Vertical integration positions Marine Ingredients to reap benefits of omega-3s turnaround
Increasing demand
Science, and focused messaging, will drive a turnaround in the sector, which has slumped in recent quarters in North America in particular, said Todd Parker, vice president of business development for Mount Bethel, PA-based Marine Ingredients. And the company is poised to profit from the upswing.
“The omega-3 market is likely set to benefit from increasing demand again. It’s important to keep in mind that according to the latest data, omega-3 is still the most widely consumed supplement in North America. The industry took a hit from some bad press a couple years back, but since then there has been a steady stream of positive research that reminds the public of the various health benefits derived from omega-3s,” Parker told NutraIngredients-USA.
The Alaska facility, located in Dutch Harbor in the Aleutian Islands, operates under the Bering Select name and began producing omega-3 ingredients earlier this year from locally caught Alaksan cod, sablefish and Alaskan pollock. The facility is a joint venture between Clipper Seafoods, Marine Therapeutics, Marine Ingredients, and Siu-Alaska Corporation. The facility takes advantage of a heretofore unused resource, said Clipper Seafoods president David Little.
“The Bering Sea cod fisheries are robust and produce vast amounts of a high quality omega-3, a resource not utilized until now. By locating the plant in Dutch Harbor, the center of the Bering Sea fishing fleets, we can capture these precious oils in the freshest form possible,” he said.
The scientific adviser for the effort is Jeffrey Bland, PhD, who is associated with Marine Therapeutics, said the raw material offers some unique benefits.
“Alaska cod oil contains a unique combination of omega-3 fatty acids and fat soluble nutrients that together result in numerous health benefits; such as balancing immune activity, supporting healthy blood lipid levels, and calming and reducing inflammation,” he said.
The ingredients that flow from the Dutch Harbor facility will be marketed under the Alaska Naturals brand name. Marine Ingredients’ business model has consisted of supplying finished formulations, packaged and ready for labeling and the two new facilities now make the company vertically integrated, company sources said. Bulk oil sales will form a small part of the business but finished products will continue to be the mainstay, they said.
High Norwegian standards
Having a facility in Norway is a big plus, too, Parker said. The facility, located in Brattvåg and which now operates under the name Marine Ingredients AS, is fully compliant with strict Norwegian pharmaceutical regulations.
“Having an omega-3 production facility based in Norway sets the bar very high regarding quality control requirements, the standards are elevated. For example, all of the crude oil production facilities established near the fisheries must be EU human food grade certified in order to be imported and refined in Norway. It is of course also necessary to follow the abundant EU and Norwegian quality and safety guidelines. Further, Marine Ingredients AS has attained a Norwegian pharmaceutical license, which is not easily achieved,” he said.
Meeting those quality standards can reassure customers in this time of questions about supply chain integrity in the wake of the New York Attorney General affair. Parker said he believes that omega-3s are less likely to suffer a diminished reputation that other categories of supplements from the resulting negative publicity.
“Anything that has a negative impact on consumer perception of the nutrition industry as a whole, can potentially impact the component sectors. I don’t think the NYAG issue will have much of a negative impact on the omega-3 sector, primarily because a large percentage of consumers understand that 'fish oil' is less complicated than a blend of say five herbal factors,” he said.
“Marine Ingredients is proactive in helping our customers to educate consumers about safety and quality issues. We provide complete supply chain transparency on the ingredients we utilize to make finished products, and integrate all the various QA/QC reports into one complete document,” he said.
Global business concerns
A turnaround in North America, while it would be welcome, is becoming less and less important in the omega-3s industry, Parker said. The business is increasingly becoming a global one, driven by global demographic trends. Thus, fallout from negative studies or the actions of activist law enforcement officials in the US fall more into the nature of irritants rather than deal breakers, he said. And Marine Ingredients is positioning itself to take advantage.
“The growth in consumption of omega-3 closely tracks economic development. Omega-3 is probably the most well-known nutrient globally, and when disposable income rises, so does consumption of omega-3. Take China for example, as the Chinese economy exploded, so did the public’s demand for natural therapeutics. Many top brands now derive up to half of their global sales from China. We are beginning to see signs of increased demand in India and other South Asian countries. Increasing global demand is a big opportunity for American brands and producers, as people in emerging countries have faith in American quality and safety standards,” Parker said.
