The Sustainable Nutrition Group’s MD Neale Joseph eyes slice of the $10.8 billion plant-based protein market pie
Health & Biotech
Health & Biotech
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Formerly known as Australia Primary Hemp, the company has changed its name to The Sustainable Nutrition Group (ASX:TSN) – and almost immediately nabbed a partnership with Australian Plant Proteins (APP) to develop hemp concentrate and isolates.
Essentially, it will allow the company to enter the $10.8 billion global plant-based ingredients market with limited capex requirements.
APP is a premium plant-based powder processing, packaging and distribution business, which has recently undergone a $50 million investment from a leading global agri-food company Bunge.
TSN is arguably best known for being one of the few ASX cannabis stocks to get products to the market – in the form of hemp protein bars.
TSN will own the intellectual property for this unique hemp based plant protein and have 15-year exclusivity on its sale, with commercialisation in the Australian and New Zealand markets expected to commence in Q4 FY2022.
Speaking with Stockhead, managing director Neale Joseph outlines the company’s commercialisation plans for its Hemp Isolate.
What market opportunity do you see for plant-based proteins in Australia and globally?
“The opportunity for plant-based proteins is really significant.”
“We did some independent research about four or five months ago and they valued the plant-based protein market, just from an ingredient perspective, at $10.3 billion.
“And it’s growing at a compound average growth rate of 8.7%.
“So that’s the global market and it’s primarily driven in to mainstream food manufacturing, beverage manufacturing, high protein type of drinks and stuff like that.
“It’s a broad spread, because most products that are manufactured have some type of protein in it.
“But as much as that’s a really lovely number, the real opportunities are where plant is taking the market share away from animal based proteins, as people are driving towards sustainability and traceability and environmental issues.
“The other thing is that the nutrients that are coming out of plant-based proteins are really great.
“So, putting aside all the other environmental stuff, it’s really great value-added opportunities for consumers to have better protein sources.
“And while Australia’s a small part of the global market, it’d probably be 7-10% of that number – so it represents a very significant opportunity for us.”
How do you expect the partnership with APP to accelerate commercialisation of the product?
“APP worked with the CSIRO for a number of years to develop this process. They’re very well established, and they’re really focusing on the legume market.”
“We love the technology, we did some pre-trials with them and we proved that it could be done in hemp and so it became a faster to market, lower capex opportunity for us because they’re very well established with great credibility.
“For us it means we can go to market quickly, for them it’s about their technology and factory utilisation.
“It’s a symbiotic relationship because we don’t play in the same sort of spaces.
“There are some stocks which focus on other plant proteins, oats and lupins and other bits and pieces.
“Certainly, in this space we’re the first mover but I think this whole move to plant-based, as much as it’s gaining momentum, is still quite small.
“So, for us to be able to partner with someone like APP with proven technology means we can come to the market much faster.”
With so many new plant-based protein products on the market, what makes the hemp concentrate stand apart?
“Hemp protein, as it stands today, processes dark green, it’s not soluble, it has quite a strong flavour and is about 50% protein level.”
“The product that will be created here is between 88-92% protein, it’s a pale white to cream colour and is completely soluble so it can be used in multiple ways.
“This came about because around 12 months ago we were approached by one of the major players in soft serve ice cream, who was looking to move from animal-based protein to plant-based, and they loved hemp, but it was dark green and would make all the soft serves green.
“Having that that framework being cream and soluble and flavourless really makes for significant growth.
“Why is our product better or different from others? Because apart from all of the core nutritional outcomes of hemp being the perfect mix of Omega 3s and 6s, (ours has) all the magnesium and the Linoleic acid profile.
“And the real differentiator, which is unique to hemp, is that it’s allergy free unlike other pea and soy products – and it’s also GMO free.
“And we’re vertically integrated, so it’s completely traceable, Australian-made so great for Aussie jobs, great for Aussie farmers and now we’ve got a product with all of those things that we can take to the world, which we’re really excited about.”
And the way the hemp is grown, it’s actually a carbon sink, is that right?
“Hemp by its nature, is a very short crop of only 14 weeks, and it uses about 1/10 of the amount of water that normal cereal crops use.”
“It only needs one insecticide spray on average, as opposed to 8,10 or 12 for other cereal crops.
“It grows in a short period of time, and regenerates the soil, so pumps tonnes of nutrients and nitrogen into the soil and there’s no waste to it.
“Because what we do is after it’s harvested, it gets churned back into the soil and regenerates the soil – so it’s actually a carbon sink in that regard.
“We’re doing a whole host of work now on tracing through from the farm all the way to our products.
“And we also use recyclable packaging, we’re moving towards a carbon free or a carbon neutral company. That’s our next step.
“But hemp in its very nature is very friendly to the environment.”
Is there anything else you would like to add?
“We’re vertically integrated, we’ve got scalable supply at the supply end so we can grow significantly.”
“We’ve already established brands and will continue to grow and develop those, we’re in high growth markets in human nutrition, in pet nutrition, and in health and wellness.
“So, we’re in large markets, high growth globally, the international opportunities are very significant.
“And now with innovations such as this isolates, and it’s not the only innovation we’ll do – we’ve got plenty of other opportunities moving forward – this is just the first one we’re commercialising.
“We see this hopefully enabling us to become a significant enterprise as we go forward.”