Krill conflict could threaten omega-3 potential

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Krill conflict could threaten omega-3 potential

Related tags: Nutrition, Aker, Aker biomarine

The krill category and the science backing it are still emerging, but there are many who believe krill extracts have the potential to 'go big' in the healthy foods arena. Very big.

Demand is growing so quickly the Canadian-based category leader, Neptune Technologies and Bioressources, had to shut down for several weeks in the summer while it expanded its premises.

Number two player, Aker Biomarine, has signed some major contracts recently and market figures show krill is one of the most exciting sub-sectors of the omega-3 category that will grow to about $1.6bn in 2014 according to Frost & Sullivan figures.

Krill sales are a small percentage of this – probably not more than $15m – but they are growing fast in a market whose volume surged from 13,000 tonnes in 2008 to more than 17,500 tonnes in 2013, according to Euromonitor.

The science suggests the tiny sea creatures that collectively form the largest animal biomass in the world, have a highly nutritious blend of omega-3s and other antioxidants that could give them true superstar status in the areas of fortified foods and supplements.

But the krill industry also has a major problem at the moment – the category leaders are engaged in a very public spat involving court cases on both sides of the Atlantic that could hemorrhage their nascent career and other aspirants working in the area.

If category leaders are going around suing each other, it is hardly going to inspire confidence in someone considering fortifying their new superfood with minute shrimp extracts.

While there is no end to the conflict in sight, there are lessons that can be learned from the fight for all businesses. It’s basic microeconomic game theory that through cooperation desired outcomes can be better achieved for all supposed competitors in any particular sector.

Why can’t we all just get along?

But that’s in a textbook. Out in the real world of the industry based on extracting nutrients from minute shrimp, the dogfight between Neptune and Aker increases in intensity. This is not good, healthy competition. It’s verging on a form of wild pugilism from which everyone emerges battered and there is no clear winner.

But then, when locked in this kind of battle, it can be hard to see the bigger picture. The companies in question clearly do not respect each others way of doing business, and if one report can be believed, cannot even bear being in the same room together. Any kind of category-building joint effort seems a long way off.

Indeed Aker has twice been sued by Neptune this month – once in the US for an alleged patent infringement that is yet to be ruled on; and at the recent Food Ingredients Europe trade show in Frankfurt, Germany, where Neptune won an injunction over EU novel foods rules that saw bailiffs clear Aker’s stand of materials on the second morning of the show. Ouch.

Aker is contesting the German decision and says it is ready to fight Neptune in the US courts as well.

The fact Aker recently won a large US account from Neptune (a switch Neptune is also contesting in the courts) has amped things up even more even as the omega-3 trade group GOED works with krill players on a krill monograph that should boost quality across the sector.

It’s not for this publication to speculate about the causes of the acrimony between the Canadian and Norwegian firms, but its effects are likely to be felt by other companies in the sector such as Israel-based Enzymotec and US company, Azantis.

While this kind of feuding is difficult to arrest, even a partial truce may yield great benefits to the Neptune and Aker and allow all involved in krill to become as big as they deserve to be.

Shane Starling is editor at NutraIngredients-USA.com and NutraIngredients.com. He has been writing about the nutrition industry for about ten years.

If you would like to comment on this article, please email shane.starling'at'decisionnews.com

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