Natural biotech solutions to Flavour & Fragrance industry

R&D team

Lus Fonseca Dragana Barros Vernica Romo

Assistant Professor @ IST PhD student @ CEBQ IST PhD student @ CEBQ IST
lfonseca@alfa.ist.utl.pt dragana@ist.utl.pt veronicamartins@ist.utl.pt

Executive support: Eurico Pereira

managing director @ Enerpura
 An aroma compound, also known as
odorant, aroma, fragrance, flavor, is a
chemical compound that has a smell or
odor
Aroma sources
Natural Extraction
5 million jasmine flowers
are needed to produce
1 kg of aroma extract

Chemical Synthesis
chemical synthesis can
never truly
recreate nature
Smelly problem....
Natural Extraction Chemical Synthesis

Expensive processes Environmental unfriendly

Low concentration of desired
compounds
Severe processing conditions
Seasonal
Difficult to control (weather,
plant diseases, pesticides
contamination)
Allergic reaction
production processes
Use of toxic solvents
Increased purification costs
Lacks substrates selectivity
Undesirable racemic mixtures
Does not mimic perfectly
natural aromas

Consumers around the world scrutinize labels looking

for natural components
Aromatic Solution....
Bio
tec
h
pro nolo Alternative route to
ce gic produce natural
ss al
classified aroma
compounds

Based on Completely new

enzymatic production
reaction with process at
several industrial
advantages scale
... Process Advantages

as Env
e d iron
ss if i
c ess frie ment
Cla al pro ndl al
ur y
nat

proc tivity

Vers
ess
prod igh

Bioaroma
uc

atilit
H

vs
Chemical aroma

y
vs
Extract
ch
Re p p

s
ct
ea

-p No
la ro

du
tiv ce

ro
el ss
y

Chiral purity

by
as in Nature
Bio...Technology

Organic acid Biocatalyst

Biocatalyst
Biocatalyst
valeric Alcohol enzyme
enzymeon
enzyme on
on
solid
solid form
solid form
form
butyric ethylic
acetic Bioreactor Reusable
benzylic
propionic dimethylic Stable
hexanoic butylic Low cost
others others

More than 30 different pure esters

ethyl
ethyl formate
formate
ethyl
ethyl acetate
acetate
ethyl
ethyl butyrate
butyrate
ethyl
ethyl heptanoate
heptanoate
ethyl
ethyl valerate
valerate and
and many
many others...
others...
Value Proposition
Natural is an important
attribute but expensive
and hard to find
Natural
Alternative
EC Flavour Directive
(88/38/ECC) Natural aromas
compounds are substances
obtained exclusively by
physical, microbiological or
enzymatic processes
-decalactone (peach aroma note), natural extract retails for
$8 525 a kg, whereas its synthetic equivalent retails for $202
Aromase offers the F&F industry a variety of natural
aromas obtained from an enzymatic process at a
competitive cost:
Aroma esters compounds priced between $10 and $250 / kg.
Ethyl valerate produced by chemical synthesis sells for $54/kg
Product
differentiation Meet
Customer
Preference
Growing number of consumers
prefer food products that can be
labeled as natural.
Value Proposition

high

natural extract
quality

chemical aroma

low
high
15
cost
Tasty market
World Market of flavour and fragrances (F&F): $18 billion

Essential oils &

Natural extracts
AGR 3.6%
2540 Flavour blends
2.5 AGR 4.5%
7255
7.3
Billion US $
6.6
2.2

AGR 5.1%
6570

Fragrance blends AGR2195

2.9%
Aroma chemicals

Classes of chemical molecules: Estimated

Terpenes; Lactones; Pyrazines; Esters market:
Ethers; Esters; Others $1.1 billion

2005 by The Freedonia Group, Inc.

Industry full of flavour

Aromase
Natural
Natural aroma
aroma compounds
compounds

Raw Aroma
materials F&Fs F&Fs
compounds
suppliers blenders users
producers

Simple
Simple Flavour Food,
Food,
Organic
Organic acids
acids Flavour and
and
Compounds
Compounds fragrance beverages,
beverages,
Alcohols
Alcohols fragrance
esters
esters blends cosmetics,
cosmetics,
Catalyst
Catalyst blends
aldehydes
aldehydes detergents,
detergents,
lactones
lactones and
and many
many other
other
terpenes
terpenes flavored
flavored products
products
Competitors & Customers

Flavor & Fragance Market excluding

Top
Top 10
10 tier
tier companies
companies (75%
(75% share)
share)
Branded Soft Drink Concentrates
Sales:
Sales: up
up to
to 800
800 M$/yr
M$/yr

Danisco - 1.7% (DK) 12% - International

~~ 500
500 small
small companies
companies Flavors & Fragrances
Sales: (US)
Sales: 10
10 20
20 M$/yr
M$/yr
Others - 35.4% 12.8% - Givaudan (CH)

Virtual
Virtual absent
absent medium-size
medium-size
companies
companies
Sales: 7.6% - Quest Int'l (NL)
Sales: 75
75 100
100 M$/yr
M$/yr
Sensient - 2.8% (US)
9.1% - Firmenich (CH)
T. Hasegaawa - 2.5 % (JP)
Mane - 1.8% (FR) 8.6% - Symrise (DE)
Takasago - 5.6% (JP)
The smell of money!!!

Production capacity:
capacity 1000ton/yr; Average price $33/kg
Investment: Initial - Pilot-scale $0.3M + Semi-industrial $2.7M (3 reactors 1 m3)
Additional - Full-scale $3M (3 reactors 5 m3).

M $USD 40
35
Sales and accum ulated cash-flow

Sales
30
Fixed and total costs,

25
Total costs
20
15
10 Accum. Cash-flow
5
Fixed costs
0
-52008 2009 2010 2011 2012 2013 2014

-10 Additional Investment Break-even point (4 yr)

Semi-industrial scale (3 reactors 1m3) Full-scale (3 reactors 5m3)

The strong smell of money!!!
Revenue forecast
Total sales will be 34 M $USD and free cash-flow 11 M $USD at 5th
year of activity.
Company value estimated at 110 M $USD at year 5.
Investors return (IRR) higher than 50% at year 5.
M $USD
Sales Cash-flow
40
35
30
25
20
15
10
5
0
-5 2008 2009 2010 2011 2012 2013
-10
Risks & Strategies

Scale-up validation
Search for industrial expertise support

Intelectual Property protection

Define the strategy to protect our technology (patent or trade-secret)

difficult to reverse engineering
Market risk

Deeply understand the market segmentation

Search for high valuable products
Market evolution

Aromase offers both high quality and lower price

Volume
After
BeforeAromase
Aromase

natural
naturalextract
extract chemical
chemicalaroma
aroma
 t e
as
T
e
th
ep
e
l ,K
ra
t u
Na
ay
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