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Innovative Microalgae Feed Ingredient to improve Animal Health for a more sustainable Food Chain

Periodic Reporting for period 1 - MiAlFeedIngredients (Innovative Microalgae Feed Ingredient to improve Animal Health for a more sustainable Food Chain)

Reporting period: 2017-02-01 to 2017-07-31

The use of antibiotics as a growth promoter for animal farming is forbidden in the EU (since 2006) as well as in an increasing number of countries worldwide. Nevertheless, 1700 tons of antibiotics were added to animal feed in Germany in 2014 (legal, when dosis < 2 days). This is because farmers have a strong financial incentive to avoid infections: healthy animals grow faster with the same available quantity of feed (=costs). The excessive use of antibiotics in animal mass production is the reason for the development of multi-resistant bacteria with an estimated 25.000 annual casualties in Europe.
Scientific studies have provided significant evidence that microalgae have the same positive effect on animal growth as antibiotics. However, until now microalgae were too expensive for animal feed. The consortium has developed the first microalgae-based feed ingredient with production cost that allow an application in the feed market. Hence, our product is an alternative to antibiotics for global meat production. Farmers benefit because they may apply the product constantly and as prophylaxis. European citizens benefit from a reduced risk of multi-resistant bacteria stems.
Microganic´s “FitFeed” is a powder mixed from four different microalgae species combining the unique health promoting effects of each microalgae. This blend will be added to animal feed as an ingredient. Our product will reduce the use of antibiotics in European food production. Both cost savings in medication and improved growth of healthy animals will make European farmers more competitive. The increased use of natural ingredients and the reduction of medication will make modern farming more sustainable. Microalgae bind C02 in photosynthesis on a large scale once established as a standard ingredient in animal feed. FitFeed is a milestone in making EU meat production more sustainable and competitive, avoid the emergence of multi-resistant bacteria stems and establish the consortium as important suppliers to the feed industry.
The objective is to provide a new type of product to the animal feed industry enabled by a patented microalgae-growing system. FitFeed optimizes health promoting effects through a scientifically developed and protected formulae. Compared to existing natural feed ingredients we will offer a superior product (quality + bigger health effect). Compared to antibiotic growth promotors our product can be applied as prophylaxis on a long-term basis. The target market size was 153 mio. tons of feed in the EU (2014).
The project consists of only 1 reporting period. The goal of this period was to validate the business plan by market- and competative analysis. After a pre-market study we bought samples competitor´s products and quantified their level of antimicrobial agents and bioactivity in commercial labs.

Results of the Study:
The feasabilty study of FitFeed as a potentially new product of Microganic showed
• that the product concept of FitFeed and its superior level of ingredients has been validated,
• that the competing substances are actually cheaper available in the market than orginally assumed in the proposal,
• that the stronger effects and higher levels of bioactive ingredients do not justify a market price, which would be necessary for a profitable buisiness case.
The results therefore do not confirm the business plan of the proposal, which needs to be revised. Further action will need to be taken by Microganic before a market introduction of FitFeed can start. Microganic needs to find ways to further improve the value of the product or bring costs down. Alternatively FitFeed is not as competative in price, which would increase the risk of failure and make it difficult to justify high market introduction costs. An option to improve the value of the product is by prooving the superior antibacterial effects in a feeding trial, quantifying and prooving financial benefits for farmers. In this way customers can be convinced even to pay a higher price.
Before any decisions are taken, we will line-up further customer meetings and suggest higher prices for the product. We will get customer feedback again, but will also propose to introduce the product in premium niches first, e.g. in the “all natural segment” or the organic segment, which most large animal feed manufacturers have in their assortment. These premium segments can support higher priced ingredients, however, in the example of “organic” also Microganic´s cost prices will rise. Microganic will explore further options for marketing the product in an other way than originally envisaged.
The project was a feasability and market orientated study, no progress beyond the state of the art could have been expected and was not achieved. Socio-economic impact will be achieved once the product is introducted into the market. As descrobed in the section above, Microganic needs to undertake further means in prepartaion of market entry, including a reshaping of the product positioning and price-concept.