A simple seaweed value chain

An overview of the industry and the categories of organizations in it

Something that happens to me from time-to-time is that people reach out to me with an interest in learning about the dynamics of the seaweed industry (🎉).¹ [A common part of these conversations for me is laying out a general overview of the value chain within the industry, discussing the different players, and describing what might be helpful in making an impact in that part of the value chain.

With this in mind, here is the 101 level of how I understand the Western seaweed industry.² It is by definition an oversimplification — many organizations play across the categories I’ve created — but I’ve found it helpful as a starting place and hopefully you will as well. If something better exists, please point us to it!

Supply

The first part of the value chain is concerned with supply: how can we produce more seaweed, more efficiently, more sustainably, and more profitably?

Farmers / harvesters: Seaweed starts in the water. Someone is responsible for cultivating it or wild harvesting it. This is where the value chain begins. There is no industry without these people because there is no crop!³

Farm technology providers: While it’s certainly possible to farm seaweed without investing in technology, in practice, no one does this at scale. Seaweed farmers need tools and products to make farming easier: more predictable, more efficient, more sustainable. 

Regulators: Almost all seaweed production happens within a regulatory framework. One of the most common topics from people entering the seaweed industry on the production side is the process of getting approved to begin farming in the first place. It may seem odd to put regulators in this production section, but since most seaweed production must be permitted before it can begin, regulators are absolutely a critical piece of the industry. Creating effective regulations is difficult and the seaweed industry needs thoughtful, talented regulators who can balance different interests (social, environmental and private), ideally finding ways to make regulations effective without being onerous.

Demand

This part of the value chain is concerned with demand: how can we turn seaweed into something that someone, somewhere wants to buy and use?

Processors: More often than not, seaweed is not directly consumed right out of the water; someone does something to it to make it more useful to customers. Sometimes that thing is relatively simple, like freezing or drying it or turning it into a powder. Other times it is more complicated, like stabilizing it and transforming it into chemical components. Sometimes processors are also farmers; sometimes, like in the case of Macro Oceans, they are stand alone organizations devoted to turning seaweed into value added products. We believe processors have a unique role to play in helping scale the industry by making it possible to serve more industries with seaweed based products at lower costs than is possible with current technology.

Distributors / market makers: After the seaweed is processed, it’s common for there to be a distributor of the processed product. Although this isn’t always the case, it’s common for these distributors to view themselves as outside of the seaweed industry and instead aligned with an industry  (e.g., they are a distributor of natural ingredients for food and nutraceuticals, not just a distributor of seaweed ingredients).

Application creators: This is where the magic happens; somebody uses a seaweed based product to make something consumers love. These are the inventors and innovators, often supported by substantial R&D efforts, who create new and exciting products using seaweed. They continuously explore different uses for seaweed and refine existing products to make them more appealing to consumers. Frequently, these creators use seaweed and its natural benefits as a part of the value proposition to consumers and brand themselves as a part of the seaweed industry, but just as often, seaweed just ends up as part of the product without consumers ever knowing because it’s the best product for the job. 

As much as anything else, the growth of the industry depends on these creators to think about how to use seaweed based products to make things people love. If you are one of these people or even think you could be one of these people, hit us up at hello@macro-oceans.com; we’d love to try and help you out if we can. 

Industry catalysts

Both the supply and demand sides of the industry rely on and benefit from government, research and education institutions to do basic research into seaweed and share best practices.

Research: Basic research plays a vital role in understanding what seaweed is useful for and how to most effectively produce it. Many of the players in the supply and demand side of the seaweed industry work directly with educational institutions to understand how to operate or indirectly with those institutions via their published papers.

Government: In addition to their role as regulators, many governments have sought to help spur industry development through funding basic research and private seaweed initiatives on both the supply and demand sides of the industry. The industry and the public benefits from this by pulling forward investments that are too risky for private investors to make.

Educational institutions: Educational institutions and non profits help educate players in the industry about the latest developments in research and best practices. Perhaps most importantly, these institutions also help educate consumers about the benefits of seaweed as a crop, creating market demand for the industry.

Thanks to Peter Green and Fed DeGobbi for reviewing early drafts of this post and providing feedback on it.

1. One of the best things about seaweed is the way that it captures people's imagination and pulls them in, whether or not they have a formal background in the industry; in our opinion, it’s one of the most positive signs for the industry.

2. I’m not knowledgeable enough to speak on how the seaweed industry works outside of the US / Europe. Someone else should write this post!

3. There is a debate to be had about whether or not it is better to farm or to wild harvest. I won’t deal with that here, as I think it’s outside the scope of the topic at hand. Once again, someone else should write this!