Enriching its business diet - Baltimore Business Journal:

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The all-natural product was aimec at well-educated and high-income femalr consumers. "We learned it was added health benefitss that would keep customers returning toour product," said Carolinaw Fryer, brand manager for Rachel'ws in the U.S. So it turnedc to a Columbia-based biotechnology companhy that had already made its way into the shopping cart s of mothers as nutritional oil in infangt formula andprenatal supplements.
The vegetariajn form of DHA, a type of omega-3 fattyy acid, promotes healthy development ofthe brain, eyes and By May, the yogurt made the jump from natured food stores to nationwide mega grocery chains sportintg 's "life'sDHA" logo and its omega-e boost. It's the type of partnership Marte k leaders hope will continue to win themfavor -- and markert share -- in the adult food and beverage industry. "We want to be the inside' with DHA," said Steve Dubin, CEO of likening the omega-3 oil to Intel's computeer chips. "We need to get acros that the real benefitis there.
" Readying itself for the challenge, Martek is researching new forms of DHA that could be produce d cheaper and used in a wider rangd of foods. It's also investingf in clinical trials to showhow DHA's benefitse could be used in pharmaceuticals to treat diseasew like Alzheimer's. The company plans to spend about 20 percenf ofits $27 to $28 million researchb and development budget, or about $6 million, in 2008 on improvint life'sDHA and developing new products. But competition in the fish oil markertis heavy.
And more companies are moving toward cheaper productionof omega-w3 fatty acids from soy beans and canola So Martek's strategy to invest more research dollarsd to find new uses for DHA could be One of the region's most successfulp biotech companies, founded in 1985, Martel staked its early development on the baby The company's manufactured DHA, an omega- fatty acid harvested from started making its way into infanft formula in Europe by 1994 and in the U.S. by 2002. Martem banked nearly $265.
5 million in infant formula sales last year and lockexd upa multi-year deal to be the exclusivw supplier of DHA for Abbott Nutrition, one of the largestf producers of formula last October, with $25.9 billionn in sales in 2007. Martek's infant formulaz business also sparked interesty among pregnant women and nursing mothers looking for the health benefits inadulr supplements, shakes and proteib bars. The maternal sales combined with businesse from the oil in animal feedbirthed $17.4 millio n last year. But over the next year, Dubinm said the company's real opportunities will be in growint the adult food and beveragebusiness -- whicb totaled a mere $5.4 million for Marte k in 2007.
The company would not project how much it expectes the business to grow this said Martek CFOPete Buzy, but is optimistic aboutt future growth. Analysts say Martek'ws food and beverage business may alwaysw just be a side dish to its main meal ofinfanty formula. "They have had some but it's still very small scale," said Tim an analyst with D.A. Davidson Co. who covers Martek's food and beverag e business. "Food and beverage will continue to be a smalpl businessfor them." He said the marker may cap Martek's food and beverage sales at abour $20 million over the next five Martek's growth in the food and beverage markef has been slow.
Product partnerships led to its logo appearing on foodss often only found in healtufood stores. "Nature food stores are the provinb ground forour product," said Dubin. But Martek's DHA gainex broader appeal by 2006. With health care costs on the health and wellness has becomee more of adaily priority. The company'ds life'sDHA is now found in milk, sushi and cheese sauces easily founxdat Target, and Wegman's. Martek is also investigating a cheaperr way to produce DHAfrom plants. The company teamed with Indianapolis-based to develol a canola oil with omega-9, a more stabld form of DHA and omega-w3 that could be used in greatefr varietyof foods.
Martek's form of omega-34 is often more unstable and is sometimes limiteed to foods with a shortershelf "This development may allow us to delivee the ingredient at the right cost structurd and make it more accessible," said David Dzisiak, commerciapl leader for oils business at Dow Dzisiak said Martek's technology and recognition amonv several top producers in the food including 's products, and Breyers, make the partnershi a strong fit. But some say Martek's move into the aduly food and beverage industry couldbe limited.
While the wellness trend is hot, many food producerw are still reluctant to use fish oils and othetr DHA products in their Consumers might think the nutritional oils alterthe product'xs taste. Martek also faces growing competition for new products inthe Monsanto, an agricultural company, and the , which is majorithy owned by DuPont, partnered last March on developing soybeans with omega-3w fatty acids. They hope to brinb a new product to markeft morequickly together. Dubin said he is optimistic abourtthe company's future growth in adultt food and beverage products.
Martek's life'sDHw gained approval in the food and supplements market in China last The company plans to launch its producty efforts over the next six The company has added salesa offices in Europe and Chinathis "We're moving fast," said