AUSTRALIAN Pulse Proteins (APP) is already in discussions with potential customers around the globe for its plant-based proteins seven months out from its planned start-date.
APP principal Phil McFarlane told the Australian Pulse Conference (APC) 2019 in Horsham, Victoria, yesterday this ready demand indicated a business model which involved looking from the consumer down the supply chain, instead of up it from the producer angle.
Based on the theme of ‘Taste and Technology’, rising demand for plant-based proteins was a common thread in many of the presentations, with APP shaping up as Australia’s biggest consumer of faba beans for human consumption.
Its first site is being developed around the corner from the APC2019 venue, and not far from the farming community of Brim, where Mr McFarlane grew up.
The $20-million development will produce 2500 tonnes per annum of isolates made from faba beans in its initial stage, before doubling to its 5000t capacity when lentils become the second input.
“We need to move fast in the market. We need to get on our bike and start producing,” Mr McFarlane said.
He said further investment interest meant other plants, including a greenfields site in Horsham as well as the brownfields one now being fitted out, and possibly plants in South Australia and Western Australia, were expected to follow.
Mature markets sought
APP is planning to sell its isolates to manufacturers of brand-name products including protein bars and drinks, dairy and meat substitutes, and pet-food.
Mr McFarlane said the emergence of a consumer in the world market who was prepared to pay a premium for a plant-based protein of certain origins had enabled the business model to take shape.
He said the burgeoning plant-based protein sector in North America had indicated its products would contain 55-60 per cent protein.
APP optimised the protein content extracted from faba beans to more than 80pc through a CSIRO Kick-Start project.
Through a Kick-Start project, CSIRO has worked with APP to develop the technology the Horsham plant will be using, and Mr McFarlane said this will be in the 85-90pc range.
The APP plant expects to export 95pc of its isolates, with initial export markets likely to include Canada, France, Japan, New Zealand, the United Kingdom and the United States.
“We’re in the field of working with international companies who pretty much tell us what their customer trends are and how we can supply to them.”
Mr McFarlane has dealt with Chinese importers in an earlier infant-formula business, which he said helped to inspire the APP development at Horsham.
“China gave us our first start.”
He said APP had, however, decided to go with mature markets in its initial production phase, but did not rule out selling product to China in the not-too-distant future.
“We know they’re coming, and we know they’re coming fast.”
Marriage of supply, demand
Mr McFarlane said discussions with farmers in Victoria’s Wimmera region six years ago about the need to value add second-grade faba beans and lentils, coupled with Chinese customers in particular asking for plant-based protein, sparked the idea for APP.
Working with CSIRO to develop the technology to extract isolates from pulses, followed by eight months of due diligence from APP, picked up the momentum.
“We engaged with CSIRO to rent their facility, and we spent 18 months with the CSIRO running through continual trials with focus into the refining process and the actual use of the product.
“There’s really no waste, and it’s a dream made true from an environmental perspective.”
He said whole and split seeds and kibbles could feed the APP process, which was also looking at spent grain and other byproducts from processing as future feedstocks.
He said faba beans had been settled on as the base for APP’s first products because of their flavour and colour, and lack of odour.
Mr McFarlane said APP food technologists were working with their customer equivalents to interrogate the properties of APP isolates, and they could convey feedback to the pulse research-and-development community as represented by many APC2019 delegates.
“The worlds are coming together where that intelligence needs to be shared down the chain.”
He said questions about varieties, disease and agronomy could all be expected from customers.
“Bringing in expertise about the plant is not far away and that’s pretty exciting to bring the scientific world to the commercial world.”
Mr McFarlane said the research and development which had transformed the pulse industry in the Wimmera had given APP its leverage into the market.
“It’s an exciting time for the pulse industry in Australia.”
APP will by sourcing pulses through agents, and not buying direct from farmers.
Evans Agribusiness Trading (EAT) Group is the investment firm behind APP, and Mr McFarlane told the audience it was also building a $50 million abattoir on King Island to process cattle.
“We don’t want to be the poster boy for the vegan market.”
Australia is the third fastest-growing vegan market in the world, and Mr McFarlane said its custom was certainly part of a broad demand base he saw for APP.
“It’s a small market, the vegan market, but it’s growing quickly.”
Report recognises potential
Pulse Australia and the Grains Research & Development Corporation have funded the Raising the Pulse report, which was released at APC2019.
It paints a positive outlook for the pulse industry, both as a commodity supplier for a growing staple in world diets, and as a value-adding processor of high-end ingredients to food and feed manufacturers.
Pulse Australia chairman Ron Storey said the report was the result of result of the organisation seeking to find out where the plant-protein trend was heading to 2030, and where Australia should position itself to capture the best opportunities.
“Raising the Pulse starts that conversation,” Mr Storey said.
“It does not answer all the questions, but it certainly helps the pulse industry focus on what needs to change, what
investments will be required, and how we might create greater value and be part
of the quest for a $100 billion Australian agriculture sector by 2030.”
Pulse crops contribute export earnings of around $1.5 billion per year, and Mr Storey said the next decade will see growth in plant-protein consumption because of consumer demand for healthy, sustainable, affordable food.
“We expect to see export growth in commodity supply to existing Indian subcontinent markets, further growth in Asia, and new processing and fractionation plants on the ground in Australia – some are already under way.”
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