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Feasibility study for the implementation of the production of organic, granulated enzymes for detergent application by automated solid-state fermentation and fluidised-bed technology

Periodic Reporting for period 1 - SSFENZYMES (Feasibility study for the implementation of the production of organic, granulated enzymes for detergent application by automated solid-state fermentation and fluidised-bed technology)

Reporting period: 2016-12-01 to 2017-05-31

"The global enzymes market size was USD 8.18 billion in 2015 and is expected to witness significant growth over the next eight years on account of its increasing application in detergents, pharmaceuticals, and food & beverages. The use of enzymes for laundry was introduced in the early 1900s. Since the latter part of the century, temperature stable bacterial enzymes (proteases, amylases, lipases and cellulases) are applied because of their stain removing capacity. Most of the industrial enzymes are currently produced by submerged fermentation of genetically modified microorganisms (GMO). The worldwide enzyme market is led by three large companies.
The effect of incorporating enzymes is that less detergents are requires for the laundry product and lower washing temperatures may be employed with consequent savings in energy consumption.
The demand for sustainable and organic products for daily use is steadily increasing which caused by the rising awareness of European consumers towards issues such as sustainability and environmentally friendly processes without the use of GMOs.
The retail sales of organic products in EU-28 reached € 27.1 billion in 2015 of which Germany has the biggest market share. The label ""organic"" according to Council regulation (EC) nº 834/2007 is meant for food products only, while the Ecocert standard is deemed for articles for daily use, e.g. laundry products. The Ecocert standard is not prohibiting the use of GMO. Convinced buyers of organic products are refusing GMO which is the reason for the absence of enzymes in most of the eco-laundry products. Ironically, this fact is contradictory to the idea of sustainable, organic products, because more detergents and higher temperatures are required for a satisfying cleaning performance.
Within the SSF feasibility study, Naturstoff-Technik GmbH (NST) has successfully exploited the results of a previous EU Project, namely the economic production of an organic, non-GMO, granulated enzyme product for detergent application by automated Solid-State-Fermentation at industrial scale using organic, renewable resources as substrate. NST's product will have at least proteinase, amylase and lipase activity and is certified according to Council regulation (EC) nº 834/2007 on organic production and labeling of organic products. The result of this feasibility study shows that NST SSFENZYMES product will enable the production of organic laundry products according to the expected new BNN guidelines in 2018.
NST will soon be able to provide a granulated enzyme product to be sold B2B to the European producers of Eco-laundry products fulfilling the future BNN guidelines in 2018. In a first step, NST will be addressing producers which are certified according to the Ecocert-Standard.
The well-established SME NST is carrying out large-scale processing and refinement of ingredients for the food and cosmetic industry for more than 30 years. Although the European food and cosmetic industry is a constantly growing market, having only one branch as business pillar seems to be too risky for an SME on the long-term. In order to stay competitive in the future, NST is eager to step into a new business area by selling an own product.

NSTs organic enzyme product will have clear advantages over most of the current enzyme producers who are using submerged fermentation:
• The product has organic label.
• Therefore it will be applicable in organic detergent products following the Guidelines for ecological detergents and other cleaning agents (Bundesverband Naturkost Naturwaren, 21st January 2016)
Additionally, the application of enzymes in organic detergents will reduce the use of surfactants and it will improve the wash performance of the detergent at lower temperatures which was not possible for such products as they simply did not apply enzymes.

Incorporating the SSFENZYME product in eco-certified laundry products will result in the state-of-the-art properties of such laundry products
• improved product properties,
• higher stain removing performance
• lower temperatures
• less detergents
• non-GMO, fulfilling the BNN standard 2018
• lower production costs according to
• less surfactants and lower washing temperature required for satisfying stain removal
• resulting reduced production costs for a more effective end product
which will significantly strengthen the competitiveness of the European Market for Eco-, and furthermore, organic laundry products.
NSTs enzyme product will be sold B2B will enable their customers the production of organic laundry products which will fulfill the expected new BNN guidelines for organic products for daily use in 2018.
During the 6 months feasibility study, NST carried out comprehensive work on
• Evaluation of the envisaged enzyme preparations for European organic detergent market by means of a comprehensive market survey with insight into european standards as well as upcoming regulations
• Establishment of a network of potential customers of the detergent industry, licensees, researchers and NGOs
• Assessment of the automated prototype for solid-state fermentation, extraction and granulation process for the production of detergent enzymes with temperature and pH control
• Demonstration of the economical granulation process for the enzymes by evaluation of the economic feasibility under different scenarios

This has been done by carrying out a
• Detailed analysis of the market potential in Europe for the SSFENZYMES organic GMO-free enzyme granulate which was be based on NST's already existing internal market and consumer survey
• Analysis of the potential amounts of granulated enzymes for the targeted market (demand site) in order to plan the production capacity (necessary amount of the product, timing, production conditions)
• End-user requirements and letter of interest and commitment of potential end users by contacting the relevant European and national associations and NGOs
• Identification of the most dedicated partners/customers within Europe
• Standards, certification and norms (ISO and organic-certification) by constant updating of the existing requirements
• Design of required stain removing efficiency tests for product application in a follow-up demonstration project because potential users have their own laboratories and require a sample test before even considering a test in their production facilities.

A comprehensive market analysis was performed with focus on the key markets in Europe for laundry detergents. This included a market segmentation and trend analysis. Market dynamics and trends with focus on formulations (solid vs. liquid) as well as a competitor analysis were performed as well. In addition, the market shares of relevant products and the different sales channels were evaluated. Furthermore, the needs of the customers and basic habits as well as influence of branding and bio-/eco-trends were investigated. The value proposition for a laundry detergent based on bio-enzymes was developed as well as the relevant customers segments, customer relationship and sales channels and documented in a business canvas. Altogether a roadmap and executable business plan for a phased marketing of the product was developed.
The key resources, activities, and partners were evaluated and developed in a business plan. The supply chain was investigated and actions to partner on the supply chain side as well as on the sales channel side were prepared. Finally, the cost and revenue structures were analysed and documented in the business plan.
Furthermore a basic partnering and licensing strategy was developed, which comprised several options and a phased model for partnering and development of the business.
"NST's enzyme products are produced without genetically modified organisms (GMO) and from renewable resources, they show a higher temperature stability and they are produced organically according to EC Regulation 834/2007.
The demand for sustainable and organic products for daily use is steadily increasing which caused by the rising awareness of European consumers towards issues such as sustainability and environmentally friendly processes without the use of GMOs.

In order to promote product innovation in natural goods sector, the Association of Organic Processors, Wholesalers and Retailers (Bundesverband Naturkost Naturwaren (BNN) e.V.) established a new guideline for ecological detergents and other cleaning agents in January 2016. This new guideline requires that beside others the following objectives have to be implemented in the currently approved standards (Ecogarantie, Ecocert, NCP – Nature Care Product, ABG – Austria Bio Garantie):
• Non-use of enzymes produced by Genetic Modification
Some of the approved standards cannot guarantee complete exclusion of genetic engineering at all levels of production. At the date of publication (21st January 2016), enzymes, which are produced by genetically modified microorganisms (GMMO), are permitted. By the end of 2018, the standards are encouraged to permit only enzymes that have not been produced by GMOs in their standards.
• Ingredients originating from Organic farming
If available, agricultural ingredients originate from certified organic farming. All approved standard owners are encouraged to implement this criterion into their regulations and to ensure its traceability by the end of 2018.
The application of these two objectives leads to the non-use of genetic engineering, requiring that all ingredients, in particular enzymes, must not have been produced either from or by genetically modified organisms. The compliance with this requirement must be documented along the entire processing chain. Only products, for which the manufacturer can guarantee that genetic engineering techniques have been excluded in the extraction of ingredients from microorganisms (enzymes), are covered by this guideline. Products that contain enzymes require a clear statement from the manufacturer declaring freedom from genetic engineering. Only detergents carrying the label of one of the approved standards and complying with the additional requirements in terms of genetic engineering exclusion over the entire processing chain can obtain the BNN identification code. From 1st January 2018 products not fulfilling the requirements will be graded as uncertified product.

Currently it is very difficult to get enzymes positioned in certain third party certification standards as it can be challenging to determine the compliance status of the fermentation media. Complications arise in the case of enzymes. Enzymes that are sources from non-GMO organisms and are standardized on identity preserved carriers are readily available to the industry. However, when obtaining non-GMO certification – one that demands proving GMOs are not utilized anywhere in the production process – the enzyme industry faces a significant challenge. Additional, the organic detergent sector following the BNN guideline is smaller and not on the main interest for bigger enzyme producers especially as until now the use of enzymes without certification were possible.

On the one hand, enzyme containing laudry products according to the Ecocert ""Natural Detergents and Natural Detergents made with Organic"" standard cannot be concidered ""organic"" according to the above regulation but they comprise the advantages of less sufectants and lower washing temperature required for satifying stain removing. On the other hand, the detergent producers whose products fulfill the expected for 2018 do not apply enzymes and their organic products to not comprise the advantages describes before.
The application NST's SSFENZYMES product for organic laundry detergents will enable producers of organic laundry products to provide highest product quality according to the upcoming regulation in 2018.

Consequently, this sector offers a huge potential for Naturstoff-Technik as its enzyme production process is already certified according to council regulation 834/2007. Therefore, enzymes produced with the process of Naturstoff-Technik would fulfill the requirements of the BNN standard which is expected for 2018.