Raw material sources for the long-chain omega-3 market: Trends and sustainability. Part 2.
By Anthony P. Bimbo
Editor's note: This paper is an update of a presentation delivered at the 99th AOCS Annual Meeting & Expo in Seattle, Washington, USA, May 19, 2008. The first part of this article appeared in the March 2009 issue of inform.
Nutraceutical (omega-3) Fish Oils
A recent report from the Global Organization for EPA and DHA (GOED 2008, where EPA is eicosapentaenoic acid and DHA is docosahexaenoic acid) indicates that the omega-3 market has reached $13 billion. Actually, about $180 million covers raw materials, $1.28 billion covers refined oils and concentrates, and $13.1 billion covers consumer products. The structure of the omega-3 fish oil market is somewhat complex, with many companies and many joint ventures and/or strategic alliances involved at various layers within the industry. This structure is shown in Figure 1 (Bimbo 2007).
The base of the market is the producer of crude fish oil. Every producer wants to be involved in this market, seduced by the $13 billion pie, but only a few have the patience, stamina, and financial support to pursue it. Most of the nutraceutical fish oil producers are large chemical or nutritional oil companies that have installed expensive processing facilities to produce a final food- or pharmaceutical-grade fish oil. Unfortunately their plants are relatively small and not suited for removal of the macro impurities in the crude oil. That job is left to the semi-refined and refined fish oil producers who generally are capable of degumming; alkali refining; carbon, silica, and clay bleaching; and possibly winterizing. There is some overlap between the semi-refiner and the refiner, and there might also be some overlap between the refiner and the nutraceutical fish oil producer. There are also strategic alliances and joint ventures along the way. Companies in the middle of the chain want to lock up the basic raw materials at the bottom of the chain. Generally the finishing steps in the process involve the removal of the micro impurities and contaminants as well as the concentration or purification of the omega-3 fatty acids. All of these processing steps produce a large volume of by-products, which must be disposed of or utilized.
figures 2 and Figure 3 outline the processing steps involved in the production of these types of oils. These previously appeared in a 1998 INFORM article (Bimbo 1998) but still have relevance. There might be other processing steps, for example enzymatic processes, but these are generally proprietary and not disclosed.
Other Sources of omega-3 Oils
In addition to the traditional sources of the omega-3-desirable fish oils, there are other sources either just entering the marketplace or in the pipeline. These other sources are much more expensive than fish oil but are now of interest as the price of fish oil skyrocketed during 2006-2008 and then retreated. Figure 4 shows the historic run-up in the price of crude fish oil C&F [cost and freight] Rotterdam.
First of all, to put things into perspective, the fish oil price peak in 1998 during the major El Niño event was unprecedented. Before that, fish oil was always the least expensive commodity oil available because it required much more processing to make it similar to vegetable oils. The El Niño event reduced global production by almost 50%, which pushed the price up, but the price returned to traditional levels after El Niño. The relatively rapid rise in prices since about 2000 coincides with aquaculture growth and has provided an incentive for consumers of fish oil across all markets to pursue other sources. The rise in price over the last few years probably reflects greater interest from the omega-3 market, plus the general run-up and decline in the price of all commodities. These high prices have also provided incentives for companies to produce fish oils and other marine oils from additional sources that had previously been burned or simply discarded.
About 33 million metric tons (MMT) of fish and by-products go to fishmeal and oil production, but only about 17 MMT are in the "desirable" category from an omega-3 perspective. If we assume an average 5% fish oil yield, then 33 MMT of fish would yield about 1.65 MMT of fish oil, and 17 MMT of "desirable" fish would yield about 850,000 metric tons (MT) of "desirable" fish oil. But the global production of all fish oil averages about 1 MMT per year, so potentially an additional 650,000 MT of fish oil could be produced that is presently probably being discarded along with the by-products. Alaska, for example, catches about 53% of the US catch, or about 4.4 MMT of fish. Since most of the fish are lean fish, we might assume that 46% would be waste and that waste might yield 2% fish oil. In that scenario, Alaska potentially could produce 40.5 thousand MT of fish oil. Current data for Alaska are somewhat confusing, but it shows that the state produces somewhere between 15,000 and 30,000 MT. Most of this oil would come from pollock and wild Alaska salmon, oils that are not in the "desirable" category at this time but might be if selected batches could be isolated.
Another example is tuna. About 5.4 MMT of various tuna species are landed globally each year. If we assume 50% waste and a 1% oil yield, there is a potential for about 27,000 MT of a very "desirable" tuna oil. Actual production figures for tuna oil are not generally available, but undisclosed sources put the figure at not more than 5,000-7,500 MT per year. The oil is generally burned or used for industrial purposes (water-proofing wooden fishing boats, for example). The general interest in tuna oil and the markedly higher fish oil prices have generated interest in recovering this oil.
One of the new products on the market is krill oil. This oil is different from the traditional fish oils because it contains three active components: omega-3 fatty acids, phospholipids, and astaxanthin. Krill are the main food for a variety of sea creatures including whales, seals, sea birds, penguins, squid, and fish. Nicol and Endo (1997) estimated that these predators consume between 150 and 300 MMT per year. The Antarctic krill are protected by treaty, and quotas have been established for their capture. Because of the general interest in omega-3 fatty acids, a number of new modern capture vessels are being or have been constructed to capture them. Krill decompose very quickly, so the current thinking is either to dry them aboard the vessel and bring the powder back to a land-based plant for oil extraction or to enzymatically digest the krill and then separate the oil. The current Convention on the Conservation of Antarctic Marine Living Resources treaty allows 6.55 MMT to be caught in the major statistical areas (www.ccamlr.org/pu/e/e_pubs/cm/07-08/toc.htm ), but the average catch over the last 10 years has been about 120,000 MT (FAO, 2009). Krill have a very low oil content. If we assume that they contain 3% oil, and all the current krill catch is processed to produce oil, then about 3,600 MT of krill oil are potentially available. If the entire treaty volume were to be caught (6.55 MMT) and processed to make the oil, then there would be an unrealistic potential for about 197,000 MT of krill oil. This is unrealistic because that level of catch would probably trigger a major environmentalist outcry and never be permitted. The Antarctic krill fishery has just entered the Marine Stewardship Council certification process, so it will be interesting to see how this progresses.
Much has been written about the single-cell oils (SCO; marine algae, fungi, yeasts). Many groups have developed banks of cultures of organisms that are capable of producing cells with a high oil content and a very high DHA content. The advantages of these oils include simple fatty acid profiles, freedom from environmental issues, and a high concentration of the specific fatty acid wanted. The disadvantages include high cost, limited production capacity, and potential adverse public perception (Wynn and Ratledge, 2007). SCO that are rich in DHA and arachidonic acid have been produced. In 2008, a European company announced the availability of a single-cell algal oil with both EPA and DHA in a ratio of about 3.6 DHA to 1 EPA, almost the same as tuna oil. Work also continues in other areas, and perhaps a genetically modified (GM) yeast might one day produce an EPA-rich SCO product. Ratledge (2004) estimated that 650 MT of SCO was produced in 2003, so today the figure might be closer to 2 thousand MT. Since the oil must be extracted from the biomass with hexane, other lipid compounds are also extracted as well, and the oil must be refined. There is also the issue of disposal of the spent biomass, and today several companies are selling it for pet foods, designer egg (hen) feeds, and aquaculture feeds.
A potential spinoff from the biofuels development work going on around the world is the production of algal oils. There are many companies and institutions evaluating different marine algae. The effort is directed toward finding organisms that will produce high levels of oil, which will increase yields and improve the economics. It is not out of the realm of possibility that someone will come across an organism that produces high levels of omega-3 fatty acids and perhaps more EPA than DHA.
GM oilseeds, another potential source of omega-3 fatty acids, are on the horizon and perhaps 3-5 years away. Companies such as Monsanto (high stearidonic acid soybean oil), Syngenta AG, DuPont, Dow Agrosciences, Arcadia Biosciences Inc. (high g-linolenic acid safflower oil), Bayer Crop Science, and BASF (canola and rapeseed oils) are working in this area. The main issue with these oils is whether they will be accepted in food products and whether foods containing them must be labeled as GMO (GM organism) products.
Look for part three of this article in the May issue of inform.
Anthony P. Bimbo is a consultant on marine oils, working out of Kilmarnock, Virginia, USA. He may be contacted by e-mail at email@example.com.
For further reading
GOED 2008. Growth in the health market for fish oil. Paper presented to the 2008 Annual Meeting of IFFO (International Fishmeal and Fish Oil Organisation), San Diego California, USA.
Bimbo, Anthony P., Processing of marine oils, in Long-Chain Omega-3 Specialty Oils, edited by Harald Breivik, The Oily Press, PJ Barnes & Associates, Bridgwater, England, 2007.
Bimbo, Anthony P., Guidelines for characterizing food-grade fish oil, INFORM 9:473-481, 1998.
Oil World Annuals 1980-2007, ed. Thomas Mielke, ISTA Mielke GmbH, Hamburg, Germany. Internet: www.oilworld.de .
Nicol, Stephen, and Yoshinari Endo. Krill fisheries of the world. FAO Technical Paper 367, Food and Agriculture Organization of the United Nations, Rome, 1997.
FAO 2009. FAO Fisheries Department, Fishery Information, Data and Statistics Unit. FishStat Plus: Universal software for fishery statistical time series, Version 2.3, 2000.
Wynn, James P., and Colin Ratledge, Microbial oils: production, processing and markets for specialty long-chain omega-3 polyunsaturated fatty acids, in Ratledge, C., Single cell oils-A coming of age, Lipid Technology 16:34-39, 2004.