According to CEO Matts Johansen, the Norwegian firm’s sales revenue in China has been growing by 80 per cent each year over the past two years.
This extent of growth did not come overnight for the firm, as it has been on the ground in China since 2011.
Johansen believes that a better understanding of krill oil and the entry of more brand owners into the krill oil category has expanded the market.
“We’ve been having an office in China since 2011, so we've been investing long term in the country. But I would say that it’s only in the last two or three years where sales really started to peak in China and that's how it is when you do business in China.
“It's a long-term [commitment]…You need to launch the first brands, you need to start educating the consumers, the demand needs to come up, and then more brands jump on, and you can see that positive spiral.
“It’s the time now where more brands have launched and starting to meet the critical mass of consumption,” he said.
Some of the brands using Aker BioMarine’s krill oil include VIK and NY-O3. Both brands belong to Function (Qingdao) Marine Technology.
Anti-ageing has been noted as one of the main reasons for krill oil supplement consumption amongst the Chinese, especially against the backdrop of the government’s Healthy China 2030 initiative.
“I think different brands are positioning the benefits of krill oil differently. But I think this whole anti-ageing position is particularly interesting in China. It's something that the Chinese are very focused on.
“China’s a big market with a big middle class that can afford these types of products, so it's a key priority market for us.”
Healthy ageing research
With China’s ageing population fast rising, Johansen said that Aker BioMarine would be investing in scientific research related to ageing.
“Today, all the costs related to health care in China takes up about seven per cent of the GDP. In 2050, this is estimated to be 25 per cent of GDP.
“The government from China is starting to put in programs for preventive health, which I think are positive for our industry. With this as a background, we are investing quite heavily in studies related to anti-ageing or healthy ageing,” he said.
The scope of research ranges from krill oil’s effects on muscle strength, joint health, skin health, the nervous system, and all the way down to the cellular level.
For example, a new study in Japan is underway to investigate the effect of krill oil consumption on skin health.
The study will see the intervention group consume two grams of Aker BioMarine’s high strength krill oil marketed as Superba Boost daily for 12 weeks. Its effect on skin health would be assessed by measuring the change in trans-epidermal water loss (TEWL) from baseline, as well as its effects as compared to the placebo group.
Last November, a study funded by the firm showed that krill oil could protect dopaminergic (DA) neurons from age-related degeneration in a cell model. Findings were published in Aging (Albany NY).
Another study published last September showed that the supplementation of Swisse’s Ultiboost High Strength Deep Sea Krill Oil could improve knee pain, stiffness, and physical function. The product similarly uses Superba Boost.
Enforcing sustainability
About 70 per cent of the global krill oil market share belongs to Aker BioMarine and Johansen believes that the firm should lead and uphold sustainability standards for the industry.
“The way we started in our sustainability initiatives was by partnering with some of the NGOs and environmental groups.
“They advised us that as an industry leader which is catching about 70 per cent of all the krill in the world, we will have to take responsibility for the whole industry. This is because if someone else does something wrong, it's going to hurt us.”
To rally the other krill oil suppliers, the firm started the Association of Responsible Krill Harvesting Companies (ARK) in 2012.
Aside from Aker BioMarine, other members include Chinese krill harvesting firm Liaoning Pelagic Fisheries Corporation, China National Fisheries Corporation, Korean krill harvesting firm Jeong-Il Corporation, and Dongwon Industries Corporation.
Members are supposed to follow best practices during the krill harvesting process, such as having an independent observer on board the vessel to report on the harvesting activities and allowing scientists onboard to conduct scientific research.
Violators would have a reduced krill harvesting area that is about twenty per cent smaller in size.
Cost is one of the main hurdles in upholding sustainability, but Johansen believes that suppliers would need to take up the responsibility as regulations tighten.
“It costs to have a really sustainable product, and I think that's the biggest challenge, and the issue then is who is going to pay for it? Is it the consumers? Is it the retailers, the brands, or the ingredient manufacturers?
“I would say that for our industry, it’s companies such as us, the ingredient company, that pays for all of it. So that when we go to customers, the sustainability position that we have can help us open the door, but we don't charge any premium versus the competitors that don't do so. We give the same price.
“Also, regulations are getting tougher and I believe companies will be forced to do something about sustainability in the next few years,” Johansen said.