Neptune’s new CEO: ‘Science will drive the next wave of change in the omega-3 market’
Hamilton, a 30 year industry veteran and immediate past chairman of the Board of Directors of the Council for Responsible Nutrition (CRN), told us he watched Neptune over the years and has been particularly impressed by the strategic steps they have taken in recent history to enhance their business model and put in place the necessary ingredients for success.
“Neptune has a great story by being the pioneers in the krill business,” he said. “The company’s intellectual property estate is powerful. I’ve seen a lot of businesses and very few of them have this kind of IP estate and the science.”
The company’s IP was strengthened by the resolution of a long-running patent dispute with other krill suppliers, all of which agreed to licensing deals with Neptune.
Production and products
Hamilton, who started officially on February 2, takes over a company that has emerged strongly after a challenging period. As noted during its recent financials, Neptune achieved the150-ton annual production level at its rebuilt extraction facility in Sherbrooke, Quebec. That facility was destroyed in an explosion and subsequent fire in early November, 2012.
“That was a period of time that few experience,” said Hamilton. “The team did an amazing job during those times by maintaining continuity for the customers.”
In addition to its state-of-the-art facility being up and running, the company has expanded its portfolio over the past year to offer its NKO krill oil in combination products targeting specific health conditions. The product targeting cardiovascular support is called NKOBeat, and includes Coenzyme Q10 (CoQ10) with its NKO krill oil. Internal data showed that CoQ10 had 25 times better absorption rate when compared to a generic CoQ10, he said.
The joint health product, NKOFlex, includes vitamin D with the NKO and other ingredients. The combination results in up to two times increased digestion of vitamin D2, according to the company.
The third product, NKOFocus, is positioned to support brain and vision health. The product includes thiamine and lutein, said Timperio. In this instance, lutein’s absorption is reportedly improved by as much as eight times.
“The challenge in B2B is to help customers and marketers to be successful,” he said. “There’s really interesting science for the combination products in terms of applications and stability, and you’ll see more of those combination products from us in future.”
Finished combination products should launch in the US in the next six months, said Hamilton, and the company is also looking further afield for opportunities.
Neptune recently received MAPA approval for Brazil, which allows it to export krill oil in bulk for the Brazilian market. “Brazil is an important market for us as it is the leading South American region for dietary supplements,” added Sabrina Di Blasio, marketing director, Neptune Technologies & Bioressources Inc. The company is also going through the registration process in other LATAM countries and in Asia.
Hamilton has a ‘special interest’ in omega-3s, having been President of DSM Nutritional Products USA, Inc. during the company’s many acquisitions in the fish oil sector. “For the omega-3 category we’re seeing a globalization of the business,” he said. “Some of the big brands are taking success in the US and applying it elsewhere to create winning conditions.”
While the omega-3 industry as a whole has experienced a decline in recent years on the back of a lack of positive media, with the bulk anchovy fish oil hit hardest, krill is among the sub-sectors of omega-3 to post growth: Data from Nielsen via GOED indicated a $27.4 million drop in value sales for anchovy from 2012-2013, but krill recorded an $18.7 million increase in value sales in 2012-2013.
A consortium of fish oil suppliers and GOED have been working on a new campaign to remind people about the importance of taking their omega-3s, with a test campaign in Charlotte, NC working wonders in that local market.
Negative media, or a lack of positive media, is not limited to omega-3s, however, as the recent New York Attorney General’s investigation into herbal products has shown.
“The negative media is a challenge for the industry,” said Hamilton, but the industry response is also an issue. “The industry defends the legislation aggressively, but there are companies out there who do not obey the law or the spirit of the legislation. There are adulterated products, and they affect the underlying credibility of the industry.
Which is why the focus must be on the science, he said. “Where science leads, the industry will follow.
“If you look at omega-3s the science is overwhelming. And if you look at the science of omega-3s then you have to look at krill because the science there is strong. And if you look at krill then you have to look at Neptune, because we were the pioneers in krill oil and we have the IP estate,” said Hamilton.
The science will also “drive the next wave of change in the omega-3 market” from a financial perspective, he said.
Following multiple acquisitions in the omega-3 space by the likes of DSM and BASF, does Hamilton expect further consolidation in the market? “I think the big multinationals have already made their moves,” he said. “Where there could be further financial movement is from the pharmaceutical side.”
Neptune is already involved in that game, with its stake in Acasti Pharma Inc. Acasti recently announced successful Phase II trial results for its CaPre for improvements in triglycerides and non-HDL-C. CaPre is a purified high omega-3 phospholipid concentrate derived from Neptune krill oil.
“The omega-3 space and krill specifically has an incredibly intriguing future,” hesaid.