Algae Products Market

Market Overview

The global algae products market size was valued at USD 1,812.62 million in 2022. It is expected to reach USD 2,833.73 million by 2031, growing at a CAGR of 5.09% during the forecast period (2023–2031).

Highlights

• The algal oil segment is the highest contributor to the market by product type.
• The dietary supplements segment is the highest contributor to the market by application.
• North America is the most significant revenue contributor by region.

Algae are photosynthetic, oxygen-exhaling, unicellular, or multicellular microorganisms with various characteristics, including carbon dioxide consumption and storage of essential nutrients, minerals, and vitamins. Rich in nutrients, algae products are single-celled, aquatic, plant-like substances. They are utilized in nutritional supplements, personal care products, and pharmaceuticals. Seaweed, Chlorella, and kelp-based algae products frequently contain algae. Algae products are rich in protein and contain essential amino acids, which improve human metabolic processes such as enzyme formation.

The global algae products market is driven by the increasing consumer awareness of the health benefits of omega-3 and the market's multi-industry reach. In addition, the high demand from the pharmaceutical sector, the growth of the global population, and the rising demand for feed and food supplements are macroeconomic factors that positively influence the global algae products market. Other factors, such as the growing demand for aquaculture feed utilized for fish breeding and the rising demand for healthy food products, will moderate the market's growth rate.

Market Dynamics

Global Algae Products Market Drivers

High Impact Trail to Biofuels

The advantages of foods and supplements made from algae continue to grab public attention and spark consumer interest. Numerous foods and beverages can incorporate algal biomass in a variety of ways. The first to break new ground, innovators who are cultivating, processing, and marketing algae as an excellent food source will add significant value and raise standards of living worldwide. Algae are crucial for many industrial applications, such as creating dietary supplements, sewage treatment, and coloring agents. However, one of the algae's most exciting applications is as a renewable source of biofuels.

Algal vegetable oil can be refined into various biofuels, including renewable diesel and jet fuel, or used directly (straight vegetable oil esterified into biodiesel). It can also be combined with other chemical ingredients for products like cosmetics. Using algae for biofuels also has the significant benefit of not requiring farmland currently used for growing food sources. Algae have the potential to produce at least 30 times more energy than the land-based crops presently used to make biofuels, according to the "Department of Energy." Algae are an ideal eco-friendly energy source because they can effectively recycle atmospheric carbon.

Health Benefits Related to Consumption of Algae Products

Algae, including microalgae, are photosynthetic organisms used to produce dietary foods that are said to have a high protein content and other nutritional advantages, making them an ideal ingredient for dietary supplements, cosmetics, functional food and beverage products, and animal feed, among other uses. In addition to being a source of protein, algae, and microalgae have additional health advantages due to the presence of various bioactive components. Moreover, microalgae have higher pigment concentrations than different plant and floral species. The essential amino acid (EAA) profiles of proteins derived from algae are complete. These proteins have a higher protein content than proteins from traditional sources like meat, poultry, and dairy goods.

Numerous microalgae species are said to be abundant in lipids, proteins, carbohydrates, and other bioactive substances. Some microalgae-derived compounds, like peptides, have been shown to have antioxidative, antihypertensive, immunomodulatory, anti-cancerogenic, hepatoprotective, and anticoagulant properties. According to Becker et al., microalgae are a great source of minerals like potassium, iron, magnesium, calcium, and iodine, as well as vitamins like vitamins A, B1, B2, B6, B12, C, and E. They also contain potent probiotic substances that boost energy, support the body's detoxification, and strengthen the immune system.

Global Algae Products Market Restraints

High Market Price and Degrees of Downstream Processing

Algae have a lower environmental impact than fish and krill and are a more affordable source of raw materials for industrial production. Algae must be grown and harvested over a large area before being extracted and refined into a pure state. 2%–3% of the total capital cost goes toward the cost of harvesting microalgae. The primary ineffective biomass recovery process is centrifugation. Due to high equipment costs, the process is costly.

Moreover, centrifuges have high capital and operating costs. Microalgae are dried for oil extraction after being converted to biomass to lengthen the product's shelf life. Some drying techniques used to prepare the ingredients for algae omega products include spray drying, freeze drying, solar drying, and convective hot air drying. The two main processes that produce high-quality products are spray drying and freeze drying. Freeze-drying is comparatively more efficient because biomass is not exposed to high temperatures, preserving the ingredient's maximum nutrient quality. However, both methods could be more pricey in capital expenditure and operating expenses, limiting their appeal to start-up businesses.

Global Algae Products Market Opportunities

Release of New Opportunities Due to the Development of New Algae Variants

Algae grow everywhere and can be used anywhere in food, claim researchers and ingredient companies. However, only a small portion of the more than 200,000 species of microalgae are currently grown for food components, indicating that algae have a tremendous future. The potential of different algae species as alternate sources of protein and nutrition, as well as in terms of their widespread applications, are being explored by major FMCG giants like Unilever and Nestle SA in partnerships with research experts and ingredient manufacturers. This will support the growth of the algae products and additives market globally.

Consistent Use of Algae Omega-3 in Nutritional Products

The nutraceutical and pharmaceutical industries have seen a significant increase in the use of algae-based Omega-3 in recent years. Various nutrients from algae are being incorporated into supplements and medications to meet the demand for alternatives to animal protein. Algal oil is a source of omega-3s that can replace animal-derived nutrition in infant formula, other foods, plant-based vitamins, and omega-3 supplements. Additionally, as consumers become more aware of the supplements they are ingesting into their bodies and make decisions that support healthier lifestyles and are consistent with their values and preferences, they are demanding alternatives to animal-based proteins. As a result of this phenomenon, ingredient producers like ADM have unveiled new lines of algae additives.

Regional Analysis

The global algae products market is segmented by region: North America, Europe, Asia-Pacific, and the Rest of the World.

North America Dominates the Global Market

North America is the most significant revenue contributor and is expected to grow at a CAGR of 4.44% during the forecast period. Algae is remarkably adaptable because it can be used as a functional food and beverage ingredient, a food additive, and an ingredient in supplements and cosmetics. Although the use of algae-derived products and additives has generally remained outside the mainstream in the United States, a trend for vegan and plant-based ingredients and products has emerged as a result of the constantly shifting market dynamics and consumer behavior, supporting the market growth for algae and microalgae-derived nutrients. Furthermore, producers in the nation are looking into the potential of additives derived from algae considering the rising demand for vegan and high-protein food products. While astaxanthin is arguably the most well-known algae-based ingredient in the nation and is thought to be a powerful antioxidant linked to inflammation reduction, membrane preservation, and cardiovascular health, the industries are also experimenting with other algae derivatives that may offer broad-ranging wellness benefits.

Asia-Pacific is expected to grow at a CAGR of 6.54% during the forecast period. Over the past 21 years, China has emerged as a significant producer of microalgal biomass worldwide. The most extensive microalgal product by tonnage and value is spirulina (Arthrospira), followed by Chlorella, dunaliella, and haematococcus. In the nation, the four main types of microalgae are commercially grown. The nutraceutical industries sell about 90% of China's microalgae biomass production for human consumption as dietary supplements or human nutrition products, with smaller markets in animal feeds, primarily for marine aquaculture. China is estimated to produce two-thirds of the world's microalgae biomass. The Chinese Microalgae Industry Alliance (CMIA), a network established by Chinese microalgae researchers and business enterprises, supports the manufacturing of algae-based products by promoting higher standards of quality and safety as well as the development of cutting-edge technologies that can increase demand for microalgal products.

Furthermore, the food and beverage industries in the nation are starting to work with the manufacturers of microalgae and algae ingredients to unleash a new set of possibilities by launching animal-protein substitute foods and beverages in recognition of the potential of algae products and additives as well as the health benefits linked to their consumption.

The U.K. is a significant algae market. Seaweed farming may not be an ancient practice in the U.K. But the concept has gained popularity in recent years, and several operators have started to appear. One such instance is the Scarborough-based company SeaGrown, which has obtained a permit to grow the brown seaweed species Laminaria Digitata, Saccharina latissimi, and Alaria esculenta on 25-hectare site four miles into the North Sea. However, due to the country's small algal oil production, most of the algal oil consumed is imported. The only two domestic producers of algal oil in the nation are British Algoil Ltd. and Varicon Aqua Solutions Ltd. Beta carotene, which is primarily derived from Dunaliella salina and is offered by manufacturers like BASF, is continuing to gain significant traction in the country due to the continued popularity of natural and functional ingredients in the food, beverage, and dietary supplement industries. This is anticipated to support the market's growth for algae products over the forecast period.

The rising health concerns in Brazil and Argentina drive the demand for algae ingredients in supplements and medications. For instance, Brazilians primarily know about the advantages of omega-3 for heart and brain health. Furthermore, a study on Brazilian adolescent subjects demonstrates that a higher omega-3 content linked to less DNA damage promotes market expansion. Numerous foreign businesses are launching new algae-based EPA products or partnering with local companies to introduce supplements and products with algae-based EPA in the Brazilian market. Moreover, ingredient producers are investigating several new species of algae and microalgae to be used for industrial purposes in collaboration with research experts and algae technology companies. For instance, according to SiB Colombia, 473 species of seaweed and 605 varieties of sweet water algae were recorded in Colombia as of 2019. This country is the subject of research. Due to the high potential of algal oil as a renewable and sustainable fuel source, recent studies also considered wastewater a promising source of algal biomass for Brazilian and Argentine biodiesel production.

Segmental Analysis

The global algae products market is segmented by product type and application.

Based on product type, the global algae products market is bifurcated into algal oil and beta-carotene.

The algal oil segment is the highest contributor to the market and is expected to grow at a CAGR of 9.01% during the forecast period. Essential fatty acids in omega-3 oils obtained from algae have a variety of health advantages, including advantages for the heart, eyes, and brain. Alpha-linolenic acid (ALA), eicosapentaenoic acid (EPA), and docosahexaenoic acid are the three main types of omega-3 fatty acids (DHA). Pollutants like polychlorinated biphenyls are not a risk of contamination with these oils. Algal oils are gaining popularity and making their way into consumers' daily diets on a global scale. The leading causes of this change have been the rise in lifestyle diseases and the number of people using preventive healthcare.

The pharmaceutical, cosmetic, and food industries use a variety of compounds and natural pigments that microalgae can produce. Microalgae have some high-value-added substances, such as Carotene, astaxanthin, vitamin B, and lutein. On an industrial scale, the mold Blakeslea trispora and the alga Dunaliella salina are grown for their -carotene content. The most prevalent pigments in nature are beta carotenoids and tetraterpene pigments with yellow, orange, red, and purple. They are also found in photosynthetic bacteria. Due to their coloring abilities, some species of archaea, fungi, algae, plants, and animals are used by the food and beverage industries and manufacturers of nutraceutical and cosmetic products.

Based on application, the global algae products market is bifurcated into food and beverage, dietary supplements, and pharmaceuticals.

The dietary supplements segment is the highest contributor to the market and is expected to grow at a CAGR of 4.61% during the forecast period. Since the development of probiotic dietary supplements in the last three to four decades, the health benefits of microalgae have gained more and more attention. Long-chain polyunsaturated fatty acids are primarily responsible for the health benefits of food ingredients and dietary supplements (LC-PUFA). Additionally, the choice of novel functional food ingredients with positive effects on human health is greatly influenced by algae's biochemical makeup and biological activity. Some of the algal species that are gaining popularity with producers of nutraceutical products include Chlorella, Arthrospira (spirulina), Dunaliella, Haematococcus, Scenedesmus, Aphanizomenon, Odontella, and Porphyridium, with species of Chlorella being recognized as particularly rich in polysaccharides.

The food and beverage is subdivided into bakery and confectionery, meat substitutes, and drinks. The market is expanding due to the rising demand for convenience foods like pasta, drinks, cakes, bread, gravies, and pastries, as well as the growing world population. Gelling agents and texturizers can be replaced with algae ingredients to create low-fat formulations with a rich texture. Bakery categories frequently use them to get a low-fat recipe with a decadent value proposition. Microalgae also benefit from being allergy-friendly, allowing companies like Mondelez's Enjoy Life Foods to substitute it for soy, peanuts, or eggs in its brownie and other baking mixes. Agar is additionally used to thicken ice cream and other desserts. Algae-derived hydrocolloids are widely used in the food and beverage industry to produce goods like bakery and confectionery.

Recent Developments

• March 2023- Provectus Algae (Provectus) secured an undisclosed strategic investment from CJ BIO, a division of South Korea-based food and bio company CJ CheilJedang.
• July 2022- Researchers at the University of Colorado Boulder developed a way of using algae to create carbon-neutral or even carbon-negative concrete.