Investor backing sought by ovine collagen company
Tertiary Extracts Ōtautahi (TEO) has quickly grown to 30 staff and set up a factory processing more than 550 tonnes of waste sheepskins into collagen since beginning operations last year.
The company was created by four co-founders, including chief scientific officer Dr Rob Kelly, who want to build sales in the functional foods, dietary supplements and personal care sectors.
Research began in 2021 to develop Ovitage — ovine collagen with a greater range of amino acids higher in cystine, tyrosine and glutamic acid — followed by marketplace testing.
Initial ingredient sales to the United States, with plans to enter Europe and Asia, and TEO's launch of its own range for women encouraged the founders to seek investment to step up production.
Dr Kelly said the capital raise was expected to take place within the next few months.
"We are in the beginnings of business and, based on the opportunity that we see from this interest we are getting in early exports, we are looking to grow significantly. So we will be undertaking a capital raise shortly to drive this growth both in the entry of new markets and supporting further work to identify different health benefits."
They wanted to ideally work with strategic investors who understood the overall sector and specifically the nutritional market, he said.
They were "open and flexible" to a range of possibilities, which could include a shareholding.
Initial investment came from the founders and their families and friends, with support also from Callaghan Innovation, Ārohia Innovation Trailblazer grant and the Agricultural and Marketing Research and Development Trust (Agmardt). Development research was carried out at Lincoln Agritech.
Dr Kelly said they saw the main growth for the "world's most complete collagen" coming from the branded ingredient market, but had just released a finished product brand.
Last October, TEO launched its Everee Women range of functional protein supplements, with different product formulations for each stage of women's lives.
The range is combined with local plant extracts and biologicals to help with ageing and menopause.
Another perimenopause product combines Ovitage with a kiwifruit extract for gut health, while a post-menopause product has a blackcurrant extract to help brain health and cognitive performance.
Dr Kelly said women's health was a key area of focus because TEO's highly functional proteins addressed their under-served needs.
TEO is a finalist in the technology innovation category for the Primary Industries New Zealand Awards and also an early-stage category finalist in the Fieldays Innovation Awards.
The founders had been working in the nutritional space for many years in dietary and food supplements, particularly in the US.
"The [global] collagen market is over $US9 billion [about $NZ14.9b] and still growing quickly, so we saw that New Zealand didn't really operate in it of any significance and we also saw opportunities in that market."
Bovine collagen had associated environmental issues as it could come from factory-farmed beef or cattle raised on Brazilian land clear-felled of rain forest, while consumers were seeking differentiated proteins providing health benefits, he said.
"So, we looked at New Zealand materials and we produce a lot of raw material for collagen in the form of sheepskins from the red meat sector which are traceable, ethically sourced and grass fed with no-one felling rain forests to grow sheep and the sheepskin has a novel material. Nobody has really looked at ovine collagens and it barely features in this massive collagen market so we undertook the research to look at that."
Hundreds of thousands of waste sheepskins supplied by red meat processors would likely have gone into landfills.
A novel way was developed to isolate proteins from sheepskin materials to produce the patented Ovitage process and product for ovine collagen.
The amino acid profile produced a differentiated protein with greater health benefits, he said.
"Those amino acids are well understood as being important in particular health areas, and these were identified through our market analysis which were not being well met by existing proteins, particularly in women's health in the menopause area and the sport nutrition area."
For example, cystine aided healthy hair and nails, which was important for menopausal women, and helped with leaky gut syndrome.
A higher level of branched chain amino acids assisted with building and maintaining lean body mass, particularly for ageing women and men.
TEO proteins are mainly sold in powder form for overseas customers to make their own smoothies, protein bars, gummies and other formulations or turn into capsules for dietary supplements.
tim.cronshaw@alliedpress.co.nz
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