Smart Microfarms is a winner of Algae Industry Magazine 2015 International Readers Poll in the category “Food, Feed, Nutrients”.
AIM International Readers’ Poll mission is to 1. Recognize and reward innovation and excellence, 2. Convey who and what make a difference, 3. Celebrate innovative people, companies, technology.
Smart Microfarms – Growing algae for feed, food and nutrients will have greater impact on reducing negative effects of climate change than biofuels. If 10% of the funding for algae biofuels had been directed into R&D for animal nutrition studies and reducing costs for aquaculture and animal feeds and human food, we would be well along this path.
Robert Henrikson, CEO of Smart Microfarms, offers scalable microalgae growing systems for greenhouse, school, urban, rooftop and vertical farms to grow high value food that is local, sustainable and profitable. For nearly 40 years he has been an algae entrepreneur, a pioneer in spirulina production and marketing. A founder and director of Earthrise Farms, world’s largest spirulina farm, for 20 years – as President of Earthrise Company – he marketed superfood products in 30 countries around the world.
Algae Ambassador – Robert Henrikson
Improved Planet Contributions – International Algae Competition
Algae Microfarm – Smart Microfarms
Algae Food, Feed, Nutirents – Smart Microfarms
Algae Cultivation Facility – Earthrise Nutritionals
Are Algae Microfarms the Future of Urban Farming?
Growing local food in community gardens and urban farms is a popular and growing trend. Because urban space is limited and valuable, some entrepreneurs are transforming old warehouses and even underground spaces into indoor farms using artificial lighting. Others propose vertical farms, even growing food in skyscrapers.
But some scientists calculate that indoor urban farming results in food production with a high cost, high energy use and a big carbon footprint, regardless of whether energy comes from the conventional grid or renewables. They caution indoor food grown with artificial lighting may be less sustainable and more damaging to the environment than food transported from 3000 miles away.
Greenhouses growing food in empty lots or nearby urban areas would be a more cost effective solution. Urban greenhouses would extend the growing season, use existing urban infrastructure, enjoy close access to local markets and customers, and harness the best source of energy – the sun.
Will algae microfarms grow new superfoods for urban and rooftop farms around the world?
What’s coming now is the opportunity to grow high value microalgae to diversify greenhouse food production and significantly enhance revenues.
Over the past 30 years the microalgae spirulina has gained global recognition as a superfood supplement. This productivity breakthrough grows over 20 times more protein than any other conventional food crop on the same area, yet its therapeutic benefits are even more remarkable. Published international research shows how small amounts daily boost immune function, enhance detoxification, restore beneficial intestinal flora, improve neurological function and rally the body’s own healing response. Spirulina commands premium retail prices, $80/lb for dry product in the USA, €150/kg in France. Where fresh frozen product is available locally, even higher prices.
Most people think of large algae farms located in hot sunny desert or tropical locations. But in this past decade, over 110 algae greenhouse microfarms have spread across France. In the USA, spirulina is being successfully grown in greenhouse microfarms in the northern climate of the Pacific Northwest.
< Algae growing ponds have retractable and removable greenhouse covers. In cooler seasons, ponds are covered at night to retain warmth. In summertime, covers are completely removed.
These new algae microfarms are modular and scalable greenhouse systems with smart monitoring systems and web cameras so remote experts can successfully guide local operations at many locations simultaneously. With insulated ponds and efficient LED lighting and heating systems, the algae growing season can be extended in northern climates well beyond the typical short 4 or 5 months.
< The first Pacific Northwest spirulina microfarm near Olympia Washington. This eco-region has a temperate rainforest climate with warm sunny summers and wet cloudy cool winters.
Smart Microfarms’ CEO Robert Henrikson founded one of the world’s first and largest algae farms, Earthrise Spirulina in Southern California, 35 years ago. He explains his own evolution from large to small farms. “For decades, algae have been grown on large commercial farms with extensive technical staffing and infrastructure. Now the time has come to introduce algae microfarms to grow healthy foods in local communities. Profitable business models already exist.”
The Pacific Northwest algae microfarm testbed will develop metrics for microfarm operations and productivity especially for temperate climates. They will test practical, affordable and replicable systems for growing algae for local food and high value products in community, urban, rooftop, mobile and vertical gardens to demonstrate how microfarms can transform small food growing area into generating more income.
Smart Microfarms can help terrestrial, hydroponic and aquaponic greenhouse farms diversify income stream with high-value algae food products.
“Algae Microfarms”, the new book by Henrikson, available at Amazon.com, features individuals and organizations around the world growing algae on a small scale and making a difference today.
Some of these small farms are humanitarian, some are commercial, some are both. The book is a look into our future of scalable microalgae systems for home and community gardens, urban and rooftop farms and even living buildings.
Spirulina Algae Microfarm near Olympia Washington.
The first Pacific Northwest spirulina microfarm is located near Olympia Washington, a temperate rainforest eco-region with warm sunny summers and wet cloudy winters. Algae are harvested through a micro screen several times a week during the growing season. This smart microfarm testbed will show how algae microfarms generate income from a small area.
2:00 minute video of Spirulina Algae Microfarm near Olympia Washington (2013).
Benefits of spirulina for protection against radiation effects
The 2011 earthquake and tsunami accident at the Fukushima nuclear power plant in Japan and the continuing radiation releases have raised concerns about radiation exposure. Many people have heard of reports about the beneficial effects of spirulina blue-green algae in protection against radiation and its related health problems.
These reports are published studies from Belarus in the 1990s using spirulina. The benefits for the Children of Chernobyl affected by radiation collaborated previous research, suggesting that spirulina provided beneficial effects against radiation and may be used to supplement other means of radiation protection.
Scientists theorize spirulina can bind heavy metals like mercury, lead, cadmium and radioactive isotopes and can accelerate excretion of these elements from the body.
Summary of three main benefits of spirulina against radiation
1. Belarus studies on humans affected by Chernobyl radiation. Five grams of Spirulina a day given to children caused reduction of Cesium-137 in urine by 50%. Spirulina decreased radiation dose load received from food contamination with radionuclides. (Belookaya 1991) (Loseva 1993) (Evets 1994). A Russian patent was awarded for the use of spirulina as a medical food to reduce allergic reactions from radiation sickness.
2. Chinese studies on radiation. Previous research demonstrated a natural polysaccharide extract of spirulina had a protective effect against gamma radiation in mice (Qishen 1989). Following research showed phycocyanin and polysaccharides from spirulina enhanced reproduction of bone marrow and cellular immunity (Zhang 1994).
3. International studies on benefits of spirulina against radiation effects. Three long-term effects of radiation are weakened immune system, oxidative stress and cancer. Numerous international studies have shown how spirulina stimulates the immune system and has antioxidant, anti-inflammatory and anti-cancer benefits (spirulinasource.com).
Spirulina and the Children of Chernobyl
From the book Spirulina World Food, by Robert Henrikson
Years after the Chernobyl disaster, four million people in Ukraine and Belarus continued to live in dangerously radioactive areas. The water, soil and food over an 11,000 square mile area were contaminated. Over 160,000 children were victims of radiation poisoning, with birth defects, leukemia, cancer, thyroid disease, anemia, loss of vision and appetite and depressed immune system, called “Chernobyl AIDS.”
Based on promising international research that indicated spirulina may be beneficial against effects of radiation, while I was President of Earthrise Company, Earthrise donated spirulina to Children of Chernobyl Hospitals in Belarus and Ukraine in 1989.
Doctors reported spirulina’s health benefits for child victims of Chernobyl radiation. Spirulina reduced urine radioactivity levels by 50% in only 20 days. This result was achieved by giving 5 grams a day to children at the Minsk, Belarus Institute of Radiation Medicine. The Institute program treated 100 children every 20 days.
Based on testing in 1990, the Belarus Ministry of Health concluded spirulina promotes the evacuation of radionucleides from the human body. No side effects were registered. The Ministry considered this food was advisable for the treatment of people subject to radiation effects, and requested additional donations from the Earthrise Company of California and Dainippon Ink & Chemicals of Japan (Sokolovskiy 1991).
In a 1991 study of 49 kindergarten children aged 3 to 7 years old in Beryozova, spirulina was given to 49 children for 45 days. Doctors found T-cell suppressors and beneficial hormones rose, and in 83% of the children, radioactivity of the urine decreased (Belookaya 1991).
< Nurse and child radiation victim at a medical clinic in Belarus.
An unpublished 1993 report confirmed 1990-91 research, concluding “spirulina decreases radiation dose load received from food contaminated with radionucleides, Cesium-137 and Strontium-90. It is favorable for normalizing the adaptive potential of children’s bodies in conditions of long-lived low dose radiation.” (Loseva 1993).
A Russian patent was awarded in 1994 for the use of spirulina as a medical food to reduce allergic reactions from radiation sickness. The patent was based on a study of 270 children living in highly radioactive areas. They had chronic radiation sickness and elevated levels of Immunoglobulin (IgE), a marker for high allergy sensitivity. Thirty five were prescribed 20 tablets per day (about 5 grams) for 45 days. Consuming spirulina lowered the levels of IgE in the blood, which in turn, normalized allergic sensitivities in the body (Evets 1994).
Research continuing through 1999 in Belarus showed immune building, normalization of peroxide lipid oxidation and detoxifying effects of spirulina supplements in children and teenagers. Scientists theorized spirulina may form non-absorbable complexes of radionucleides through analogues such as calcium or potassium and pro¬motes their excretion (Loseva 1999).
References from Spirulina World Food (Amazon.com):
• Loseva, L.P. and Dardynskaya, I.V. Spirulina- natural sorbent of radionucleides. Research Institute of Radiation Medicine, Minsk, Belarus. Presented at the 6th Intl Congress of Applied Algology, Czech Republic, Sep. 9, 1993.
• Sokolovskiy, V. Corres. from the First Sec. BSSR to the United Nations, May 20, 1991.
• Belookaya, T. Correspondence from the Chairman of Byelorussian Committee “Children of Chernobyl” May 31, 1991.
• Qishen, P. et. al. Radioprotective effect of extract from spirulina platensis in mouse bone marrow cells studied by using the micronucleus test. Toxicology letters. 1989. 48:165-169.
• Zhang Cheng-Wu, et. al. Effects of polysaccharide and phycocyanin from spirulina on peripheral blood and hematopoietic system of bone marrow in mice. Second Asia Pacific Conf. Ibid, April, 1994.
• Evets, P. et. al. Means to normalize the levels of immunoglobulin E, using the food supplement spirulina. Grodenski State Medical Univ. Russian Federation Commitee of Patents and Trade. Patent (19)RU (11)2005486. Jan. 15, 1994.
• Loseva, L. P. Spirulina platensis and specialties to support detoxifying pollutants and to strengthen the immune system. Research Inst. of Radiation Medicine, Minsk, Belarus. presented at 8th Int’l Congress Applied Algology, Italy. Sep. 1999.
For a complete health library with 40 years of published international scientific research by health category go to www.spirulinasource.com/health-library.
ANTI-VIRAL ACTIVITY • ANTI-CANCER STUDIES • BETA CAROTENE AND CANCER PREVENTION • CHOLESTEROL REDUCTION • DIABETES AND HYPERTENSION REDUCTION • GLYCOLIPIDS AND SULFOLIPIDS • HEMATOPOIESIS AND IMMUNOMODULATION • IRON AND PREVENTION OF ANEMIA • KIDNEY AND LIVER DETOXIFICATION • LACTOBACILLUS IMPROVEMENT • MALNUTRITION RECOVERY • PHYCOCYANIN AND IMMUNE SYSTEM • POLYSACCHARIDES AND IMMUNE SYSTEM • RADIATION PROTECTIVE EFFECT AND IMMUNE SYSTEM IMPROVEMENT
How will growing algae change the world and improve our lives?
July 5, 2012: Imagine our future living in cities where buildings are covered with photosynthetic skins and vertical gardens, collecting the sun’s energy and producing food and energy for urban citizens. Imagine greening desert coastlines and producing food for millions of people. Imagine algae systems that recycle polluting wastes into high value animal food, fuel and biofertilizers.
This book reviews algae production, products and potential today and showcases some of the amazing visions of our future from the International Algae Competition. Our future with algae offers rich and diverse opportunities that will impact every aspect of our lives.
International Algae Competition is a global challenge to design our future with algae food and energy systems.
As a participatory design game, Algae Competition invited global citizens from around the world to design their own future with the foods they eat, systems that grow algae, and landscapes and cityscapes they dream of living in. 140 participants responded, representing 40 countries, and they submitted some amazing designs, projects and food ideas.
Imagine Our Algae Future chapters
2. Algae Production, Products & Potential Today
3. International Algae Competition Awards
Exhibits from the International Algae Competition
4. Algae Production Systems
5. Visionary Architecture and Landscape Designs
6. Algae Food Development and Recipes
7. References and Author Biographies
By Robert Henrikson and Mark Edwards
Available at Amazon.com
164 pages, full color • 8″x10″ • ISBN 1475128185 • $29.95
About The Authors
Robert Henrikson has 35 years experience in sustainable development of natural resources such as algae, bamboo and forest carbon. Robert began algae production in 1977 and was founder and director of Earthrise Farms, which became the world’s largest spirulina algae farm in the 1990s. For 20 years Robert, was President of Earthrise Company, pioneer in algae, developing Earthrise® brand products in the USA and 30 countries. During that period he traveled the world promoting the health and environmental benefits of algae through hundreds of articles, publications, interviews and presentations. He authored Earth Food Spirulina in 1989, translated into 6 international editions, updated in 2010 as Spirulina World Food. Robert founded Algae Alliance in 2009, and is a consultant to companies and investors in algae ventures, and in 2010, founded the International Algae Competition, attracting 140 remarkable entries from 40 countries. Created the 2007 International Bamboo Building Design Competition, with registrants from 64 countries, and published the book Bamboo Architecture based on the competition.
Mark Edwards, PhD, served for 22 years as CEO of TEAMS International, the advanced assessment, software and technology firm he founded. Mark served as lead consultant for over 600 organizations globally in advanced metrics, leadership assessment and development, and new product development. The Financial Times named Mark one of the top 50 CEO coaches. TEAMS won the Inc. 500 Award and then sold to an international consultancy in 1998. Mark has taught strategic marketing, leadership, sustainability, and entrepreneurship at Arizona State University since 1978. Mark advises food, energy, and technology companies on strategy, structure, and technology. Mark has published over 100 articles and 18 books that span business and science disciplines. Green Algae Strategy won the 2009 Independent Publisher Gold Medal for best science book. Abundance: Sustainable fossil-free Foods win the 2011 Gold Medal for best book on the environment. Several of Mark’s nine books in the Green Algae Strategy series are used in colleges and universities in over 26 countries.
International Algae Competition objectives are to create an open source collaboratory that expands and shares a vision for algae in our future with design ideas for algae production landscapes, sustainable and affordable algae production systems (APS) for food, feed, energy, nutrients, water remediation, carbon capture and fine medicines, and new algae foods.
An exciting time for algae business development
by Robert Henrikson • March 14, 2011
Download this 2 page article pdf.
This year, Rand Corporation positions the algae biofuel industry as a research topic, calling into question the viability of renewable biofuels made from algae. Royal Dutch Shell Oil exits from its algae biofuel venture as Monsanto enters the algae industry. Is this the beginning of the shakeout?
Algae ventures have successfully raised millions for research and development for algae biofuels based on early promises. But will they be able to deliver algae biofuels that are cost competitive with conventional fuels within this decade? So far algae biofuels have been an engaging and expensive R&D project. The challenge of scaling up to demonstration projects begins now. Funding required for scale up is huge, and the lack of access to funding will amplify this shakeout.
Watch these scenarios unfold in the shakeout as the algae industry moves toward more realistic, sustainable business models.
• Those ventures with access to deep financial backing from big oil or government funds, and with technology that works, will be prepared to stay the course and produce biofuel products.
• Some high profile ventures are already pivoting their business models to develop more valuable and more immediate ‘co-products’ from algae. Two years ago, many ventures had dismissed co-product markets for algae food and feed products as ‘niche’ markets.
• Other ventures who realize they can’t make it all the way to biofuel commercialization will license or sell off assets such as algae research, cultivation knowhow, intellectual property, technology or system design or components.
• Some big venture partners will bail. The executive decision will be: “had a good look, got some good green press, but now we are cutting our losses and moving on to more immediately profitable opportunities.”
• Other ventures will continue with smoke and mirrors, touting their secret sauce, proprietary IP or GMO breakthrough to keep grabbing R&D funds or government grants. They operate on the hope that they can sell out to bigger fish before the world perceives they have no clothes.
• More ventures will shut down. Surviving ventures will pick off infrastructure, technology and personnel, like carrion birds feasting on a carcass.
Big investments in algae biofuels are bringing big benefits. Breakthroughs in identifying and adapting algae and innovating new technology and systems will lower algae production costs and open new markets for higher value algae food and feed products.
The scramble intensifies for algae ventures to show how their business model can actually produce algae at a reasonable cost for markets that are real and immediate. Smart algae biofuel companies are redirecting finite financial resources toward more immediate income streams from algae products to survive in the shakeout.
Large corporate players are now realizing the huge potential market for algae food, feed and nutraceuticals. Much investment will be directed towards algae, such as spirulina, that can already be successfully cultivated at lower cost.
We are entering a very exciting time for algae business development.
How big investments in the ‘biofuel of the future’
will grow our future food and its own bio-packaging from algae.
by Robert Henrikson • October 27, 2009
Today, algae is called the ‘biofuel of the future.’
30 years ago, it was called the ‘food of the future’.
Three decades ago, the first algae entrepreneurs were building growing ponds in countries like Mexico, India, Israel, Japan, Taiwan, Thailand and the USA.
The first algae food supplements were introduced in the US natural food market in 1979. Growing food with 20 times the productivity as conventional crops, algae promised to become the ‘food of the future’. The dominant technology for commercial algae production for food and supplements has been open ponds in warm, sunny climates. Over time, some specialty algae products have been cultivated in closed or fermentation systems.
But production costs have remained high due to these factors: using agricultural land, fresh water, clean nutrients, skilled personnel, servicing big investments for pond systems, harvesting and drying infrastructure, and complying with food and quality regulations.
With production costs over $10 per kilo, growing algae is ten times the cost of many commercial foods and feeds. Annual world microalgae output may have reached 10,000 tons of spirulina, chlorella, dunaliella and hematoccocus.
Even big commercial algae farms are relatively small, less than 100 hectares in size. Nevertheless, over the years, the number and variety of high value food and specialty products from algae has flourished.
Most people have no idea how many everyday products contain algae.
Algae is an ingredient in thousands of products for food, feed, colors, nutraceuticals, medicinals, cosmetics and personal care, biofertilizers and fine chemicals. Even more innovative algae based products are coming.
The drive for cheap biofuel will make algae the food of the future. To become the “food of the future”, and compete with conventional human foods and animal feeds, algae production costs must be ten times lower. Lower costs will deliver healthy algae omega 3 oils and protein food and feed products, rebalancing our diets. We’ll see algae based resins, biopolymers, bioplastics and a range of specialty chemicals replacing today’s fossil fuel chemical products.
The big algae energy investment underway may take a decade to reach commercial biofuels. Algae food and bio-plastic products are likely to arrive earlier, since fuel is one of the least valuable end products. To deliver competitive algae biofuel, companies will need to crush costs to $1/kg or less!
How will algae production costs come down? Biomimicry.
Numerous ventures have now successfully raised a combined billion dollars for algae biofuel R&D and production. Innovations and technological breakthroughs will dramatically change the way algae has been produced over the past 30 years. How?
•Discover better performing algae cultures. Thirty years ago, scientists used available natural strains such as spirulina and chlorella. Today, backed by R&D budgets, scientists screen, identify and engineer strains of algae with superior and enhanced properties, faster growth rates, and abilities to grow in conditions such as low light and temperature and high saline, brackish or ocean water.
•Develop simpler, less costly design and technology. Rethink, redesign and reengineer the entire growing system, harvesting, processing and drying sequence to reduce capital costs for equipment, operating costs and power consumption.
•Use marginal land and water just like nature. To grow algae on the large scale needed to produce biofuels, growers should not use valuable fertile agricultural land and scarce fresh water. Rather, find remnant flat land and ocean, saline, brackish or waste water near nutrient resources.
•Use waste nutrients just like nature. To lower costs, future algae growing systems will have to follow principals of biomimicry. Recycle waste CO2 effluent, animal and plant wastes, which are costly problems today. Ferment agricultural, animal, industrial and waste streams into carbon, nitrogen, phosphorus, potassium and trace nutrients to feed the algae. Or grow algae by cleaning up municipal waste.
•Use all the algae biomass just like nature. Sell all of the algae. Start with the end product and work backwards. What are the products that can be sold, and for how much, and how will markets be developed for those products?
•Create multiple revenue streams to offset costs. Environmental services may include CO2 and pollution mitigation, wastewater treatment, biomass and waste heat for generating electricity and even carbon offsets. Non-fuel algae products may represent the 70% of the algae biomass. Potential revenue streams include algae oil and lipid supplementation in animal and human feed, like healthy omega 3 oils, animal feedstocks and supplements, biofertilizers, fine chemicals and bio-plastics, extracts for pigments nutraceuticals, pharmaceuticals and medicinals..
•Get big. Scale up to thousands of hectares. Large algae farms will enjoy economies of scale. Along the way, demonstration farms to prove out technologies will generate revenue streams from non-fuel products for smaller markets.
•Exploit the unexpected – carpe diem. Investment drives innovation, creates serendipity and breakthroughs. Who knows what will unfold that we haven’t thought of yet.
So get use to life from the base of the food chain.
The dazzling array of eco-products coming from algae will be healthy for you and our planet.
How Ventures can Harvest from the Third Great Algae Bloom
by Robert Henrikson • April 3, 2009 • Download this 4 page article pdf.
Algae has a natural bloom and bust cycle.
In a natural environment, algae blooms in lakes when spring rains deposit nutrients and summer sunshine heats the waters. When rapid algal growth exhausts its nutrients, sudden collapse leaves a big mess.
In a commercial growing environment, scientists control nutrients and growth conditions to prolong algal growth and achieve high productivity.
In the world business environment, three decades of algae development may more closely parallel the bloom and bust of natural algae ecosystems. The race to develop a new biofuel from microscopic algae represents a third algae business bloom. Lessons from the first two highlight opportunities and challenges for those companies that hope to harvest this new algae bloom.
Government, corporate and private investment dollars are pouring into R&D to grow algae and extract oil for biofuel. The big opportunity is the promise that growing algae is 20 times more productive per land area than terrestrial crops.
The big challenge – as commercial algae growers know well – is the big cost. Investment and operating cost to achieve algal productivity is far higher than terrestrial crops.
Today algae is grown commercially for higher value products such as food and feed supplements and pharmaceutical extracts, selling for 10 to 50 times more than fuel. Using known technology and experience, if biofuel from algae could be produced, it may cost $30 per gallon. How can costs fall to compete when oil costs only $50, $100, or even $200 per barrel or $2 to $5 per gallon at the pump?
Before algae biofuel ventures burn though millions, exhaust their nutrient supply and collapse, how can they reach the goal of harvesting a commercial biofuel? How can they last the 5, 10 or 15 years to get to scale to lower costs? What business models and product strategies along the way will produce revenue streams to buy time?
In each of the past three decades, three algae blooms that stimulated business and market development were the first demand bloom 1981-83, the second demand bloom 1994-97, and now the first investment bloom beginning in 2006.
First Bloom: Algae as diet fad 1981-83.
The first algae commercialized for food and feed supplements were Spirulina and Chlorella. By 1981 the first algae producers had begun in Mexico, Thailand, Taiwan and California USA with production research facilities in Israel, India and Japan. Production scale was about 500 tons worldwide. Since 1979, spirulina was sold in the US health food market as a new natural food, gaining credibility and market share as an energizing, high-protein, all-natural, detoxifying food supplement – the food of the future.
In June 1981, a front page National Enquirer story hyped spirulina as a “Safe Diet Pill”. This overnight diet fad pumped demand 10 to 100 times, outstripping supply, mostly from a grower in Mexico (Sosa Texcoco), followed by growers in Thailand (DIC Japan Siam Algae) and next in California (Earthrise Farms).
The first round of algae wars unfolded as existing spirulina marketing companies fought over the limited supply. For scores of diet pill manufacturers eager to harvest this diet fad, no supply was no problem. They manufactured and sold millions of bottles of phony spirulina, largely adulterated with alfalfa and other green colored filler.
The diet fad, of course, ran its course, and much of the public turned off to algae by the lack of results losing weight and hearing about phony products. The algae market tumbled down, down, down through the 1980s. Even worse, US Food and Drug Administration (FDA) now alarmed by these drug-like health claims and phony adulterated products, launched a pogrom against algae as a food
The brunt of the FDA assault was borne by the two commercial algae producers in the USA, Earthrise in California and Cyanotech in Hawaii. Years of regulatory battles ensued, to educate the FDA about what microalgae was and how it could be safely and legally sold as a food supplement. Along the way, algae producers developed a range of quality certifications, including ISO 9000.
Second Bloom: Algae takes off worldwide 1994-97.
Behind-the-scenes, scientific research, much of it from Japan, was documenting the health benefits of spirulina. Published research on the immune system, detoxification and beneficial intestinal flora, supported why people felt better taking as little as 3 grams of algae per day. By the early 1990s, the US market for spirulina and chlorella was growing, backed by informative articles on health benefits.
Around this time, distributors from a multi-level marketing company were growing their business with health claims for ‘wild’ blue green algae (aphanizomenon flos-aquae) harvested from a lake in Oregon. International demand for spirulina began taking off, and US producers began exporting more. Just about the time when a huge new market for spirulina began booming in China through multi-level marketing, a supply shock took place.
In 1995, the world’s largest spirulina producer in Mexico stopped production due to problems in its larger business group. This worldwide supply shortage lasted several years and drove spirulina prices up much higher. Within 3 years, profitable operations helped the two large US producers restore their balance sheets, overcoming a decade of accumulated losses.
But good times began to unravel by 1997. The Chinese government, fearing multi-level marketing companies were out of control, shut down all network marketing companies across China. The huge spirulina export business from the USA to China collapsed. The multi-level marketing company harvesting blue-green algae from the lake in Oregon was exposed by the state for alleged toxic algae contaminated product, and their business trailed off.
Then new government subsidized spirulina farms in China began dumping lower priced product into the world export market. Indian spirulina producers began exporting. With world supply surplus, algae prices tumbled, and by 1998, the second algae bloom was history.
Third Bloom: Algae biofuel investment 2006-present.
Nearly a decade has passed. Annual world microalgae output may have reached 10,000 metric tons including spirulina, chlorella, dunaliella and hematoccocus.
By 2006, hundreds of millions in government, corporate and private investment funds were looking for the biofuel of the future. Knowing ethanol from corn was a net energy loser, and while looking at crops like palm oil, oilseeds and jatropha, the productivity of algae looked better – 20 times higher than terrestrial crops. Some fast-growing oil-rich species are 25% hydrocarbons. Driven by investors, the third algae bloom unfolded.
During the first two algae blooms, many ventures entered the business of growing algae. Few survived and prospered. The same will be true this time.
Numerous algae companies have successfully raised millions for algae biofuel R&D and production. But, consensus at conferences is commercialization may be 5, 10 or 15 years away. Experts with actual commercial experience growing algae are more sanguine.
To achieve high productivity, algae systems require more capital investment than conventional agriculture. This investment must be serviced. Large-scale production has challenges acquiring water in areas with suitable heat and sunshine for growing, and buying phosphate and other limited nutrients. Time and experience are necessary to maintain culture stability and purity and prevent zooplankton grazers. There are high costs and energy to separate algae from water and extract the biofuel portion.
Some ventures claim breakthroughs in harvesting technology. Even if such technology can be successfully scaled up, harvesting represents only one component of production cost. Some ventures claim productivity greater than 10,000 gallons of oil per acre per year, although current maximum yield is more like 2,000 gallons per acre. Other ventures claim patented, genetically modified algae is the solution for higher productivity. But this raises the fear of releasing fast growing GMOs into the environment, and will likely trigger legal challenges and environmental roadblocks..
Ventures that promoted and bet on a simple biofuel business model based on short development time to produce low cost biofuel are burning through capital and are still many years away from commercialization. They will be scrambling for another round of funding, or may be hoping to be bought out by an oil company. Or, they may be moving toward a more complex business model.
How ventures can harvest from the third algae bloom.
Ventures wanting to commercialize algae biofuel, should be asking “what business model, value chain and product development along the way will produce revenue streams to buy time to scale and learn how to reduce costs?”
This means commercializing other algae products and services to develop a scalable and sustainable business model.
From environmental services, revenue streams may include CO2 and pollution mitigation, wastewater treatment, biomass and waste heat for generating electricity and even carbon offsets.
From algae products, revenue streams may include algae oil and lipid supplementation in animal and human feed, like omega 3 oils, animal feedstocks and supplements, human food ingredients and food supplements, extracts for pigments, fine chemicals and bio-plastics, nutraceutical, pharmaceutical and medicinal products. All have higher value than commercial biofuel and represent smaller but substantial markets.
Finally, developing commercial biofuel will lead to innovations and surprising breakthroughs not even identified yet. Ventures that survive long enough to discover new products and technologies will evolve new business models.
Algae biofuel ventures that survive the next 5 years will be asking this question: “Now that we have made our big investment in algae systems, if we can give our investors a better return selling higher value algae products and services, why should we chase after low value biofuel?” The winners in the third algae business bloom will grapple with this question and come up with new answers.
Based on algae blooms of past decades, a few ventures may ultimately succeed in commercializing algae biofuel. Some of those who don’t could become winners anyway. They can become successful using their biofuel investment to innovate new algae technology, products and services.