SINGAPORE (Aug 19): Marine biologist Baruch Dach’s quest to grow algae began in the most unlikely of places — in the Negev desert in Israel. In 2009, the new graduate was among a team of scientists commissioned by a petro­chemical company to turn algae into biofuels or biofuel feedstock. Oil prices were lofty, sparking a boom for alternative energy sources. “We were crazy enough [to take on the project]. I was in charge of building the facility in the desert,” he laughs. “It was us, a camel and a goat out there.”

Three years later, oil prices crashed and Dach’s project ended, as it made more commercial sense to stick with crude oil. To be fair, most algae-for-fuel productions fell through, as costs were prohibitive. Dach did not abandon his quest. Instead of creating an alternative energy source, he pivoted towards the creation of an alternative food source: He started growing the blue-green algae spirulina for human consumption.

In 2013, Dach and a few friends built a makeshift freshwater pond and a greenhouse using tools he bought from hardware stores. The backyard testbed eventually grew into one of the biggest fresh spirulina commercial facilities today. Dach’s company AlgaeCore — now known as AlgaeMor after a joint venture with Israel’s agricultural company Mor Group — has two ponds in Israel producing 0.35 tonne of spirulina each month. 

With a footprint in the US, Europe, the UK and Israel already, the company recently expanded its sales to Singapore and has plans to start building artificial ponds to grow the cyanobacteria mass here at some point. This comes as the start-up is raising its first venture round of US$5 million ($6.93 million) to triple its production capacity in Israel. 

Although Dach is rapidly expanding his spirulina production, the spirulina business is actually a niche one. It has been the craft of artisanal farmers in France who work no more than a few months a year. The entire industry produces just 20,000 tonnes of biomass a year, mostly as nutritional supplements. But Dach wants the green mush his company produces to compete with other plant-based protein.

“To be a real industry, we need to hit one million megaton a year and really compete with animal- and plant-based [food]. Companies are operating as single entities in single locations. This has to radically change, and we believe we have the answer on how to do it, starting with our new facility operational next year. It makes more [financial] sense to produce spirulina for food, protein and micro-nutrients than any other current plant-based crops like peas, beans and chickpeas,” he says, adding that the company is experimenting with turning spirulina into dairy alternatives and possibly creating a blue-green chicken breast. Today, the green mush is sold fresh, frozen in packs. 

Plant protein craze

AlgaeMor joins an increasingly long and ambitious line of start-ups trying to outsmart the meat industry. Meat and dairy have long been accused of fuelling global warming, as agriculture and forestry account for about 26% of total greenhouse gas emissions. 

But in the past few years, US-based Impossible Foods and Beyond Meat have developed plant-based meat alternatives that have gained some degree of acceptance among meat lovers, be it driven by novelty or environmental consciousness. In Singapore, products from Impossible Foods are now used as ingredients in 200 restaurants, from just eight when it was introduced less than half a year ago. Sales value in Asia for Impossible Foods was up more than 400% over the same period, indicating that the growing popularity of meat alternatives is not an isolated trend here.

Some start-ups are now also trying to grow plant-based protein with algae and microalgae. US-based Sophie’s Kitchen plans to grow microalgae through the fermentation of food waste. This process requires minimal amount of space, a feat incredibly suited for crowded urban zones. Singapore’s Life3 Biotech and Temasek Poly­technic are working together to produce microalgae on a large scale for food ingredients. Bangkok-based EnerGaia and US-based Spira are both trying to grow spirulina on a large scale.

Proponents say algae makes sense in more ways that one. Just a tenth of the land is needed to produce an equivalent biomass. Algae grows 10 times faster than other terrestrial plants. It is also adaptable and can be produced in non-arable land. This makes it a viable contender even among other crop-based protein. Though nutritional information of algae as a protein alternative is harder to gauge, AlgaeMor claims that 10g of its product has the nutritional value comparable to an egg.

One of the biggest challenges about growing algae is finding the strains that have the right nutritional value. It is also technically challenging to harvest algae effectively. Other industry players say they worry about toxin levels in some algae strains. 

In addition, algae is simply not the most palatable food product. Observers say the demand among consumers is still relatively low. But this may change as plant protein becomes more crucial in the food supply chain. “With increasing worries around climate change and a growing global population, there is only so far you can go with traditional crops. Genetically modified crops is like fire-fighting: It’s not a complete solution,” says William Chen, Michael Fam chair professor and director of Nanyang Technological University’s Food Science and Technology Programme.

Big farms

AlgaeMor says it is teaming up with two restaurant chains in Asia to sell their products soon. The company is ramping up sales in Asia after it partnered Singapore-based advisory firm Sechel Asia to bring its products to Asia through a 50:50 joint venture called Simpliigood Asia. Sechel is backed by Sassoon Investment Corp, which is owned by the Sassoon family, whose fortunes span retail to real estate and venture debt. 

To push AlgaeMor’s products in Asia, Dach is raising its production in Israel. One of the biggest challenges for spirulina growers is cultivating the biomass on a large, commercially viable scale, while keeping the quality consistent.

According to Dach, the company’s success comes from its strict cultivation process. “We keep our strains in a clean culture room, blowing them up in volume from a few millilitres to five litres to create a critical mass. Then, it is transferred to an indoor cultivation facility. From there, the biomass goes into a greenhouse for acclimatisation for about two weeks, before [it is] injected into our commercial ponds,” he explains. 

The laborious cycle that lasts over a month is crucial to keep the spirulina consistent. “A lot of companies focus on products and algae application, not realising that a solid supply and quality rely on solid resources and foundation,” he says.

Unlike algae-for-biofuel projects, most observers say it is possible to rake a decent profit from growing spirulina or other algae for food. But currently, prices of spirulina and algae-based food are multiple times that of other plant proteins, which restricts its consumption. It also raises ethical concerns that better food may be limited to only those who can afford it. 

AlgaeMor’s Dach counters that the cost behind its product is mainly from R&D. A much ­larger-scale operation and greater automation can bring the price of spirulina protein down to the price of meat. That would take time, but Dach can now celebrate how far the company has come, having just turned cash flow positive after seven years in operation. And unlike his previous algae project, it is still growing.

This story appears in The Edge Singapore (Issue 895, week of Aug 19) which is on sale now. Subscribe here