Upcycling is a new term highlighting the ability to make the most of surplus food waste; Alvinesa has been on this path for decades, and is accelerating its efforts.

Upcycling allows firms to make the most of surplus waste, such as food waste, to incrementally add value to the supply chain. While it’s not a new concept, the term itself has taken on greater resonance in recent years as companies seek to make the most of every part of their base ingredients. From a family-owned company founded in 1948 to ‘upcycle’ spent waste of the wine making process, Alvinesa has developed into a firm devoted to exploring how to develop high value nutraceutical ingredients. In partnership with its new investors Intermedial Capital Group, and with new CEO Jordi Ferre on board, Alvinesa is extending its geographic and market reach. In this podcast, Ferre speaks to the opportunities around upcycling and the circular economy, the importance of increasing geographic reach, and how companies can extend their own journeys around sustainability.

Tune in to hear more about:

• The concept of upcycling and opportunities to make the most of agro-waste.
• How using natural extraction processes can optimize ingredient positioning.
• Increased acquisition and geo-extension plans for Alvinesa.
• Inspiration for greater sustainability creativity.

Guest: Jordi Ferre, CEO, Alvinesa Natural Ingredients

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Welcome to the Vitafoods Insights Sustainability Series podcast. From responsible sourcing to supply chain logistics, this dedicated podcast addresses some of the industry's greatest challenges and champions the stories of sustainability success. Today's host is Heather Granato, Vice President of content.

Before upcycling was a term, many entrepreneurs and inventors found unique ways to make the most of spent material from food production. Today defined as creating new high quality products out of surplus food waste, upcycling is an innovative way to make the most out of every part of a resource. It's this focus on making the most of ingredients that is at the basis of Alvinesa Natural Ingredients. The Spanish company was founded in 1948 as a distillery business, developing chemicals and alcohol from spent weights to the winemaking process. In 1993, the company transformed into Alvinesa and moved into more fine chemicals such as tartaric acid and grapeseed oil. In the last few years, the company has pivoted further into high value nutraceuticals such as grape skin extract, grape seed extract and polyphenols with a desire to extend into the F&B industry, and have a broader geographic reach. In early 2021 Intermediate Capital Group acquired a stake in the business and brought Jordi Ferre and as the new CEO to lead the company's expansion. With a commercial and operations background in the food sector, he brings knowledge of the value added ingredients and agri tech sectors, and is excited about the path ahead. Jordi, thank you for joining me today.

Thank you for having me here.

So, let's dive right in. Could you give me some thoughts on your industry journey and why this position was the right fit for both you and Alvinesa?

When I look back at my professional life, I think one thing has been common is that I always been employed in the food industry. I started in consumer goods, I started in marketing, I started as a product manager, I move up in the marketing commercial ladders, and then continue on to be in operations and then a CEO role. I started in consumer goods, and then I moved into food ingredients. For 11 years, I was with Food Ingredients, I had the privilege to be in, I think, very good company in the industry, Tate & Lyle, a British company. There was leading their sucralose Splenda efforts. And then he moved to a more startup business at that time, which was Pure Circle, it was actually traded on the London Stock Exchange. And Pure Circle was a stevia company. And we became the world leaders of stevia products. We were selling to all the major food and beverage industry companies in the world. My last experience before joining Alvinesa was more in the agriculture to be more exact in the post harvest industry. So if you look at my experience, over time studying with consumer goods, then moving to food ingredients, value added food ingredients, and then going to agri sciences, I think all that made it a very good combination for me to join Alvinesa because obviously, Alvinesa combines agriculture, combines food ingredients, and also with a very interesting proposition, in terms of eliminating food waste, etc. Also, finally, I would say that there was a good cultural fit for me. I lived 21 years in the US. So I'm a dual citizen, Spain and the US. And after 21 years, it was a good opportunity for me also to return to my original country, Spain. So there is a little bit of a cultural fit, although I just noticed that I have quite a lot more of American than I ever thought so, as being here, but I would say that all these things made me, I would say an appropriate fit for this role.

You've made a little reference to it, so let's dive in this term, upcycling, is sort of a new term. But could you talk about how this concept is really at the foundation of Alvinesa and how it's extending further as the company is looking at even more ingredients from what could really be considered kind of agro waste?

Correct. So, upcycling, which is a word or term that's very much in vogue called circular economy, which I totally believe the way to go into more and more into the future. It's really in the core of our business, also the industry. We started in 1948. And if you look at what we do, we actually take all the organic matter comes out of the winemaking process, we create value out of basically that supposedly organic waste. So everything that's discarded in the wine process from the grape is been, you know, taking by us and transformed into a number of different ingredients that are so with good value to the food industry. So basically what you do is, you avoiding that something goes to waste, and you create value out of it. And you do that in a circular way in the sense that nothing goes to waste, everything is actually consumed used, and what is not useful food ingredients, that output is used actually for biomass energy. So everything is basically recycled or upcycled.

Could you speak to the natural extraction process that is used and why that differentiates the ingredients produced?

One of the things that we actually have that I think it's very interesting is everything that we do an extraction, we don't use solvents, we do everything with water. So it's a very gentle way, actually, to really separate and take out all the different ingredients. There's no chemical solvent to actually do the extraction. So I think it's a very interesting process. And we'll also see that the raw material that we use here in Spain, more specifically in Castilla–La Mancha, which is in the centre of Spain. Another interesting thing is that it comes with no pesticides, or very low levels of pesticides, compared to other regions in the world. So we got very good raw material, and we actually making sure that the whole extraction and the process transforming is actually not in a very gentle and sustainable way.

So, what are some of the newest ingredients in the Alvinesa portfolio and how are they developed and brought to market?

So, we have a number of different ingredients that have been sold by the company for a long time. We do extract obviously, alcohol, which is the first thing you do and a lot of the alcohol we extract goes for industrial use, meaning bio ethanol, etc. Then you move into tartaric acid, you do as well grapeseed oil, which is actually a very interesting proposition that's growing, especially in markets like the US. And then you go into colours. We actually take out colour from the mainly red skin from pumice, which is an interesting proposition versus other products that are, you know, grown and destroyed. Let's see to make colour, Coliad Black Carrot or other beetroots. In the case of ours, we actually take the colour out of as I said, byproduct of the winemaking process, but I wouldn't say for us personally, here at Alvinesa, some of the new products are more related to the belief and also antioxidants that you actually find in grapes. And we do those out of the red skin pumice or we do that from the white skin. And, especially we do it from the grapeseed extract. So we actually take grapeseed and take out the polyphenols antioxidants where very much more are sought for health and nutrition purposes, and to a number of industries from food, animal feed, but also to cosmetics and other things, because of all the goodness that these products have. We also have different variations of those, we have products with high monomers, which is a very positive components of that extract. We do have also products certified organic, because of the low pesticide use, and actually the sourcing that we are able to get. And we have products where we actually take all the sulfites out so there is different variations of the same thing. And I would say that our new line of new in inverted commas because we started three years ago, polyphenols is really making a mark in the market right now.

So, in terms of geographic reach, why is now sort of that ideal time to expand the supply chain? And how do you deliver on this promise of sustainability and traceability?

I think it's the right time in terms of, when you talk about geographic reach, obviously, we have sales around a number of countries around the world. So we sell globally. In terms of the reach of the supply chain, we do that in different ways. One is we have high capacity plant, it's a state of the art plant, which makes everything much easier. And so we are able to buy more raw material and diversify because we do have ample capacity in our plan to do that. Second, we do that through acquisitions. We just bought a company in January, that is actually based on the northeast region of Spain, Cades Penedes, which has an excellent raw material as well that reinforces what we do. And we believe that elsewhere as well beyond Spain or even Europe, there are opportunities to expand the supply chain and through the acquisitions and in potential consolidation of a global supply chain that today to be honest with you when it comes to great promises, it's not really accomplished. So I think we're looking at opportunities or other You know, basically southern hemisphere, etc to really have a global true global upcycle, if you want to call it that way supply chain in that respect, that's truly important right now. So we offer that not only from a regional standpoint, but also a global standpoint with a consistent supply chain is extremely important.

That's definitely exciting times ahead. So, interested to hear, what can we expect then to see from Alvinesa in the coming years? And maybe what are some of the goals of ICG, the family and you personally?

Well, I think that clearly in ICG partner with the family owner here Cantero family. And the idea basically is to expand consolidate around the world. And how you're going to do that is one is definitely we're going to continue with acquisitions with the sport and power of the ICG financial strength, we're going to continue with acquisitions. And that's going to help us to one side, consolidate, spend regionally consolidated supply chain, and make these ingredients really ingredients there are going to be stable for big companies. I'm targeting food and beverage companies that were already selling some but it's just going to be products that are going to be able to be contracted globally, supply chain, etc. So that's very important for us. Second, I think the health and nutrition piece that we talked about, is very important, and the sale of these polyphenols, to give you an example of that the natural extraction is extremely important. And I think that although we're making great progress, I think there's a lot more to grow in this area, the market itself and also as well in supplying them everyday more. So that's all important goals, together with ICG. I personally as well as with my partners here, in doing this, we want to obviously grow the business, create value, but do it in a sustainable way. So you will see a lot of the sustainability message that you asked me before being president quarter where we do, you know, I can give you lots of examples of things that we're doing. In Spain, for instance, here we have a 2.5 photovoltaics on plant. So Alvinesa use the solar panels to actually create energy. So we are less dependent on the local greed, biomass, recycling water, there's a number of things that we're going to be doing so the industry grows but grows in a sustainable manner, that's very important. So, we can defend you in all corners on what we produce, and how we sources and how we transform it.

It's quite inspiring to hear this story. So how could other firms in the broader agricultural space follow this path toward supporting this circular economy?

I think where they should go is, first of all, there has to be an understanding, I think it's more from everybody that, you know, last I checked, the population of the world is continues to grow, while the resources and the size of the Earth doesn't. So I think there has to be a lot more focus to review and see, what is everything that we can actually upcycle and create value of it to put it back into the system. Believe it or not, while in pharmacy has been done for a number of years, and it always is getting better. And now Alvinesa is leading this, there's a number of industries, actually, you'll be surprised how much effort there is now, things like asparagus or other things where you actually, you know can or you process somehow, and you will still be surprised so much of that, let's see micro components that are created that is not properly used, so I think there's a lot of potential. And I think it's a message discussing up in a lot of places, then the importance of actually reusing all of that, that we create in our processing, to make sure that it's actually put back into the system. I'm talking about food industry here. I mean, obviously, you talk a lot about the recycle packaging materials, I think it's the way to go. As I said, we have to be very conscious about the limited resources that we have. And the need that we will continue to have to service more a growing population in the world.

I so agree the opportunities are tremendous, and certainly innovative thinking is what's going to get us there. So Jordi, thank you again for joining me. I'm excited to see what comes next for Alvinesa.

Again, thank you very much for having me. It's never really a bad moment when I have the chance to talk about the great things that our company does. So thank you for giving me that opportunity.

A pleasure. And thank you also to our listening audience, and please do tune in for our future Vitafoods Insights podcast.

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