The extra capacity should be fully on line in six months, said chief executive Brent Bailey. “With our astaxanthin sales almost doubling since January, we have ramped up production and are realizing record yields month after month."
Cyanotech’s sales of astaxanthin, which hit the headlines earlier this year following rave reviews on Dr Oz and Oprah, surged 97% in the first quarter with momentum following the PR boost appearing to have been sustained, said Bailey.
“We’re seeing demand continue to build nine months after the first Dr. Oz segment initially aired. We’ve been able to benefit from this recognition because Cyanotech has the world’s largest production capacity and we had excellent inventory levels coming into this period of increased demand in January."
The competition
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 dietary supplements market and is also being promoted as a functional food ingredient following several GRAS applications.
While rival Fuji/BioReal has recently increased astaxanthin production capacity in Sweden (using photo bioreactors), 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”.
However, Algatechnologies – which harvests microalgae in a closed photo bioreactor system in the desert of southern Israel - recently announced a major expansion project.
Speaking to NutraIngredients-USA at its facility in June, director of marketing and sales Efrat Kat said: “I think it is perfect timing for larger companies to start talking about astaxanthin because I don't know of many products that are so new to the market but have the regulatory status and technical support of astaxanthin.”
Structure/function claims
Cyanotech produces its BioAstin astaxanthin from Haematococcus microalgae, which is grown in closed culture systems and then put through a 'reddening' cycle in open culture ponds (pictured).
A potent antioxidant, astaxanthin is claimed to have a wide range of benefits spanning 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.