“Roughly one million tons of crude fish oil are produced annually and only 15% to 20% are used for human consumption,” Ludger Eilers, director of human nutrition for BASF Nutrition & Health, North America, told NutraIngredients-USA. "The majority of the remainder is used as fish feed, especially for salmon farming. This is changing as fish farmers become more aware of alternatives to fish oil like rapeseed oil. Hence, marine omega-3 has a sufficient supply today and in the near future.
"Being focused on highest concentrates, new formulations and even chemically optimized Omega-3 products we do not see the necessity in being backwards-integrated. BASF/Pronova manages its fish oil supply strategically with long-term supply partnerships with partners from several regions."
Rationalizing production
Recently the German chemical giant sold one of its omega-3 production plants in a move to put its manufacturing capacity more in line with where it sees the market going. It sold a facility located in Brattvåg, Norway to New Jersey-based company Marine Ingredients. That facility, which was acquired as part of the 2010 Cognis acquisition, was set up to process low to medium fish oil concentrations. BASF also has another plant in Sandefjord, Norway that came with the 2013 Pronova acquisition that was optimized to produce concentrates all the way up to the pharmaceutical level, which stands at 90%. In addition, BASF had acquired another, high-capability facility in the UK as part of the Equateq acquisition in 2012.
“The high concentrates segment is characterized by innovation, product differentiation, regulatory know how and other entry barriers. In this domain, BASF can most effectively realize synergies via its global presence, significant know how in manufacturing and a long standing expertise in regulatory affairs as well as in R&D. The Brattvåg site is focused on medium concentrated omega-3 production,” Eilers said.
Bright future for concentrates
Eilers said that despite the recent weakness of the market in the United States, BASF sees a bright future for the ingredient, especially at the high end of the market.
“We see a very bright future for omega-3, specifically in the high concentrate area, thanks to the high demand from health conscious consumers. In 2013, the global market for Omega-3 ingredients amounted to $2.3 billion and is expected to grow significantly fueled by rising popularity of nutraceuticals in industrial countries and an expanding middle class in emerging economies,” he said.
Eilers said part of the push toward higher concentrates concerns the large number of positive studies that continue to accrue. This is something that many other observers of the sector cite, as if the research realm were a numbers game, i.e. more is better. But what really matters is what those studies say and how they are reported in the mainstream media, and in that the omega 3s sector has taken some serious hits in the past year. But the Global Organization for EPA and DHA Fatty Acids (GOED) has fought back with a pilot ad campaign that ran in North Carolina that from preliminary data has had a positive uptick on sales. Eilers said a planned rollout of the campaign in other markets will have a positive effect on the market as a whole.
“The GOED campaign reminds us how important omega-3s are. The totality of omega-3 science is solid and compelling and consumer awareness is rising. It's up to the industry to remind consumers why omega-3s are a smart way to boost people’s overall health,” he said.