Fishing for a winner: sea powders and oils new market for Kiwi company
Bonnie Flaws05:00, Jul 13 2020
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Powdered mussels and oysters are used in nutraceutical health products, says Aldo Miccio.
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Marine biotech company, New Zealand Coastal Seafoods, has built a business out of exporting the dried swim bladders of the eel-like deep water fish, ling – highly prized in Asia for its collagen content.
But Coastal Seafoods has now set its sites on exporting the powders and oils derived from green shell mussels, oysters and seaweeds to Europe and the United States, to be processed into pharmaceutical-grade health supplements, often in the form of capsules.
Executive director Aldo Miccio said the company has won a $70,000 order for its mussel powder for the valuable European nutraceutical market, which is expected to be worth US$58 billion (NZ$88b) by 2024.
The global nutraceuticals market was valued at around US$267 billion (NZ$400b) in 2019, and was expected to reach around US$404b by 2025.
When Coastal Seafoods began in 2016, Miccio, a former mayor of Nelson, and business partner Peter Win were already running a seafood trading company when they noticed the high value of frozen ling swim bladders – called maw – shipments going to Hong Kong.
The maw of New Zealand ling had higher collagen content than standard marine collagen and commanded between $400 and $500 a kilogram in Hong Kong, Miccio said.
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MARION VAN DIJK
New Zealand Coastal Seafoods exports value-added seafood products to Asia, Europe and the United States, says executive director Aldo Miccio.
"We thought that is something we can get into, add value to the product in the New Zealand market and distribute it into Hong Kong.
"Two years into that we thought we need to expand and so we raised some capital by listing on the ASX (Australian stock exchange), which has a bigger capital market and is more connected to South East Asia and Hong Kong," he said.
The company raised NZ$5.6 million, which it used to finance an upgrade to its Christchurch factory, moving into larger premises and retrofitting it with new purpose-built equipment for drying and powdering.
While ling maw was still its biggest seller, Miccio predicted this would change in the next few months as it developed the nutraceutical business.
"The bulk of stuff going to Europe and the States will be oils. The more value you can add the more profits you can generate," he said.
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New Zealand Coastal Seafoods still sells a ready-to-eat range of seafood products, alongside marine nutraceuticals.
Currently, the oil extraction process was done by a subcontractor but that would be brought in-house when new equipment arrived.
Its Christchurch factory was recently certified to export high grade pharmaceutical products to the US and Europe and Coastal Seafoods was in discussions with distributors to secure orders.
"We view ourselves now as a biotech company. Having gone from a health fast moving consumer goods' product, we are now starting to process and dry the ling and extract the collagen from it ourselves."
It also sold a ready-to-eat line of products including cooked ling, paua and dry ling maw, in addition to the powdered products, he said.
Coastal Seafoods' biggest markets were evenly split between China, Hong Kong, Australia and New Zealand but Miccio expected that to shift as it developed the nutraceutical side of the business.
In February the company bought nutraceutical ingredient developer and supplier, Kiwi Dreams International, which specialised in producing antioxidant pigment astaxanthin from algae.
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Simon Pooley and his family have a thriving mussel business in the Marlborough Sounds.
Coastal Seafoods employed about 25 people and expected its factory staff to triple over the next year as production ramped up.
The country's largest seafood company Sanford announced last year its $20 million marine extract facility would bring 30 new jobs to Marlborough, as it expanded its production of nutraceuticals.
Natural Health Products NZ chairwoman Lorraine Moser said consumer habits were starting to drive more interest in the nutraceutical market.
The organisation represents about 80 per cent of the natural products industry.
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Lorraine Moser, chairwoman of Natural Health Products NZ, says there is a global mega-trend in the popularity of collagen beauty products.
”People are more aware and want to take health into their own hands proactively instead of waiting for things to go wrong and nutraceuticals are the first line [of defence],” Moser said.
Research was identifying new compounds from marine sources and as a result there was new interest in the area.
Marine collagen had attracted particular interest from the beauty sector for use in skin products as the type of collagen found in marine species was smaller and consequently more bioavailable, she said.
“There is definitely what we call a macro-trend in collagen as an ingredient, globally.”
Other factors had contributed to this, including interest from the beauty sector, a greater consumer interest in natural health, PR and the fact that it was an industry by-product, she said.
“The tipping-point towards global commercialisation was about two-to-three years ago,” Moser said.
Cosmetics NZ executive director Garth Wyllie said marine collagen was used in the industry for hair, nail and skin conditioning and was found in a large range of products from aftershave lotions to nail polish.
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Simply Collagen owner Michelle Dods said the popularity of marine collagen was still on the rise.
The increased use of collagen, which could also be derived from animal sources, was because a number of companies had taken the lead to promote it for use as a cosmetic ingredient and as a nutraceutical. Other companies had jumped on board, he said.
However, the trend had been niche initially, with health stores generating a lot of the interest.
“Anything natural is perceived to have a better outcome for consumers and the environment and this has been driven to some degree by environmental groups and those who lean towards the natural and organic product, irrespective of what type of product it is,” Wyllie said.
Department stores had been “me too adopters”, and focused on picking up brands that contained marine collagen and marketing them, he said.
The primary customers were women aged between 25 and 50, Wyllie said.
Moser said previously collagen products had been primarily marketed for joint and connective tissue health but now beauty products dominated.
Founder of Gisborne company Simply Collagen, Michelle Dods said the popularity of marine collagen was increasing.
The client base was predominantly women but more men were becoming customers after experimenting with their partner’s products, she said.
“Younger woman are often drawn to the beauty benefits while mature customers find it supports their mobility and joint health.”
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