Solarvest - Model OMEGA-3 - Innovative Algae Technologies
The Omega-3 nutraceuticals market is substantial, $13 billion in sales (forecasted to be $15 billion by 2015) and consistent double digit growth since 2003. Americans especially are becoming more aware of the need for Omega-3 products as part of a healthy diet, and approximately 17% of US consumers supplement their diet with Omega-3. There are approximately 35 million vegetarian buyers (regular to heavy buyers) and 15 million vegans (some overlap) in the US and they get very little DHA in their diet. In addition pregnant mothers in North America are reported to have very low levels of DHA, which is an essential nutrient for growing babies.
Highlights Omega-3 Market
- Omega-3 is an essential nutrient with numerous health benefits
- Omega-3 products sell 13 billion globally, almost 7 billion in the USA alone
- 78% of Canadian Children are deficient – University of Guelph Study
- Most adults in North America are Omega-3 deficient
- DHA is the most bioavailable resulting in the highest value Omega-3 oil
The company’s near-term strategy is to launch natural high EPA DHA Omega-3 oil products. These products will be free of the toxins that can accumulate in fish, are sustainable and are produced with as little processing as possible to retain the maximum quality of the fatty acid.
This initial target is exciting and profitable as has recently been demonstrated with one Canadian east coast company that specializes in Omega-3 fish oil, recently sold for $540 million (2.8 times sales). Solarvest Inc.’s algae based products have real advantages when compared to oil processed from dwindling sea harvests. Algae production is sustainable, and sustainability is a growing concern for the market, so much so that a large food retailers are questing the environmental impact and ensuring the claims prior to stocking products.
Awareness of the benefits of Omega-3 fatty acids (O3) has reached critical mass, according to a Packaged Facts report titled “Omega-3: Global Product Trends and Opportunities.” Correspondingly, the number of consumers who are seeking out high-Omega products has increased dramatically over the past few years.
In the U.S. market, for example, 9% of grocery shoppers buy products (food or beverage) that are either naturally high in Omega-3 or have been functionally enhanced by the addition of Omega-3. The percentage of adults who take fish oil supplements has increased from 8% in 2006 to 17% in 2011. The majority of these supplements have been supplied by vitamin companies in the form of soft gelatin capsules containing fish oil, but some algae oil based products are now available - although Omega-3 oils from algae are much less common. The global consumer spending on Omega-3 food and beverage products (excluding fish), health and beauty care products (including supplements) and pet products was approximately $13 billion in 2011. Consumers need for Omega-3 products will continue growing briskly over the 2011-2015 period with upwards of $15 billion (7.9 billion in the USA alone) in spending forecasted. The public is seeking, at a substantial premium, products that promise delivery of Omega-3. Food processors are responding to this demand by supplying a greater number of Omega-3 enhanced functional foods. Many Omega-3 certified products are available such as omega-3 fortified milk and eggs. This market has grown explosively and remains far from reaching maturity.
Pet foods are now being enhanced with Omega-3 sources as well as treats and grooming products. The veterinary animal health and nutritional products market was estimated to be 21.7 billion globally and the range of Omega-3 enhanced products will in all likelihood be essentially the same as the human products available.
The wide-ranging and well-publicized health benefits of these fatty acids are primarily responsible for consumer awareness that has resulted in this robust market. Omega-3 is very well studied and it can be said that it is among the most important nutrients for physical and mental health. Essential fatty acids support cardiovascular, reproductive, immune and nervous system health. One University of Guelph study (published in the Journal of Nutrition) determined that 78% of the Canadian children studied are Omega-3 (EPA &DHA) deficient.
Research shows that Omega-3 fatty acids reduce inflammation and may help lower risk of chronic diseases such as heart disease, cancer, and arthritis. Omega-3 fatty acids are highly concentrated in the brain and appear to be important for cognitive (brain-memory and performance) and behavioral function. In fact, infants who do not get enough Omega-3 fatty acids from their mothers during pregnancy are at risk for developing vision and nerve conditions.
The majority of health benefits (especially for brain function) are specifically linked to DHA and consumption of other Omega-3 fatty acids such as alpha-linolenic acid (ALA) from flax is not as beneficial. The conversion of ALA to DHA in the body is negligible; hence the best source of Omega-3 fatty acids for brain development and cardiovascular health is DHA. In fact, University of Guelph researchers are now calling the conversion of ALA (the only Omega-3 that plants contain) to DHA dietary insignificant. In a recent study by the University of Guelph it was reported that animals (humans included) have very little capacity to convert ALA and EPA to DHA. (1) This indicates a very strong future for fish and algae products that are able to supply a substantial amount of DHA.
Vegetarian diets typically contain a very limited amount of DHA, and vegan diets typically contain no DHA. Vegetarians and vegans have substantially lower levels of DHA in their bodies, and short-term supplemental ALA has been shown to increase EPA, but not DHA levels. However, supplemental DHA, available in algae-derived oils or capsules, has been shown to increase DHA levels.
- Chemical-free extraction will result in a healthier product free of toxic solvent residues and will reduce the environmental impact of using solvents such as hexane in the oil extraction process.
- Contains high levels of DHA, the most valuable and most bioavailable Omega-3 oil.
- Will not contain the toxins often found in fish oil – heavy metals, dioxin and PCB’s.
- Sustainable, not reliant on dwindling sea harvests like krill and fish.
The Company’s current products are based on a strain of marine micro-algae and its ability to produce high levels of long-chain Omega-3 fatty acids, primarily docosahexaenoic acid (DHA). Solarvest BioEnergy Inc.’s algae based Omega-3 has significant benefits when compared to Flax oil. Algae-based Omega-3’s desirability will only increase in value as ocean fish stocks are depleted.
The Omega-3 market alone is substantial and will continue to experience rapid growth as more enhanced products are launched and promoted through grocery channels. The US egg producers were not only able to charge higher prices (average of a dollar a dozen), for Omega-3 enhanced product; they were also able to increase the consumption of eggs when growth in that market had become flat due to health (cholesterol) concerns. Omega-3 fortified milk has also experienced similar success by attracting much higher prices. With startling performance like this, the food industry is rushing to supplement a huge variety of consumables.
The Company will market in bulk to feed producers in the companion animal and animal feed markets. The product will also be sold in bulk to nutraceutical suppliers and food processors.