As more and more people are becoming aware of the ecological and physical consequences of eating meat, they are moving towards sustainable plant-based options. This shift is driving manufacturers to come up with algal protein-based options at competitive market rates.
Last year, the global market for algae proteins was estimated at US$771.3 million, which is projected to reach US1.1 billion by 2026, growing at 6.6%.
One of the most promising segments, spirulina is expected to grow at a record CAGR of 7.1% and reach US$698.1 million by the end of the analysis period. A closer analysis of the business implications of the pandemic and COVID-19 induced economic crisis, growth in Chrorella segment has been revised to a 6.1% CAGR for the next seven year period.
Algal proteins have several health benefits when compared with their animal-based counterparts. Amongst the most popular ones is spirulina, which is widely used as a food colorant and functional food ingredient owing to its disease-fighting properties due to the presence of fibre and phyto-nutrients. This popularity is encouraging manufacturers to look into phytoplankton and chlorella as key strains.
The US market for algae-based protein has been estimated to reach a $221.4 million in 2021, while in China, the same is aimed at 176.1 million by 2026.
Among other key geographic markets are Japan and Canada, with an estimated growth of 4.8 and 6.4% respectively. Germany is expected to grow at a CAGR of 5%.
The market is fuelled by continuous transition from animal-derived to plant-based alternatives. The trend is contributing to the popularity of plant-based soy and wheat protein options.
However, allergies related to gluten and soy are prevalent too, and therefore, more and more companies are shifting their focus towards algal proteins.
This emerging source of protein is expected to make gains from increasing availability of scientific validation over its use, along with rising concerns around carbon emissions and sustainability.
The primary driver of algae proteins is the huge demand from consumers who are rooting for a healthy lifestyle. Health drinks such as functional beverages are rising in popularity. Algae proteins find application in foods and functional beverages, boosting the market worldwide.
The demand from skincare and pharma industries is also going to drive the demand for algae, which contain multiple minerals and vitamins, as well as essential fatty acids such as Omega6 and Omega3.
In terms of source, freshwater algae shall be extensively cultivated in artificial fresh water given the demand from nutraceutical and food and feed industries.
Global freshwater segment has been estimated to reach US$743.7 million by 2026, reflecting a growth rate of 6.1%.
Europe is the largest regional market for the freshwater segment accounting for over 30.6% of the global sales. China is fast growing at 8.3% over the analysis period to reach US$133 million.