Aker shifts to offering services along with supplying krill oil

© iStock / redstallion

The krill sector is rapidly diversifying, and supplier Aker BioMarine is joining that trend by emphasizing the solutions aspect of its services to its customers.

Matts Johansen, CEO of Aker, and chief scientist Nils Hoem sat down with NutraIngredients-USA at the recent SupplySide West trade show to talk about what the sector looks like now that the two major combatants in the Krill Wars—Aker and category pioneer Neptune Wellness Solutions—have formally ended their dispute

Sales still strong

First off, Johansen wanted to dispel a notion that has taken root, that being that krill oil sales have hit a soft patch. Calculating sales of dietary supplements is as much art as science, with the multiplicity of SKUs and sales channels and different sources of data. Johansen said the common methods for measuring sales do not do a good job of capturing private label sales, and that is where much of Aker’s output has gone in recent quarters. If anything, the krill oil sector continues to grow at a healthy pace in his view.

“The thing that happened is that private label came on big for krill. If you look at the IRI data, private label is not reported. We think krill has been extremely strong in this period of soft omega-3s sales,” Johansen said.

Johansen wanted to dispel another notion, that being that the advertising that supports those krill oil sales and product launches has diminished since Schiff Nutrition was purchased by Reckitt Benckiser. Schiff built its flagship MegaRed brand into the best selling omega-3s SKU of all via a massive marketing campaign that touted the bioefficiency and digestibility of krill, allowing consumers to take just one small pill a day. The prevalence of those ads in mainstream media channels has diminished, but Johansen said the issue there is somewhat akin to the measurement of sales: How you view the situation depends on where you look. There are still plenty of ad dollars supporting krill, but Johansen said that spend has been dispersed to the plethora of media platforms younger consumers are engaging with these days and so is less visible to the casual observer.

“The marketing activities have become much more targeted to the group you want to reach,” he said.

Dedicated marketing services

Much in the same way its customers have had to target their activities to reach certain groups of consumers, Johansen said Aker has evolved to target its own services to better engage with its customers and serve their interests. Aker has had to move from selling a commodity, albeit a unique one that commanded a high price, to offering a range of custom ingredients and concentrations and behaving more like a branded ingredient supplier. Along with the premium price for a superior product, customers in this sphere have come to expect a range of services to be part of the package.

“We have implement a new strategy to take the company to the next level. Rather than just being a supplier of krill oil, we have to actively engage with our customers to help them connect with their consumers. That means we need to get consumer insights, and merge that with our deep understanding of what krill can do. We have built up a new marketing department whose main task will be help our customers market and sell krill in their individual markets,” Johansen said.

“Things go so fast now. The product life cycles have become so short that the brand owners don’t have time to do some of this product development work for themselves,” he said.

"It's like if you look at the auto industry. They don't offer new individual models any more so much as they offer new platforms," Hoem said.

Better organoleptic properties

In addition to building up its marketing moxie, Aker has also dramatically improved and increased its extraction capabilities. The company, which is based in Norway and previously worked with Naturex as an extraction partner, now has its own extraction facility in Houston, TX up to full speed including new technology that allows for a cleaner oil with vastly improved organoleptic properties. By investing in the process to remove the offending salts from the oil, the company has been able to almost entirely get rid of the nasty spoiled shrimp odor that characterized the base ingredient for so many years. The new extraction equipment also allows the company to offer krill oil with higher omega-3s and phospholipid concentrations for the first time.

What’s good is still good

One thing remains the same, though: The base proposition, that krill oil is a more consumer-friendly way to deliver EPA and DHA, still holds sway.  The phospholipids in krill are more easily digested than the triglycerides and ethyl esters of competing fish oil products. Digestion difficulties is an issue that causes many consumers to consider leaving the category.

“If you ask the consumers who are familiar with omega-3s, 60% say they are looking for alternative sources. Fish burps is the No. 1 reason for that,” Hoem said.

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