Blue Tree Technologies, an innovative Israeli startup, has successfully raised $2.26 million in a funding round led by OurCrowd, with additional participation from Sucden Ventures, the venture capital arm of food commodities trader Sucden. This investment marks a significant milestone for Blue Tree Technologies, which has developed a patented process to selectively remove sugars from natural beverages like juice, milk, and beer without compromising taste or clean label credentials.
Gregory Merran, Chief Investment Officer at Sucden, highlighted the relevance of Blue Tree’s technology in the context of juices, stating, “Blue Tree’s technology, which selectively removes sugars, is especially relevant and perfectly complements our portfolio of solutions.” This funding round comes on the heels of Blue Tree securing self-GRAS status for its approach and scaling its solution with Israeli juice manufacturer Priniv.
Founded in 2020 by Didier Toubia and Yuval Klein, Blue Tree Technologies graduated from Israel’s Fresh Start incubator in June 2022. Since then, the company has transitioned from lab-scale to prototype-scale and signed an agreement with Priniv. CEO Michael Gordon, who joined the team in July 2022, noted, “In 2023, we fully scaled up our solution and expanded our development to other categories beyond orange juice.”
Blue Tree’s technology stands out in the crowded field of foodtech firms aiming to reduce sugar in juices. While competitors like Better Juice use enzymatic treatments to convert sugars to fibers and IncreBio employs microbes to consume the sugar, Blue Tree’s method involves ultrafiltration coupled with adsorption. This process selectively removes disaccharides such as sucrose, lactose, and maltose, leaving the sweeter monosaccharides intact.
This two-step process, which includes ultra-filtration and adsorption using the mineral zeolite, acts like a magnet to disaccharides while leaving monosaccharides and organic acids untouched. “The question was, how do we remove the disaccharides but leave the monosaccharides and other things in the juice intact?” explained Gordon. The result is a juice that retains its sweetness even with significant sugar reduction.
Blue Tree’s first patent describes this innovative approach, and a second patent is pending that explores an alternative separation technique. Both methods emphasize maintaining the natural integrity of the juice without introducing any external ingredients, ensuring a clean label.
The company plans to license its system to juice producers worldwide and is currently in negotiations with large-scale manufacturers in Latin America, Southeast Asia, and Europe. “They are looking at the numbers and saying this is cost-effective,” said Gordon. Blue Tree aims to charge no more than 5% of the gross margin, and manufacturers can also generate revenue from the sugar removed from the juice.
The system allows for significant sugar reduction across various beverages. In orange juice, for instance, Blue Tree can cut total sugar by 50%, while in milk, it can remove up to 75% of the sugar. For beer, the technology can eliminate all sugar, enabling the creation of zero-sugar beer. However, Gordon emphasizes finding the right balance, with the initial recommendation often being a 30% reduction.
Labeling regulations vary by territory. In the US, juice processed through Blue Tree’s system can still be labeled as 100% juice if no additional ingredients are added. In the EU, current regulations classify it as a drink or beverage, though this may change under proposed directives allowing terms like ‘reduced-sugar fruit juice.’
Blue Tree offers a leasing model for its system, providing a turnkey solution that integrates into a partner’s manufacturing line within two months. The company handles maintenance and consumable replacements, charging a service fee. Looking ahead, Blue Tree envisions a partnership model with royalties.
As consumers increasingly seek lower-sugar, natural, and clean label products, Blue Tree’s technology offers a compelling solution. “We see our approach as a no-brainer if products can still be labeled as sugar-reduced 100% juice,” said Gordon. With just one ingredient on the list, Blue Tree delivers on both health and simplicity.