AlgaEnergy, which specialise in the production and commercial applications of microalgae, has inked an agreement with electrical engineering and software company Yokogawa. The strategic agreement involves an approximately €10m investment by Yokogawa to acquire newly issued shares of AlgaEnergy, making the Japanese company a reference shareholder.
AlgaEnergy has been a pioneer in the microalgae biotechnology field since 2007. It currently operates a commercial production facility in the south of Spain. In late 2015, the company launched the world’s first line-up of microalgae-based biostimulant products to promote efficient crop cultivation.
The deal is significant for the execution of AlgaEnergy’s business plan and the capital injection will be used to expand the group’s reach into the food sector, Rodríguez-Villa explained. AlgaEnergy will also leverage Yokogawa's advanced technologies and know-how related to the automation of industrial processes to maximize quality and efficiency as production volumes increase.
“We are following a very clear strategy that is prioritizing our efforts in the short-, medium- and long-term. Due to several factors, Food and beverage (F&B) was not the first business line we actively pursued in terms of generating revenues, but it certainly is going to be the next one, and will become one of the main business lines of AlgaEnergy in the following five to 10 years," Rodríguez-Villa revealed.
‘The growth potential in the food sector is immense’
Rodríguez-Villa sees some fundamental issues supporting the growth of microalgae as a food source. In particular, he stressed it is a sustainable source of high quality protein. “Microalgae are the source with the highest protein content on the planet, the original source of Omega-3 PUFAs (phytoplankton). And on top, plant-based. The growth potential in the food sector is immense.”
While it might seem like a bit of a switch from AlgaEnergy’s current core revenue stream, the company has been working on developing different food lines “for years”.
These efforts include: “Integrating microalgal biomass as functional ingredients in common food matrixes, extracting compounds to integrate those as functional ingredients, working with chefs on the organoleptic properties following a more gourmet kind of approach.”
Rodríguez-Villa revealed AlgaEnergy has already established commercial relationships with (unnamed) “important companies in the F&B sector” in order to supply functional ingredients. Funds will in part be used to develop this “promising pipeline” in the F&B sector.
But AlgaEnergy isn’t planning to stop there: “We started as a raw material or ingredient provider, but will launch our own
brand soon.”
Science-based innovation
AlgaEnergy’s approach to innovation is underpinned by scientific research into the benefits of microalgae consumption.
Rodríguez-Villa explained: “We have analysed the situation with market experts and see a clear opportunity to innovate with microalgae. The innovation will be science-based, not marketing based, as AlgaEnergy has participated in several applied R&D projects in the field of nutrition since 2014.
“Some of these projects have had the support of the government of Spain, and are being executed in collaboration with relevant companies in the sector, as well as researchcentress, universities, chefs and even hospitals.
“AlgaEnergy collaborates with around 20 companies in applied research consortiums that seek to develop ready to market products. In fact, some products including our microalgae are already marketed, to be found on the most known supermarkets.”
AlgaEnergy has participated in three important projects: METASIN, PROGRESO and ALIPROT.
Rodríguez-Villa detailed:
“The main objective of the project METASIN is to research and develop ready to market multifunctional active ingredients, foods and nutritional complements, which are able to have on influence on the pathologies and risk factors associated to the metabolic syndrome. The aim is to improve the quality of life of the targeted population in an integral way, generating new business opportunities for the F&B companies.
“The main objective of the PROGRESO project is to research in innovative technologies which allow the obtaining of nutritional products of high added value, which improve the content of proteins in the diets and provide technical solutions to targeted population segments with specific protein demands. In this sense, the project will provide valuable know-how, technology and innovation in order to make use of the protean raw materials which are currently not being exploited yet, as a high quality source in the human nutrition.
“The main objective of ALIPROT is to research technological and healthy features of different protein sources (dairy, meat, vegetables and from algae) as well as their applicability in different food matrices. Such research will aim to establish methodologies for the design and development of innovative ingredients and new healthy foods with high protein content, tailored to the nutritional and sensory requirements of population groups with greater muscle and vascular wear, such as the senior population (given the relation between loss of muscle mass and aging) and athletes (with a very active muscle metabolism). Within this context, microalgae, the vegetable containing the highest amount of proteins on Earth, will play an essential role.”
‘A determined incursion’
Rodríguez-Villa was bullish on AlgaEnergy’s ability to capitalise on the opportunity in the food and beverage space for products containing microalgae.
“We have been preparing ourselves to enter this market from a scientific, product development, regulatory and commercial point of view, and our activities in the F&B won’t be a half throttled test but a determined incursion,” he stressed.
AlgaEnergy is also confident on the long term prospects for microalgae, which Rodríguez-Villa said are “massive”. He predicted that these will continue to grow as “the cultural and regulatory bottlenecks” in different regions are being overcome.
“AlgaEnergy is in a privileged position to take advantage of current and future opportunities. We accumulate over four decades of knowledge in microalgae, we have five different culturing technologies, two public multinational companies as shareholders, over 120 research partners across the globe, experience with microalgae species that are unknown, experience in collaborating with large F&B companies, a huge pipeline of products and ingredients. We are very confident on our capabilities.”