Are Astaxanthin Suppliers Overcoming Supply Challenges?

March 14, 2014

And is there enough consumer demand to meet the new supply?

Microalgae-derived astaxanthin is, historically, a challenging ingredient to produce. And although astaxanthin continues to build up more a consumer following, thanks to its antioxidant benefits as well as endorsements by Dr. Mercola on The Dr. Oz show, astaxanthin suppliers in years past have struggled to meet demand with supply. Production also is generally expensive.

“Natural algae astaxanthin is very difficult to grow,” says Bob Capelli, vice president of sales for astaxanthin supplier Cyanotech (Kailua-Kona, HI). “We’ve seen at least 10 companies try it and fail over the last decade-some that have been in the algae business for many years, and others like Yamaha Motors that are very well funded but still couldn’t find success. Plus, it is quite capital intensive for current suppliers who know how to grow it to expand rapidly.”

But the tide is changing.

Numerous astaxanthin suppliers recently announced they have increased their supply capacity for Haematococcus pluvialis microalgae-derived astaxanthin. Last summer, Fuji Health Science (Burlington, NJ) reported plans to build a new manufacturing facility in Washington that will double its AstaReal production by 2015. In February, Fenchem Biotek (Chino, CA) announced it is doubling production of its AstaMarin astaxanthin. And just this month, Israel-based Algatechnologies and Valensa International (Orlando, FL) said they are ramping up capacity.

Algatechnologies is planning to double its AstaPure astaxanthin production by investing $20 million in its facility in Israel. “The expansion will be executed in phases, with a substantial part to be completed in 2014,” said Hagai Stadler, Algatech’s CEO, in the press announcement. “Part of the new plant is dedicated specifically for production of new microalgae products, based on our expertise and capabilities in the microalgae cultivation process. Innovative technologies will be merged into the current process to increase the facility yield and to reduce costs.”

Valensa, meanwhile, is investing financially in its microalgae supplier, California-based Contract Biotics. Contract Biotics will construct an additional six acres of algae production units, which will more than triple its current biomass production-which will increase supply to Valensa.

“The market supply of astaxanthin continues to lag behind demand,” said Rudi E. Moerck, PhD, Valensa’s president and CEO, in a press release.

But is there enough consumer demand to meet the new supply? Are enough consumers currently buying in to astaxanthin? Astaxanthin suppliers say yes.

“Everyone involved thinks that astaxanthin’s going to become a huge successful ingredient over time because it just seems to work so well for such a high percentage of the people that try it,” Capelli says. “A lot of products you take you take on faith that they’re doing something for you, but with astaxanthin, most people, within a month of taking it, can feel the difference.”

He says that the recent ramp-up in supply will help meet the current demand, as opposed to years past. “It’s starting to level off, and I’ve felt over the last few months in particular that some companies weren’t getting as much as they needed-I think a lot of them are getting what they need now. It’s not like it was two or three years ago when there was definitely more demand out there than supply. I do think it’s leveling off.”

 

Read about how microalgae astaxanthin suppliers have formed a new association.

 

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine jennifer.grebow@ubm.com