Algae may be small, but their impact on the food and feed industries will be big. These little plants are full of protein and oils, and they can act as an alternative to limited existing sources. Their ability to produce omega-3 oils makes them suitable for replacing fish oil and fishmeal in animal feed, especially aqua feed. We can expect to see increased use of algae in these segments, as well as in the food ingredients market.
In order to realise their potential as a functional ingredient, some hurdles still need to be overcome. Pilot projects are needed, for example, to prove that production is both possible and profitable on a commercial scale. And offtake contracts from F&A companies are needed in order to reduce the risks of scaling up production. In Rabobank’s view, algae production is reaching a tipping point—where it goes from being a product with potential to a potential game-changer. Now is the time for F&A companies that need—or will need—this product to decide how they want to engage with the fledgling algae industry in order to secure their competitive advantage for the future.
Algae provide sought-after specific functional nutrition
Established players in feed and food, academic research institutes and inventive start-ups are all increasingly aware of the potential of algae, with their high nutritional value, along with high yields of proteins and oils. And the possibilities will grow, once farming reaches sufficient scale and costs decline. Today, the algae industry has an estimated production of 9,000 tonnes dry weight annually, making it a tiny sector compared to food commodities such as soybeans, with annual global production of about 300 million tonnes.
Further R&D, investment and the involvement of established F&A players are needed to grow the algae industry and bring it to commercialisation. If challenges in the production process can be overcome, these microscopic plants could start to play an important role in providing protein and omega-3 oils that are otherwise only found in seafood products further along the supply chain.
More details can be found in the Rabo Research report ‘A Brave New World: On the Potential of Using Algae in Human and Animal Nutrition\', available to customers.
Source: Lian Heinhuis, Associate Analyst – Seafood, Rabobank.
