Martek confident for DHA in foods, despite slow sales

By Lorraine Heller

- Last updated on GMT

Related tags Docosahexaenoic acid Eicosapentaenoic acid

The company yesterday posted its performance for the three months to July 31 2008, which revealed a 12 percent increase in product sales to $83.5m compared to the same period last year.

Sales growth was, as always, driven by demand from the infant formula sector, which is Martek’s core business.

DHA, or docosahexaenoic acid, along with EPA, or eicosapentaenoic acid, are recognized as the most bioavailable sources of omega-3 for humans. It has been found to help cognitive function and development, particularly in infants, which has resulted in a growing market for the ingredient in infant formula.

At present, the main source of DHA – as well as EPA – is fish oil. However, a vegetarian source is favored for use in products designed for infants, which has driven demand for Martek’s DHA from microalgae.

Martek said sales to its infant formula customers in the third quarter had increased 12 percent since last year, to reach almost $75m.

More potential for DHA?

Beyond growing its infant formula customer base, Martek has also invested heavily into expanding its ingredient into other food and beverage categories. This remains an emerging area for the company’s business, but one that holds significant potential.

In the third quarter this year, Martek spent $6.3m on research and development efforts, just slightly below the $6.6m it forked out last year.

However, sales of its DHA ingredient to the non-infant formula market remained below expectations this quarter, which the firm put down to “seasonality and the current challenging economic environment”.

One of the major obstacles for food manufacturers looking to incorporate DHA in their products is price – microalgae-sourced DHA is significantly more expensive than fish-sourced omega-3. And recent technological developments have meant that food manufacturers can increasingly add fish-derived omega-3 to their products, without the fishy taste.

Martek said that overall sales of its branded DHA ingredient to the non-infant formula market, which includes supplements, foods and beverages, and animal feeds, were $7.5m during the third quarter. Although this was a 12 percent increase over the same period last year, it was below the $9m-$10m expectation.

Nevertheless, the company remains optimistic going forward, forecasting that non-infant formula nutritional product revenues will reach between $31m and $33m for the full fiscal year 2008, which would represent an increase of 40 percent over fiscal 2007.

Expanding DHA sources

Martek has also recently joined forces with Dow AgroSciences, a major agricultural firm, to develop a new generation of DHA ingredients.

The two companies plan to develop a DHA oil from canola, which they claim could lead to the launch of a new, cost effective source of the ingredient.

This could be a tremendous boon to the market, as currently only shorter chain omega-3 ALA (alpha-linolenic acid) can be obtained from crops, such as flax. While this has its nutritional uses, it is less bioavailable for humans, and is not included in the US health claims covering DHA and EPA and heart health.

As well as its benefits for cognitive health and infant development, DHA has also been well researched for its role in supporting other health aspects, including eye health, joint health and heart health.

Martek spokesperson Cassie France-Kelly told in May that Dow already has a canola​ seed with omega-9, which is used as the basis for a line of healthy oils. The cross-company team will work to apply an omega-3 producing gene from Martek's microalgae to this seed.

According to France-Kelly, the plant would be genetically-modified, but the resulting oil would contain no genetically modified proteins.

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