FUNDING ROUND SUMMARY
Our first ingredient, Citri-Fi®, is a high water binding ingredient manufactured from citrus waste and sold under a license agreement by our associated company, Fiberstar, Inc. Citri-Fi® has generated more than $50 million in global sales to date and provides us with an excellent source of on-going revenue from licence fees. Worldwide demand for Citri-Fi® continues to grow so rapidly that Fiberstar has just completed the tripling of its production capacity.
Now we are ready to execute our 3-stage plan to commercialize and manufacture our own technology called Modi-Fi™, an all-natural thickening and suspending ingredient aimed at the $1 billion addressable global food ingredient market and the $5 billion US natural polymer market for industrial applications. This technology won’t be licenced, we are going take full benefit from this exciting innovation as owners and manufacturers. Here’s the plan:
Stage 1: 2015—Complete technology development and pilot scale-up.
Stage 2: 2016—Build a small demonstration and commercial production plant (1/10th scale)
2017-18—Small commercial production @ $4.5 million revenue per annum.
Stage 3: 2018—Build a full-scale plant (production and sales)
2019-2021—Full-scale commercial production projecting over $45 million revenue per annum.
- Clear and growing global demand for natural additives and ingredients in food and cosmetics.
- > $1 billion instant access food additive market with a potential $5 billion industrial additive market to follow*.
- Existing global distribution and customer Network of 50 specialty ingredient distributors in over 60 countries ready and prepared to introduce Modi-Fi to their customers.
- Hold two large platform technologies consisting of 12 issued and 10 pending patents.
- Strong current and growing licensing revenue from sales of Citri-Fi.
- Experienced management team that previously led Fiberstar, Inc.’s high revenue growth (3-year 47% CAGR), and are Ph.D, B.Sc and MBA alum from Wisconsin, Minnesota and St Thomas respectively.
- Award winning technology – Citri-Fi was awarded the prestigious Food Ingredient Europe’s Silver Award for Most Innovative Ingredient in 2007.
- The team drove Fiberstar, Inc. to be named three times to Inc5000’s list of fastest growing companies in the USA.
- High performance , all-natural, sustainable clean label products that are superior to competing products on performance and price.
- Citri-Fi. An existing line of easy to use, all-natural, high water binding ingredients made from fibrous citrus processing waste streams which are licensed to Fiberstar, Inc.
- Modi-Fi. A new product line under development, this new and easy to use line of highly functional and all natural suspending, emulsifying, and thickening ingredients made from fibrous citrus processing waste streams can be used to maintain stable suspensions of insoluble particles and to replace chemically modified and synthetic ingredients in a wide variety of their food, beverage, personal care and in industrial products. In both food and industrial applications, Modi-Fi provides impressive suspending and thickening functionalities at low use levels, including such as in suspending sand in oilfield drilling fluids and pigments in industrial coatings (e.g., paints). Modi-Fi can also be used to replace pectin, xanthan gum, and gellan gum.
In food and beverage applications, Citri-Fi and Modi-Fi provide a non-slimy, water based mouthfeel, novel properties which other hydrocolloids aren’t able to provide, in addition to being natural, gluten free, clean label and non-allergenic.
These ingredients can be used by any size manufacturer to improve their products’ natural label declarations and sustainability story while maintaining or reducing their products’ cost-in-use.
However, as global consumers have become more connected and informed about the ingredients that go into making the products they purchase, they are asking food, beverage, personal care and industrial product manufacturers to replace chemically modified and synthetic functional ingredients with natural ingredients which are green, eco-friendly, ‘clean label’ and sustainable. When used in food and beverage products, they want these natural ingredients to also taste good, be non-gritty and non-slimy, and to improve the quality and nutrition of the food and beverage products. In Europe, consumers also want to consume foods and beverages that are made with ingredients that are green, sustainable, and ‘e-number free’.
The problem is that there are few ingredients that meet these requirements, meaning that manufacturers are left with the choice of using chemically modified, synthetic, or extracts (meaning that they require an e-number and are not ‘clean label’) or using less functional natural alternatives, meaning higher use rates are required which negatively impact taste and texture.
The expanded surface area creates non-gritty, easy to use ingredients whose functionalities equal or exceed those of chemically modified, synthetic or other natural ingredients.
This enables product manufacturers to ‘clean-up’ or ‘green-up’ their ingredient labels and improve the sustainability of their products to meet consumer demands while maintaining or lowering their products’ cost-in-use.
Fiberstar Bio provides superior technical support to its distributors and customers so that they can quickly and easily understand how to use its Citri-Fi or Modi-Fi line of ingredients to ‘green up’ the products they manufacture.
It is BIO’s strategy to continue to expand on the team’s history of creating innovative patent-protected solutions and continue as a market leader in the creation of highly functional ingredients made from natural plant materials.
Together, xanthan and pectin replacement represent a $1.2 billion addressable market. Of the addressable market, Europe (38%) and North America (33%) accounted for 71% or $852 million. Both xanthan gum and pectins require e-number labeling in Europe.
2 Markets and Markets, Global Food Hydrocolloids Market, Trends and Forecasts (2013-2018), August 2013.
Ceamsa’s website promotes their citrus fiber product as high water and oil binding capacity and as a texture improver, but their website makes no mention of applications where viscosity is declared to be a valuable functionality of their of their citrus based Creamsa ingredients.
Herbafoods website promotes their citrus based ingredient, AQ+, as a high water binding ingredient but makes no mention of its value as a viscosifier even though we know it produces viscosities in the 20,000 cP range at 3% solids at ambient conditions. Modi-Fi provides 50,000 cP range. As compared to AQ+, Modi-Fi would require only 0.4 units to achieve the same viscosity as 1 unit of AQ+.
Z-Trim’s website promotes their corn based ingredient as a multi-functional ingredient including its viscosifying functionality. They say their product provides viscosities of between 20,000 to 40,000 cP at 4% solids and at ambient conditions meaning Z-Trim provides 5,000 to 10,000 cP of viscosity per 1% of ingredient. Modi-Fi provides 16,667 cP per 1% of ingredient. As compared to Z-Trim, Modi-Fi would require only 0.4 to 0.8 units to achieve the same viscosity as 1 unit of Z-Trim.
Awards & Testimonials
Meat Product Producer Agrosuper—Chile: “In the past, we made different tests with other ingredients to prepare low-fat products, but we did not succeed; there were always texture, exudation, and sensorial problems. We worked with the idea of not altering the product’s appearance and sensory characteristics”, says Mr. Ulloa. “Currently, very few products with these characteristics are available in the market, and their cost is very high for the consumer. The most important change was reached by developing a low-fat product, with 60% fat reduction, thanks to the use of Citri-Fi. We organized a blind panel with the product containing Citri-Fi and the regular product, and panel members did not find any difference”, adds Mr. Ulloa.
Comments made by reviewers of Bio’s successful SBIR Phase II Proposal
- “The primary researchers are very well qualified and have a record of success in the lab and in commercialization.”
- “Based on the past successes of the applicant with similar projects, my assessment is that this grant would accelerate the pace of the project toward commercialization and make it possible to acquire equity financing.”
Planned Use of Funds
Fiberstar Bio-Ingredient Technologies, Inc.