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Aurora Algae hungers for food and feed market

The algae-farming company decides to shift its focus to food and pharmaceuticals from biofuels, a common theme among algae companies that are having trouble displacing oil.

Liquid fuels is one of the biggest markets in energy, but a quicker path to profitability for algae companies may well pass through the supermarket.

Aurora Algae on Monday announced it has changed its name from Aurora Biofuels and is now targeting a broader set of products than biodiesel.

Aurora Algae

The Alameda, Calif.-based company has worked for four years isolating and enhancing strains of algae it plans to grow in open ponds. A year ago, Aurora's focus was biofuels, but now it intends to farm algae for pharmaceuticals, food, and animal feed.

Among the planned products are Omega-3 fatty acids for health supplements, protein for health shakes and protein bars, and fish meal. It still intends to harvest algae for biodiesel.

The company, which has raised $40 million from investors, is now operating a 20-acre demonstration facility in coastal Florida which uses brackish seawater. Rather than license its technology, it plans to produce algae and end products.

Aurora Algae's switch to emphasize food products reflects the difficulty of cracking into the liquid fuels business with biomass-derived fuels. Although the fuels market is bigger, there are significant barriers to entry, and undercutting oil on price has proved difficult for algae companies.

Company CEO Greg Bafalis projects the company will be cash-flow positive in two and a half years, he told VentureBeat.