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Market Attractive Algae Bioactives

Emilie F. Slaby [email protected] 612-851-3733

Algae Biomass Summit | Orlando, Florida | EF Slaby | October 2, 2013

Market Attractive Algae Bioactives: Overview

1. Scoular’s Market Segments and Ingredients

2. Opportunities in Feed Proteins

*market example: Pet Food

3. Opportunities in Nutritional Supplements

*market example: Omega-3s

4. Co-development Partnership Outline


1. Scoular Markets and Ingredients

Feed, Food & Nutritional Ingredients


Scoular Ingredient Market Segments


<100s

MT/yr

Specialty

Ingredients

Commodity

Fats & Proteins

Energy

Commodity

1000s-100,000s

MT/yr

MMTs/yr

Volume

Value/Unit

Targeted

Nutrition

100s-1000s

MT/yr

Scoular’s Ingredient Market Handle


-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2008 2009 2010 2011 2012 2013

Metr

ic T

on

s

Specialty Ingredients Commodity Fats & Proteins Energy Commodities

2. Opportunities in Feed Proteins


2012 US Feed Production: 157.1 MMT

Algae Biomass Summit | Orlando, Florida | EF Slaby | October 2, 2013 Data courtesy of Feedstuffs 2013; USDA WASDE, report 4/13; IFFO; Pet Food Institute

21.4

78.8

17.7

21.2

7.4

10.6

0

5

10

15

20

25

30

35

40

45

0

10

20

30

40

50

60

70

80

90

Pork Poultry Dairy Beef Pet Aquaculture

Bil

lio

n U

SD

Mil

lio

n S

ho

rt T

on

s

MMT USD

2012 Regional Pet Food Market by Value

Source: EuroMonitor (presented at Pet Food Industry Forum 4/2013) Algae Biomass Summit | Orlando, Florida | EF Slaby | October 2, 2013

139.1 MMT feed fed to US Livestock 2012

Source: The ProExporter Network 2013

In MMT

Minus Corn

58.2 MMT Protein

Minus Corn & DDGS

35.3 MMT Protein

Minus Corn & DDGS & SBM

7.1 MMT Protein

Oilseed 3.20

Animal 2.60 Fish

0.60

Gluten 0.70

SBM 28.20

DDGS 22.90

Oilseed 3.20

Animal 2.60 Fish

0.60

Gluten 0.70

SBM 28.20

Oilseed 3.20

Animal 2.60 Fish

0.60

Gluten 0.70


Feed Proteins Price History


$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$/M

T

Blood Meal Ruminant Poultry Meal (64 Pro) Fish DDG SBM Gluten Meal

Source: Jacobsen Indcex, 09/2013

Feed Fats Price History


$-

$500

$1,000

$1,500

$2,000

$2,500

$/M

T

Menhaden (US Gulf) Tallow (IL) Yellow Grease (US Gulf)

Soybean Oil (US Gulf) Palm Oil (US Gulf) Coconut Oil (US Gulf)

Source: Jacobsen Indcex, 09/2013

3. Opportunities in Nutritional Supplements


Scoular Ingredient Market Segments


<100s

MT/yr

Specialty

Ingredients

Commodity

Fats & Proteins

Energy

Commodity

1000s-100,000s

MT/yr

MMTs/yr

Volume

Value/Unit

Targeted

Nutrition

100s-1000s

MT/yr

Omega-3 EPA/DHA Ingredients Market Unit Shipment Growth

Forecast by End Application (Global)


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2010 2011 2012 2013 2014 2015 2016

Metr

ic T

on

s

Dietary Supplements Animal Feed Human Other

Source: GOED, 2012

US Supplement Raw Material & Supply

2000-2011


0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

$M

US

D

Fish/Animal Oil Plant Oil

Source: Nutrition Business Journal, 2013

Omega-3 EPA/DHA Ingredients Market Unit Shipment Growth

Forecast by Region (Global)


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2010 2011 2012 2013 2014 2015 2016

Metr

ic T

on

s

North America Europe China Japan ROAPAC Rest of the World

Source: GOED, 2012

US Nutrition Industry Raw Material Sales by Product

2000-2020


-

2,000

4,000

6,000

8,000

10,000

12,000

$M

US

D

Supplements Functional Food N&OPC & Household

Source: Nutrition Business Journal 2013

Long-Term Co-Development Process Stage-Gate Approach

Product Concept

Strain Initiation

Strain Selection

Pilot Process Development

Scale Up

Product Launch

Commercial

Timing: 1 mo

Timing: 6 mos

Timing: 6-12 mos

Timing: 6-12 mos

Timing: 6 mos

Timing: 6 mos

Feasibility Assessment

Balancing Scoular’s portfolio with partner’s strains

Ability to produce target bioactive

Understanding of key metabolic pathways

Tailor cultivation and strain to maximize

bioactive expression.

Prove reproducibility of results at pilot level;

optimization of key growth parameters

Produce large unit mass of target with indicative

form and specifications; cost refinement


Customer development and marketing

campaign including media and trade shows

Summary: Attractive Algae Bioactives

1. Growth in nutritional markets driven by customer demand,

price sensitivity, rising raw material prices, competitor

ingredients and market saturation.

2. Feed Protein Opportunities • 7.1 MMT Protein Ingredients (Gap $800 to $1600/MT)

• $22 B North American Pet Food Market

• $76 B Global Pet Food Market

3. Human Nutrition Opportunities • $4 B Supplement market

• Personal Care & Functional Foods growth 2.5x

• < $0.25 B Omega-3s (raw materials)

4. Co-Development Process is a multi-year investment


Market Attractive Algae Bioactives

Emilie F. Slaby [email protected] 612-851-3733


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