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Microalgae as an Alternative Protein Source

Posted on:May 8, 2018

May 8, 2018— The Protein Trends & Technologies Seminars consists of a one-day Pre conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

SPECIAL SESSION: Microalgae as an Alternative Protein Source

The microalgae biomass contains numerous ingredients that offer supply-chain opportunities. [For larger PDF of this chart, click on the image.]

Algal proteins have become a strategic factor for global food and beverage industries, aqua-farming and animal nutrition. Gary Brenner, Owner, Brenner pharma/food Business Development, reminded the audience that algae is a broad category, in his Special Session presentation entitled “Microalgae as an Alternative Protein Source: A Developing Story.” The distinction between micro and macro is important. There are differences between environmental diversities, and the technology and purification of ingredients.

Traditionally, research has focused on Spirulina, Chlorella, Porphyry, Nannochloropsis, astaxanthin, Dunaliella and fucoxanthin. Yet the opportunities extend to over 72,000 microalgal sources of species and strains that have not been fully researched or developed. A critical part of the success in developing protein sources from microalgae lies in the byproducts that are created after cracking the biomass of the algae and extracting out fractions.

It’s not unlike the history of soy products and the price comparison between soybeans, soybean meal, soybean oil; and soy flour, concentrates and isolates. For the same percentage of protein, different food categories, such as infant formula, can demand a much higher price, although the requirements are much stricter. Added value has been found in phytochemicals, isoflavones, saponins and phospholipids.

“The world of microalgae is taking the same approach,” Brenner said. Microalgal proteins are not a niche product. The business model is centered on high-protein concentrations, functionalities and flavor profile, and ultimately—dollars per kilo.

“I’m all too aware, and the people with whom I interface are aware, that $6-8 a kilo for 70% algal protein concentrate is steep; but we can expect that most high-concentration alternative proteins will in this range, a little less or a little more,” he said. Brenner and his colleagues expect two things to happen to bring the price down. Different nutritional benefits will be associated with protein levels; efficiencies will also
drive down cost.

Work in Europe is focused on revolutionizing food production. European Institute of Innovation and Technology (EIT) Food is a consortium of 50 food partners across business categories whose objectives are, in part, to catalyze food innovation.

By supporting research and entrepreneurship, they are working to improve nutrition and make the food system more resource-efficient, secure, transparent and trusted. Of all the land crops, algae is the most sustainable, with the lowest carbon, water and arable land footprint.

Brenner said many of the industry partners are committed to the use of microalgae for alternative protein sources. One of the proposed projects given to EIT Food’s €1.2 billion multi-year initiative (over seven years) is the development of algal plant-based protein sources. The project aims to develop cost-effective, highly functional and good-tasting specialty proteins with important essential amino acid profiles.

While fractions such as PUFA concentrations may be an added value of a microalgal source, protein is driving project development, both in terms of functionalities and price point. “The alternative protein sources are putting us into a different mindset, when it comes to the possibilities of synergies between these different proteins, with new functionalities solving issues of everything from price to taste and everything in between,” he said.

Flavor is a key consideration, as are amino acid profile and digestibility. The goal is also to achieve functional characteristics that give food developers new tools with which to work. Solubility, emulsification, heat stability, color, viscosity and gelling are properties the industry is working to achieve, Brenner stated.

Brenner also brought home the need for distinction when referring to alga by showing Mintel data. When studying ingredient labels, he found many of the products are from seaweed and not microalgae. Only 24 out of 120 actually are found in food and beverage products; the remainder are dietary supplements. A separate search for microalgae protein shows two food products, both dry blend mixes with Spirulina.

His conclusion? The market for food and beverage applications for microalgae proteins is still a virtually untapped category.

“Microalgae as an Alternative Protein Source: A Developing Story,” Gary Brenner, Brenner pharma/food Business Development, garybrenner@pharmafood-bd.com

 


The Food Industry’s Current and Future Regulatory Environment

Posted on:April 27, 2018

April 27, 2018-– The Protein Trends & Technologies Seminars consists of a one-day Pre-conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

The Trump administration’s current freeze on food ingredient definitions and food package-labeling regulations may slow the pace of new product introductions. Why introduce new products if package claims must be redesigned before roll-out?

The Food Industry’s Current and Future Regulatory Environment
Jessica P. O’Connell, Special Counsel, Covington & Burling’s Food and Drug practice group

“What I really wanted to talk about is what to expect over the next few years, given the new administration,” said Jessica O’Connell, Special Counsel for Washington, D.C.-based Covington & Burling O’Connell.

Administrative change in Washington, D.C., normally generates uncertainty regarding new food regulations, but these are abnormal times: What happens when a new administration makes reducing government regulatory burdens one of its primary goals?

U.S. government statutes currently awaiting clarification and implementation include: FDA guidance on definitions for “healthy,” “fresh” and “natural;” FDA guidance on implementation of the Food Safety Modernization Act (FSMA); final rulings and guidance on a revised Nutritional Facts panel; FDA guidelines on ingredient definitions; and the USDA’s guidelines regarding GMO foods’ labeling.

“One of the Trump administration’s first acts after inauguration was to issue a regulatory freeze, until pending regulations could be reviewed by new administration appointees,” said O’Connell. This is a common practice.

“Shortly after the inauguration, a ‘two-for-one’ order was issued, indicating that for every new regulation approved, two would have to be rescinded,” recounted O’Connell. This was later clarified to apply only to new rules that imposed significant cost burdens on society. Months later, a further clarification instructed agencies to focus their attention on regulations that “eliminate jobs or inhibit job creation;” are “outdated, unnecessary or ineffective;” or “impose costs that exceed benefits.”

“We will have to wait and see what regulations will be eliminated under this directive, although it will probably first entail old rules and standards that are outdated,” O’Connell noted. She also pointed out that there are significantly different social and business cost burdens incurred from FDA regulations defining package-label designations, such as “natural” or “fresh” on the one hand, and the much heavier burdens associated with implementing FSMA regulations on the other. Some costs defy easy measurement.

The FSMA is especially burdensome to food and beverage manufacturers, and companies remain in limbo until the new regulatory regime sorts itself out. All seven of FSMA’s foundational rules have been published, and compliance dates have been staggered for each rule, leading into 2019…or beyond.

“There was very limited FDA guidance on FSMA compliance before the election and nothing thereafter,” observed O’Connell. If the administration applies the “two-for-one” rule to this legislation, it is fair to ask whether such guidance will ever be forthcoming, or whether the regulations will even be implemented, she continued.

Food labeling was “a huge focus” for the preceding Obama administration, but this won’t necessarily be the case for the Trump administration Though not directly pertinent to proteins and protein ingredients, the current freeze on food ingredient definitions and food package-labeling regulations threatens to derail the pace of all new product introductions: Why introduce new products if package claims must be redesigned before roll-out? Markets abhor uncertainty.

There is also one action before the USDA that should concern protein ingredient and food manufacturers, cautioned O’Connell. A USDA standard defining “bioengineered foods” disclosures is due to be implemented July 29, 2018. Implemented to pre-empt individual state initiatives, the law vaguely requires the USDA to foster collaboration with the National Organic Program (NOP), but much remains to be done.

“There have been legitimate questions regarding whether and when it will be implemented,” said O’Connell. She said that an Advanced Notice of Proposed Rulemaking (ANPRM) was submitted by the USDA in January but withdrawn less than a week later—due to the regulatory freeze.

O’Connell also alerted attendees to a soon-to be completed USDAsponsored study evaluating the use of QR codes to communicate information on food packages, which would have major implications for food labeling, marketing and advertising. She expected results “pretty soon,” so stay posted!

“I think that a final question we need to consider is [that of] resources,” said O’Connell. “It has always been a struggle to determine how many resources these two agencies could apply toward statute implementation.” This, too, remains to be determined. Without credible regulatory guidelines or enforcement, continued uncertainty can only freeze the gears of innovation.

[Editor’s Note: On September 29, the FDA released a proposed rule to extend the compliance dates for the Nutrition Facts and Supplement Facts label final rule and the Serving Size final rule from July 26, 2018, to Jan. 1, 2020. https://goo.gl/Mx9iVk].

“The Food Industry’s Current and Future Regulatory Environment,” Jessica P. O’Connell, Special Counsel, Covington & Burling’s Food and Drug practice group, jpoconnell@cov.com

 


Identify Trends, Stay Relevant with the Evolving Consumer Market

Posted on:April 23, 2018

April 23, 2018— The Protein Trends & Technologies Seminars consists of a one-day Pre-conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

How to Identify Trends to Stay Relevant with the Evolving Consumer Market
Blake Mitchell, Partner and President, Interact On Shelf

“A Sunday on La Grande Jatte,” by G. Seurat (1884). The painting, a pixelated composition of colored dots, provides a good metaphor for how many innovations, fads and trends combine to define patterns of innovation in the food and beverage industries.

People in the food and beverage industries need to get out of their laboratories and into the hidden corners of consumer food markets, if they want to catch the leading edges of food and beverage innovation.

That was the message conveyed by Blake Mitchell, Partner and President of Interact on Shelf, in his presentation titled “How to Identify Trends to Stay Relevant with the Evolving Consumer Market.”

“We help food and beverage brands realize their full potential through packaging and marketing. But this talk really is about how to identify trends,” said Mitchell. He cited his location in Boulder, Colo., as being especially well-situated for catching incipient food trends. “Boulder has a wonderful food and beverage community that supports a lot of innovation,” he said, listing leading avant-garde food brands incubated in the Boulder environment, such as Doctor D’s, Quinn Snacks and Purely Elizabeth. The Huffington Post once listed Boulder as “the number one place to start a food company,” continued Mitchell.

Mitchell likened the process of analyzing food trends to the pixelated impressionism of 19th Century painter, Georges Seurat. “Each point of color stands alone, but combined with others, creates an overall trend pattern.” However, he cautioned, one has to learn to distinguish between fads and ideas. Even famous painters erase designs and repaint their canvasses before their masterpieces emerge.

The venues whereby Mitchell and his colleagues search out incipient food trends range from food magazines and trade journals; global food and beverage trade shows (they attend some 14 per year); to major retailers—and to the dark, hidden alleys of major world cities, such as Hong Kong.

Some food and beverage trend events are readily accessible online through web services, like Project Nosh; others are small, specialized and highly regional trade shows, such as the all plant-based, annual Seed Food and Wine Festival, located in Miami, Fla. Rabobank, a leading international food and agricultural-focused bank, developed FoodBytes, a series of events and competitions designed to connect food companies and investors with start-up innovators.

Small foodservice outlets also incubate food and beverage ideas, transforming fads into tangible food and beverage trends. Mitchell pointed to MatchaBar’s (Brooklyn, N.Y.) building a beverage franchise around matcha-green tea beverages, while the Juice Press Bar in New York City features an expanding line of coldpressed fruit and vegetable juice-based beverages: Both companies sell their products on-line.

Speaking of protein, Los Angeles-based Mainland Poke (“po-kay”) has been introducing the “wildly popular” Hawaiian raw, cubed fish cuisine to the continental U.S. Presumably, poke will not be sold on-line.

“Food trucks are another great source of inspiration,” said Mitchell. “Take the time to speak with the chefs: They love to discuss their ideas and businesses.” Globally, farmers and fresh food markets around the world are continuous sources of ideas for new flavors and food combinations.

Finally, a wide constellation of food and beverage incubators beckons from around the world. Take the time to visit them or, if nothing else, explore their websites for ideas, says Mitchell. For example, NYC-based AccelFoods, a food entrepreneur accelerator and incubator backed by $35 million in investment capital, plans to use Amazon.com to launch new product ideas.

It bears reflection at this point to ponder how on-line sales venues have completely transformed the financial models for food and beverage start-ups. In Los Angeles, L.A. Prep and L.A. Kitchens are combining efforts to build a large incubator facility dedicated to helping entrepreneurs tackle issues such as regional unemployment and food waste. In Chicago, there is the Food Hatchery Chicago. In London, there is the Food Foundry. “These are great places to meet entrepreneurs and to learn how they think,” said Mitchell.

The bottom line is that the world is full of great ideas that are easily accessible, once one takes the initiative to start digging in both the obvious and the hidden corners of the world. “Be curious, be uncomfortable, be OK walking down a dark alley late at night toward a beckoning neon sign in some international city. Talk to entrepreneurs; talk to category managers.” And always: Ask questions.

“How to Identify Trends to Stay Relevant with the Evolving Consumer Market,” Blake Mitchell, Partner and President of Interact on Shelf, blake@interactonshelf.com

 


Supply Chain Challenges: Organic and Non-GMO Ingredients

Posted on:April 9, 2018

April 9, 2018–The Protein Trends & Technologies Seminars consists of a one-day Pre-conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation highpoints and is available for download by clicking here.

Steady growth in demand, combined with raw material-production bottlenecks, translate into increased price volatility for raw organic ingredients and finished goods. This increases market risks for organic food and beverage producers, manufacturers and retailers. [For larger PDF version of chart, click on image.]

Supply Chain Challenges: Organic and Non-GMO Ingredients

Nathan Clark, MSc, former Director of Business Development at Mercaris (Silver Spring, Maryland), flagged the growing supply-chain challenges facing the organic food, beverage and ingredient categories, with particular reference to animal proteins. Mercaris, a company committed to supporting sustainable agriculture practices, supplies market data along with an electronic trading platform for North American organic, non-GMO and other certified-sustainable food ingredients.

“In 2016, the U.S. organic foods market was valued between $45-47 billion, according to best estimates,” said Clark (up-from $30 billion in 2012). Fresh organic fruits and vegetables remain the strongest pillars of this category (about 35% of sales), followed by dairy and packaged/prepared foods (each at 15% of sales). The fastest growth organic food categories between 2005- 2013 were snack foods and packaged/prepared
foods (+14%). Organic breads and grain sales grew 11%, while organic meat, fish and poultry sales grew 12% during the same period. Although a well-established category, the dairy products sector showed a bit lower growth at 10%—still a healthy, double-digit level.

Such continued growth momentum has put special strains on the supply of organic-certified ingredients, creating supply-chain bottlenecks. This is especially challenging as organic certification expands into more animal protein categories, such as meat, poultry, fish and dairy…and by association, dairy protein ingredients, explained Clark. “Nearly half (48%) of all organic grains and feed production is channeled into the dairy category,” Clark stated.

Farmers desiring to engage in organic production to meet this growing demand face significant hurdles. Foremost, organic certification requires a three-year transition period in production. This means farmers must invest in new agricultural production practices and contend with lower yields for three seasons, before they can recoup their costs via organic price premiums. Given that farming represents a high-risk endeavor, this is especially onerous for farmers operating on already-thin margins.

In addition, longer geographical distances between organic producers and users can further put the price of organic crops at a disadvantage, not just in transportation costs, but also by the added complexity of organic-certified storage, transportation, warehousing and distribution. Combined, these hurdles work against/negatively impact market supply and demand flexibility.

“Much organic production occurs in non-traditional growing areas,” said Clark. He displayed a map identifying New York state as the second-largest organic corn-producer. This is a good location for up-state New York yogurt manufacturers—but not for organic milk and beef producers situated 2,000 miles (3,220 km) away in the West.

Organic milk production has more than doubled in the last 10 years, said Clark, expanding from 2 billion lbs (0.9 billion kg) to more than 4 billion. (1.8 billion kg) per annum. “About half of U.S. organic milk production is channeled into value-added dairy products. With conventional milk sales declining, the market share for organic fluid milk reached 5% of total fluid milk sales in 2016.”

Within the organic dairy category, the fastest growth categories ($-sales) are cheese (+24%), followed by butter (+16%) and yogurt (+9%). For now, organic cheeses enjoy only a 6% slice of market share in organic dairy products. Should consumer demand for these products and protein powders surge, expect a surge of pressure on organic fluid milk and, therefore, animal feed supplies. Growing numbers of large and small, food and beverage manufacturing and retail companies (General Mills, Nestlé, Clif Bar, Danone, Stoneyfield Farms, Walmart, Costco) have publicly committed to expanding their own organic and other sustainable product portfolios.

For large-volume manufacturing companies, the supply-chain demands serve to further accentuate price volatility at the raw materials and retail levels. Thus, corporate ingredient buyers have been forced to try new ways to secure reliable access to organic raw materials, from vertically integrating themselves farm-to-factory, to extended contracting with growers through complete crop-rotation cycles.

To summarize: “For the foreseeable future, organic ingredient demand will continue to outpace supply,” warned Clark. This challenges organic food, beverage and—more specifically—protein ingredient manufacturers to aggressively anticipate and address tightening supply-chain bottlenecks.

“Supply Chain Challenges: Organic and Non-GMO Ingredients,” Nathan Clark, former Director of Business Development, Mercaris, [Note: Please contact Kellee James, Founder & CEO, Mercaris, kellee.james@mercaris.com, mercaris@mercaris.com]


2017 Food & Health Survey

Posted on:March 30, 2018

April 2, 2018–The Protein Trends & Technologies Seminars consists of a one-day Pre-conference Program: Business Strategies and a one-day Technical Program: Formulating with Proteins. Attendees can register for either one alone or for both for a cost savings. The Pre-conference Program: Business Strategies’ goal was to provide information for upper-level managers to help them identify opportunities and threats in the protein ingredient marketplace. Speaker highlights into consumer and product trends, market volatility, global regulations and emerging market opportunities, among other topics, were offered.

This year’s conference took place on May 23-24, in Itasca, Illinois. The “2017 Protein Trends & Technologies Seminar Summary-Business Strategies” provides presentation high points and is available for download by clicking here.

A Healthy Perspective: Protein Trends and the American Consumer  

IFIC’s annual survey of consumer food choices indicates that both animal- and plant-based protein consumption should continue to exhibit steady growth. [For larger PDF of chart, click on image.]

2017 Food & Health Survey
The good news is that most consumers associate “protein” with positive health benefits. So, protein sales are likely to continue their upward trajectory. The bad news is…most consumers don’t appear to be very clear as to what they mean by “healthy.” However, that’s a longer-term concern: For now, things look good.

These were the principle takeaways from the International Food Information Council Foundation’s (IFIC) annual “2017 Food & Health Survey.” The survey was drawn from on-line interviews of approximately 1,000 consumers weighted to represent the demographic profile of the U.S. IFIC is an industry-supported foundation dedicated to “effectively communicating science-based information on health, food safety and nutrition for the public good,” explained Liz Sanders, MPH, RDN, Director, Research and Partnerships, at IFIC.

Confusion about protein’s association with positive health benefits is particularly important, as the FDA’s current focus on “healthy food” definitions could have major implications for how protein is labeled on food and beverage packages, explained Sanders.

Close to 60% of respondents associated “healthy” foods as those high in nutritious ingredients, while about 58% associated them with the absence of undesirable ingredients (artificial ingredients, preservatives, etc.). Forty-eight percent of respondents associated “healthy” with specific food groups. However, at least half of consumer appear to be generally unable to link specific foods to specific health benefits, such as cardiovascular or digestive health.

And, while “weight-loss management” was the most commonly expressed “health benefit” that respondents were interested in getting from foods (30% of those surveyed), “We’ve never seen many respondents really pointing to protein as a source of weight gain,” said Sanders. So, in general, protein’s “health halo” remains rather undefined.

What do consumers perceive as healthy ingredients? The usual suspects (vitamin D, fiber, whole grains) still top the list, but a solid 70% of respondents identified plant proteins as “healthy,” and about 38% of respondents vouched the same for animal proteins.

Interestingly, the Millennial generation (age 18-34) expressed a far more positive health image for animal proteins than did aging Baby Boomers (age 65+): 47% of Millennials surveyed proclaimed animal protein to be healthy, against 27% of Boomer respondents.

The survey did expose a slight bias against meat proteins: 15% of respondents professed to perceive meat protein to be less healthful vs. 12% professing the opposite. For plant proteins, the bias was more in favor of their perceived healthfulness, with 21% perceiving them as being “more healthful,” against 8% perceiving them as less so. Underscoring the importance of marketing and public relations, these respondents cited media, friends and family as the primary sources for these perceptions. Ironically, Sanders also presented data indicating “media reports” to be among the least-trusted sources for nutritional and dietary information.

The survey highlighted the higher percentage of people trying to increase their protein consumption—from 48 to 64%, between the years 2012-2016. When asked about which specific types of protein they sought to consume more, most respondents (70-76%) identified poultry and eggs.

The greatest number of respondents professing an increased avoidance of any protein was in relation to beef, with 45% actively trying to avoid beef vs. 53% trying to increase their beef consumption. This is still a net positive for the beef industry. For soy, 14% sought to increase their consumption in 2016, while 27% sought to avoid consumption. Significantly, 68% of respondent sought to consume high-protein beans, nuts and seeds.

Is there a ceiling to increased protein consumption? Likely not. Still, barriers to protein consumption remain among some groups. About half (44%) of respondents claimed they were already consuming sufficient protein in their diet, while 21% respondents cited the higher cost of protein as a barrier to higher consumption. Lower income
respondents were more likely to cite cost as a barrier to protein consumption.

“2017 Food & Health Survey,” Liz Sanders, MPH, RDN Director, Research and Partnerships, International Food Information Council Foundation, sanders@ific.org 

 


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