Valensa moves to meet astaxanthin demand with new algae supply agreement

By Hank Schultz

- Last updated on GMT

Related tags: Supply and demand

Valensa moves to meet astaxanthin demand with new algae supply agreement
The ongoing demand for astaxanthin has led category formulation leader Valensa to conclude a supply arrangement with algae producer Contract Biotics. But capitalizing on that demand curve will mean using astaxanthin as a component in multi-ingredient formulas, said Valensa’s CEO Rudi Moerck.

Astaxanthin got a huge boost in the marketplace several years ago when a Dr. Oz Show segment featured the ingredient, in which Dr Joseph Mercola described the potent red antioxidant as the “number one supplement you’ve never heard of that you should be taking,”​, astaxanthin sales “skyrocketed”.

Astaxanthin suppliers reported a tenfold demand spike following that show. Demand has remained high​, with the current global market size of natural astaxanthin for the human market is estimated to be about $200 million. This is predicted to hit $700 million by 2017.

 “I do see continuing demand mainly because of Valensa’s activity in the marketplace making formulated products that are conditions specific and contain astaxanthin as a component. As for one ingredient products, we believe that is far more susceptible to a declining demand. Single ingredient supplements just lead to high pill count for the consumer.  And there may be some downward pressure on sales on those,”​ Moerck told NutraIngredinets-USA.

California-based production

Contract Biotics is a California based wholesale producer of a wide variety of high quality algae biomass and related biological compounds. The company has corporate officies in La Jolla, while its production facility is located near San Diego where it raises its algae in a combined bioreactor-raceway pond system.

While there are a number of different approaches to algae production, Moerck said most companies are settling on a common approach.

“Most people nowadays are using a closed system for the green phase of growing the algae and then the question becomes how do you finish it,”​ Moerck said.

The plants have to be stressed in the reddening phase where the astaxanthin is produced, Moerck said.  This requires lots of sunlight with almost no nutrients for the plants, a situation that helps keep in check the main drawback of open ponds, that being the possibility of contamination.

“In the stress phase you are not having a lot of food available,”​ Moerck said.

Contract Biotics’ facility is located inland, away from the fogs that can drape the Southern California coast for weeks at a time, Moerck said.

“They have ideal conditions as far as temperature and humidity and they are using a local strain of Haematococcus that is adapted to that environment,”​ Moerck said.

“Many startups significantly underestimate the requirements and cost of QA/QC and Good Manufacturing Practices.  Valensa’s expertise and capabilities in this area have been invaluable as it allows us to focus on what we do best, which is to grow tons of algae,”​ said Ken Reynolds, CEO of Contract Biotics.

Moerck said Valensa is approached “almost every week”​ by a potential algae supply partner that started in the biofuels sector and is now seeking to make the jump into nutraceuticals.

“We think that only about 30% or less of these projects will succeed,”​ Moerck said.

Shoring up supply

In addition to Contract Biotics, Valensa buys astaxanthin from parent company EID Parry in India as well as other suppliers.  Eustis, FL-based Valensa has been moving aggressively to increase its supply, which has been a bottleneck in the astaxanthin sector, Moerck said.

The company is also filling in the supply hole left by the collapse of a relationship with Hawaii-based algae producer Cyanotech.  That rift led the filing of a couple of lawsuits​ that are ongoing and that Moerck said Valensa is seeking to settle.

In addition to shoring up its supply portfolio, Valensa is also increasing its formulation capabilities, having just concluded a deal with Algaeon Inc.​ to bring additional algae-based nutraceuticals to market.

Valensa’s ingredient and formulation portfolio already includes such algae-based products as Zanthin brand Astaxanthin, Parry Organic Spirulina, SpiruZan ​(astaxanthin + spirulina) tablets and phycocyanin-coated Pur-Blue SpiruZan.

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