Algal Plant Proteins (MicroAlgae)

A Disruptive Opportunity

Market Trends, Technologies, Key Success Factors

23 May 2017

In our previous episode…

May 2015, Matt Carr – Algae Biomass –

…reported key motivating factors and state of

commercialization for alternative microalgae

farming, yield & sustainability.

At that time, price for barrel oil still expected to increase, with

huge investment in algae-based biofuels.

Microalgae was primarily directed to added-value dietary

supplements & cosmeceuticals.

Investment in algal protein sources was still limited.

2017+ … Algal Proteins have indeed become a strategic factor for global

food & beverage industries, aqua-farming & animal nutrition.

2015 Milestones, SepEU Sustainable, Safe and Nutritious Food, New Nutrient Sources

Lux Research

Global protein consumption is estimated to reach 944 MMt by 2054.

Animal protein dominance will decrease over next decades.

Consumption of alternative protein sources to grow by 9% annually.

By 2054, up to 33% of the total protein consumption, i.e. 311 MMt.

o Algae 2024 … ~2% of alternative protein market

o Algae 2054 … ~18% of alternative protein market, i.e. 56 MMt. *

Sustainable, Safe & Nutritious Food

2015 Milestones, DecRabobank Industry Note, Algae: A Brave New Industry

Researchers still focused on traditional sources: Spirulina, Chlorella, Porphyridium,

Nannochloropsis, Astaxanthin, Dunaliella, Fucoxanthin.

72,000 other algae species, offer different properties, farming methods,

applications, volumes and price-points … and not IP protected!

Rabobank – KSF for Microalgae Proteins

o Farming of algae will need to take place on a larger scale.

o Market forces are essential to commercializing technologies.

o Supporting a smarter food system requires managing risks (Technology,

Market, Business, Regulatory, Reputational).

2015 Milestones, Dec Rabobank Industry Note, Algae: A Brave New Industry

In order to match the quality of animal & traditional plant protein sources, the way

forward is to blend different types of plant proteins to optimize & harmonize

nutritive values & obtain advantageous amino acid content.

Sustainable, Safe & Nutritious Food

2nd + 3rd generation plant

(pulse) + Algae (+ Insects)

proteins change metrics

of global agri biodiversity.

Microalgae Sustainability

Matt CarrMay, 2015

Algal Protein Key Success Factors

Microalgae Protein

Protein value proposition drives all other considerations…

Algal Protein Screening & Selection Process Key Success Factors

Microalgae Protein

Location

Autotrophic or Heterotrophic species, and where to source optimal strains:

o Reactors, Ponds, Raceways – outdoor open systems

o Fermentation – indoor fermentation tanks

Microalgal Species selection

Water source

Medium use

Continuous or batch culture

Downstream processing & final product (Human consumption or feed?)

Allergenicity, ANF (anti-nutritional factors)

Process strategy to achieve high protein yields

Alternative Microalgae Protein Growing Systems

Algal Protein Characteristics & FunctionalitiesKey Success Factors

Microalgae Protein

Amino Acid Profile

Digestibility (PDCAAS, DIAAS)

Solubility (pH)

Emulsification

Heat Stability

Color

Flavor & Taste

Viscosity

Gelling

Functionalities giving synergistic properties with other alternative plant & algae proteins.

Algal Oil Key Success Factors

Microalgae Protein

Triglycerides

Fatty Acid Profile

Micronutrients

o Vitamins & minerals

o Antioxidants

o Phytochemicals

o Carotenoids

Fibers

Added value fractions to strengthen algal protein business model.

Algal Protein Key Success Factors

Microalgae Protein

US$ 6-8 / Kg for ~70% algal protein concentrate

o Benchmark: alternative plant proteins (soy, pea, whey)

oNot niche product

Large volumes

Versatility for F&B applications

o Food• Meat & non-Meat• Food & beverage• Bakery & patisserie• High nutritional value foods (sports, infant, medical foods)

o Animal & aqua

Develop additional algal fractions

Facilities close-to-market / Contingency Plan

Alternative Plant Protein Value ChainSoy Case Study

Alternative Protein Value ChainMicroalgae Case Study

Known Protein Producing Microalgae Strains

72,000 other sources ?

Screening & Selecting, Challenges for Microalgae ProteinsTechnology readiness levels (TRL)

Growing & processing

Cellulosic cell wall poses serious problem

in digesting/utilizing algal biomass.

Hence, effective treatments necessary

to disrupt cell wall.

Drying method can drastically affect

nutritional quality of the algal protein.

Downstream

Nutritional benefits & Functionalities

Added value fractions

Cost of Goods (COGS)

Ability to compete with other alternative

plant proteins in food/feed products.

The European Perspective

European Institute of Innovation and Technology

EIT Food, a €1.2 Billion Multi-Year Initiative

EIT Food, a €1.2 Billion Multi-Year Initiative

Senior Vice PresidentPepsiCo

https://eit.europa.eu/newsroom/eit-selects-winning-innovation-partnership-food

https://eit.europa.eu/eit-community/eit-food

EIT Food Innovation ProgramsFramework for microalgae protein project

Title of Proposed Idea:

Develop innovative algal plant-based protein sources with important functional

properties needed for a wide variety of food and beverage applications.

Objective:

To develop sustainable algal plant-based protein sources for a wide range of

applications, including meat & non-meat alternatives, food & beverage, bakery &

patisserie products, and food products with a high nutritional value (including

sports nutrition, infant formula and medical foods for elderly). The project aims

to develop cost-effect, highly functional and good tasting specialty proteins

with important essential amino acid profiles.

EIT Food ‘IDEA’ Assumptions & KSF for Algae-based Proteins

Develop new micro-algae sources, for protein & other nutritional properties,

selecting top 3-4 for further evaluation (COGS for growing and down-processing).

Implement established technologies:

o Growing, harvesting & down-processing of high protein algal sources;

o Extraction and separation to utilize all fractions (protein, lipid, polysaccharide,

fiber...) for food and nutritional applications/products.

Analyze all functional properties, for most suitable applications; to achieve early

business wins & long term sustainable business opportunities.

Nutritional by-products & value streams of micro-algae fractions to be evaluated.

EIT Food ‘IDEA’ Assumptions & KSF for Algae-based Proteins

EIT Food, a €1.2 Billion Multi-Year Initiative

Plant Protein Industry Standards (Guidelines)

Thank you to: David Plank, Factors impacting Protein Quality & a New Way for Measuring, May ‘16

Will CRISPR Technologies be Used?

CRISPR/Cas9 and Targeted Genome Editing: A New Era

in Molecular Biology

A CRISPR/Cas9 system adapted for gene editing in

marine algae

Genome editing of model oleaginous microalgae

Nannochloropsis spp. by CRISPR/Cas9

Food & Microalgae ProteinsIngredients Insight: Proteins – Dec ‘16

Protein continues to be sought out by consumers and is considered a part of

a healthy diet.

Consumers are becoming more interested in plant-based protein options.

Consequently, there has been an increase of vegetarian and vegan claims on

high protein food and drink launches.

Other market drivers (relevant for microalgae): Allergen free, Gluten free,

Lactose free.

Sustainable & environment friendly cultivation, processing and supply are

key success factors.

While pea, chickpea, lupine, seeds & nuts, and insect proteins are all

mentioned in new product launches, a microalgae Search shows only 120

products product launches 2012-2017. However…

Many of these products are from seaweed and not microalgae.

Only 24 out of 120 are actually found in food & beverage products; the remainder

dietary supplements.

~16 out of 24 are either infant formula or breastfeeding products, i.e. for DHA-EPA

health benefits.

A separate search microalgae protein shows

2 food products, both dry blend powder

mixes w/ Spirulina.

Conclusions

Food & Beverage applications for microalgae

proteins is still an untapped market category.

Food & Microalgae ProteinsIngredients Insight: Proteins – Dec ‘16

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?

?

Microalgae Protein Versatility for Multiple Categories

…A reminder that in targeting multiple food & beverage categories, there is an

important role for food technology, bench application development, and

downstream processing of microalgae proteins.

(circa 1997)

Aquaculture & Microalgae

In contrast with human

consumption, use of

microalgae by growing

aquaculture industry is already

thriving.

Aquaculture The production &

husbandry of aquatic animals

& plants in controlled

environments.

UN-FAO The State of World Fisheries and Aquaculture 2016

The Food & Agricultural Organization (FAO) acknowledge that global fishery output

must be increased by ≥50% to offset projected shortfalls in dietary protein by 2030.

The use of microalgae in fish hatcheries is for both production of live prey and

greening the larvae rearing medium.

~30-40 million tons must be produced in

order to achieve 50% increase in global

aquaculture production.

Realistically, this goal can only be met by

further development of new intensive

aquaculture systems and intensification of

existing facilities.

Intensive Culture Systems represent >90%

of projected growth within next decade.

Cultivated microalgae are integral part of

hatchery production and commercially

important aquaculture species.

Aquaculture & Microalgae

Microalgae provide important direct or indirect feed

source for early developmental stages of species.

Hatcheries have traditionally cultivated microalgae

in-house or collected microalgae from natural

environments.

Commercial concentrates & dried products were

introduced into the industry during last decade.

The success of introducing external microalgae

source to marine hatcheries is based on several

critical parameters:

Aquaculture & Microalgae

o Product performance (survival, growth ratios, anatomical disorders)o Repeatability and consistency of producto Absence of infectious diseaseo Price

The microalgae requirement for the rearing and enrichment of rotifers is 1000 kg

of microalgae paste for production of 10 M juveniles (2g).

We are involved in a microalgae aqua project in Turkey-Greece, where the demand

for Nannochloropsis alone is projected to be 79 MT per annum, for one species

only! There are several species now in the pipeline.

Per 2015 Rabobank Report - Farming of algae will need to take place on a larger

scale; Market forces are essential to commercializing technologies; Supporting a

smarter food system requires managing risks.

Therefore, having a combined Food/Feed Microalgae Strategy is essential to any

Algal Protein Business Plan.

Food + Feed (Aqua) & Microalgae, Strategic Plan

EIT Food ‘FINAL PROPOSAL’ Deliverables for Algae-based Proteins … Oct ‘17 – Dec ‘18

Title Description

Identification of heterotrophic microalgae strains

“Early Bird” '17 efforts, results of species screening & selection. IP-FTO report.

Testing identified strains for fast growing & high yields

Test results should be completed by end-May '18. Regulatory pathways (ANF, allergenicity).

Optimization of the process in the selected media Processing selected media, small scale bioreactors, mid-Oct '18.

Establish new capabilities for functional properties protein concentrates

By 3 universities and commercial companies - once supplied with microalgae biomass samples, Jul-Nov ’18.

Implementation new processes, pre-scaling design & first cost-benefit analysis

Cultivating & concentrating new protein sources, pre-industrial scale … simulate ingredients to be commercialized, Aug-Oct ’18.

Consumer product acceptance studies by market segment

First new food & beverage products, specifications & samples for evaluation, Nov-Dec ’18.

Thank you!

Gary Brenner

Brenner pharma/food Business Development Ltd.

Kibbutz Hatzor, Hatzor-Ashdod 6097000 Israel

garybrenner@pharmafood-bd.com

www.pharmafood-bd.com

+972 52-7215299