As industry interest in upcycling is growing, Australian company Extracta transforms surplus fruit streams into high-quality ingredients for nutraceutical, food and cosmetic sectors, aiming to develop products in demand on the market while doing something useful for the planet.
It is sat down with Rod Lewis, the company’s CEO to discuss the need for high-quality suppliers that produce nutrient-dense ingredients for bowel and gut health in Australia.
Lewis states that he and his business partner found high levels of food waste when they traveled the country. For example, in one area in Queensland, 60% of the citrus crop – such as mandarins, oranges and lemons – were thrown away, while “people are starving and the prices of food are going up,” he says.
“We’re very serious about doing the right thing for the environment,” adds Lewis. “But there’s no point doing that if you can’t make money, because to run the business I’ve had to take on investors and those shareholders need a return.”
7.3 million tons of food waste
Lewis further reveals that the United Nations Environmental Program estimates 2.5 billion tons of global farming losses, adding to the carbon footprint.
In Australia, Extracta estimates that 7.3 million tons of food is wasted annually, costing the economy around AUD$36.6 billion (US$23.49 billion) annually.
“If we can use everything that’s been thrown away, the carbon footprint for Australia globally may stay the same, but we will get much more to feed people. That seems right in every sense, economically and morally,” highlights Lewis.
“We use wasted sugarcane, grapes, citrus and a few other things, but sugar cane prompted our interest.”
He explains that up to half or even two-thirds of the sugar cane substrate is lost. “Sugar cane is roughly 15% dietary fiber, 15% sugar and the rest is water. Of the edible parts, half or more is discarded.”
Because it has a cellulose base, sugar cane waste is burned to produce energy and carbon, whereas Extracta uses sugarcane to create dietary fiber and diabetes products.
The company also upcycles grape waste from the wine industry. According to Lewis, about a fifth of grapes are thrown away, mainly seeds, skins and stems. “We can use 100% of the waste, same for citrus. So we thought, there’s a huge opportunity. That’s why we started.”
Sourcing food waste
To find new raw materials to transform, Extracta takes a sample of agricultural waste and some from initial processing, such as orange peel from the juice industry.
“Next, we analyze the samples, which can vary from crop to crop and even from process to process, and determine if there’s something that we can use,” explains Lewis.
He adds that the company tries to use every element of raw materials it sources so it does not produce waste.
“Then we check if there is a market and if there are different product grades on the market. We hired a staff member to do market analysis, determine prices, grades and types, potential clients, what return they might get and if we can source a reliable supply of the raw material.”
“The biggest challenge was developing a financial or business model that worked with seasonal ingredients from remote regions that makes transport expensive.”
Lewis explains that finding suppliers or partners to work with has been easy. “They contact us, asking us if we can take their waste. It saves them money, and they can demonstrate to their clients that they’re being responsible from a sustainability point of view.”
Cost-effective processing
Extracta received a government grant for just under AUD$2 million (around US$1.3 million). The company uses this to develop processes and technology to take nutrients from food waste and produce new ingredients while at the same time making it cost-effective.
Extracta’s products retain and capture available vitamins and nutrients and are naturally high in polyphenols, antioxidants, minerals and essential amino acids.
“One of the biggest problems is not producing the ingredient and final product, but doing it economically. Most crops are seasonal, which is challenging, but we’ve overcome it,” says Lewis.
“We needed to keep the factory working 12 months of the year with seasonal inputs. We do that in several different ways. Part of the plant is portable, so we can move it to production areas. For example, the grape season is four months, so there is no point building a plant close to those fields.”
By accepting the grant from the Australian government, Extracta committed to utilize 100% of the materials it sources.
“We’ve also commissioned three Ph.D. students to look at the various peels and waste from sugar cane and its ingredients to figure out nutraceuticals we can extract from that cost-effectively in the next two years.”
Market response
At the same time, Lewis underscores that the business has to work financially.
“We also have to produce a range of ingredients because that’s what customers require. My main business development manager keeps in touch with customers’ demands and opinions. There’s no point doing all this work, building the factories and getting investors on board if the customers change.”
He adds that it has not been a problem to find new customers. One product that has been easy to sell is pectin, which is used in jams, preserves and as a thickening agent in the food industry. Extracta is recreating a pectin industry in Australia after being primarily outsourced to China.
“When we went around the market and said we will be producing Australian pectin, every customer said they would like us to supply them if it’s Australian made. We’ve got a subsidiary in the US, and they’re starting to say the same things.”
As Australia is a small commercial market, Lewis notes the company will start exporting its pectin to the US.
“The dietary fibers from our apple, citrus and sugar cane are also easy to sell because consumers are aware they need to increase the dietary fiber,” Lewis continues. “This has been effectively increasing since we got in the business, but it's expanded substantially for the last two years.”
Health benefits
Lewis shares that Extracta’s ingredients are tested for gut and microbiome health at universities and the company’s labs. Final products are tested in clinical trials in a major hospital in Australia, as well as in a hospital near Chicago, US. The company will also start a trial at Manchester University.
“We test for blood sugar, mental health, irritable bowel syndrome and other health benefits. We also look at immune health because we found the greatest effect our products have is on the inflammation, which directly affects immune health.”
Extracta works with NATA labs, which provides assessment, accreditation and training services to laboratories and technical facilities across Australia.
“The lab is the highest standard in this part of the world. We test all of our batches there for contaminants, " Lewis adds.
Expanding industry focus
The company is also determining whether it can upcycle new food waste materials cost-effectively, such as bananas, pineapples and peach and apricot kernels. Moreover, Extracta is looking into opportunities in the bakery and pet industries.
“We found that some of the ingredients can produce significant health and commercial benefits in baked goods, where a mix of our ingredients can dramatically improve the antioxidant levels. Some bakers are expressing great interest, and they’re starting to do trials.”
“The sugar cane significantly improves the yield of a baking dough,” adds Lewis. “If they include our product, it expands because it retains water. It doesn’t apply to every dough but to almost everything we’ve tested.”
“Human biochemistry is very similar to the biochemistry in animals,” he concludes. “We now also sell these products to dogs for arthritis and diabetes.”
