BUSINESS
B E H I N D THE M A R K E T S H A R R Y STENERSON, Associate
editor
Vitamin A market has expanded to over 120 trillion units as the result of margarine reinforcement and increased uses in pharmaceutical and feed trades "OKHIISÎD t h e recent price reductions in bulk vitamins are a number of developments which point to expanded markets, increased manufacturing facilities, and competition in sales. W e have seen something like this in the past among antibiotics, although it is highly unlikely that vitamins will engage in a price decline paralleling that of penicillin. But the price reductions announced at t h e year-end in synthetic vitamin A were not exactly moderate, and can only mean that keen rivalry has made itself felt i n this product for the outlets offered i n pharmaceuticals, margarine, and the animal feeds. Through these price cuts vitamin A w a s brought down to the lowest levels in history. T h e reduction amounted to about three cents, establishing the market at 1 2 cents p e r million USP units for t h e product which has a potency of 5 0 0 , 0 0 0 units or over. Vitamin A of lower potency, that i s , less than 5 0 0 , 0 0 0 units, was reduced t o 12.5 cents "oer million units. The half-cent premium for the lower potency product will probably puzzle those w h o are not familiar with the practices i n this indlustry. Vitamin A potencies of less than 5 0 0 . 0 0 0 units are sought for the r e inforcement of margarine, and the chemic a l manufacturers usually reach these lower specifications through dilution w i t h such things as cottonseed oil or corn w h i c h increases t h e cost. For reinforcement purposes t h e margarine manufacturers employ vitamin A ranging as a rule anywhere from 2 0 0 , 0 0 0 to 400,000 units, and in some cases have employed dilutions down to 100,000 units. Potential Markets I n Vitamin Large It is estimated in the trade that the pharmaceutical market for vitamin A, a good deal of it in the form of over-thecounter sales of the vitamin itself as well as in multiple preparations, is somewhere b e t w e e n 4 0 and 60 trillion units annually. If the margarine reinforcement uses are added, the total is brought u p into the neighborhood of 60 to 7 0 trillion units. The feed market for vitamin A in recent years has been gaining in importance, and if this outlet is added to pharmaceuticals aiiu margarine, w c n s v e a «.otSi o*. somewhere between 120 and 130 trillion units. In these estimates the totals for dilutions used in margarine h a v e been reduced, to t h e units in concentrated "A." Most manufacturers have probably inc e a s e d facilities, or are planning to increase such facilities for synthetic vitamin A. Four are engaged in making the syn196
thetic: Hoffmann-La Roche, Nutley, N. J.; Merck & Co., Rahway, N . J.; Chas. Pfizer & Co., Brooklyn; and Distillation Products, Rochester. The latter manufactures the syntlnetic vitamin A. Synthetic as acetate contains ï . o million units per gram. T h e palmitate runs about one million units of "A" x>er gram. Margarine Outlet Fastest Growing Inculcations of increased sales competition are seen i n the fact that the vitamin A producers are all equalizing their f.o.b. plant costs through freight allowances to buyers. This enables manufacturers more remcrtely situated to compete for the business of a consumer w h o m a y be favorably situated near someone else's plant. The fast-growing margarine business is responsible for this, in part, as well as for larger-quantity packaging of t h e vitamin. The margarine makers w o u l d like t o have, w h e n they can do so, t h e product weight weigrhed out in a single can for application t o a single batch of margarine. MEargarine industry's vitamin A requirements were supplied chiefly b y t h e fish livers oil products until recently. T h e order authorizing the use of synthetic "A" was not issued until Aug. 2 1 , 1952. About 979£? of all margarine in this country t o day is fortified with vitamin A. T h e minim u m requirement for this purpose is 15,000 USP units. Margarine sales, due to liberalization of state and federal restrictions, have edged up close t o and even m a y h a v e surpassed the sales totals for butter. T h e most recent estimate is that some 123 million pounds of margarine w e r e sold during October 1952. Washington is one of t h e most recent states t o take off margarine restrictions. According t o the Bureau of Agricultural Economics, margarine consumption increased 2 0 % during 1951—52 over the previous fiscal year, at which time per capita consumption was 7.7 pounds. Otlmer Vitamin Products Slashed i n Price Thiamine hydrochloride (Bx), thiamine mononitrate, riboflavin ( B 2 ) , and ascorbic acicl (G) last month w e r e all lowered in cost, even prior to the price action taken on synthetic "A." Thiamine was reduced to 3>135 per kilogram after ruling for a number of years at $160. All leading malcers joined in t h e price cut which was apparently explained b y competition. FÇiboflavin was reduced to $100 per kilo from the previous quotation of $125. T h e n e w price of $100 is just one-half of the cost which prevailed for riboflavin during C H E M I C A L
the last war. The vitamin has w o n large established outlets in pharmaceuticals, foods, as well as in the f e e d industry, and it is likely that the opening of t h e Canadian enrichment market played some part in the latest price reduction. Following the practice in this country, the Dominion next month will provide for the inclusion of B 2 , Bi, niacin, and iron, in bread and flour (C&EN, Dee. 22, 1952, page 5 3 4 2 ) .
VITAMINS (THOUSANDS OF POUNDS)
1946
1947
1948
1949
1950
1951
1952 (EST.)
Ascorbic acid or vitamin C, already a low-cost product in large production, w a s given a further price reduction in D e cember to $21 per kilo, from the previous level of $24.50. T h e latter quotation p r e vailed at the close of 1 9 4 4 for large lots. Even without the benefit of large industrial outlets like margarine and feeds, a s corbic acid is third a m o n g vitamins from a volume standpoint, i t s output in 1951 came to 1,552,000 pounds. Unit Sales Average L o w for Niacin N o c h a n g e has been effected recently in the costs for niacin or nicotinic acid, t h e second most important vitamin on t h e basis of the Tariff Commission's production data for 1951. In that year its output amounted to 1,596,000 pounds. Niacin is one of the required nutrients in bread and volume operations have brought its price down t o l o w levels. T h e unit cost for its sales in 1951 averaged $ 3 . 7 2 per pound. The similar unit sales average for ascorbic acid was $9.60 (including its derivatives); for riboflavin, $51.32; and thiamine hydrochloride, $65.90. Vitamin E , represented by the tocopherols, is another item in this group meeting with increased uses in feeds, particularly for treating the diseases of poultry. Renewed demand on part of the leading consumer groups, margarine, feeds, and pharmaceuticals would appear to explain upturns which have been taking place in the production of nearly all leading vitamin products. Going from August to September, monthly outputs of niacin and niacinamide increased from 111,329 lb. to 154,584 lb., thiamine hydrochloride from 4,796 lb. to 21,188 lb. In t h e opinion of leading vitamin manufacturers an even better market may make itself felt for their products in 1953. O n e looks for margarine production to forge ahead of butter. A N D
ENGINEERING
NEWS
