Sustainable expansion of aquaculture is critical to global food security, and bivalve shellfish aquaculture represents a sustainable method to provide people with affordable nutritious food. Oysters represent 54% of the global bivalve market by value, with propagation of juveniles within hatcheries critical to allow the industry to grow. Growth and survival of juvenile oysters in hatchery systems is constrained by suboptimal feed. The live algal feed currently used is expensive, of variable quality, contamination prone, and the high level of skill and equipment required limits where hatcheries can be located. We demonstrate how a novel microencapsulated diet can increase the growth and survivorship of Ostrea edulis (European flat oyster) juveniles in both the laboratory and hatchery setting. The microcapsules are easily produced in large quantities, stable for long term storage, and can be customised to have exceptionally high levels of nutrients key for oyster growth. O. edulis larvae fed a combined diet of microcapsules and algae for 8 days had a 46% greater increase in maximum size, 171% greater increase in minimum size, and 5% higher survival than larvae fed algae alone. O. edulis spat of 4 mm fed the combined diet for 7 weeks also had significantly greater survivorship (16% greater in hatchery, 58% greater in laboratory) and growth comparable (hatchery) or better (laboratory experiments) than algae alone. Further tailoring of the nutritional composition of microcapsules to specific bivalve species or growth stages could allow microcapsules to replace a greater proportion of or even completely replace algal diets. There is potential for these diets to revolutionise bivalve shellfish farming globally.