A Sea of Possibilities: The Growing Potential of the Australian Algae Industry

Algae has been heralded as the key for sustainable food, a fast-growing crop with a small environmental footprint and the potential to be used across an impressively broad range of products. The rich biodiversity of algae – the group of marine plants that include seaweed – is matched only by its potential for commercialisation as an ingredient in foods, supplements and beauty products.

And with our clean, green credentials, extensive shoreline and a history of agricultural innovation, Australia is in the driver’s seat to capitalise on market growth. Already the world’s largest producer of algal beta-carotene – used as a food colouring agent and a source of supplementary vitamin A – local research and innovation is helping to extend the list of potential uses of algae-derived ingredients.

The use of Omega-3 supplements is one such example. Traditionally, sources of Omega-3 supplements have been sourced from fish and krill but consumer perceptions around large scale fishing and the demand for vegan products encouraged the industry to consider the alternatives. In 2020, global sales of fish oil supplements exceeded $3.2 billion, and with funding from AgriFutures Australia, Sampano Pty Ltd partnered with CSIRO and identified several species of algae that could be used to produce commercial quantities of Omega-3.

“The research found that Australian seaweed and algae contain bioactive health ingredients, such as Omega-3, that are in demand globally within established markets but not produced or sourced locally,” said Project Lead Adrian Spencer.

“At the same time, other uses for algae and seaweed are receiving interest for food, colouring, skin care, hair products and other health benefits across a range of market segments.”

Research also uncovered the potential for algae as an ingredient in the lucrative collagen market. Several algal compounds were discovered to have properties that inhibit the depletion of collagen, unlike traditional products that promise the addition of collagen. Valued at USD$8 billion annually – and growing at a rate of around 9 per cent per annum, the global collagen market is one of the most rapidly developing market segments. The discovery of a way to inhibit the depletion of collagen provides skin care manufacturers with a new angle to market their products in a crowded but lucrative market.

Tasmanian biotechnology company Marinova has already put this opportunity to market, extracting key ingredients from seaweeds including the extract which reduces the depletion of collagen.

“We recognised the global trend for effective ingredients that are natural, sustainably sourced, certified organic and supported by a dossier of scientific evidence,” said Dr Damien Stringer, Marinova’s Operations Manager.

“Quality marine ingredients, such as high purity fucoidan (found in brown algae) extracts tick all these boxes, satisfying global ingredient efficacy and transparency,” he added.

Between 2013 and 2021, the global market for vitamins, minerals and supplements and functional foods grew from $100 billion to $180 billion. In Australia, the industry generates around $5.2 billion annually. While the domestic seaweed industry is currently valued at approximately $3 million per year, strong local and international demand for algae is set to grow this figure significantly subject to the expansion of the Australian supply chain.

“Currently it is not possible to meet local demand, let alone supply international markets,” said Mr Spencer, “there are not enough growers or volume of seaweed and algae yet for the local and international markets”.

Specific barriers to meeting market demands include connecting manufacturers with algae suppliers, along with the development of infrastructure to secure the volume of production required.

“More investment is needed to establish facilities and a greater variety of seaweed and algae types are required to create the diverse products that can be derived from these core ingredients”.

To find out more about the report findings, background to the opportunity and the market context, plus information on how to participate, read the report here.