NutraIngredients.com reported last March that the Swiss company had teamed up with a technology partner to develop a process to extract DHA and EPA from microalgae. Although both omega-3 fatty acids occur in fish oil, Water 4 says it is presently the only company to have succeeded in extracting EPA as well as DHA from algae.
Known as V-Pure, the oil's main use so far has been in dietary supplements sold over the Internet. But as sales have steadily increased, the company is now scaling up production with a view to offering it as an ingredient for mainstream foods and supplements, where it could challenge existing oils from fish and other sources.
At present, V Pure oil contains around 23 per cent EPA/DHA combined, but a 35 per cent version is in the pipeline and development studies are on-going for a 70+ per cent version for pharmaceutical applications.
Regulatory approvals for Water 4's product under European novel foods legislation are currently in works, and the company is working with partners in the US on parallel approvals for that market.
General manager Mark Broughton, formerly of Swiss Caps (which supplies the VegaGel capsules for the finished supplements), told NutraIngredients.com that approval for the EU is expected later in 2007.
But quantities have already been sold to food companies so that they can start investigating how the ingredient may be used in products and conducting stability tests. Potential food uses include baby, dairy, bakery and confectionery products.
Because of the time that customers need to conduct such assays, Broughton does not expect the regulatory process to stand in the way of future finished product launches.
In order to meet the initial needs of the food sector, production of V Pure oil is to be increased five to ten-fold from its current level of over 5 tonnes a month. The algae is grown in ponds in Brittany, France.
Aside from containing EPA in addition to DHA, this natural claim is the main point of differentiation between Water4's oil and microalgae-derived oils from Martek and Lonza.
Broughton said that to some extent the marketing campaign - which "will be quite aggressive in mid-2007" - will be anti-fish oil.
Although fish oil is seen by many as the premier source of omega-3 fatty acids, there are presently three main perceived issues which are helping to drive development of alternative sources: the sustainability of current fishing practices; fears over contaminants; and CO2 emissions associated with shipping fish products far away from coastal regions.
In addition to the nutritional aspect, Water 4 is positioning as an environmentally-conscious company. Indeed, its production process actually uses up considerable quantities of carbon dioxide, which makes it eligible for EU subsidies.
Another key aspect that Water 4 plans to leverage is the natural extraction process that uses no artificial extraction solvents. Details of the process and the particular algae used are being kept closely guarded secrets.
UK-based Leatherhead Food International is currently conducting research that aims to put a figure on the European omega-3 market. Previous estimates put it at around €160m in 2004, with Frost and Sullivan and Euromonitor International forecasting average annual growth of eight per cent to 2010.