Aker BioMarine CEO: Innovation Needed to Buck Growth Erosion in the Omega 3 Space

04 Jul 2016 --- Leading krill oil supplier Aker BioMarine is looking to innovation in order to differentiate its products within the crowded omega 3 space. Of the company’s turnover of $US105 million, $20 million was reinvested into enabling technologies and scientific support behind them. The investment led to the launch of its first krill oil concentrate. Called Superba Boost Caps, the product contains significantly more phospholipids and omega 3s compared to the previous generation of Superba Krill Oil.

This type of innovation is necessary, as omega 3 players look to stand out in a market that is only just starting to recover from several years of overcapacity and growth erosion, which the company’s CEO blames on a sustained period of negative mainstream press coverage since mid-2013.

“The omega 3 segment was enjoying +10-15% growth each year and the outlook was that it would continue like that in years to come. Most producers were ramping up their capacity, in order to be ready to take on the increased future volumes. New capacity was built in Latin America, Norway and elsewhere,” Matts Johansen, CEO, Aker BioMarine told FoodIngredientsFirst in an exclusive interview.

Then he noted how a negative media hit came in the summer of 2013, where a “questionable” paper published in the American Journal of Epidemiology 2013 (Brasky et al, 2013) made a correlation between prostate cancer and high omega 3 supplement intake. “That caught fire in the US mass media and 20-30% of the omega 3 consumers stopped buying it as a result. Before that, the majority of articles in the press were positive about omega 3s, but it shifted towards a majority of negative ones following this study. That negative coverage continued well into 2015, but is now stabilizing. Omega 3 sales are still at a significantly lower market now than in 2013, however,” Johansen added.

Fish oil suppliers were also hit on their own costs and margins. For example, reduced fish quotas in Chile, meant that the price of raw material went up, even as the price at which they could sell their product went down, amid to the difficult market dynamics.

As an omega 3 source, krill oil suppliers were also indirectly hit by these factors. “Retailers become more skeptical about taking new omega 3 source products to the shelves and a lot of consumers relate krill oil to this segment,” he adds.

But rather than cutting back and hoping that the market would recover, Aker BioMarine bucked the trend and increased their investment in R&D in order to bring new innovations to the market. “In 2015 alone, we spent over US$20 million on new technology and clinical trials to come with new innovative krill oil products,” he notes.

This investment led to two significant innovations in the krill oil space. The major technology innovation from the company relates to removing the salt that causes the smell and taste of the krill oil, which should ultimately lead to increased applications in the functional foods arena.

This Flexitech patented technology will enable it to continually expand its product line, bringing more innovation to the krill oil market. More specifically, this processing flexibility allows Aker BioMarine to up-concentrate krill oil’s various beneficial components (such as phospholipids and omega 3s), as well as remove the salts in krill oil, which can lead to off odors and taste.

Flexitech does not involve any form of high temperature treatment such as molecular distillation. Furthermore, it does not involve the use of other solvents besides ethanol and water. Flexitech relies solely on low temperature and efficient fractionation methods, which remove unwanted salts and other polar constituents.

“There are different components in krill that are there naturally. The salts in krill react with oxygen to create that seafood smell. What you do is purify the krill oil and remove all those salts, to take them out of the product. This makes it much easier to use it in other applications,” he says.

The first new product to result from this technology is Superba 2, the next generation of Superba Krill Oil. Superba 2 features enhanced encapsulation properties such as improved smell, taste and visual appearance. This new technology and products wouldn’t be possible without Aker BioMarine’s new commercially operational facility in Houston, TX. This 180,000 square foot NSF GMP facility is where the company will now produce Superba 2, along with future Superba innovations.

Johansen believes that Flexitech will increase the opportunities for applications, where fish oil could typically not be considered to be a viable fortification option in the past. “It is very difficult to work with regular fish oil in fortified foods, as it doesn’t mix in formulations. If you put it in a juice, for example, you will have to microencapsulate it in order to get it to be homogenous in the juice. Krill oil will naturally do that. So if you can solve the smell and taste problem, it will open up a whole new market,” he adds.

Aker BioMarine is now testing different applications with Flexitech products. “We are looking at where to go right now and the feasibility studies will show what has the biggest potential. We are assessing everything, ranging from cosmetics (e.g. topical skin creams) to fortified drinks. The question we are facing right now is to consider that when you take a fairly expensive ingredient like krill oil into a drink, will it be cost prohibitive?,” he notes.

Using the Flexitech technology, Aker BioMarine has now also launched its first krill oil concentrate. Called Superba Boost Caps, the product contains significantly more phospholipids and omega 3s compared to the previous generation of Superba Krill Oil. Just two capsules of Superba Boost qualifies for four EU-authorized health claims, including:

• EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) contribute to the normal function of the heart
• Choline contributes to the maintenance of normal liver function
• Choline contributes to normal lipid metabolism
• Choline contributes to normal homocysteine metabolism

Furthermore, Superba recently received Novel Foods Approval at extended use levels, which means that it is the only standard krill oil in the EU allowed to dose more than 250mg EPA/DHA (up to 3000mg) per day – the other players in the market cannot go beyond 250mg.

“Typically, krill oil is a natural source, however we have been able to concentrate both the phospholipid and EPA/DHA content levels in our new product Superba Boost. The product is now appearing on the B2B market and will start to show up on the shelves this autumn,” notes Johansen.

At a retail level, the cost of krill oil compared to a high quality fish oil will be double or more, therefore consumer research is also required in order to uncover why someone would find it worthwhile to consider the more premium option. Taste and concentration factors will help, claims Johansen, on the back of research conducted in various western markets.

“What we found across all markets we looked at was that about half of the existing or previous omega 3 consumers are looking for an alternative to fish oil. The number one reason was due to the fishy aftertaste and the unpleasant ‘fishy burp’ effect that you get. The second reason is that the capsules are too big and therefore difficult to swallow,” he adds.

He notes that the reason a fishy aftertaste exists in the stomach is that the fish oil floats to the top of the stomach and reflexes up. “The phospholipid in the krill oil is water soluble, meaning that krill oil mixes in the stomach so you don’t get that fishy aftertaste. We understand the technical and chemical composition of our product, we can match that with the consumer insight, to get a good value proposition with no fishy aftertaste,” he claims.

He also notes how EPA/DHA are bound phospholipids and therefore more efficiently absorbed into the cells. “So you need less to get the same effect and therefore require a smaller capsule. Even with regular krill oil, the EPA/DHA is twice as well absorbed as fish oil, so you need half as much to get the same effect,” he adds.

The company’s strategy now features a new marketing approach, whereby a team is in place who are solely focused on helping customers successfully take their krill oil products to market, by partnering on concept creation. “We have come up with different market stimulation programs, in order to show how we can support the brands and do more consumer education that are successful, based on our products,” he notes.

Aker BioMarine also has a sampling program in place with free krill oil for customers. This is a value proposition that is very easy to deliver to consumers. “Normally in the dietary supplement space it is difficult for consumers to feel the effects that you promise. But if you say ‘it has no fishy aftertaste,’ you will know straight away. This is why it is so good to sample, so they can see for themselves,” he adds.

A detailed interview with Matts Johansen will appear in the 2016 summer supplement issue of The World of Food Ingredients (Nutrition Insight).

By Robin Wyers

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