EnCoate receives more than $500,000 from TechNZ 

From grass grub to snack food

Technology originally developed to kill grass grub in New Zealand pastures is being used to produce health enhancing ingredients that can be added to snack bars, cereal, beverages and even pet food.

“It’s a great example of science that started out helping farming, traditionally an area of strength for New Zealand, being transferred to other areas with big export earning potential,” says EnCoate CEO Simon Yarrow.

The company has embarked on a major research and development programme, with more than $500,000 funding from TechNZ, to work out how to incorporate its technology during food manufacturing.

EnCoate was formed in 2003 to commercialise knowledge from publicly funded research at AgResearch. Scientists had found a way of stabilising and encasing the naturally occurring bacteria that kills grass grub so it would keep doing its work in the tough environment of the paddock. They developed bio-polymers, or strings of molecules attached in long chains, that could be wrapped around the bacteria to keep it active.

The bio-polymer components are widely available – it’s the intellectual property around how to coat or encapsulate unstable ingredients that is novel.

Long term, EnCoate plans to use its IP to develop other bio-control products says Mr Yarrow, but considerable research is needed before they hit the market.

The company investigated other, shorter term applications, and saw potential to use the technology to stabilise probiotics for the food industry. Probiotics - bacteria that benefit gut and immune function – is one of the fastest growing markets in the world, already valued at US$16 billion worldwide. However, products containing probiotics are usually confined to the chiller at supermarkets because they degrade when exposed to oxygen, heat and light.

 Using EnCoate’s technology, beneficial bacteria can be added to dry foods and dietary supplements, as a powder or a flake, and have a shelf life of many months.

Trials have proved that EnCoate’s technology works with probiotics.

EnCoate’s R&D involves a clever, three pronged approach designed to fast track the learning into the market place says Mr Yarrow. Scientists at AgResearch and Massey University will carry out the base research. When they find a way of using the technology to produce a particular food or beverage, the process will be tested at Massey’s food pilot plant or with an industry partner. Once proven, it will be transferred into the factories of major probiotic food manufacturers around the world.

In 2007, EnCoate received venture capital funding from BioPacificVentures and its Swiss partner Inventages and Mr Yarrow says that European connection is helping the company find customers internationally.

“Speed to market is really important and that’s where the TechNZ funding is critical,” says Yarrow. “There are others working on similar kinds of technology and whoever gets to market first will get the pot of gold. The TechNZ investment allows us to research on the scale we need to.”

Richard Bentley, Foundation Group Manager, Manufacturing & High Growth Firms, believes EnCoate’s R&D will form a springboard for major company growth.

“EnCoate’s a great example of TechNZ funding accelerating the growth of a viable and valuable New Zealand export business, built on knowledge gained from long term government funding for science.”