Following TerraVia takeover, Corbion expanding with new shrimp feed additive
Having purchased the assets of TerraVia in September 2017, Corbion is seeking to leverage the algae platform to develop an innovative new algae-based shrimp feed additive in Asia, according to company executives.
Jill Kauffman Johnson, Corbion’s head of global market development for algae ingredients, told SeafoodSource Corbion’s takeover had been a net positive AlgaPrime DHA, the long-chain omega-3-rich aquaculture feed developed by TerraVia.
“We’re now part of a global company based in the Netherlands that has deep experience in ingredients production,” Kauffman Johnson said. “We’re seeing new levels of expertise and investment coming into the company, and as a result, we’re able to continuously improve our fermentation production activity.”
That investment has stretched into TerraVia’s production agreement with Bunge Limited, a New York-based company it signed a distribution agreement with in May 2016 to jointly produce AlgaPrime at the SB Renewable Oils factory in Orindiúva, Brazil. In June 2018, Corbion acquired Bunge’s stake in the joint venture, spending more than USD 22.5 million (EUR 19.6 million) on the acquisition. The deal also includes a five-year earn-out provision with a maximum value of an additional USD 20 million (EUR 17.4 million).
Corbion Global Aquaculture Lead Chris Haacke said Corbion’s acquisition had not affected production or product development.
“There has been no slowdown at all during the transition. Both groups were very well aligned, which made integration very easy,” he told SeafoodSource. “If anything, having access to the engineering manufacturing abilities of Corbion has made production smoother and has given us improvement on efficiency.”
Corbion's algae operations are still based in San Francisco, California, U.S.A., and the company still operates research and development and pilot facilities in California, as well as a demonstration plant in Peoria, Illinois, Kauffman Johnson confirmed. Employees at each facility are in regular communication with their new colleagues in the Netherlands, she said.
“There is a lot of coordination. We get quite a bit help around fermentation as Corbion has a lot of expertise – there’s a lot of distance learning – obviously at our factory in Brazil as well,” she said.
Corbion is willing to accept short-term losses in its investment in TerraVia in exchange for its potential to produce high-value ingredients for a variety of industries, company CEO Tjerk de Ruiter said in a company announcement.
“TerraVia's IP portfolio and R&D pipeline, as well as its partnerships with industry leaders, provide high-growth opportunities for many years to come,” de Ruiter said. “At the same time, we are of course aware of the challenge of bringing the business from promise to commercial success. Corbion's more than 80 years of reliably and economically running industrial-scale fermentation plants and producing sustainable ingredient solutions will help us turn the TerraVia assets into profitable businesses in the coming years."
The winner of the 2017 Global Aquaculture Innovation Award, AlgaPrime is considered one of Corbion's most promising products, as it allows aquaculture firms to lower their fish-in, fish-out (FIFO) ratios, while at the same time maintaining – or even augmenting – the amount of omega-3 content in their fish.
The company is now earning revenue from AlgraPrime, which is being used as an ingredient in BioMar feed for Lerøy Seafood’s Aurora Salmon, Silverside Coho Salmon from Ventisqueros, and Blue Circle Salmon, Haacke told SeafoodSource. Getting those “first movers” was a huge step for Corbion, Kauffman Johnson added.
“It has been quite a journey. AlgaPrime DHA won innovation award a year ago, and now a year later, here we are actually with salmon products on store shelves in the market in the U.S. and Europe that have been fed AlgaPrime DHA. It’s a nice moment for us, and we think it’s an important milestone for the industry in showing its adoption of this new ingredient,” she said. “These are companies that are innovative in a certain way or want a point of differentiation. And they are products that are available at a range of supermarkets across the U.S. – everything from basic to high-end. W believe it will continue to be adopted in other companies.”
Corbion has a multifaceted expansion strategy, beginning with expansion in the Atlantic salmon market, and adding in other species, such as coho salmon and rainbow trout. The company is also working with aquafeed producers in Asia to incorporate AlgaPrime DHA into shrimp feed.
“We’re growing,” Haacke said. “Obviously, we would like to take over the planet overnight but that’s just not reality. But we’re building momentum, and we’re pretty pleased with where we are pushing to take the next steps.”
Adding AlgaPrime to shrimp feed allows companies to drastically reduce the amount of fish oil needed to create a nutritious feed that is showing “very good results in all stages of the shrimp lifecycle,” Haacke said. Using an algae-based feed also offers shrimp-farming companies assurance in the sustainability of their feed, and allows them to add omega-3s into their product, he added.
In seeking new partners, Corbion looks to put sustainability front and center in its messaging.
“One of nicest benefits of Corbion’s [management] is that they’re deeply committed to sustainable food production in the future. They’ve aligned themselves with the United Nations’ Sustainable Development Goals,” Haacke said. “We’re interested in finding those companies that are interested in making that change and who are concerned in changing their supply chain to make it more sustainable.”
Kauffman Johnson said many of the companies now using AlgaPrime as part of their aquafeeds boast about it publicly. Lerøy and feed producer BioMar, for example, made a large public announcement about its adoption of AlgaPrime at the 2017 Seafood Expo Global in Brussels, Belgium.
“Nearly all of the companies using AlgaPrime … are pretty vocal that they’re using microalgae in their feed,” Kauffman Johnson said. “While it used to be unusual [to go into detail about feed ingredients], customers are more and more interested in hearing the story of their products they buy, and their provenance. We think that’s something that could find even more resonance in the future.”
And while AlgaPrime remains a big part of Corbion's business, the company is not limiting itself to the aquafeed market. It’s also looking at terrestrial animal feeds, and it just launched a culinary algae oil that is being distributed nationally in the United States by Walmart. The oil is being marketed with a focus on its health qualities – it has one of the lowest amounts of saturated fats of any cooking oil, and is high in mono-unsaturated fats.
“The rise of the application of algae in many different ways reveals the heart of what makes it so appealing to the aquaculture industry,” Kauffman Johnson said. “It’s the nutritional aspect that’s interests aquaculture companies most about AlgaPrime DHA. To be able to market a product that’s got high levels of omega-3s and that doesn’t negatively impact the ocean – that strikes right to the heart of what we do, which is enhance nutrition responsibly.”
Photo courtesy of Corbion