4.1 Microalgae: The Solution for Sustainable Ingredients ... · Markets •Existing markets:...
Transcript of 4.1 Microalgae: The Solution for Sustainable Ingredients ... · Markets •Existing markets:...
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4.1 Microalgae: The Solution for Sustainable Ingredients in Animal
FeedsMonday July 24, 2017
8:30 – 10:00 am
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Introduction
Harmon Consulting, Inc.
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Why Microalgae?• Microalgae are an incredibly diverse set of one celled plants
• Fast reproductive rates providing fast crop turn around time with harvests occurring from production systems frequently, a crop harvest at least every week
• As primary producers, microalgae synthesize valuable compounds such as essential nutrients that animals – including humans – can not synthesize internally. Nutrients that must be ingested• Fatty acids• Polysaccharides• Pigments• Proteins• Etc.
• Tiny, efficient, and natural manufacturing plants with optimization possible via genetic modification and synthetic biology techniques
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Sustainability• Due to ever increasing world populations, our ecosystems are pushed to the limits in an
attempt to feed ourselves.
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Sustainability• Microalgae offer one solution for production of essential nutrients and high quality
proteins, as well as many other compounds.
• Avoid competition for agricultural land and water
• Carbon dioxide mitigation
• Extremely productive per acre compared to traditional crops
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Chlorella, a FW microalgae was produced at Cambridge pilot plant. From the data generated it was estimated that algae can produce 17,000 – 40,000 pounds of protein per acre, while soybeans only produce 250 - 800 pounds of protein per acre (50x more productive)-The Technological Fix: How People Use Technology to Create and Solve Problemsedited by Lisa Rosner
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Production Platforms• Outdoor vs Indoor
• Open (ponds) vs Closed (Photobioreactors)
• Phototrophic vs Heterotrophic
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My Experience Selling Microalgae for Animal Feeds
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My experience: Cyanotech Corporation
Harmon Consulting, Inc.
• V. Harmon hired as Technical Sales and Animal Feed Sales Manager
• Summer of 2004 from the Cultivation Department
• Responsibilities included:
• grow sales of NatuRose™ product
• maintain sales of animal grade (low grade) spirulina product
• Provide technical sales support to human grade product customers and animal feed grade product customers
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Initial Strategy
• Identify markets that fit the size of available production quantities and quality specificatioins
• Regulatory approval had to be in place or customer had to have the resources to do the regulatory work
• 120 MT annual production
• 1.5% astaxanthin (10% overage)
• One year shelf life
• Regulatory approval as a color additive for salmonids
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Markets• Existing markets:
• Sled dogs – 0.5 ton annually
• Chickens – 1 ton annually
• Ornamental fish – 2 tons annually
• Prawns - 1 ton annually
• Potential new markets:
• Pets: big markets, very hard to get in the door but had interest from Nutro, Hills and Purina• Potential for customer to handle regulatory approval
• Horses, particularly race horse market interesting• Potnetial for customer to handle regulatory approval
• Salmon: market is huge and price sensitive – Chile, Norway, Canada, Scotland and Ireland• regulatory approval in place
• We positioned for niche market, organic salmon farmers, as it fit size of production and interest was high
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Strategy and the End of our Story
• Organic Salmon markets
• Sales trips and meetings with interest from feed manufacturers in Ireland and Scotland
• After significant effort and supplying product for trials in manufacturing and feeding fish, an exclusive contract for all of production to one supplier offered (120 MT annually)
• Value Proposition: NatuRose Natural Astaxanthin from algae, one feed manufacturer, one group of organic salmon farmers, and a grocery chain with exclusive rights to the organic, naturally pigmented salmon
• Demand for product in human markets began to increase with a significantly higher price point, so the exclusive contract was not negotiated
• In 2008 Cyanotech exited Animal Feed markets
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Microalgae Industry Challenges
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Regulatory Challenges• Feed ingredients vs feed additives
• Careful attention to terminology in marketing to determine if product is an additive or an ingredient
• Feed additives are added for nutritional value or pigmentation
• Data is required to show what the value of the additive is, expensive
• Petitions for feed additives can take a long time unless equivalency can be claimed
• Equivalency with existing feed additive petitions can be a route to approval
• Pet feeds are highly regulated, and the regulatory hurdles are not insignificant
• Require safety studies that are very expensive $200,000
• Can get GRAS approval for animals in US, but your GRAS application needs to state what you want to sell for specifically – GRAS status for humans does not apply to pets/animals
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Industry Challenges
• Markets require steady supply
• Capital necessary to achieve economies of scale
• Product must be consistent so that blend formulas are easy and straightforward
• Extrusion stability matters – think about a preservative
• Shelf life and stability studies important
• Safety data of product should be available, this is expensive
• Most big markets are out of reach for algae producers, due to volumes needed and commodity market pricing
• However this is changing!
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Our panelists today are ready to supply animal feed markets!
They are overcoming Industry ChallengesThank you very much for your time and attention!
Harmon Consulting, Inc.