A new report has found the European seaweed industry experienced exponential growth in the number and value of investments over the past decade.
Seaweed for Europe’s “Investor Memo – The Case for Seaweed Investment in Europe” found investment in European seaweed companies grew from less than EUR 900,000 (USD 1.03 million) per year in 2010 to more than EUR 21.6 million (USD 24.7 million) in 2020. The number of investments grew by 34 percent in value and from one to 18 transactions per year in volume over the same period, with significant additional investment made during the first six months of 2021. The report did not take conventional bank financing into account in its growth in investment calculation.
The report found the environmental, economic, and social benefits of seaweed were leading factors in the investments, along with increasingly attractive risk-return profiles. The public and philanthropic sectors have also grown more involved, providing catalytic funding to help the industry grow.
The report gathered information on 92 investors who declared a combined total input of EUR 69 million (USD 79 million) over 11 years, amounting to an average of around EUR 610,000 (USD 698,000) per investor. They also identified more than 220 innovative seaweed start-ups and SMEs in Europe ready for investment, up from 74 in 2010.
A shift in investment pattern is noted in the report, with venture capital funding being the predominate driver in 2010, shifting to private equity and debt funding from 2014 onwards.
According to the Food and Agriculture Organization of the United Nations (FAO), the value of the global market for seaweed trebled between 2000 and 2018, when a production total of 32.4 million metric tons worth EUR 11.3 billion (USD 13 billion) was recorded.
Most market forecasts anticipate a double-digit compound annual growth rate for the next five to 10 years, the report found. In a high-ambition scenario, European demand for seaweed is projected to reach more than EUR 9 billion (USD 10.3 billion) by 2030, with use for feed, food, and biostimulants accounting for the largest share, and employment potential estimated at 85,000 jobs. Achieving such demand would switch the market away from the current situation, in which Asian producers dominate.
More than 50 percent of the companies surveyed have a focus on food products, but an increasing number are exploring pharmaceuticals, cosmetics, and bio-packaging. Many of these undertake more than one activity such as production, processing, biorefinement, and product development, according to the report.
The European seaweed industry is benefiting from growing political support at global, national, and local level, as well as an increasing interest by large corporates investing to secure a supply of a sustainable feedstock.
“To realize the full potential of seaweed, policymakers need to understand the value at stake and adapt policies to create the conditions that will allow it to thrive,” Maria Damanaki, the co-chair of Seaweed for Europe and former European commissioner for maritime affairs and fisheries, said.
Adrien Vincent, Seaweed for Europe program director and ocean lead at coalition partner SystemIQ, said mounting investor appetite reflects a recognition of seaweed as a nature-based solution to many modern environmental challenges.
“Seaweed products provide sustainable, healthy, low-carbon and less harmful alternatives to existing options, while their production contributes to restoring ocean health,” he said. “Europe has perfect conditions for seaweed production, a vast network of world- class research centres, and growing demand, which combine to position the European seaweed industry in a very sweet spot.”
Photo courtesy of Pascale Gueret/Shutterstock
