Abstract: A method for protecting the activity and bioavailability of heat- and/or oxygen-labile compounds during processing, particularly processing by extrusion of a food product containing the heat- and/or oxygen-labile compounds. Beadlets are formed wherein the heat- and/oxygen-labile compound is protected by a shell of calcium alginate and an ancillary polymeric compound, such as gelatin. The beadlets are added to a food product prior to extrusion and protect the active compound against heat degradation during the extrusion process. The beadlets also provide a protected form of the compound that decreases oxidation. In an alternative embodiment, oxidizing agents and/or free radical initiators to be added to a product containing labile compounds are coated with the protective material to protect the labile compounds from degradation by the oxidizing agents and/or free-radical initiators.