Brittany-based Algaia SA, which makes algae-based ingredients for food, feed, and personal care industries, has confirmed the ‘strengthening of its shareholding structure’ though financial interest from AgriTech company Sapec.
Per the agreement, Sapec has purchased 31% of Algaia’s shares from Demeter & Cap Decisif.
“They become now the second largest shareholder after Maabarot Products Ltd.,” Algaia CEO Fabrice Bohin told FoodNavigator. “The rest of the company is in the hands of [French private equity firm] SuperNova Invest, which did not want to sell.”
An an agro business firm with experience in fertilisers, chemicals and logistics, Sapec has limited experience in the food sector. However, as Bohin explained, Algaia’s scientific foundations sparked Sapec’s interest.
“They were particularly interested in the fact that Algaia could co-extract the traditional ‘actives’ – like alginates – contained in the seaweed AND the other molecules that can be used as plant biostimulates – plant nutrition and health – or plant biofertilisers,” Bohin told us.
These capabilities that make Algaia a player in both food and agriculture, he continued: “It allows a better valorisation of the 40,000 metric tonnes of seaweed Algaia purchases locally every year.
“It participates to an improved sustainability programme of lower carbon emission and gives more strategic opportunities for the local fisherman industry.”
The transaction means the company is benefitting from a pool of investors, said Algaia’s chief executive, none of which are “competing with any of Algaia’s customers and prospects, [yet have] individual and collective experience in life science, food, baby food, nutraceutical and AgTech.”
According to Sapec CEO Antoine Velge, the investment represents part of an overarching strategy to develop in businesses “where we see significant growth opportunities”.
“Algae based products correspond to multiple market demands, all looking for more natural and sustainable solutions,” he continued.
“During the due diligence process, we were impressed by Algaia’s vision, people, outstanding assets, innovation capabilities and execution drive. We share with Maabarot and SuperNova similar values and we are excited to start contributing to the company’s development.”
Sustainability and health drive algae demand
The announcement follows significant investments in Algaia’s seaweed extraction capacity, notably through the French firm’s acquisition of Cargill’s alginate business in 2016.
In the food industry, alginates can be used as natural and clean label thickening agents for ice creams, drinks and jellies.
More generally, the firm touts its seaweed extracts as an excellent alternative to animal derived products, observing increased attention in vegan applications, nutraceuticals, probiotic encapsulation and edible films.
“Since last year, the US Food and Drink Administration is also now considering enforcement discretion relative to the declaration of alginates as a dietary fibre,” said Bohin.
“We observed increased attention for algae-based solutions, alginates or carrageenans, often considered by customers as additives being extracted from more sustainable raw materials,” he continued.
The chief executive predicts demand for algae-based ingredients to continue, for reasons relating to both sustainable and health.
“The algae trend is here to stay for the next years and there are a lot of new product development launches with algae ingredients due to its high nutritious profile and growing clinical studies to support its health benefits.”
And as this trend grows, so does Algaia; the firm is currently experiencing double digit growth, we were told.
“The carrageenan business of Gelymar handled by Algaia in Europe increases double digit as well. The company will continue to invest and grow, looking for additional strategic alliances with companies sharing the same vision and values and continues to seek for M&A opportunities as the shareholders have appetite and financial means for this as well,” said Bohin.
“By end of the year 2019, more than €7m will have been invested at Algaia production centre since its acquisition from Cargill.”
