms.[/caption]
A new era of biosolutions
The $12.3 billion merger between Chr. Hansen and Novozymes was the largest ever between two Danish companies. It was a deal 15 years in the making, having been discussed by both companies at least four times previously, according to Bacher.
The fact that both companies had the same majority owner, the Danish firm Novo Holdings, helped the deal finally fall into place this year.
“Our technological backbone is the same. It’s all about fermentation, either fermentation to drive enzymes or fermentation to drive lactic acid bacteria or probiotics,” said Biolley. “All of it makes sense because we are talking the same language. We are doing the same thing.”
Both companies came together with a common goal in mind: leveraging their respective biosolutions to solve some of humanity’s greatest challenges.
In the future, Grover believes the company’s biosolutions will be used more heavily in the human health care space, as federal regulations allow new innovations to come to market. This category currently comprises just 11% of Novonesis’ business.
“I envision down the road, there’ll be even more applications for enzymes,” said Grover. “People could use them for vector targeting disease, that could be something coming down the line.”
Novonesis continues to roll out new innovations, launching an enzyme that serves as a sustainable alternative to petroleum-based laundry brightening products earlier this year.
Future innovations in the plant-based food and household care categories are also in the works.
The company’s “innovation agenda” remains strong, said Ester Baiget, president and CEO of Novonesis, during the company’s second quarter earnings call. Novonesis will continue to invest heavily in research and development.
“(At) Novonesis, we will unite the brightest minds and the best science and technology in the field to help customers and businesses prosper while enabling to solve some of the greatest challenges we all face,” said Baiget. “We are here to start an era of biosolutions.”
