Aker Biomarine, based in Oslo, Norway, is world’s largest harvester of krill, free swimming shrimp-like crustaceans that live in all the worlds oceans. Aker operates a multi ship fleet that concentrates on the harvest of the Euphasia superba species which forms an important link the food chain of the oceans off Antarctica.
Krill: Niche but growing market
Krill oil is characterized by its phospholipid form, which has provided a strong differentiator for ingredients made from krill over standard forms of omega-3s from fish oil, which are found naturally in triglyceride forms or in ethyl ester forms after manufacturing. The phospholipid form has been shown to be more easily digestible, which leads to fewer complaints about the ‘fishy burps.’
A recent market report by GOED (the Global Organization for EPA and DHA Omega-3s), of which Aker is a member, found that the overall market grew by a modest 2.3% in 2018. The market is dominated by common refined oils, the vast majority of which come from the anchovy fishery in Peru and Chile. Those oils accounted for 40,754 metric tons in 2019.
Krill, on the other hand, is a minor player, at 859 tons of volume in the same time frame. But by value the ingredient makes up a larger share of the market, and it’s a share that is expected to grow, said Aker CEO Matts Johansen.
“I think 2019 is going to be the best year we’ve had from a growth standpoint,” Johansen told NutraIngredients-USA. “We think the growth of krill is actually starting to accelerate.”
Support from drug development
Johansen said one of the things driving the interest in krill is the development of a drug by Canadian company Acasti Pharma called CaPre for which Aker supplies the raw material. The drug is a highly refined form of phospholipid omega-3s that is being studied for the condition hypertriglyceridemia. In much the same way that omega-3s drugs developed from fish oil have boosted the confidence among consumers in the benefits of those ingredients, Johansen said CaPre research could do the same for krill.
Since its founding in 2008, Acasti has progressed along its clinical development path, with Phase 2 studies showing “a statistically significant reduction of triglycerides and non-HDL cholesterol levels in patients across the dyslipidemia spectrum.”
“Pharmaceutical development had a tremendous impact on the fish oil category, and I think that it will be very positive overall for the krill category, too. You will have doctors involved who will have a much more general trust in the product,” he said.
Caution is needed when using data from clinical trials on a specific drug to market dietary supplement forms of the same base ingredient, as has been shown by the aggressive legal maneuvering of Amarin, a drug company that markets Vascepa, a highly refined form of EPA from fish oil. But successful clinical trials can still serve to give consumers confidence that a given category of ingredients do have proven benefits.
“What’s positive for us the data from the Acasti trials will be public and it will be available for the market as a whole,” Johansen said.
The benefits of scale
For years Johansen has preached the gospel of the scale necessary to succeed in the krill business. Now that Aker has bought out the krill operations of its major competitors, Neptune Technologies and Bioressources and Enzymotec, that day has finally arrived. With the commissioning in 2019 of an additional harvesting vessel, Johansen said 2020 will be a year in which Aker can fully realize the benefits that sufficient scale brings.
“The whole thing with krill is big fixed costs. You need a certain scale to be profitable. With the fleet we have now we have that scale to make the economics work for us. 2019 was an all time high year for us and we expect 2020 to be even better,” he said.
Keeping up the marketing support
Johansen said another thing that that big scale allows Aker to do (beyond making a dent in repaying the huge start up costs incurred by its parent company) is to develop a full suite of marketing materials for the use of its customers. One the things that is thought to have contributed the swoon in the fish oil markets in early to mid 2010s was dearth of positive messaging for consumers. The market was resting on laurels, so to speak, or so the thinking went.
Much of positive push among consumers was provided for krill in the form of an aggressive ad campaign funded by Schiff Nutrition on behalf of its MegaRed brand before its acquisition by Reckitt Benckiser. “Small. Red. Powerful,” was a slogan that helped make MegaRed the best selling omega-3s SKU of all at the time.
Johansen said Aker is well aware of the market history of omega-3s and wants to make sure a similar interregnum in marketing support doesn’t happen in the krill sphere.
“We are spending a lot of resources on education and marketing tools that our customers can use,” he said.