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Food technology that will be developed with the aid of $6.3 million in private equity funding has the potential to double the US$600 million ($742 million) global market for probiotic ingredients, says AgResearch.
BioPacificVentures, a $100 million Australasian venture capital fund, said yesterday it was investing in Encoate, a joint-venture between AgResearch and fertiliser company Ballance.
Present technology means probiotics - microbes linked to health benefits in humans and animals - must be refrigerated, limiting their use to yoghurt and milk products.
However, Encoate has developed a range of biopolymers that allow microbes to survive at room temperature for long periods.
Encoate has developed one product using the technology; a bio-control agent commercialised by Ballance that is used to protect pasture from pests.
But AgResearch commercial services general manager Ian Boddy said the technology had the ability to double the market by enabling food manufacturers to extend the probiotics category from refrigerated foods to non-refrigerated products such as breakfast cereals, infant milk-powders and dog-biscuits.
AgResearch and PGG Wrightson are also investors in BioPacificVentures, whose largest funder is global foods giant Nestle.
Boddy said being an investor did not mean a company had the first option of any of the technology developed although Nestle's involvement brought several positives.
"Certainly having linkages into Nestle, [means] Nestle could be a potential partner," he said.
BioPacificVentures executive director Andrew Kelly, who joined the fund from AgResearch commercialisation vehicle Celentis in 2004, said two directors would be nominated to the Encoate board.
Cash to carry
* BioPacificVentures is a $100 million Australasian venture capital fund backed by Nestle, PGG Wrightson and AgResearch.
* It is investing $6.3 million into AgResearch/Ballance Agri-Nutrients joint-venture Encoate to widen the application of a biopolymer that can boost the life of probiotics into the food sector.
* The development could double the US$600 million global market for probiotics - microbes linked to health benefits in humans and animals.
