- Developed patented process to isolate Omega-3 fatty acids from flax (linen) seeds
- Additives enjoy a shelf life of over two years, and thermal stability which ensures they can be used in baking and freezing
- Devised way of keeping overhead costs low by doing its manufacturing out of Ecovatec Solutions manufacturing facility
What LeanLife Health does:
LeanLife Health Inc (CSE:LLP) has developed a patented process to isolate Omega-3 fatty acids from flax (linen) seeds — one of the richest plant sources of this essential fatty acid.
The company’s long-term, shelf-stable extractions are available in oil, emulsion and powder forms with purity in excess of 98% and can be used as food additives, or as nutraceuticals.
The Vancouver-based company is riding a wellness trend as Millennials believe that when it comes to fats, there’s one type you don’t ever want to cut back on: Omega-3.
They like to tuck the “wonder fat” into their diet and eat it with impunity in almost anything. As a result, the biggest category of Omega-3 products are not supplements, but Millennial staples such as milk, bread, cereal, noodles, juices, and cheese to which the Omega-3 fatty acids have been added.
LeanLife’s products are sold online and have been used as additives by food processors in Europe for making staples from bread to milk products.
Why do Greenland’s Inuit rarely get heart disease in spite of a high-fat diet of whale blubber? This consumed Danish physician Hans Olaf Bang and his protégé Jorn Dyerberg who used an old gas chromatograph to analyze Inuit blood, only to discover Omega-3 acids. Studies have since shown that Omega-3 fatty acids keep nerve cells functioning optimally. The wellness molecules are associated with healthier hearts, improved mood, reduced joint pain, lowered triglycerides, and healthier skin.
Omega-3 fats are found in certain foods, most famously in oily fish such as salmon and cod liver oil, which contain the long-chain fats called eicosapentaenoic acid (EPA), and docosahexaenoic acid (DHA). High-fat nuts and seeds, in particular flaxseeds, contain another sort of omega-3 called alpha-linolenic acid (ALA).
Here lies the rub: consumption of fish oil has been linked to mercury and selenium intake through fish contamination with the European Union warning that it can inhibit children’s development. There’s no such danger with Omega-3 oil derived from flaxseed. Moreover, fish oil sources of Omega-3 can impart a fishy taste, but LeanLife’s fatty acid ethyl esters are odorless and impart no flavor.
How is it doing:
LeanLife is gaining traction as its proprietary processing produces a stable product resistant to oxidation, a clear advantage for storage. It enjoys a shelf life of more than two years and thermal stability ensures its products can be used in baking and freezing.
In April, the company inked a sales agreement to sell products in 18 Asian countries through health food industry veteren Desmon Yau. The deal will bring LeanLife products to China, India, Indonesia, Pakistan, Japan, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore, Taiwan and Hong Kong, among others.
Yau, acting as an agent, will earn a 10% commission on a fixed selling price. He also received 200,000 stock options at a rate of C$0.05 per share for a period of two years. The agreement is valid until February 28, 2021. Yau has worked for years as a conduit for Canadian manufacturers to help meet demand in Asian markets.
LeanLife also boosted sales by tapping former Procter & Gamble Co (NYSE:PG) executive Marisa Sanchez to take charge of sales of its products in Mexico.
The new North American trade agreement reached by the US, Mexico and Canada is likely to help to bolster exports of LeanLife’s products to Mexico. Mexico is a food processing hub, as it is home to several multinational companies such as Nestle and Unilever, which export their processed goods and sell them domestically as well. Grupo Bimbo, one of the largest baking companies, is also headquartered in Mexico.
Elsewhere, ARYZTA, a Zurich bakery with US$4.2 billion in revenues is experimenting with LeanLife products in their bread using funding from the European Union.
LeanLife also has an understanding with RD Heritage Group LLC to assist with marketing strategies and the sale of its products.
On the production side, LeanLife continues to improve manufacturing processes.
In February, the firm lifted output, reduced costs, and increased profit margin with the installation of new equipment. With an upgraded reactor for its exclusive extraction process, the company said it can now generate more than 300,000 litres of its unique, Omega-3 flaxseed oil product each year. The company also sold some equipment it bought last year, which was surplus to requirements.
The new reactor was used to produce samples for LeanLife’s growing international network of sales agents who are focused on securing over C$1 million of new customer contracts in 2020.
Most significantly, LeanLife reduced overhead costs last year by signing an agreement with nutraceutical processing company Ecovatec Solutions Inc to use its manufacturing facility in Abbotsford, British Columbia.
Production at the Ecovatec facility using equipment and technology supplied by LeanLife in a toll processing arrangement protects LeanLife’s intellectual property. Using the Ecovatec facility with its own equipment allows LeanLife to avoid the overhead costs and capital required to acquire its own production facility while allowing for the commercialization of its plant-based food products.
The arrangement follows a previous testing agreement with Ecovatec during which the company validated its scalable, proprietary process and produced a certified product so incredibly high in purity and quality that it set a new near-impassable standard in the market.
- Near-term revenue potential from marketing push into 18 Asian countries
- Upside potential from flourishing in Mexico through new hire Gavin Mah
- The new reactor will result in reduced labor and cost of production thereby increasing profit margins for the company
- Once the efficiencies of this improved production process materialize, the company intends to enter into a further agreement with Ecovatec where they will benefit from increased economies of scale
- LeanLife’s production at Ecovatec Solutions’ facility in Abbotsford through a sublease provides cost savings as it brings down overhead expenses
- The company is tapping into latent demand as the global Omega-3 market reached US$33 billion in 2016 and is expected to reach upwards of US$57 billion by 2025, according to a report by Grand View Research Inc
- LeanLife enjoys significant market size potential
What the boss says:
“The indications are that we will need to increase production capacity for 2020,” LeanLife Health CEO Stan Lis said when announcing the new equipment boost.
“We are therefore upgrading our facilities to put the company in a position to meet this potential customer demand for our plant-based omega-3 product.”
Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
Published at Fri, 10 Apr 2020 13:00:00 +0000-LeanLife Health is riding the Omega-3 fatty acid fitness boom