The microalgae specialist, which also makes spirulina - a blue/green nutrient packed with protein, carotenoids, B-Vitamins, GLA and essential amino acids - posted a 21.8 percent rise in net income to $486,000 on revenues up 54.3 percent to $5.95m in the three months to June 30.
Astaxanthin sales surge 97 percent
The sharp rise was primarily due to a surge in sales of astaxanthin (accounting for 63 percent of sales) which were up 97 percent in the quarter, vice president sales and marketing Bob Capelli told NutraIngredients-USA.
The sparkling sales figures were the "result of a large increase in demand", said Capelli. "Several famous doctors and opinion leaders are raving about how beneficial astaxanthin is in the media, and consumers are finally starting to realize just how great a supplement it really is.
"The TV spot in January with Dr Joseph Mercola on the Dr Oz show extolling astaxanthin’s benefits in front of a huge backdrop calling Astaxanthin 'The #1 Supplement You’ve Never Heard of that You Should Be Taking' started a movement which is still going strong.
"We’ve seen no decrease in demand in the seven months since the Dr Oz show, as usually happens a short while after some big PR hits."
Spirulina sales up 12 percent
Spirulina sales (accounting for 37 percent of sales) increased by a more modest 12 percent in the quarter.
Chief executive Brent Bailey said: “The significant increases in packaged product sales are attributed to our focus on the growing consumer market for health and nutrition supplement products, combined with recent media reports regarding the benefits of both astaxanthin and spirulina.”
While gross margins had dipped due to lower Spirulina production over the last three quarters, they would improve as the firm sold its higher cost inventory and production levels returned to normal, predicted Bailey.
Functional foods
Astaxanthin has primarily been used in the feed industry to make farmed salmon a richer pink color. However, it has recently gained momentum in the human dietary supplements market and is also being promoted as a functional food ingredient following several GRAS applications.
However, the functional food and beverage market for astaxanthin was "still in the early development stage", cautioned Capelli.
"Some companies have shown some interest, but no significant products have launched yet. Spirulina, on the other hand, has much better acceptance, with several large and many small companies with products already in the market, particularly in the 'green drink' category."
While rival Fuji has recently increased astaxanthin production capacity in Sweden, it recently closed its facility in Maui, Hawaii, claiming the Swedish operation was more scalable. Fellow producer Yahama Motors has also closed its production facility in Japan citing “difficulties in achieving profitability” and “limited market size and future growth prospects”.
Cyanotech has 17 structure/function claims associated with its BioAstin astaxanthin covering everything from joint, skin and eye health to healthy immune function, healthy tendons, UV protection for the skin, anti-aging, increased energy, recovery after exercise and a healthy cardiovascular system.
For the 12 months to June 30, 2011, Cyanotech posted net profits of $1.82m (figure includes a $552,000 non-cash tax) on sales up 21.5 percent to $18.9m.