Situated just a stone's throw from the Gaza Strip, recruiting new staff can be a challenge for Garlic & Herbs Dorot, despite its commercial success, concedes international sales and marketing boss Tal Tal-Or.
But this is all part and parcel of doing business in a country most of us only hear about via the latest bulletin from a war correspondent not the export institute, and on a commercial front, things are changing rapidly.
For example, Garlic & Herb which has created a completely novel food category with the launch of pre-portioned packs of frozen crushed garlic and fresh herbs in oil for major supermarket chains across the globe from Sainsbury to Trader Joe's is located on a kibbutz. But all kibbutzim are not equal, points out Tal-Or, with many drifting away from their collectivist roots to a privatised system with differential wages and property ownership. "The trouble with a kibbutz is that it's great in theory, but in practice, not everyone pulls their weight and people feel it's not fair."
Way down south in the desert in Eilat, by contrast, the kibbutz in which Algatechnologies' plant is located runs very successfully on traditional lines, claims production manager Mike Harris. "It's not perfect, but it works. The guy who cleans the toilets gets paid the same as everyone else."
Algal inspiration
Regardless of how they choose to organise themselves, however, Israeli firms cannot be faulted in the innovation stakes, especially in the field of food ingredients and nutraceuticals. Indeed, it is hard to think of many manufacturing facilities as innovative and frankly bizarre as the Algatechnologies site, which has developed a novel, patented process for producing astaxanthin (a potent antioxidant) from microalgae in conjunction with Ben Gurion University. While rivals grow the algae in open ponds, Algatechnologies grows it in a labyrinthine network of glass tubes, which enables it to precisely control the process, eliminate contaminants and produce high purity astaxanthin in an ultra-efficient way.
The global natural astaxanthin market is worth $35-60M at a wholesale level today and is forecasted to hit $200M by 2015, with much of the growth likely to come from food and drink as firms move beyond supplements, predicts sales and marketing director Efrat Kat. "We are predicting growth in volume terms of more than 35% compared with last year.
"However, there are still regulatory issues as, in Europe, novel food approval for astaxanthin is restricted to supplements. As for applications, a Japanese customer has developed a water soluble nano-emulsion enabling it to add astaxanthin to clear drinks but more work is needed to develop applications for a broader range of products."
There has been dispiriting news on the regulatory front from the European Food Safety Authority (EFSA), which has given the thumbs down to a raft of health claims about astaxanthin. However, the US Food and Drug Administration has been more accommodating, with claims about astaxanthin and neurological function, skin, eye, joint, digestive and immune health recently approved. But regulatory and technical hurdles notwithstanding, there has been a lot of interest from food and drink manufacturers looking to incorporate astaxanthin in everything from soft drinks to pasta, says Kat. "They could take five years to reach the market but big names, including Coca-Cola, are looking at astaxanthin."
In the meantime, Algatechnologies' UK-based majority shareholder the Jewish Charitable Association is fielding takeover offers from a variety of sources as investors cotton on to the potential of algae as a source of energy as well as nutraceuticals.
Brain food and chill pills
If Algatechnologies wins the prize for most interesting production facility, however, Lipogen based in Haifa in the north of Israel scoops the award for most interesting ingredient with its 'brain vitamin' phosphatidylserine (PS). A phospholipid abundant in human brain cell membranes, Lipogen's PS is derived from soy lecithin using an enzyme from cabbage.
While there has not been as much clinical research on PS as the omega-3 fatty acid DHA, Lipogen chief executive David Rutenberg is confident that PS will ultimately win over the sceptics. A 2006 generally recognised as safe (GRAS) ruling gave Lipogen the green light to market PS for use in a range of foods in the US, while a (heavily) qualified health claim secured in 2003 enables firms to say that consumption of PS "may reduce the risk of dementia/cognitive dysfunction in the elderly"
EFSA, however, has yet to issue an opinion on a claim about PS and memory/cognitive functioning in the elderly, and major European food manufacturers are wary about linking big brands with PS until there is clarity on this front, admits Rutenberg. "Marketers in major food companies are pretty conservative. They don't want to try anything too radical."
Another fertile area of opportunity is stress reduction, for which Lipogen has developed Lipogen PS-Plus: a combination of PS and phosphatidic acid claimed to impact the stress hormones cortisol and adrenocorticotropic hormone (ACTH).
Historically Lipogen has had most success in supplements, where it is seeing growth of 15% year-on-year. Longer-term, however, it has set its sights on food and drink. While the blue chip brands in the US and Europe have yet to embrace PS, Lipogen has recently broken into the infant formula market in South Korea and China and has developed formulations for dairy, bakery, bars, chocolate, drinks and snacks, so that if and when the big guns in food and drink have a change of heart, it can respond.
Protecting bioactives
The competition for the techie prize in the Israeli ingredients trade is intense, but F&C Licorice subsidiary Karmat Coatings also based near Haifa certainly deserves a spot on the shortlist for its work on nanoencapsulation with the Israel Institute of Technology.
Dr Eyal Shimoni, associate professor at the faculty of biotechnology and food engineering at the institute, has been working on a patented technology enabling the production (via a high pressure homogeniser) of self-assembling nano crystals. These comprise a helix made of starch (amylose) which spirals around and protects functional ingredients such as conjugated linoleic acid (CLA), long chain omega-3 fatty acids or soy isoflavones.
Crucially, says Shimoni, the crystals are so small they can be used in clear beverages, do not feel grainy on the tongue and are heat stable. They are only released when they are broken down by pancreatic juices in the gut.
Tests are now progressing on using the technology to nanoencapsulate a range of unstable bioactives in products from bread to pasta, he says. "Nanoencapsulation offers distinct advantages over microencapsulation: self-assembly, controlled release, targeted delivery and molecule by molecule protection."
Hey big spender
As for cold hard cash, the award for making lots of it should go to Frutarom, which is the seventh largest supplier of flavours in the world but also a significant player in natural ingredients from soy isoflavones to fenugreek.
Chief executive Ori Yehudai, who is aiming to break the $1bn turnover barrier by 2012, is eyeing up several acquisition opportunities, and reckons the combination of flavours and health ingredients in his portfolio gives him a competitive advantage. For example, a customer experimenting with a natural ingredient will also need flavours to help mask its taste, says product manager David Hart. "Big companies align themselves closely with one flavour house so it can be hard to get them to talk to you, but if you are selling them something else, it gives you a foot in the door."
While the recent stream of negative opinions from EFSA about health claims has made some customers more risk averse, he says, the longer-term prognosis for better researched health ingredients remains good, as consumers still want help to tackle obesity, ageing, chronic diseases and nutritional deficiencies, whatever regulators allow suppliers to say on pack.
Indeed, it would be a mistake to get too hung up on claims, says Udi Alroy, global marketing and sales boss at LycoRed, which specialises in tomato lycopene and other carotenoids, and has sites in Yavne and Beer Sheva.
The firm, which developed patience in spades after waiting almost five years to secure EU novel food approval for its lycopene oleoresin from tomatoes, is confident in its science, but philosophical when it comes to what it will actually be allowed to say about its wares, says Alroy. "Even if claims are approved, it can be frustrating to see what you actually end up with in terms of approved wording."
Lycopene, which is associated with a bewildering array of benefits from prostate, eye and heart health to cell protection, is probably generating the most excitement in skin health, says the firm. According to clinical studies, supplementation with LycoRed's lycopene-rich tomato extract helped protect the skin against damage from UV radiation by reducing sunburn cell formation and protecting the skin's immune system (by slowing down the depletion of Langerhans cells which protect the skin), says product development chief Dr Zohar Nir. "People put on sun cream when they go to the beach, but not for day-to-day exposure; oral supplementation with lycopene provides 24h protection."
Future studies will look at synergies between lycopene and other antioxidants for skin protection and eye health, says the firm, which is also working on novel encapsulation technology and using glutamic acid from tomato juice as a salt flavour enhancer.
Doing it for the kids
Finally, the novelty prize goes to Anlit, which has developed an innovative means of delivering nutrients to kids via blister packs of pectin-based gummy bears laced with vitamins, 'chocolate' bears with probiotics (with a shelf-life of two years) and yogurt bears with omega-3s from fish oils (with 18-months' shelf-life).
The challenge is getting enough omega-3 in the bears, says vice president Shai Karlinksi, who is targeting export markets in Europe and the US. "They have a melting point of 60°C, but as soon as you add fish oil, this drops to 30°C, so we advise customers to put them in the fridge."
On the plus side, recommending that kids munch two or three yogurt bears to ensure they get a recommended dose is considerably easier than getting them to swallow three fish oil capsules a day, he points out.