LycoRed intent on bigger share of carotenoids market

By Dominique Patton

- Last updated on GMT

Related tags Carotenoids Lycopene

Fresh from the acquisition of Buckton Scott in the US, Israel's
LycoRed is reorganizing its subsidiaries to position itself as a
major supplier of natural carotenoids.

Already a leader in natural lycopene extracted from tomatoes, LycoRed has also started producing beta-carotene derived from fungi and zeaxanthin from berries that it imports to its extraction plant in Israel.

"We also have the know-how for lutein but will probably produce part of it and contract out the other part,"​ Morris Zelkha, president and chief executive of group, told

"Our mission is to be a leader in the natural carotenoids business offering each of the carotenoids."

This will make LycoRed the first to supply all of the carotenoids in natural form, and the additional marketing capabilities acquired with the Buckton Scott business will help it execute this strategy.

The multiple product offering will have advantages for both food and supplement makers.

"This means that in one beadlet you can have all the carotenoids. And there will also be space-saving opportunities,"​ said Zelkha, an issue that particularly concerns US supplement makers, and especially multivitamins.

"Where today you might use 5 per cent lycopene, 5 per cent beta-carotene and so on, we will offer a highly concentrated formula of 25 per cent carotenoids. So instead of buying 100 tons of different carotenoids, you could buy 35 tons of the combination, giving you space to add other ingredients to a supplement,"​ he explained.

The leading supplier of natural lycopene, the group will still face competition from synthetic carotenoids, often two to three times cheaper.

It has heavily marketed the results of studies demonstrating that its natural lycopene has advantages over the synthetic form, owing to the other tomato compounds that act in synergy with lycopene to fight free radicals.

But studies on natural versus synthetic beta-carotene have not yet revealed major differences in health benefits. And awareness of most of the carotenoids as health ingredients is still low in much of Europe.

However LycoRed will benefit from its expanded carotenoids line to increase its range of 'natural' colours. It already offers tomato red colour in Japan and will shortly gain FDA approval for the US. The new acquisition in the US will help it market this product to food makers.

Zelkha says colours are a major growth area for the firm. While the biggest volume of LycoRed's sales are in lycopene for dietary supplements and some foods, higher revenue is made on its tomato red colorant because of the formulation and technical services required to market it.

Strong demand from Japan for this colour helped boost sales growth over the last year. Parent company Makhteshim Agan reported last month that it had seen an increase of 17.6 per cent in sales of its non-agro products (LycoRed and a hydrogen peroxide and other business) to $151.7 million for the first nine months of the year. This growth "mainly stemmed from an increase in LycoRed's sales," it said.

The company is also seeing growth from studies showing the skincare benefits of lycopene.

The new organisation, whose 140 employees offer raw material sourcing and formulation expertise at Buckton Scott (now LycoRed Corp) and microencapsulation technology at Biodar (now LycoRed Bio), will help it continue developing new applications for the carotenoids range.

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