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Is algae oil about to go mainstream?

Algae oil boasts some impressive nutritional, environmental and functional benefits – and several companies appear to be on the verge of broadening its use. The question remains, will food manufacturers (and consumers) buy it?

Algae oil already enjoys a good degree of success. Varieties high in DHA omega-3 fatty acids are widely used in infant formula and supplements, as well as various foods for adults. A recent European ruling has expanded the permitted uses for algae oil in the EU, following notification from BASF, Nutraveris and Mara Renewables that they intend to market the oil as a novel food. This potentially could open the European algae oil market to more mainstream food and drink manufacturers. And in the United States, major supplier Corbion has announced that it will introduce its Thrive Algae Oil at 2,000 Walmart stores, adding to the 3,500 other major retail outlets at which it is available, including Target.

So far, the market for algae oil looks promising. According to Grand View Research, global sales could reach $2.09 billion by 2025, boosted in the food and drink sector by its antioxidant content and favourable fat profile, especially as a vegetarian source of omega-3s. However, it notes that relatively high production costs compared to commodity oils could limit uptake.

As an environmentally friendly choice, algae oil is far less reliant on limited natural resources like land and water, and outstrips all others in production per hectare. Palm oil is by far the most productive land-based vegetable oil, yielding about 5,590 litres per hectare, but algae oil from open ponds could yield as much as 95,000 litres of oil per hectare, according to a report prepared for the US Department of Energy. And unlike oils from palm and soy, algae oil has not been linked to habitat destruction, deforestation and workers’ rights violations.

Research suggests that sustainability claims are becoming increasingly important to consumers. Euromonitor International says ethical labels on global food and drink products were worth $794 billion in 2017 – $67 billion more than health and wellness claims.

As well as in open ponds, algae can also be grown in fermentation tanks. It can then be harvested in days, meaning it is easier to produce large quantities to order, independent from climate and local weather conditions.

From a functional perspective, algae oil has an unusually high smoke point, making it a good choice for deep frying. It has a neutral taste, which is useful for baking, frying and coating, and as an ingredient in dressings and margarines. In addition, it is vegan, non-allergenic, contains no trans fats and about 25% more monounsaturated fat and 75% less saturated fat than olive oil.

So, will the benefits of algae oil prove sufficient for long term market success? Consumer interest in alternative oils has spiked in recent years, driven by demand for healthier ingredients. Oils from nuts, avocado, sesame, flax, hemp and grape seed, as well as more novel sources like krill, and berries like sea buckthorn and juniper have all increased in popularity. For packaged foods, heat stability, biochemical profile and consistent taste are the most important considerations.

Algae oil’s production costs may still be a barrier, but if these can be overcome, its functionality, health profile, eco-credentials and regulatory status mean it holds enormous promise.