Forget kale—algae could be the next new ‘superfood’ by Laurie Tarkan @FortuneMagazine September 30, 2015, 11:06 AM EDT E-mail Tweet Facebook Linkedin Share icons As concerns over the health and environmental impacts of eating meat have grown, more Americans are consuming fake meat–also called plant-based meat alternatives. The vegetarian market is a $2.8 billion-a-year industry, including sales of wheat, rice soy, nuts, spices, beans, vegetables and dairy products. But are Americans really ready to start eating algae? That’s what a group of entrepreneurs are banking on, developing algae-based oils to replace olive oil and algae-based pizza crust, brownie mix and even coffee creamer. They’re also developing algae-based lipid powders and flours that food producers can use instead of eggs. The claim is that a type of algae — a cousin of that green slime on your local pond — is a superfood, loaded with protein and nutrients and when made into an oil, has less saturated fats than olive or canola oil. A San Francisco-based renewable fuel company, Solazyme is marketing its algae products, which have been okayed by the FDA, under two names. AlgaVia products include algae-based lipid powders and flours that food producers can use instead of eggs and oils. They’re free of known allergens and gluten free, according to Solazyme. “The lipid powder can halve the fat of an ice cream, and you wouldn’t know it, or can remove eggs from a challah bread,” says Brooks. “The size of the market for either silently or proactively positioning, is huge. We’re hoping to transform nutrition without sacrificing taste, feel or flavor.“ Similarly, France’s Roquette, an even bigger player in the eatable algae market, is developing a line of algae-based foods. “Algal flours seem like they have a lot of promise for the vegan market, and maybe the non-allergenic market,” says Michael Ritzenthaler, vice president and senior research analyst at Piper Jaffray. A handful of early adopters are incorporating Solazyme’s ingredients into their products such as Enjoy Life Brownie Mix, Pizza Crust mix and other baking mixes, Rising Hearts Vegan Brioche, Califia Farms coffee creamers, a dairy-free Mac and Cheese, chocolate chip cookies, and chocolate. “We have projects with all leading food and beverage manufacturers. Whether that be evaluation of ingredients, or development of consumer testing of products that will be on the market soon,” says Brooks. Total revenue of Solazyme was $60.4 million in 2014; the company did not disclose the specific sales of their algae-based food products. “Their commercial sales of food products are pretty much nonexistent at this moment,” says Ritzenthaler, the analyst. The other product, launched September 30th, is a cooking oil called Thrive. According to Solazyme, it’s healthier than canola and olive oil, with high monounsaturated fat and less saturated fats. Algae oil has previously been used in meal replacement drinks made by Soylent. “Algae is pretty amazing. It’s unbelievably sustainable, actually it’s more like renewable, since they make algal oil using microbes. It doesn’t tax our land,” says food development expert Barb Stuckey, Chief Innovation Officer at Mattson, a Silicon Valley-based food development firm that has formulated algae-based milks and baked goods. “And the algal ingredients don’t have any of the flavor ‘baggage’ you’d expect.” An “algae boom” isn’t as far-fetched as you might think. Spiralina, a type of algae, has been a regular at juice bars and in supplements for years, and over 90% of infant formulas use algae oil as the source of their healthy fats. The type of algae Solazyme uses is called Chlorella, and because it’s grown in sealed microbrewery-style tanks, it doesn’t turn green (recall from 4th grade science: plants make green chlorophyll when exposed to sunlight). But chlorella is packed with nutrients. “There’s nowhere else you can find healthy triglyceride oils, plus protein and micro nutrients,” says Mark Brooks, SVP of Solazyme, more known for its plant based fuels. According to the Solazyme’s website for its food product, called AlgaVia, algae contains 63% protein, 19% carbohydrates and 11% lipids, along with a number of nutrients. Soy was the first plant based product to transform how vegetarians eat, but it got some bad press with concerns about soy’s potential estrogen-mimicking qualities and the fact that almost all soy is genetically modified (GMO), which doesn’t sit well with some people. By the way, concerns about soy’s estrogenic effects have been refuted. “Algae is positioned to take advantage of soy at this moment in time,” says Stuckey. Food manufacturers are looking for protein alternatives that don’t change the texture or flavor of their products, and that are sustainable. Because algae has a tough cell wall, it doesn’t interact with other ingredients, so unlike other proteins that can make a food soft or thicker or gritty, it has little textural effect, Brooks says. “There are all these foods our kids eat, like goldfish, and I’d like for them to be as nutritious as possible,” says Brooks. “They could have fiber and protein in them.” The problem, says Ritzenthaler, is the cost. “It’s much cheaper to make ice cream from milk than algae at this point,” he says. “I think the big issue that the algae companies are going to face is marketing. How do you convince consumers that algae is going to taste good? To most consumers, it’s pond scum. It’s green; it’s scary,” says Stuckey. But Brooks says Solazyme’s focus groups have offered a different view. “People are generally neutral or positive, inclined to give it a try,” says Brooks.