ENTREPRENEURSHIP
1-Executive Summary
China faces the twin problems of the environmental cost of food production and increasing demand for quality infant nutrition. The soybean industry produces enormous amounts of soy whey annually. Soy whey is a liquid by-product known as whey, which is often discarded as waste. If disposed of improperly, it causes environmental pollution and contaminates water sources, thus wasting the product's intrinsic value. On the other hand, China's infant formula industry, valued at over 300 billion RMB annually, still cannot provide infant formula that comes close to matching human breast milk's full nutritional profile. One such key missing nutrient is 3′-Sialyllactose (3′-SL), a naturally occurring oligosaccharide associated with improved infant gut health, enhanced immunity, and better cognitive development.
Our solution directly addresses these two problems: through innovative biotechnology, we produce 3'-sialyllactose (3'-SL) using soy whey, making it a sustainable, cost-effective, and safe additive in infant formula. This integrates the urgent issue of soy whey waste with improved infant nutrition by introducing a natural breast milk component. This product will meet industrial and parental expectations as a low-cost, environmentally friendly, and consumer-trusted alternative to synthetic 3′-SL, which is expensive and resource-intensive.
Thus, our innovation is at the intersection of environmental sustainability and human health. Adding 3′-SL to infant formula would thus contribute to SDG 3, Good Health and Well-being, by supporting the development of healthy gut microbiota, immunity, and cognitive development in infants. At the same time, our process upcycles soy whey into high-value nutrients, thus contributing to SDG 12, Responsible Consumption and Production, in which the waste and pollution generated by the food industry in China are reduced through the circular use of resources in the food sector. Third, through the state-of-the-art bioconversion technology of infant nutrition, we contribute to SDG 9, Industry, Innovation, and Infrastructure, to further build capacity in sustainable biotech innovation in China and develop competitive advantages in the global infant nutrition market.
Our initial target market is China's domestic infant formula industry, where demand for safe, natural, and high-quality nutrition is surging. Access low-cost, large-scale raw materials through partnerships with soybean processors. In addition, leading infant formula manufacturers accelerate the commercialization and certification process. Seven professionals from biotechnology, nutrition, finance, marketing, and sustainability form a multidisciplinary team with the technical and strategic capability to take this innovation from the lab to large-scale adoption.
Our only mission is to transform waste into life and breast milk-like nutrition for every child in China.
2-Market Analysis
2A-Market Trends
The Chinese infant formula market is one of the world's largest and most dynamic. Despite demographic headwinds, the industry was valued at around CNY 91 billion in 2023 and will continue to grow steadily toward 2029, driven more by rising per-child spending than birth volumes. After several years of decline, the birth rate stabilized in 2024, with 9.54 million newborns and a birth rate of 6.77 per 1,000, the first increase in years. Although modest, this demographic rebound reflects the impact of pro-natal government policy through subsidies and childcare incentives. Household behavior has now shifted toward the "fewer children, better nutrition" philosophy, with more significant expenditures on each child's health and education. This underlies solid demand for premium, science-based infant formula, even if birth numbers plateau at lower levels.
Market trends are also unambiguously toward premiumization, science-driven innovation, and sustainability. Over the past five years, Chinese parents have consistently expressed a willingness to pay more for formulas enriched with functional bioactive ingredients, especially human milk oligosaccharides (HMOs). In 2024, two HMOs, 2′-FL and LNnT, were formally approved in China, opening the door to further regulatory support for their use. In the same year, the CFSA opened public consultation for 3′-SL and 6′-SL, so their approval is imminent. Once approved, the demand for 3′-SL will be immense as formula brands will rush to use it in their premium ranges, given consumer preferences for formulas closest to breast milk and growing consumer interest in eco-responsibility.
2B. Macro-Environmental Analysis
We applied PESTEL model to the macro-environmental analysis.
2B1-Political
Infant nutrition is politically sensitive and highly regulated in China. The 14th Five-Year Plan on Circular Economy discusses resource recycling and waste valorization, directly supporting using soy whey as raw material. Although CFSA approval processes are stringent, once approved, 3′-SL will be legitimate and enjoy political protection associated with innovative products compliant with regulations. This creates high entry barriers for competitors while increasing trust in approved suppliers.
2B2-Economic
The absolute number of newborns remains historically low, but the spending trend of quality over quantity is strong. Parents spend much more per child on safety, nutrition, and premium branding. The ¥3,600 childcare subsidy introduced in 2025 adds to the budget at the household level and keeps demand for high-quality formulas stable. For us, soy whey input guarantees low input costs and allows us to offer a premium nutrient at a competitive price.
2B3-Social
Consumer psychology is formed by the 2008 melamine scandal, which established parental demands for safety, transparency, and scientific evidence. Families will go for formulas with regulatory and clinical validation. Younger parents are socially aware, and eco-friendly choices represent a future for their children. Marketing 3′-SL as clinically proven and environmentally responsible taps into these social drivers.
2B4-Technological
Recent developments in fermentation and glycoengineering enable the industrial scalability of HMOs. In addition, EFSA's safety approval for 3′-SL sodium salt in 2023 reflects this maturity. Our innovation carries a unique angle in valorizing soy whey through biotechnological waste reduction, thus developing a peculiar technological niche. Locally, biotechnology is heavily financed in China, thus creating conducive conditions for partnerships toward acceleration and compliance.
2B5-Environmental
Untreated soy whey is highly polluting to the water system due to its organic load. The valorization of soy whey to proteins and oligosaccharides has been studied. Our product prevents pollution while producing nutrition by industrial symbiosis in transforming soy whey into 3′-SL. This fits Chinese policy and, more broadly, UN SDG 12: Responsible Consumption and Production.
2B6-Legal
The legal regime is strict but evolving. The CFSA has approved 2′-FL and LNnT, and in 2024, it initiated public consultation on 3′-SL and 6′-SL. This means that we must invest in documentation and compliance, but upon approval, the product will be defensible and trusted by the market.
2C-Micro-Environmental Analysis
We applied SWOT and Porter’s Five Forces model in micro-environmental analysis.
2C1-SWOT
2C1A-Strengths
The prouct's most distinctive strength lies in its cost structure and sustainability story. While multinationals rely on expensive synthetic fermentation to produce 3′-SL, we use soy whey- a cheap and low-value by-product from the huge soy processing industry in China. This gives us a structurally cost advantage that is very difficult to replicate in other contexts. Scientifically, the product also aligns with the natural breast milk composition, which confers credibility in front of regulators and consumers. From a company perspective, the strength derives from a culture of collaboration and transparency across the team, seven members spanning biotechnology, nutrition, sustainability, finance, and marketing from a technical to a commercial strategy. This very lean and functional structure allows agility versus large incumbents. On an industry level, these factors position us as a domestic innovator aligned with national priorities for infant health and circular-economy development.
2C1B-Weaknesses
These reflect the early-stage start-up's challenges. On the product side, it is still at large-scale pilot validation, hence the uncertainty on production scale-up and regulatory timelines. On the company side, there is no distribution network, lobbying power, or brand awareness like the big multinationals. Another weakness on the consumer side is that while HMOs, such as 2′-FL, are entering public debate, 3′-SL is relatively unknown; hence, consumer education and branding must be done with care not to be misunderstood as a "soy by-product." On an industry level, this means that our success will hinge on building good partnerships with domestic processors, formula makers, and academics to leverage our limited resources.
2C1C-Opportunities
The Chinese infant formula market is experiencing premiumization, with parents requesting formulas closer to breast milk. Hence, there will be an immediate opportunity for 3′-SL incorporation upon regulatory approval. For the product, this translates into rapid uptake, as brands will compete in differentiating themselves. For the company, this goes beyond infant formulas into adjacent markets of nutraceuticals, probiotics, and functional foods, where HMOs could find a role. Regionally, Southeast Asia presents a similar demographic and consumption profile, making it a logical step after domestic success. On an industry level, the regulatory progress, consumer demand, and government sustainability policy creates a timely and scalable context for our innovation.
2C1D-Threats
Our main threats are global incumbents, DSM-Firmenich and Novonesis, which produce synthetic 3′-SL on an industrial scale and have well-developed distribution channels and relationships with formula brands. This implies that we have to compete not only on function but also on cost and environmental values. From our company's perspective, regulatory delays are tangible threats because, as a small player, a long approval process can strain finances and delay commercialization. There is also a risk to consumer perception: if soy whey is perceived as a low-quality by-product rather than a sustainable one, adoption will be hindered. At the industry level, increasing competition and skepticism about greenwashing ensure that only those firms with hard evidence to back up their sustainability claims survive.
2C2-Porter's Five Forces
2C2A-Supplier Power — Low
In China, soy whey is a waste product from the soy and tofu industry that even results in disposal costs for processors.¹ This implies that feedstock for our product will be abundant, low-cost, and strategically secure. For us, joint ventures with soy processors turn us into a solution provider instead of a dependent buyer, allowing us to leverage negotiation power. At the industry level, this means less input volatility compared to synthetic production, strengthening our cost-based advantage.
2C2B-Buyer Power — High (but shifting)
The Chinese infant formula market is consolidated among large companies, such as Feihe and Mengniu, as well as international players, which gives them significant bargaining power. This implies potential high pricing pressure for our product. We will need to position 3′-SL not as a commodity but as a premium differentiator that can capture value through value-based pricing. However, once 3′-SL is approved, buyer power will shift: brands will compete for contracts to secure supply, particularly in the premium segment. At the industry level, this push-pull dynamic means that buyers are powerful in volume, but suppliers of differentiated offerings can command a premium.
2C2C-Threat of New Entrants — Low
Developing an infant formula additive in China requires years of safety and clinical validation and CFSA approval. This implies that once we gain approval for our product, it would be protected from immediate replication or entry by competitors. For us, this means that early investment in compliance and documentation will be important since regulatory approval is both a barrier and a moat. At the industry level, HMOs are a concentrated space in which only well-capitalized or strategically positioned players can compete.
2C2D-Threat of Substitutes — Moderate
Synthetic HMOs, including 3′-SL, are produced worldwide and are, therefore, a functional substitute for our product but without a cost and sustainability story. Thus, our product would be differentiated as natural, ecologically responsible, and cost-competitive. This will require clear communication, lifecycle analysis, and evidence of green claims for our company. At the industry level, substitutes show that HMOs are becoming a must-have in formula; however, differentiation will be on story, trust, and efficiency, not just molecular identity.
2C2E-Industry Rivalry — High (and intensifying)
Competition heats up as multinationals aim to scale HMOs and domestic players try to localize their products. That means urgency for our product- securing supply contracts and brand credibility before being overtaken by rivals. This would require agility, partnerships, and branding with local advantages for our company. At the industry level, competition among brands in the race to add HMOs accelerates HMO adoption, quickly shifting 3′-SL from an optional feature to an industry standard, benefiting first movers like us.
2D-Competitor Analysis
We conducted a competitor analysis to map the key players shaping the HMO-enriched infant formula market. International companies lead in technology and regulatory approvals, domestic firms dominate consumer trust and distribution, and premium challengers are pushing product innovation. Against this backdrop, Whey2go differentiates itself by combining cost efficiency, sustainability, and a novel production pathway based on soy whey and self-induction fermentation.
2D1-Main Competitors
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DSM-Firmenich – Global leader with approved 2′-FL and LNnT in China; 3′-SL under review. Strength: comprehensive HMO pipeline. Weakness: high production cost, limited consumer visibility in China.
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Novonesis – Approved 2′-FL in 2024, pushing 3′-SL through its MyOli® line. Strength: strong R&D momentum. Weakness: weaker brand presence and distribution in China.
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Nestlé-Wyeth – Illuma HMO-enhanced formulas launched in China’s premium market. Strength: global brand and R&D leadership. Weakness: high price point restricts wider adoption.
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Feihe：~17.5% market share in 2025, dominant local brand. Strength: strong consumer trust and nationwide channels. Weakness: limited innovation, relies on external HMO supply.
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Mengniu： Rapidly adding HMOs to premium lines. Strength: broad distribution and local trust. Weakness: still developing high-end image.
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a2 Milk Company：Multi-HMO formula launching in mainland China in late 2025 (~6.4% share). Strength: premium positioning and product differentiation. Weakness: smaller scale and trust-building challenge.
2D2-Product Feature Comparison
Beyond market positions, we also compared competitors across key product characteristics to highlight Whey2go’s unique differentiation:
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Innovation: DSM, Novonesis, and Nestlé lead in product formulation innovation with multi-HMO pipelines. Whey2go introduces process innovation — using soy whey and self-induction to cut costs and enable sustainable scale-up.
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Cost Efficiency: Competitors rely on costly synthetic or fermentation processes, reflected in premium pricing (¥400–500 per can). Whey2go leverages abundant soy whey, reducing fermentation media costs and eliminating chemical inducers.
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Sustainability: Competitors emphasize safety and nutrition but do not address by-product valorization. Whey2go directly upcycles 70 million tons of soy whey waste annually in China, aligning with circular economy goals.
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Market Acceptance: Nestlé, Feihe, and Mengniu dominate with brand strength and distribution. Whey2go is still early-stage, requiring validation and partnerships, but has the potential to disrupt with a green and affordable positioning.
Figure 1 : competitor positioning map)
3-Marketing Strategy
3A-Product
The first important element is product differentiation. Our additive, human 3′-SL, represents an exciting opportunity for infant formula producers, given that it is a breast-milk-lifting oligosaccharide and also a soy whey co-product translated into a high-value nutrition ingredient via our proprietary bioconversion technology. Indeed, for these manufacturers, both the human health source and the innovative upcycling process underlying our co-product will resonate because they are looking for functional product advances to differentiate their formulas, but without product safety concerns. Aligning with our company culture as expressed through various teams, the product positioning aligns with our fundamental scientific culture and environmental vision: we do not want to make "just another chemical"; we wish to advance infant health while reducing wastage.
3B-Price
Second, the price: our placement vis-à-vis price makes the space clear. China soy whey is cheap and abundantly available, and our production costs are highly favorable relative to large multinationals that use synthetic pathways, so we can place our product competitively with no effect on margins relative to infant formula producers. Price also features strongly in domestic positioning, where producers "premiumize" their products for affordability. In 2024, for example, Chinese FMCG consumption was pretty flat compared to last year, and cost was the main driver of purchase decision. With our company culture being lean, our structure is built in such a manner that enables responsive pricing as we scale.
3C-Place
The third "P" is Place, which refers to the distribution and delivery channels through which products go to market. Our B2B supply will be directly delivered to Chinese infant formula manufacturers; thus, it is closer to raw material and regulatory sources. This will keep logistics straightforward and aligned with regulators, which are critical in such a tightly regulated industry. 3'-SL will be integrated into the formulas quickly, seamlessly, and compliantly in the Chinese market. The "Place" strategy will later be expanded to Southeast Asia, where premiumization is also occurring, and later to the global market once Chinese approvals lend us credibility abroad.
3D-Promotion
The fourth "P" is Promotion, which refers to product communication and market positioning. Promotion will, therefore, be two-tiered: at the manufacturer level, scientific validation, lab reports, and regulatory approvals will be promoted to build credibility; at the consumer level, breast milk mimicry and sustainability will be promoted, ensuring that parents link 3'-SL-containing formulas with safety and responsibility. For us, Promotion means that transparency is part of our culture, and we shall publish life cycle assessments, carbon footprint data, and third-party validation to build trust. After a few scandals, formula safety in the Chinese domestic market is viewed with enormous skepticism; such promotion can only be done with tangible evidence and not with slogans; hence, transparency is our best weapon in promotion.
3E-People
The fifth "P" is People, which relates to human resources and relationships. Our team of seven covers biotechnology, nutrition, sustainability, finance, and marketing, thus combining technical knowledge with market-facing skills. People are our most valuable cultural asset; transparency, accountability, and scientific rigor underpin everything we do. In China, where trust and guanxi networks underpin B2B decision-making, the team's credibility and experience will be as important as the product itself. This also extends to industry advisors, nutritionists, and lab partners, which will help build the architecture of trust convincing the manufacturers to adopt our product.
3F-Process
The sixth "P" is Process, which refers to the systems and methods for the uniform delivery of the product. Process discipline will be crucial because we have developed standardized workflows for fermentation, purification, and quality control to guarantee batch-to-batch consistency and comply with food safety requirements. Operational discipline will be manifested in an internal culture of scientific integrity and regulatory preparedness. For the Chinese infant formula market, with some of the toughest standards enforced by the CFSA, there is an absolute necessity for transparency in processes. Processes that follow domestic and international standards, such as Good Manufacturing Practice (GMP), protect consumers and reassure formula brands that using our product will never put them at reputational risk.
3G-physical Evidence
The seventh "P," Physical Evidence, refers to physical evidence that confirms the product's credibility. For us, these are certificates of analysis, lab reports, regulatory approvals, and publications in peer-reviewed journals. Publicizing them will make us transparent and help us build trust with the manufacturers. Physical evidence also refers to production facilities, which provide evidence of safety and sustainability. Modern, hygienic GMP-compliant laboratories and eco-efficient waste systems support the brand promise. Such site visits will reassure B2B partners that the processes are as described. This kind of paper- and facility-based evidence establishes credibility and transforms transparency into proof in a market like China, where consumer trust in formula has hit a record low.
4-Financial Plan
4A-Preparatory Work
1. Log in to the Beijing Enterprise Registration Online Service Platform and apply for the “Notice of Pre-approval of Enterprise Name”.
2. Apply for a business license from the Beijing Municipal Administration for Market Regulation, with an agency registration fee of 10,000 RMB.
3. Submit the “Filing Form for Pharmaceutical R&D Institutions” to the Beijing Municipal Drug Administration.
4. Apply for environmental protection approval from the Daxing District Bureau of Ecology and Environment, with a third-party environmental assessment fee of 30,000 RMB.
5. Since the company involves biosafety issues, it is also necessary to submit an approval application to the National Health Commission (NHC).
4B-Cost Structure
Total Fixed Costs: 18,341,300 RMB
Total Variable Costs: 657,400 RMB/year
The main components of the cost are as follows.
R&D Costs: During the project R&D phase, it is necessary to purchase an office, a laboratory, experimental equipment and consumables, and operate for 12 months, with a total cost of 9,073,779 RMB.
Factory Costs: During the production phase, it is necessary to purchase a fermentation factory equipped with 6 2-ton fermentation tanks, with a total cost of 2,500,000 RMB.
Raw Material Costs：Through our research on the company, we learned that the raw materials currently required for producing 3'-sialyllactose (3'-SL) include yellow serofluid, glycerol, and lactose. However, due to our technological improvements, we also need to add N-acetylneuraminic acid.
The price of yellow serofluid is 150 RMB per ton. In the first year, we plan to produce 12 tons of 3'-SL, and since the production volume is sufficiently large, the price of our N-acetylneuraminic acid raw material is much lower than the market retail price, at 0.3 RMB per gram.
In addition, 1 liter of yellow serofluid combined with 500 mg of N-acetylneuraminic acid can produce 200 mg of 3'-SL. Therefore, producing 1 gram of 3'-SL requires 5 liters of yellow serofluid and 2.5 grams of N-acetylneuraminic acid, with a total cost of approximately 1.5 RMB.
Because yellow serofluid lacks sufficient nutrients, we also need to add glycerol and lactose, which, based on a rough estimate, adds 1.56 RMB per gram. Thus, the annual raw material cost is 18,720 RMB.
Operation and Maintenance Costs: The annual operation and maintenance cost for 12 fermentation tanks is 280,000 RMB.
The cost composition table is provided in the appendix.
4C-Revenue Model
The 3'-SL produced by the company using yellow serofluid will be directly sold to other enterprises as a food additive, and the customers may include milk powder manufacturers, health product companies, and baby food companies. The research results of the R&D team will be applied for patents.
The market price of 3'-sialyllactose is 1,000 RMB/kg, and 1 ton of ordinary culture medium can produce 100 kg of 3'-SL. The gross profit margin is 90% when using ordinary culture medium for production, and 98.5% when using yellow serofluid culture medium.
The marginal cost of producing 1 kg of 3'-sialyllactose using yellow serofluid culture medium is 15 RMB, and the pricing is 600 RMB/kg.
The construction period of each fermentation tank includes pre-fermentation preparation, 60 hours of fermentation, and 4 weeks of purification. Each batch can produce 1.2 tons of 3'-SL, with 10 batches produced annually and an annual output of 12 tons.
Annual Revenue is 7,200,000 RMB for Gross Revenue and 6,542,600 RMB for Net Revenue.
4D-Parternership
A properly designed partnership network will be necessary to commercialize the technology, providing supply chain security, the validation of processes, and stimulating market adoption. Of all the partnerships, those with soy-processing plants are most important as they will give us cheap, abundant, and easily accessible soy whey by-product. Direct partnership from the source will allow production feedback on a continuous basis and thus would be sustainable for our partner in valorizing the by-product.
Therefore, from the first stage of development to entering the highly regulated infant nutrition market, certification bodies and regulatory consultants must be involved. Their guidance is accepted since this is complicated in specifying approval from the State Administration for Market Regulation in China and other regulatory agencies worldwide. Such expertise is required for dossier preparation, relevant safety studies, and certification; without them, the product will not be accepted by the formula manufacturers.
Our primary GTM strategy is B2B sales into infant formula manufacturers, who are the final users of our 3'- SL. We will target leading and emerging brands to introduce the ingredient into their formulas. More comprehensive supply agreements will allow co-branding, mutual studies on the benefits of 3'- SL in their specific formulation, and joint marketing on naturalness and sustainability of the final product.
Therefore, production efficiency will rely on advanced hardware and software. That is where manufacturers of bioreactors and automation technology suppliers enter, able to provide scalable, reliable fermentation systems with appropriate process control. Specialized suppliers for downstream processing equipment will deliver the most economically viable purification technologies. Usually, partnerships are based on essential technical support and maintenance and co-development to adapt the equipment to our process-specific demands and hence optimize productivity and yield.
This will be attained through partnerships with world-class research institutes, cutting-edge science, state-of-the-art laboratory equipment, and clinical validation studies. External R&D support is necessary for continuous process optimization, etc., new applications of the core technology beyond infant formulas, and a competitive position at the very edge of synthetic biology and sustainable manufacturing.
4E-Financial Forecast
Based on the above data, we have made financial forecast for the coming years, as shown below.
Figure 2: financial forecast
4F-Milestone
2025-2030: Steady Development Phase
2025: Conduct the first round of financing and submit registration application materials.
2026: Use funds to purchase laboratories, offices and equipment, recruit 16 company members, and the R&D team starts to develop fermentation technology. The R&D team conducts gene editing on Escherichia coli and completes verification experiments; the management team explores raw material supply channels, seeks partners and customers, confirms cooperative relationships, re-evaluates market value, conducts the second round of financing, recruits R&D personnel, and expands the R&D team to 20 people.
2027: The R&D team starts to cultivate engineered strains; the management team uses funds to purchase factories and fermentation equipment in Northeast China; the company recruits 10 technical personnel to manage the factory; the R&D team leads the trial operation and signs a 6-month production contract with customers. The factory officially operates, conducts safety assessment and environmental protection assessment on products; the R&D team continues to improve technology and reduce raw material costs.
End of the Year: Deliver products to customers.
2028: Sign a 12-month production contract with customers; the management team expands recruitment by 5 people for customer communication.
2029: Conduct the third round of financing and expand the factory to double the annual output. Sign a 12-month contract with customers after the expansion.
2030: Operate normally and achieve break-even after delivering goods in the middle of the year; submit materials to the government for listing in the second half of the year.
2031-2033: Domestic Rapid Expansion Phase
2031: Conduct the fourth round of financing; build a second factory in the Jiangnan region, recruit 20 technical personnel, expand the R&D team to 40 people, establish a research branch in Jiangnan, and achieve an annual output of 30 tons at the second factory; seek new customers.
2032-2033: Sign contracts with more customers and quickly seize the domestic market.
2034-2037: Overseas Expansion Phase
2034: Register an overseas branch in Germany, seek customers, build factories and dormitories, recruit technical personnel from China (with accommodation arranged), and sign production contracts.
2035: Establish a research institute in Germany, recruit local researchers, and operate the factory.
2036: Operate normally.
2037: The German branch turns losses into profits and continues to develop branches in other countries.
5-Risks & Compliance
5A-Market Risks
The global HMO milk powder market (e.g., products containing mature HMO components like 2′-FL) has already taken shape, with foreign brands occupying stable market positions and having established user recognition. In the domestic market, leading milk powder enterprises (e.g., Feihe, Nestlé) also have strong R&D capabilities and extensive sales channels. As a latecomer, the project’s 3′-SL-added milk powder faces fierce competition from these mature products. If it fails to highlight unique advantages or lags in market promotion, it will be difficult to seize market share, leading to squeezed profit space.
Our countermeasures focus on differentiated positioning, emphasizing the unique benefits of 3′-SL, such as stronger support for infant neural development and better adaptability to the intestinal flora of Asian infants, when compared to mainstream HMOs like 2′-FL. Another approach is to cooperate with domestic regional milk powder brands, which enjoy localized user trust but have weaker capabilities in functional ingredient R&D, to jointly develop 3′-SL-themed products and leverage their regional channels to accelerate market penetration. In addition, nutritional supplements with greater market potential can be created, as 3′-SL is highly beneficial.
5B-Technical Risks
The primary risk facing 3′-SL in mainland China is food additive qualification approval. Currently, 3′-SL has not been officially recognized as a food additive or approved as a "new food ingredient." If a project plans to add 3′-SL to infant formula (an area subject to extremely strict regulation) but fails to pass regulatory review, due to factors such as insufficient safety validation data, incomplete toxicology reports, or unsatisfactory contaminant residue testing, it will directly hinder the commercial production, sales, and application of 3′-SL in the formula industry, resulting in a waste of initial R&D and production investment. To address this issue, reference can be made to the examples of other HMO ingredients (such as 2′-FL) approved as "new food ingredients" in China. Application materials can be optimized, and proactive communication with the National Health Commission and local market regulatory authorities during the application process can be conducted to clarify technical standards and key review areas to increase the approval rate.
Another key risk is the low nutritional content of soy whey and the difficulty in extracting 3′-SL. Yellow slurry is relatively low in nutrients, particularly whey protein (a key ingredient in 3′-SL synthesis). This leads to insufficient conversion efficiency during the extraction process, resulting in higher production costs, increased raw material inputs, longer extraction cycles, and difficulty ensuring stable output. If the extraction yield consistently falls below 50% (the industry benchmark for similar products), it will not only severely impact the project's economic viability but may also prevent it from meeting downstream orders. Measures to mitigate this risk include optimizing the yellow slurry pretreatment process, such as using ultrafiltration membrane separation combined with acid precipitation to concentrate whey protein. By adjusting process parameters (controlling pH at 4.0±0.2 and maintaining temperature at 45±2°C), protein recovery can be increased from approximately 30% to over 60%. Furthermore, collaboration with universities or research institutions (such as the School of Food Science at South China Agricultural University) can be undertaken to develop enzyme-assisted extraction technology, utilizing specific proteases to degrade polysaccharide inhibitors in yellow slurry, thereby improving the efficiency of 3′-SL synthesis. Before large-scale production, small-batch verification (100 L pilot scale) should be carried out and the optimal extraction parameters (such as stirring rate and enzyme addition amount) should be locked to ensure stable yield.
6-Sustainability and Ethics
6A-Environmental Impact
Soy whey is difficult to handle and costly, it always be regarded as wastewater production process and discharged into environment directly, resulting in severe waste of resources and environmental pollution. During the process of producing 3’- Sialylated lactose from soy whey, there is no additional artificial culture medium is required, it directly use by-product from soy bean, namely soy whey, as the fermentation raw materials, directly treat 0.55~0.77billion tons of soy whey produced annually, avoid discharging pollutants into water and reduce the pressure of industrial wastewater discharging. This whole process uses coli to introduce three types of gene modules, and no need to add traditional chemical inducers, then reduce the risk of chemical reagent residues contaminating the soil and water sources. In fermentation production, the natural galactose and a small amount of protein in the soy whey are utilized to support the growth of microorganisms, in this entire process, the substances within were fully consumed. On the other hand, the residue after the fermentation would be used as organic fertilizer, thereby reducing the use of fertilizer.
6B-Social Impact
To ensure the safe use of the product and compliant with regulatory standards, we will use compliance-oriented design, clearly define the usage limits and expiration dates for different food categories. We will use food-grade safe strains, and avoid by-product residue of traditional chemical inducers during the fermentation process, ensure the product safety from the production source. We will record core data in the process of experiment, and fully disclose the process and results, ensure full transparency throughout the whole process, it is subject to the supervision of the public and judges simultaneously. We collect first-hand data through interviews with experts and on-site market research, at the same time, we need to inform the public about the technical principles and values, pledge consumers right to know.
6C-UN SDGs alignment
Our project is based on the yellow pulp water-genetically engineered E. coli-3'-SL biomanufacturing model, which can fit into several UN SDGs: in SDG 3, our project produces 3'-SL, which is a compound that can help regulate the intestinal flora of infants and young children, maintain the intestinal barrier, and support immune and brain development, and we use food-grade strains of bacteria and soy whey galactose to avoid the production of hazardous residuals In SDG9 (Industry, Innovation & Infrastructure), we break through the bottlenecks of traditional 3-SL production and build a scalable genetic engineered biomanufacturing platform, producing up to 56.8g/L of 3-SL for the transformation of Chinese Milk Powder. In SDG 12 (Responsible Consumption and Production), we will produce 70 million tons of waste yellow slurry water annually, which will be used for the production of milk powder. We transform 70 million tons of waste yellow slurry water into essential culture medium, which is a reduction in the cost of culture medium and promotes the industrys low carbon and high efficiency; in SDG 13 (climate action), we lower the energy cost of treating yellow slurry water, assuming that there are 0.3kg of carbon emissions per ton of treated wastewater and calculating an annual reduction of about 21,000 tons of carbon; in SDG 6 (Clean Drinking Water and Sanitation), we digest yellow slurry water to reduce the contamination of water bodies, and the wastewater after fermentation is simple and easy to use, so that it can be used for the production of milk powder. In SDG 6 - Clean Drinking Water and Sanitation, digested yellow slurry water can reduce the water pollution and simple treatment of fermented wastewater meets the standard discharge requirement.
6D-Ethics
We work in accordance with relevant regulations and industry standards in terms of ethics
Our selection of raw material strains complies with national safety assessments and meets national standards for food production strains, which can be referenced from the National Standard for Food Safety General Hygienic Standard for Food Production (GB 14881-2013). Therefore, we can guarantee the safety and reliability of the sources of bacterial strains, and remove the potential biosafety problems from the source.
We control the product quality by restricting the amount of 3-SL added in food based on national food additives, nutritional fortifier use standards, such as the standard on the usage of nutritional fortification in food GB (GB 14880-2012), which clearly stipulates the upper limit of the use of 3-5- SL in different types of food after multiple revisions. We have clearly stated groups of people and issues that require attention on the label of food supplement packages and other items, and we note, for example, that they can only be taken after the age of three, to ensure the safety of consumption for us, and we do labeling and marking work according to standards such as "General Principles for the Labeling of Prepackaged Foods" (GB 7718-2011).
In our production process, we use standard HPLC methods to test the content and purity of 3'- SL, and the inspection process is carried out according to the requirements of "General Rules for High Performance Liquid Chromatography Analysis Methods" (GB/T 27921-2011) to operate the process., all batches of the product are strictly tested, so as to ensure that the quality of the product is stable and meets the standard.
In terms of data management, we organize experimental data, production records, etc. into WIKI, and we comprehensively record the details of the construction of engineering bacteria, fermentation process parameters, test results, etc., so that we can facilitate the internal review and external supervision. Secondly, we carry out interviews with experts, invite industrial authorities to appraise, and guide the safety and compliance of the project. After that, we visit our partner companies to collect feedback and improve the product validation process, so that we can ensure that the project process meets the requirements of ethical norms and industry transparency, and therefore protects the rights of consumers and the order of the market.
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Appendix
Figure 3 : cost structure