Algae ingredients category bursting with life

Algae ingredients category bursting with life

Continued interest from consumers in omega-3 fatty acids and newly-kindled excitement about astaxanthin have boosted the fortunes of algae-ingredient suppliers.  These companies' sustainability stories help drive sales, too. And underlying the whole sector is the promise of algae as a source of renewable biofuels.

There’s big news in the nutrition business being generated from the smallest of sources: algae, unicellular plants that inhabit dozens of different environmental niches.  Depending on the species and cultivation method, algae can yield potent carotenoids, nutrient-dense superfood-type powders, vegetarian sources of omega-3s and even biofuels that have been successfully tested by the U.S. military.

The longtime leader of the algae space, Martek, is in the process of full integration with parent company DSM Nutritional Products, which bought Market in a billion-dollar deal in  2010. Martek recently assumed its new name —Nuritional Lipids.  The new company will combine Martek’s strengths in algal oils with DSM’s existing nutritional lipids portfolio.

“The outlook is amazing for the whole space,” said Cassie France-Kelly, spokeswoman for Nutritional Lipids. “Most market research shows omega-3s is the fastest growing category of functional ingredients and nutrition.  Awareness is growing.  Even awareness for specific ingredients, like the one we make, DHA, is very high, particularly for health-conscious consumers.  DHA and EPA are among the few nutrients that have an enormous body of extremely credible science behind them.”

Martek had its first commercial application for its DHA in an infant formula in Europe in 1993 and launched in infant formula in the U.S. in 2002.  The DHA ingredient was rebranded as life’sDHA in 2008.   In March, Martek launched Ovega-3, an all-vegetarian omega-3s supplement that uses its life’sDHA plus EPA ingredient.  The company touts it as the “world’s first fish-free fish oil.”

“Consumers and retailers alike are becoming increasingly concerned with finding sustainable alternatives for in-demand products.  Certainly that is a big part of the brand proposition and part of why we think it’s successful,” said France-Kelly.  The product also avoids the fishy burps some consumers report with fish oil, she said.

As far as Nutritional Lipids is concerned, it’s too early to tell exactly what products might arise from this new collaboration, France-Kelly said. “DSM has huge strengths for premixes as well as powdered formats.  We’re pretty early in the integration; we have some great strengths they will be able to leverage, and they have some great strengths that we will be able to leverage,” she said.

Food and fuel

Another pairing in the space, the joint venture between  Roquette and Solazyme, has also produced recent news as it makes strides toward a January release of a new “flour” derived from algae.  Food formulators will be able to use the powdery yellow ingredient to mimic a full-fat mouthfeel in products like soy milk or shortbread cookies.

Solazyme has also leveraged its algae expertise into a series of research and demonstration contracts on algae biofuels for the U.S. Navy, which has successfully demonstrated the fuels in aircraft and patrol boats.  The latest contract runs through this year and calls for a delivery of 150,000 gallons of fuel.

Algae ingredients from photosynthesis

Nutritional Lipids and Solazyme make their products in tanks via a fermentation process.  Other companies are competing in the algae ingredients sphere with a different technology, growing algae in a more familiar setting in shallow, open tanks bathed in sunlight.  A reliably sunny, lower-latitude location is ideal for this kind of growing operation.  These companies girdle the globe in locations such as Arizona, Hawaii, Australia, India and Israel.

Also important is a supply of good water, which is what led Cyanotech to locate its tanks alongside the Pacific Ocean on the lava fields of Hawaii’s Kona Coast.  Drawing water from the ocean depths yields a nutrient-rich medium in which to grow its signature product called Spirulina Pacifica. The company harvests the algae, dehydrates it and supplies it in a nutrient-dense and protein-rich powdered form for use principally in supplements and to some extent in green superfood-type drinks.

Cyanotech also cultivates a Haematococcus species from which it extracts BioAstin, a branded form of astaxanthin, a potent carotenoid and antioxidant.  Sales of this ingredient spiked this year after a favorable mention in January by Dr. Mercola on the Dr. Oz television show.

Sales of the ingredient almost doubled after the show first aired, said Bob Capelli, vice president of sales at Cyanotech. “That isn’t only because of Oz.  Mercola and Oz were definitely the triggers.” Mercola continued to tout the ingredient in newsletters, as have other healthy product popularizers such as Suzy Cohen ("America’s Most Trusted Pharmacist").  Unlike other fads he has witnessed in the healthy products business, this one seems to have staying power, he said.

Another astaxanthin producer that benefited was Valensa, which actually supplies the astaxanthin for a Dr. Mercola-branded product.  The supplement was developed after the Dr. Oz astaxanthin segment aired, said Valensa CEO Dr. Rudi Moerck.  In addition to astaxanthin, Valensa has developed a spirulina supplement product encased in a blue coating made primarily of phycocyanins, the substances that give the algae its blue-green tint.  The spirulina is supplied by Valensa’s majority shareholder, Parry Nutraceuticals of Chennai, India, located along the shores of the Bay of Bengal.

Algae in the desert

Water was also part of the story for startup Algae Biosciences, Inc., a paradox considering it’s located in a bleak, albeit beautiful, desert.  The company plans to start commercial-scale production of omega-3 ingredients in 2012 from algae grown in a photosynthetic process at its Holbrook, Ariz. plant  where an expansion is underway.  Many species of algae thrive in brackish water, water that is usually too salty for other uses.  AlgaeBio’s plant in the Painted Desert sits atop the Coconino Aquifer, a briny water source that poisons the ground above so that little will grow besides a bit of saltbrush.  But the water is extremely clean, with all of the nutrients the algae needs to thrive.  And, being located in a desert means there’s plenty of sun.

“When you look at what we can produce in this pristine water, the most valuable thing is the omega-3 fatty acids,” said Mark Edwards, a professor at Arizona State University who’s also the vice president of corporate development for AlgaeBio.

Demand will remain high

Demand is likely to increase for the high quality ingredients derived from algae, which are backed by credible science and now consumer awareness, too.

Sustainability concerns will drive demand as well.  It has often been noted that if every man, woman and child in the world were to receive their recommended daily allotment of omega-3s, there aren’t enough fish in the ocean to fill that need, however carefully harvested.   And underlying it all is the brass ring of sustainable biofuel production.

“The impetus for this seemingly urgent demand across the globe is because algae, compared to other feedstocks, can provide a high-yield source of the material under consideration without compromising food supplies, rainforests, arable land, or the atmosphere,” said Kantha Shelke, a principal in Corvus Blue LLC, a Chicago-based food consultancy.

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