Sami Sassi, founder of CILNorth, a consulting company working with the food ingredients industry, looks at the hurdles facing the microalgae industry.
The great expectations for algae in general and, in particular, microalgae, have regularly peaked and troughed during the past 75 years. But, whatever the end result, from the promises to end world hunger in the 1940s to the multimillion dollar projects to produce biodiesel in the 1990s, none has met the hopes and aspirations of many players and investors in the field. These failures raise many critical questions: what hurdles are the industry facing today and how can these be managed; how can algae meet and surpass our expectations; and why and how should we work with microalgae?
Need for algae
Based on the OECD-FAO Agricultural Outlook, 2012–2021, the key issue is one of increasing production to meet the global demands for food, feed, fuel and fibre. Agricultural production needs to increase by 60% over the next 40 years to meet the rising demand for food, whereas the total amount of available arable land is only projected to increase by 5% by 2050. At the same time, it is evident that production growth will be slower, owing to resource constrains, environmental pressure and higher material costs for items such as fertilisers. Clearly, additional production needs to come from increased productivity.
The ‘second coming’ of microalgae in the biofuel arena during the early 2000s was prompted by rising oil prices. In theory, microalgae is the perfect substitute candidate, with its ability to use CO2, minimum land usage, environmental impact and green profile. Many projects that looked promising in the laboratory turned out to be non-viable at large-scale, partly because of a lack of dedicated technology that resulted in overly expensive operation and capital costs. After years of trials, many algae oil companies started to look for other avenues of profit. These companies understood microalgae and several of them chose to move towards the food and food ingredients area. One of the reasons for that was the use of microalgae in the supplement industry and the interesting price per kilo that the products were sold for.
We need our daily bread and the demand for agricultural products is expected to remain stable, albeit expanding at slower rates compared with the past decade. Cereals are still at the core of human diets, but growing incomes, urbanisation and changes in eating habits are all contributing to the transition to diets that are higher in protein, fats and sugar. Out of the vast number of microalgae species, only a few of them are currently being used for industrial applications. Based on the type of algae used, the level of nutrients will differ: from Spirulina, containing up to 60% protein, to Dunaliella salina, being the richest natural source of carotenoids, and Dunaliella tertiolecta, with an oil yield of about 37%.
Chlorella and Spirulina have been available for years and sold as supplements (partly because of their high protein levels). These and other algae proteins are organoleptically challenging – consider an aquarium that’s been untended for several weeks – and need to be purified before they can be consumed by the general public in anything other than tablet form.
The protein market has grown exponentially in recent years. According to OECD-FAO, protein consumption has grown by 450% in the past 50 years and is expected to continue. In 2018, global protein consumption is estimated to reach 380 million metric tonnes (mmt), up from the current 250mmt. The growth is expected to come mainly from the emerging markets: the daily protein intake for each person in Indonesia is 63g compared with 114g in the US. The market value for protein will grow as it continues its way into food products such as beverages, snacks, soups and bread, and these protein-boosted products are reaching out to larger numbers of consumers. With rising living standards, consumers in emerging economies are also able to pay for their daily protein. Traditionally, the main source of this protein has been from animal sources, and finding alternative sources of protein based on less agricultural inputs, environmental emissions and land use will be key to food and land security in the future.
The use of algal proteins and other algae-derived nutritional compounds will play a significant role in the marketplace once isolated. Isolating these proteins prior to biofuel production will furthermore ensure that the mass balance for biofuel is net positive. Globally, hundreds of companies are working with algae and, at the same time, looking for the next designer proteins that will make the difference for the business.
Algae in Asia
The global demand for protein is rising and a growing number of countries, such as China, must import larger volumes. With the rising GDP, Chinese consumers are spending more money on higher quality food. China itself has limited access to fresh water and arable land, which will create a reliance on importing even more commodities in the future; this demand will also keep the prices for agricultural products at a high level. Protein consumption in China has been growing alongside its GNP. In 1992, the daily personal protein intake in China was 67g; this number increased to 89g in 2007. During the same time period, China’s GNP growth has been well above 7%.
In India, demand for protein is exceeding supply (and affordability), especially in rural areas. The excess demand is related to rising incomes and population growth. In a predominantly vegetarian society, animal proteins are generally inferior and relatively expensive, whereas a reasonably priced vegetarian protein powder could capture the market and play a significant role in local diets. This is especially valid in rural areas, where protein powders could be easily disseminated and where there is great potential for the significant growth of quality food protein. Indian consumers may have more disposable income, but the GDP is still low compared with other emerging economies in Asia. It will require a few years of economic growth and a reasonably priced protein source before suppliers are able to satisfy the current demand. To reduce the demand for milk, meat and other protein sources algae would be a potential solution for a variety of Asian countries. Moon cakes with Spirulina are one example in which algae works well and the products are sold with a premium.
Holistic approach to microalgae
For the microalgae business case to be successful, a holistic approach must be taken whereby each value stream is utilised. Many microalgal operations started with a focus on one specific part of the production chain; now, however, it’s time to look at the entirety of the microalgae value chain as a single process in which by-products are also recognised as being valuable and optimisation is continuous. With a holistic understanding of this value chain and its outputs, high value raw materials will be created for end-use applications in specific markets based on functional and nutritional properties.
Too often, an idea is born in the laboratory and other stakeholders are included too late in the process. Consulting, marketing and sales should enter the development process at a much earlier stage, as this would improve the probability of success. It’s the market and the consumer that needs to recognise and accept the product – and communicating with the market is crucial. Many consumers in the old world, such as Denmark, are more traditional when it comes to foodstuffs compared with the Asian market. But, in the West, consumers also understand the need for healthy food and are keen to try new products. If the taste isn’t appealing, consumers won’t make a repeat purchase. Turning microalgae and its derivatives into standard products by moving from niche status to mainstream is a fundamental requirement. Marketing should be employed to clarify the unique selling points and support sales by communicating this information to the market.
To increase output, genetically improved algae strains might offer a solution – but would also lead to regulatory complications, especially in the EU. Every major global food and supplement company would prefer an ingredient that is available for sale on a global basis. They would also want to have more than one supplier for any key product, owing to security of supply and to encourage competitive pricing. Current microalgae processing technology is, to a large extent, based on equipment developed for the dairy or other food processing industries. By optimising the whole process flow –from strain selection to large-scale extraction – would help to lower the production costs. Several new global algae projects are looking into possible synergies with other operations, such as combining algae production with fish farming. More specifically, industries using large volumes of water and producing CO2 are likely targets for microalgal co-operatives. In China, for example, operators with ageing industrial infrastructures that are planning to upgrade could benefit by incorporating microalgae production into the processing streams.
Marketing is an important part of the process, but it’s not the only tool in the box; work is still needed in every aspect of the microalgal industry. The key is to take a co-operative and holistic approach. Too many projects focus on developing technologies that have already been tried and tested elsewhere. Companies and organisations need to work together across departmental borders, openly and actively, to achieve best practices. Working together, throughout the whole process, will be the way forward for microalgae.
Photo: Chlorella has been available for years and sold as a dietary supplement
View original article at: Quo vadis, algae?