Israel: The Nutraceutical Jewel of the Middle East

By Rebecca Wright | July 1, 2006

From beautiful coastal cities, to picturesque desert landscapes, to lush vegetation, the country of Israel plays host to many climates and therefore a variety food offerings and export opportunities. Currently, according to the Israel Export & International Cooperation Institute, Israel's food and beverage industry is exporting $425 million worth of products a year, 50% of which is going to European Union nations, 15% to Eastern Europe and EFTA countries, 18% to the U.S., 11% to the Far East, 2% to South America and 3% to the rest of the world.

Citrus produce used to be the hallmark for the Israeli food industry, but over the last several years the country has evolved into a powerful force in the export of everything from fine wines to exotic delicacies to health foods. This in turn has spurred some interesting developments in functional foods, beverages and supplements.

Within the Israeli market itself, vitamins and dietary supplements are currently leading the OTC (over-the-counter) healthcare segment, growing 7% in 2004, according to Euromonitor International. "Vitamins and dietary supplements are relatively new to Israel's OTC healthcare market," Euromonitor claims. "However, in recent years these products have become the most interesting and dynamic." Given the recent success of the pharmaceutical industry in Israel via companies like Teva Pharmaceuticals, Israel has become a fruitful ground for the growth of health-related products.

For now, the vitamins/supplements and functional foods markets in Israel are competitive rather than complementary. Euromonitor points out, for example, "The demand for calcium food supplements will be affected by new calcium enriched milk and mineral water products. Therefore, if consumers get enough calcium from their food then they will not need to buy supplements."

That said, Euromonitor believes increasing penetration of functional foods with all their health claims will increase the awareness of healthy living and likely affect the consumption of vitamins and dietary supplements in a positive way.

What follows is a snapshot of a handful of Israeli companies that have become very active in the nutraceuticals market, whether they are offering foods and beverages, supplements, ingredients or delivery technologies.

Adumim Food Ingredients/NutraLease: New Nanotechnology Innovations

Located just outside of Jerusalem, Adumim has been active in the food ingredients business since 1977, and today is a leading supplier of specialty food ingredients, emulsifiers, emulsions and premix formulations. In June 2005, the company's controlling group was restructured, and a financial group joined the company to chart a new course for growth backed by strong financial resources. As the company maintains its firm hold on the Israeli market, Adumim is looking to expand its offerings to the rest of the world. To that end, it is collaborating with companies like Parsippany, NJ-based PL Thomas to expand distribution of its products and technologies.

Adumim is also a majority shareholder in a company called NutraLease, an R&D company churning out a variety of product applications for the nutraceutical, functional food and cosmetic markets, with a specific focus on nano-emulsions, or what it calls nano-sized self-assembly structured lipids (NSSL). This nano-emulsion technology allows for the incorporation of insoluble active health ingredients to various products. Leading the charge in nutraceutical development for Adumim and NutraLease is Dr. Eli Pinthus, PhD, who has been surveying the latest developments in the nutraceuticals market since 1996.

NutraLease's nano-emulsions serve three functions: they provide a vehicle for incorporating otherwise insoluble components into products (food, pharmaceuticals, cosmetics, etc.) where such incorporation was not previously possible; they dramatically improve the bioavailability of substances delivered in NSSL form; and they improve the stability and in some cases control the release the substances delivered in NSSL form. Some examples of potential application include: phytosterols in edible oils, phytosterols in ice cream and dairy products, and oil soluble vitamins in water, soft drinks and dairy products.

Together with Shemen Industries Ltd., the largest oil manufacturer and supplier in Israel, NutraLease has already developed a formulation to fortify canola oil with phytosterols where based on FDA's approval that was given to all food products that are fortified with phytosterols, the consumption of this oil can help in reducing the risk of heart disease.

Algatechnologies: Astaxanthin Advancements

Situated on a Kibbutz wedged between Jordan and Egypt, under an hour from the Red Sea in Israel's Arava desert, Algatechnologies is perfectly situated to produce and commercialize a potent antioxidant-astaxanthin. According to the company, sunlight and favorable temperatures provide the ideal growing conditions for its AstaPure astaxanthin.

Algatechnologies was established in 1998 when it acquired a patented biotechnology process for thecommercialization of astaxanthin. In this highly controlled cultivation system, the company uses tubular bioreactors set up in different configurations. Most recently, it more than doubled the capacity of its production facility. Since the expansion has been completed, the company claims it is the largest supplier of natural astaxanthin for human consumption. And further expansion is expected over the next year, according to Ed Hofland, chairman of the company.

Algatechnologies' astaxanthin grows from haematococcus cells, which begin the journey through the tubular processing system as green biomass. As the algae continue to travel through the tubular system, the biomass gets to a point where it is exposed to the intense desert sun. In defense, the algae becomes stressed, fashioning a deep red color. The red biomass is then delicately dried and shipped to the U.S. for supercritical extraction.

The company's patented tubular system allows it to avoid contamination issues, which can sometimes occur in open pond systems. Further, the system provides a consistent and reliable source of astaxanthin, which is extracted using no organic solvents.

As far as potency, Algatechnologies claims astaxanthin crosses the blood-brain barrier, something carotenoids like lycopene and beta-carotene are incapable of doing. In addition, astaxanthin is 500 times stronger than vitamin E.

Due to its strong antioxidant effects, astaxanthin has application in the prevention of conditions related to oxidative stress, such as age-related macular degeneration (AMD), cataracts, Alzheimer's, Parkinson's, skin health and aging in general. In fact, Algatechnologies has already initiated preclinical and clinical studies in order to prove the beneficial effects related to the use of its astaxanthin in a variety of human applications.

Algatechnologies is 22% owned by the Kibbutz on which it sits and the remainder is owned by a U.K.-based investment firm. Its specific products include AstaPure dry biomass, which contains 3.5-4% astaxanthin; AstaPure 10% standardized oleoresin (supercritical CO2 extraction); AstaPure 2.5% beadlets; and AstaPure 2% water dispersible beadlets. Its newest products include AstaPure 2.3% astaxanthin beadlets and AstaPure .4% astaxanthin NSSL (nano sized self assembled liquid structures), designed for liquid dietary supplements and beverages.

Enzymotec: Enhancing the Value of Enzymes

Enzymotec is a biotechnology company founded in 1998 by Dr. Basheer Sobhi, an award-winning biotechnology researcher, under the auspices of the Naiot Technological Center business incubator. Dr. Basheer, a renowned expert in the field of enzymatic biocatalysis, had initially developed the AMIET technology platform, which enables the improvement and enhancement of enzymes and enzymatic processes.

Using these technologies, Enzymotec develops and produces innovative lipid-based biofunctional ingredients for dietary supplements, functional foods and advanced infant nutrition products. The company's main product categories include brain health (SharpPS), heart health (CardiaBeat) and infant nutrition (InFat).

Enzymotec's SharpPS is comprised of phosphatidylserine (PS), a natural building block in the human brain that is crucial for normal brain activities and function. As PS levels decrease with age, consumers need to supplement to maintain appropriate levels and therefore appropriate brain function. Most recently, the company added SharpPS Gold to its offerings. SharpPS Gold, which is a PS-DHA (docosahexaenoic acid) conjugate that mimics the natural PS structure found in the human brain.

The company's product CardiaBeat is positioned to address several cardiovascular disease (CVD) risk factors at once. According to Ezymotec, this ingredient has been shown in tests to lower LDL cholesterol, balance the LDL/HDL ratio, lower triglycerides and prevent atherosclerotic plaque formation. CardiaBeat contains an ideal combination of DHA, eicosapentaenoic acid (EPA) and phytosterols. Most recently, CardiaBeat received Generally Recognized as Safe (GRAS) approval by an expert panel, paving the way for its use in a wide variety of food applications.

On the clinical research front, Enzymotec recently conducted a trial on 90 children who have attention deficit hyperactivity disorder (ADHD/ADD). The study, conducted at the Tel-Aviv Sourasky Medical Center, demonstrated the potential of a natural, safe and effective alternative to those concerned about the psychiatric stimulators commonly used for ADHD treatment. In this study, researchers used a chocolate spread to deliver the active ingredient.

"In this double-blind, placebo-controlled trial, we showed that daily consumption of a unique, natural lipid-based carrier lead to a significant improvement in cognitive performance, as observed by the TOVA test scores," said Dr. Dori Pelled, director of clinical research, Enzymotec. "The fact that this novel ingredient is based on decades of research in the field of brain-lipids and their relation to cognition leads us to high confidence in these results."

Most recently, Enyzmotec unveiled a new cognitive health ingredient called alphaGPC, also known as alpha-GPC or choline alphoscerate. According to the company, it has been used for some time as a dietary supplement positioned to improve mental performance.

Floris: Israel's Supplement Leader

Leading Israel's expanding supplement market, Floris manufactures medicine, vitamins, herbal remedies, nutritional supplements and cosmetics. The factory was established in 1985 by two brothers: Rafi and Yonatan Ben Shimon, both of whom are pharmacists and graduates of the University of Strasbourg, France.

In 2004, The Massout Yitzhak Moshav purchased 50% of the company shares. The Moshav is the owner of the "Albaad" factory, which is third in the world in the production of wet wipes. The acquisition of the factory by Massuot Yitzhak made it possible for Floris to begin exporting products worldwide. In October 2004, Floris bought 100% of Hadas Natural Company shares. As a result of the acquisition, the company's factory expanded. This purchase officially made Floris not only a leading manufacturer, but also the largest, most influential one in Israel.

One of its leading products is a vitamin/mineral fortified product delivered as chocolate coins. Intended for children, Floris is looking to expand distribution of this product outside of Israel. Making use of an innovative microencapsulation technology from another Israeli company, Karmat, Floris was able to deliver a product for children that is healthy and tastes good at the same time. This is because some of the "problem" nutrients were successfully masked so as not to cause any off flavors in the finished product.

Frutarom: Forging Ahead in Fine Ingredients

Firmly focused on flavors and fine ingredients, Frutarom is making the most of its 70-history by providing solutions to manufacturers in the dietary supplement, functional food and personal care markets. Frutarom has a portfolio that comprises over 14,000 products, focusing on flavors and fine ingredients, and it markets and sells these products to over 3500 customers worldwide.

In recent years, the company has experienced significant growth and much improved profitability, with sales increasing from $101 million in 2001 to $196 million in 2004. Much of this growth was a result of organic growth, strategic acquisitions and further margin expansion.

Under the company's Flachsmann brand, Frutarom Switzerland has developed, manufactured and marketed a range of ingredients for use in the pharmaceutical, nutraceutical and functional food industries. As brands and seals of quality, "Flachsmann" and "EFLA" stand for technologically superior extracts, standardized, validated and produced according to ISO 9001 and PIC-GMP guidelines.

With EFLA HyperPure, Frutarom's patented technology, undesirable lipophilic residues and contaminants are eliminated, enabling even more product safety through innovation. Competent R&D customer service, reliability and tailored solutions add up to what characterizes the Flachsmann brand, according to the company.

Most recently, Frutarom unveiled a new ingredient, EFLA 955 Wild Green Oat Neuravena Special Extract. Prepared from a scientifically selected wild accession of Avena sativa and manufactured from the plant's aerial parts, the extract targets mental health due to its effects on serotonin. The company has undertaken research to substantiate its safety and efficacy. According to Susanne Fssler, marketing communication manager, "The development of our green oat product started with bioassays. We really wanted to build the evidence behind the traditional usage of green oat products, so we looked at several thousand green oat plants and tested them for their bioactivity and safety profile in in vitro assay systems, focusing on the central nervous system."

Through its research, Frutarom found its green oat ingredient to possess physiologically relevant inhibitory activity of two enzymes that are closely connected to mental health-monoaminoxidase B (MAO-B) and phosphodiesterase 4 (PDE 4). "This was a very exciting development for us, considering the pharmaceutical activity going on in the area of phosphodiesterase inhibitors," Ms. Fssler said. "Monoaminoxidase inhibitors are also currently used by pharmaceutical companies in the areas of mood enhancement and stimulation."

For the future, Frutarom plans to initiate studies in animals to establish more efficacy for indications like cognitive support and concentration based on the bioactivity it has seen with some of its other in vitro studies. Ms. Fssler added, "This is a natural solution to stress, mood imbalance and cognitive impairment. But we also see some use in people with chronic fatigue." EFLA 955 has application in food supplements, as well as functional foods and beverages.

Gadot Biochemicals: The Creative Calcium Company

Gadot Biochemicals is a multinational company located minutes from the Port of Haifa on the northern coast of Israel. It has been a publicly traded company since May 2005. With an annual turnover of approximately $85 million, more than 90% of its product offerings are exported. Since 2001, the company has been growing approximately 20% per year.

Its diverse portfolio of ingredients enables it to supply companies in the food, beverage and detergent industries worldwide. Within the nutraceuticals industry specifically, the company provides a variety of enrichment minerals for use in food and beverage fortification.

The enrichment minerals segment brings in approximately 7% of the company's total revenues. Its ingredient offerings include calcium (TCC, TCC-VitD3, TCP, Gadocal+, Gadocal Gold, Gadolin Calcium and Gadophit), magnesium (Gadolin magnesium, Gadomag+) and zinc (TZC and Gadozinc+), which are used to fortify everything from baby food to health food to beverages and dairy products. The advantage of these products lies in their ability to enhance absorption in the body. And all products are GMO-free and Kosher-certified.

One of the company's latest innovations is Gadocal Extreme, which is a highly soluble patented calcium source designed especially for the fortification of syrups and concentrates. According to Gadot, fortification of syrups with Gadocal Extreme ensures a very stable solution, while completely preventing the sedimentation of the calcium in the long run.

Presently, the company is looking to acquire businesses in the U.S. and Europe in an effort to expand its reach and maintain its robust growth. To this end, it will continue to focus its development activity on enrichment minerals and market tailor-made solutions to the global nutraceuticals market.

Herbamed: Developing Bio-Nutraceuticals

Herbamed is a privately owned company dedicated to the development, manufacturing and marketing of what it calls "Bio-Nutraceuticals." Herbamed has a close relationship with leading academic and medical institutions in Israel, which has aided the company in the development and introduction of its patented, proprietary Emulsome (Ultrasome) technology for use in water-insoluble nutraceuticals.

The first product making use of this technology is its Ultrasome CoQ10. According to the company, clinical trials have proved the efficacy and safety in geriatric populations and those awaiting heart transplants. Ultrasome CoQ10 can be used in tablets, capsules, effervescent tablets, drinks and solids (bars, powered drinks, etc).

Herbamed also offers a variety of other products like Prostacal, CitruShape, FluVir and O'life. Prostacal combines Opuntia pollen powder and zinc for use in those with benign prostatic hyperplasia (BPH). CitruShape is an orange flavored bar containing vitamins, minerals and fiber, and is positioned for those addressing weight management and digestive issues. An open study on 116 subjects showed that the snack's fibers reduce blood cholesterol levels and improve the HDL and LDL ratio. FluVir is an anti-influenza syrup derived from special fractions of the herb hypericum perforatum (St. John's Wort). Clinical trials have demonstrated that FluVir reduces a flu attack to a period of 24-36 hours, as compared to 5-6 days when not treated. Lastly, the company offers O'life, which is a product consisting of olive leaves and is positioned for those with diabetes and high blood pressure.

Karmat: Mastering Microencapsulation

Karmat specializes in the development, production and marketing of microencapsulated products and food ingredients using a Wurster fluid-bed coating system. Seventy percent of the company is owned by Aroma Synth, and 30% is owned by Wisconsin-based Coating Place, Inc. (CPI), a contract manufacturing organization specializing in pharmaceutical grade Wurster fluid bed coating services for encapsulation of solid particulate materials like powders, granules, crystals and capsules.

Through its innovative microencapsulation technologies, the company is targeting the functional food industry, particularly in the areas of plant sterols and cholesterol reduction, turmeric and cardiovascular protection, and vitamin D/calcium and bone health. Saul Koder, CEO, believes in the importance of protecting functional ingredients in formulations in order for consumers to reap the health benefits.

Also important in the company's endeavors is nanotechnology. Karmat is looking at combining the strengths of probiotics and resistant starch using "smart" delivery systems and molecular nanocapsules. The goal is to wrap the probiotic bacteria in nanoscale delivery vehicles consisting of resistant starch. Currently, the company is at pilot scale development of this technology.

LycoRed: The Carotenoid King

Primarily known for its advances in carotenoids, more specifically lycopene, LycoRed Natural Products Industries has expanded both its range of ingredients and delivery technologies in recent years through internal growth and acquisition. Today the company, which brought in $50 million in sales last year, supplies natural carotenoids and a wide range of other nutritional ingredients and delivery technologies to the dietary supplement and functional food industries worldwide. Armed with a new corporate image, it hopes to become the international leader in carotenoids and fortification ingredients going forward.

LycoRed carotenoid heritage started with Lyc-O-Mato natural tomato lycopene complex. According to the company, Lyc-O-Mato's development began in the tomato fields and continued through extensive clinical research and consumer marketing. Over the years, LycoRed acquired Nutriblend and Biodar, whose expertise is now fully integrated with that of LycoRed. This merger of experience has allowed for expansion into production of microencapsulated ingredients, vitamin and mineral premixes and integrated fortification solutions.

LycoRed expanded its ingredient offerings further when it purchased Buckton Scott Nutrition last November. The purpose of the acquisition was to portray LycoRed as a "one-stop-shop" for dietary supplement and functional food companies in the U.S. and abroad. In this way, it is able to provide integrated fortification and technical solutions for foods, beverages and dietary supplements.

The company's most recent acquisition took place on June 12th when it purchased the Pharmachem subsidiary H. Reisman, a major player in the U.S. carotenoid market. According to LycoRed, the addition of H. Reisman's natural carotenoid range provides synergy and expands LycoRed's position in the market. Further, H. Reisman possesses significant experience in value-added carotenoid formulations and manufacturing. Following this acquisition, LycoRed and Pharmachem will continue to work closely together.

LycoRed has achieved some major goals with its Lyc-O-Mato ingredient, such as the ability to offer forms that increase solubility in beverages and/or solve stability issues in supplements. Most recently it launched Lyc-O-Mato Red for the fortification of liquid and paste applications. It delivers three times more lycopene than ordinary tomato paste, providing marketable benefits via ease of handling. The new ingredient can be used to fortify a wide variety of foods and beverages, including breads, confectionary products, cereals, soy meat substitutes and smoothies.

Razei Bar Industries: The Sambucol Story

Established in 1991 by Dr. Madeleine Mumcuoglu, Razei Bar, located in the heart of Jerusalem, was launched following years of research on a specific standardized extract of the black elderberry (Sambucus nigra L.), which was later branded Sambucol. This extract contains a potent antiviral compound, AntiVirin, as well as a high amount of three flavonoids.

Given her background in virology and immunology, focusing on the black elderberry was a natural extension of Dr. Mumcuoglu's studies. Throughout the past 20 years, she has subjected Sambucol to a battery of clinical trials, illuminating its role in the production of white blood cells. In these studies, Sambucol was shown to specifically impact influenza A and B by shortening the duration and/or lessening the symptoms of this sometimes deadly virus.

Today the company remains committed to its mission to spread the use and knowledge of the anti-viral properties of the black elderberry and to improve the well-being of consumers affected by the flu and flu-like infections. To this end, Sambucol was recently put to the test in the case of bird flu.

These recent laboratory trials, conducted by John Oxford of Retroscreen Virology Ltd., a research institute at the University of London, found Sambucol to be at least 99% effective against the avian flu virus H5N1. It was especially effective at neutralizing the infectivity of the virus in cell cultures. These results were subsequently presented during the "International Conference on Bird Flu: A Central Role for Antivirals," which was held toward the end of January this year.

Dr. Mumcuoglu says that while these results are encouraging, there is still more work to be done. "I would never suggest that Sambucol could be used as a bird flu treatment at this stage, but this certainly gives us a reason to push forward with additional research to establish more efficacy," she said. According to Dr. Mumcuoglu, researchers will continue their work with Sambucol and bird flu. In fact, another study is already under way.

Solbar Industries: Serving the Soy World

Acquired by Kibbutz Hatzor in 1987, Solbar has grown from a small Israeli company to a global player in the world of soy. Since 2001 the company has worked hard to manage its rapid growth, growing 30% annually and eventually reaching $150 million in sales. With this growth came many challenges and opportunities. One of those challenges included managing infrastructure. As a result, Solbar restructured its operations last year to create two divisions: a commodity division for production, sales and crushing of oil and soybeans in Israel; and a specialty division for R&D, production, marketing and sales of isolated and concentrated soy proteins, textured soy proteins and soy isoflavones to the global market.

Following this reorganization, the company signed agreements with three major distributors in France, Benelux and Scandinavia, as well as the Czech Republic, Slovakia and Poland. These agreements pertain to the distribution of its full range of specialty functional soy protein concentrates and isolates and textured products.

But perhaps the biggest endeavor for the company to date is its recently established operations in China. This newly constructed facility is responsible for producing functional soy protein concentrates, textured soy concentrates and steam-textured soy proteins.

With regard to nutraceuticals in particular, Solbar maintains a vast portfolio of soy-based ingredients for dairy, bakery, functional food, cosmetic and dietary supplement applications. These include isolated soy proteins (Solpro 910, 950), traditional protein concentrates (Solcon, Solcon F), textured proteins (Contex, Bontex, Soytex), and isoflavones (Solgen 3/S, 10, 10/S, 15, 20, 30, 40, 40/S; Solgen SR, Solgen C; Nutragen 3/10, 10).NW

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