Taking a bite out of organic market

OBJ Staff
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Ottawa life sciences company Avivagen Inc. is confident it has found a way for consumers to have their cake and eat it too.

Avivagen CEO Cameron Groome

The company believes its core product, a natural health optimizer compound called OxC Beta, could realistically supply $50 million worth of demand in the market right now, its chief executive officer Cameron Groome says.

The company, which trades on the TSX Venture Exchange, is reaping the rewards of decades of research into the health benefits of foods containing beta carotene. The National Research Council has found that the benefits of the carotenoid antioxidants in these foods didn’t necessarily come from their antioxidant properties, but from previously unknown products that were produced when these compounds oxidize.

The company has developed its natural compound as an immune system booster for animals, which it feels could become a natural alternative to antibiotics.

The company’s research has recently been reviewed and published by influential publications like the Canadian Journal of Chemistry. The company is also benefiting from an ever-growing push in the marketplace away from the use of antibiotics in the food supply.

For example, fast food chain A&W has made a concerted effort to promote that its beef is free of steroids or hormones.

Mr. Groome said it’s “wonderful” that the company’s product is benefiting from this trend, but he stressed the firm is driven by science.

“If we’re fashionable, it’s by coincidence,” he said. “There’s pressure on producers to back away from antibiotics and we’re not going to go back to the days of everyone raising chickens in their back yard.”

Mr. Groome is confident his company can address what he calls a “disconnect in the marketplace.” On one hand, consumers want their food to be affordable, but they also want it to be naturally produced.

The national market for organic food and drink was worth $3.7 billion in 2012, according to Canada Organic Trade Association statistics. And while domestic demand is growing, Mr. Groome said Avivagen is seeing even larger opportunities in the Asian market.

That’s because of the disparities in price between conventionally produced meat and organic alternatives. Mr. Groome estimates that consumers pay as much as 600-per-cent premiums for organic food in parts of China.

The company is currently working with overseas livestock feed producers to demonstrate how its compound helps boost the immune systems of animals. The company’s research asserts that the compound can produce similar benefits as antibiotics in treating problems such as the loss of piglets and udder infections in cows.

The road to commercial sustainability is long for life sciences companies and, in Avivagen’s case, there’s also the challenge of educating potential partners and regulatory authorities that its core product is not the same as medication or an antibiotic.

Matthew Holmes, executive director of the Canada Organic Trade Association, said the standards for food to meet certified organic criteria, for example, are “incredibly” strict.

“It’s not necessarily enough to say it’s not an antibiotic or a hormone treatment,” he said. “It would also have to pass review of the organic general management standards, as well as the permitted substances list published by the Canadian General Standards Board.”

Mr. Holmes said the growth in organic meat and poultry products is outpacing the growth of the overall organic products market.

“Consumer demand for organic or ‘free-from’ options is very high, and the consumer is increasingly aware of the humane animal standards that are a part of organic standards as well,” he said.

Organizations: TSX Venture Exchange, National Research Council, Canada Organic Trade Association Canadian Journal General Standards Board

Geographic location: China

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