Frutarom Expands its Natural Ingredients with Algae-Based Biotech Investment

January 5, 2016

Israeli, global natural flavors and specialty ingredients company, Frutarom, has invested 10 million shekels (US$2.56 million) to acquire a 50% stake in algae-based biotech startup, Algalo, according to a company statement.

 

Founded in 2011 and based in northern Israel, Algalo will use the investment to build a modern biotechnology facility for the advanced cultivation, harvesting, and processing of a variety of algae that will provide active ingredients, including antioxidants, lipids, and specialized proteins and carotenoids, for use in food, dietary supplement, and cosmetic production. Using its proprietary technology, Algalo will efficiently and competitively produce algae containing high concentrations of active elements. Under the structure of the deal, Frutarom will then have exclusive, global marketing rights for Algalo’s products.

 

"The investment in Algalo is part of a broad strategic move by Frutarom to reinforce its position and standing as a leading and innovative global supplier of natural specialty products and functional food ingredients in the fields of taste and health which already now make up over 75% of Frutarom's activity,” said Ori Yehudai, President and CEO of Frutarom Group. “Frutarom's internal research and development capabilities for producing active ingredients from algae, a field in which we are already active, and provides an innovative platform and an additional growth engine for expanding Frutarom's diverse product portfolio in the growing field of natural specialty ingredients.”

 

As consumers demand healthier options in both their foods and cosmetics, Frutarom sees significant growth in the algae-based ingredient market in the coming years as trends shift toward natural products.

 

"Frutarom believes that biotechnology represents the next generation in the development and production of innovative natural ingredients for the industries which it serves…” added Mr. Yehudai “…and the Company intends to continue expanding its capabilities in this area by intensifying investment in R&D within its laboratories as well as through additional investments and joint ventures with research institutions, universities and startup companies to which Frutarom can contribute from its experience in applied R&D, its industrial manufacturing and from its global deployment in over 150 countries with sales to more than 20,000 customers including leading global companies in foods and beverages, nutritional supplements, pharmaceuticals and cosmetics.”

 

Frutarom has production and development centers on six continents, marketing and selling over 43,000 products to more than 20,000 customers in the food and beverage, flavor, fragrance, pharmaceutical, and cosmetic industries in over 150 countries.

 

The group has been actively pursuing a course of expansion and growth throughout 2015. In September it added to its product line of natural extracts used for food preservation with the acquisition of a 79% stake in Spain-based Nutrafur for €10.3 million. In June of last year it acquired New Zealand-based fruit ingredient company, Taura Natural Ingredients for US$70 million, and in February of last year Frutarom acquired UK-based savory ingredients company, FoodBlenders for $2.4 million plus performance incentives, according to Nutra Ingredients.

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