Algae at scale: Qualitas Health triples algae farm acreage for omega-3 now, protein soon

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Think beyond nanotechnology. It’s Nanno Technology, as Qualitas’ nannochloropsis strain gets deployed in New Mexico at the old Green Crude Farm (now Green Stream Farms), as well as in Texas.

In Texas, Qualitas Health unveiled a long-term partnership with commercial crop producer Green Stream Farms to triple its algae production to 45,000 pea-equivalent acres, achieving critical mass to become a sustainable omega-3 alternative, worldwide, at commercial scale.

Fish have been the long-standing source for most essential oils like omega-3 fatty acids because they have obtained them from eating algae, the ultimate source of DHA and EPA. EPA is best known for its cardiovascular benefits, though it also has a positive impact on mood, skin and joint health.

For some time companies in the algae space have spoken of “cutting out the middlefish” and harvesting omega-3s directly from algae instead of bioaccumulated in fish oil.  For some in that quest, the issue has been yield and cost, for all there has been an issue of scale.

“At a beautiful cost,” CEO Miguel Calatayud told The Digest, we are bringing a crop to areas where nothing was growing, using non-arable land, brackish water, the sun as our source of energy and 100% scalable.”

Big enough for the omega-3 market

QH’s flagship ingredient is Almega PL. It delivers the omega-3 EPA naturally bound to polar lipids to provide superior digestibility and absorption.

“This is the first time that algae is a real alternative for the omega 3 world,” Calatayud noted. “Many have been  interested but the major multinationals have seen that the technology had reached 2-3 acres and wasn’t really scalable. Now, we have brought a real alternative to fish and krill, with the highest availability in omega-3s, 100% vegan, and with full traceability, and it’s cool and different. That’s what they’ve needed.”

Next stop: Protein like beef, without the cow

“We are building a platform with a very strong sales & marketing machine that will move us from a supplement company to a food and nutrition company,” said Calatayud. “Not just at a novel cost, but scalable. Today, we see an amazing opportunity with Millennials, but also GenXers like myself need to start taking more care of themselves, and also there are great opportunities with Boomers”

“Nanno makes a very nice protein,” Rebecca White told The Digest. “Not only 40% by mass, but with a well balanced amino acid profile, all the essential and the branch chain amino acids., It’s similar to the profile of beef. It’s a matter of extracting from the solids and cleaning it up.”

Why Millennials?

“Because 10% of millennials declare themselves as vegans,” added Calatayud, “and most are turning to pea protein, and we are 300 times more productive than peas. So our 150 acres — and this is in the algae world where the bigger farms are 4 or 8 acres — this is 45000 acres of peas in terms of the productivity. Already we have a product in omega-3s that is disruptive in the traditional prenatal market.

The development pipeline

“The next product is protein,” added SVP Rebecca White, who joined Qualitas from Sapphire Energy. “We have other products in the pipeline — it’s like biofuels with co-products, you look at look at what’s left, and with our nannochloropsis organism the protein is 40 percent of the biomass.”

Nutrition targets? “Human for sure,” White said. “you have to do the studies’, but once you have completed the NDI (new dietary ingredients process, with the FDA), the GRAS (Generally Regarded as Safe) is simple. Livestock and pet food, it’s a different process in some ways but certainly we are aiming at both.”

Sapphire’s Green Crude Farm and the Green Stream Farms backstory

If the picture of the Green Stream Farms facility is not familiar to you, it’s the old Sapphire Energy facility in Columbus, New Mexico, which Green Stream Farms acquired at an undisclosed price from Sapphire’s ownership group.

“I brought it out of constriction and into production,” White noted, from her Sapphire days, “so I know it is very versatile, and it has been put through the paces with strains and it has proven production capacity. And it’s great to have Green Stream bring their expertise in commercial crops.”

Green Stream Farms is a commercial crop producer headquartered in Manhattan, KS, with a production facility in Columbus, NM that provides algae products including nutraceuticals and animal feed to their partners.

Building yield and getting to Omega-3s: the Qualitas backstory

“The original strain was chosen for EPA, and since that strain was picked, early on, we’ve learned how to manipulate the levels with our cultivation techniques. It’s comes down to how you operate the site, and the timing.

We asked about yields. “Our yields are in line with other data you’ve seen for this strain,” White noted.  We also asked if yields crash in the winter? “In our case, we grow a winter strain,” said White, “and we struggle more in the summer when the temperatures soar.”

What about pond size? “We work with a range of ponds in Texas, between 1 and 5, the existing site has some natural boundaries that dictated size of the ponds. There are a combination of reasons why 5 is ideal right now, and 10 is more R&D,” said White.

“For is, we are a commercial business, we are going to stick with what’s been demonstrated. There are issues with flow dynamics, and for nanno one of the most important cultivation practices is maintaining flow and tuning your turbulence profile.  And depth is important for EPA< and the light-dark cycle. So you look at the capex and the energy, and the requirements of the biology, to find that best fit.”

Defending the crop: crop protection for algae that are designed to be devoured

In the world of algae, algae’s growth rate has never been a limiting factor. Though it has never received the monumental attention paid to major terrestrial crops like corn and soybeans, algae already has a gigantic growth rate advantage.

The challenge has been, in the end, just one. Defending a crop that is absolutely at the bottom of the food chain and is designed to be devoured. Otherwise, we could just harvest our strains of choice off the surface of the ocean at nominal cost.

Defending algae has meant moving it from the sea to the land — we call it aquaculture because it is grown in water, but when you think about the water intake of corn, that’s really grown in water in so many ways as well. Pond or not, modern algae farming is terrestrial agriculture, and because we have to immerse it in water (as opposed to growing in the dirt and showering with water, as with plants), we have costs to move the water to the pond, move it in the pond, get the right nutrient into the water and get the algae out of the water.

All that, because left alone, algae just gets knocked over and out-competed by almost anything. Dust storms, two-celled predators, the mildest of viruses. What’s been employed? The same concepts of integrated pest management we see in the land world, only translated into the pond.

Early detection, learning the prey and the diseases and putting them at maximum disadvantage in the pond conditions — calcium levels, magnesium, for example — or getting the ideal levels of NPI (that’s nitrogen, phosphorus and iron, which are the important nutrients for algae in the same way that we have NPK for land crops).

“Building off the experience at Sapphire, you have to go proactive and give your strain the advantage, it’s not just about killing the invader. You have to identify the villain, find their seasonality and their preferred conditions — salinity, pH, flow rate, nutrient levels, temperature, and deny those to them.

Qualitas’ Texas facility

The expansion to Columbus, New Mexico is significant but let’s not forget Texas,. That facility is

360 acres, of which 50 are developed and 45 are cultivated. Originally it was an inland shrimp farm. The water is heavily brackish and there is clay in the soil, and it was switched to algae. In Texas, there are 33 raceways, each just over 1.1 – 1.2 acres in size, and a smaller one at a half-acre that is used as an inoculation system. The lab cultivates to 5 liters, then 40 liters, then the first outstep is to small raceways.

The Calatayud backstory

A new player in the Qualitas Cinematic Universe is CEO Miguel Calatayud. Let’s look briefly at his backstory — it’s highly relevant to the overall QH progression.

Calatayud has been 20 years in the food industry, building a family-owned frozen food business from 70M to 200M in revenues, and now growing 650 million pounds of vegetables per year — think peas, corn and green beans. But especially think peas — because anyone in that business is getting a lot of exposure to the growth in vegan protein brought on by the shift with millennials.

The route to growth? Think technology, teams and global customer scale.It’s a story of ERP systems, world-class management teams and opening markets through effective B2B brands. It’s the very “next step” spoken of for the algae industry. Now, it’s happening.

The shift to wellness and health? Well, think again about peas and those millennials, and a front row seat in watching the rise of vegetable consumption. And the challenges of finding more and more suitable acreage to handle the expected surge in demand for EPA, among other nutrients, in a world where over-harvesting has severely challenged the sustainability of the fish industry.

Growth, over in fish world, is not taken for granted just because everyone says the world population will reach epic levels by 2050 and diets are shifting to more protein. In the sea as well as land, in wellness just as nutrition, there’s a race for yield on to  reduce the impact that all this harvesting will have on the oceans and the land.

Bringing us to algae.

Now, the esteemed phycologist Dr. John Benemann, Dr. No himself, has remarked on occasion, “if algae’s the answer, then we’re in big trouble.” Not because algae is a bad source of improved yields and healthy products — but because the issues that prompt short-term thinkers to embrace algae as a panacea for their ills, rarely thinks about the long-term challenges of establishing a new global, domesticated crop out of algae, who has been surviving in the Wild, Wild Wet for hundreds of millions of years precisely because it is so wild and unpredictable, blooming out of nowhere and then disappearing as quickly.

“I have been an outsider,” said Calatayud. “What I have seen in other cases is that algae has been treated as a scientific project with a halo, and filled with mystery. What we see here is a tipping point — once you get the science, it’s about lean manufacturing and scale-up and making it a real thing worldwide.” That’s why we are working with partners, scaling our own farm in Texas but scaling with partners in New Mexico, and we will use other resources with a system that is not only scalable, but 100% replicable.”

About “Pea-equivalent acres”

In the lead to the story we began to express the acreage in pea-equivalent acres. We think that makes sense to have a benchmark that eliminates the need to constantly convert acreage to account for differences in crop yield — because the difference is so vast with algae, small acreages can be deceiving. Algae produces 300 times more protein per acre than peas.

Even a 3-acre facility is equivalent to a vast farm in terrestrial crops, and when a venture gets into the hundreds of acres, it becomes a commercially-interesting venture. Over in the world of biofuels and the Renewable Fuel Standard, we generally convert gallonage to “ethanol-equivalent gallons,” for the same headache-reducing reasons.

Reaction from the stakeholders

“We are proud to produce a new category of sustainable omega-3s from algae – Almega PL® – at a scale that will give us global impact,” said Dr. Rebecca White, VP Operations at Qualitas Health. “This partnership confirms that we are poised to meet demand at a massive scale, and jumpstarts us as we prepare for exciting moves coming up later this year.”

“Omega-3 is an essential nutrient that represents an exciting market, currently dominated by fish and krill. Many people don’t realize, however, that fish and krill get their omega-3s from algae,” said Qualitas Health CEO Miguel Calatayud. “We are thrilled to be partnering with the expert farmers at Green Stream Farms to bring vegan, sustainably produced nutritional products to more people than ever before, and to become the truly green alternative in the omega-3 world.”

Added Tom Richard, CEO of Green Stream Farms: “We are proud to partner with Qualitas Health to produce algae on a commercial scale. Our partnership will lead the industry in taking a true farming approach to algae production. We plan to continue to find innovative ways for algae to become a more sustainable product.”

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