For Humans

Food Sector

Global demand for Omega-3 in baby and infant food is estimated at $350 million per year. A major industry leader in this sector is the American company Martek, which produces an extract containing the DHA acid (docosahexaenoic acid) from a fresh-water micro-algae, but cannot produce the EPA. (eicosapentaenoic acid). Martek sells this extract mainly to the world's largest baby and infant food manufacturers under marketing agreements and to a wide range of food products. The company has an

annual turnover of $114 million with an operating profit of 13% of the turnover. The reason for this low profit margin, compared to that which Seambiotic is expected to achieve, is due to the production methods, the extraction process and to expensive recourses.
Seambiotic hopes to reach an agreement with Martek, thus utilising its marketing channels.

Child Benefits of Omega-3

EPA and DHA are important building blocks for healthy and normal growth and development. In early infant nutrition a major emphasis is on the addition of DHA, which is a structural component of the brain; however, human breast milk contains both DHA and EPA in a 5:1 ratio. This demonstrates the importance of the balance of DHA and EPA in the diet. Studies suggest that after age five EPA plays a more active role in learning and development. In additional, in numerous studies conducted by researchers in the United Kingdom, Unites States and Norway over the past fifteen years, many found that there was a subtle but consistent link between eating fish during pregnancy (or Omega-3 intake) and children's subsequent test scores, even after adjusting for factors such as the age and education of the mother, whether she breastfed, and the quality of the home

environment (i.e. in poverty, divorce etc). The largest effect was seen in a test of the children's understanding of words at the age of 15 months. Children whose mothers ate fish at least once a week scored 7 percent higher than those whose mothers never ate fish.4

Functional Food Market

Some common bioactive materials, used as supplements or functional food ingredients, have been developed from by-products of the food and agriculture industries. Two examples from marine by-products are glucosamine, which is derived mainly from shrimp and crab shells, and long-chain (LC) Omega-3 oil, a by-product from fishmeal processing.

The North American functional food market is currently valued at more than US$30 billion, although marine-derived ingredients account for only a small portion of this total. Glucosamine and LC Omega-3 oils are in the top 20 selling North American supplements, and both are poised for rapid growth as functional food ingredients. Other marine by-products that have potential as functional food ingredients include protein hydrolysates from fish processing waste and under-utilized fish species, chitosan from crustacean shell, macro-algae (seaweed) and micro algae-derived bioactives. This brief review will discuss the potential and challenges involved in developing functional food ingredients from these marine sources.

Omega-3 and the Functional Food Market

According to market research carried out by the European market analysts Frost & Sullivan, of all the Fine Foods ingredients, it is Omega-3 which is expected to have the greatest future.
Frost & Sullivan estimate the Omega-3 European market at $195 million for 2004. The European market constitutes 28% of the global market; thus the global market for this sector estimated to be $700 million.

The expected grows rate in the mature European market is estimated to be 10% per annum and the American market at 20% per annum. Marine-derived ingredients are popular in Japan and many other Asian countries but are a small part of the North American market. Omega-3 oil is poised to grow rapidly as a functional food ingredient, and is estimated to have the potential to be a $100 to $500 million dollars ingredient within the next five years.
‘Players' in this market sector include Martek (with their algae extract), and companies from Canada, China, India and others who market fish oil. The use of this oil in this sector, however, is limited due to its strong odour.5 In Japan, one of the first regions we intend to target, Omega-3 oil is used in several baked goods, margarines and infant formulas3. In North America Omega-3 oil is beginning to be incorporated into food products. For example, Martek has obtained generally recognized as safe (GRAS) approval for the use of marine-algal derived DHA in infant formula. Also, Ocean Nutrition Canada has obtained self-affirmed GRAS for a variety of Omega-3 concentrates for use in functional foods.

Cosmetics Sector

Dry, inflamed skin or skin that suffers from the frequent appearance of whiteheads or blackheads can benefit from supplementing with essential fatty acids (EFAs), especially Omega-3s. EFAs are responsible for skin repair, moisture content, and overall flexibility, but because the body cannot produce its own EFAs, they must be obtained through diet.
The typical American diet is overabundant in Omega-6 fatty acids found in baked goods and grains, and lacking in Omega-3s, found in cold-water fish such as salmon and mackerel, as well as flaxseeds and safflower oil. Simply balancing the intake of Omega-3s with Omega-6s can result in smoother, youngerlooking skin. EFAs are also available in supplement form - such as fish oil capsules or evening primrose oil - and are effective at treating a wide range of disorders, from depression and cancer to arthritis and heart disease.

Health Food Sector

Consumption of Sea-Algae as health food in east-Asia is considered the highest in the world. Penetrating this market is extremely difficult due to its demanding specifications. In 2005, the Asian Omega-3 polyunsaturated fatty acids (PUFA) ingredients market was estimated to be worth $279.6 million and this market is expected to reach $596.6 million in 2012. The largest share of market is marine oils, followed by algae oils and flax oils.
Nikken Sohonsha Corporation of Japan operates in this sector, marketing products based on algae, to 17 countries in east-Asia, via 200,000 agents in these countries. This company has been operating in Eilat, Israel for the past 15 years via a subsidiary that cultivates beta-carotene rich algae. According to Professor Ben-Amotz the Japanese market is primed to purchase the Seambiotic algae.

The share holders believe that if negotiations lead to an agreement, the company can penetrate this massive and complex market. In their estimates, 80% of production will be intended for this market via Japanese companies.