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Exploring Omega-3 Sales in Different Channels

Article-Exploring Omega-3 Sales in Different Channels

<p>Recent reports showed a decline in omega-3 sales in the United States. Improved marketing and media exposure for this nutrient may help improve sales, but in a market this broad, discovering where to invest efforts can be difficult.</p>

According to a 2014 Mintel report on oils, 40 percent of people believe omega-3s are important to health. Despite this, recent reports showed a decline in omega-3 sales in the United States. Improved marketing and media exposure for this nutrient may help improve sales, but in a market this broad, discovering where to invest efforts can be difficult. The free Omega-3 Insights digital issue, “Omega-3 Sales in Different Channels," offers more information.

Health writer, journalist and blogger Danielle Rose said the responsibility of an independent health food store to provide accurate information and a product the consumer can trust is vital. An important element to look for in a fish oil is a third-party independent lab assay with adequate testing.

Andreas Koch, marketing director at Barlean’s, finds the mass market adoption of more natural products significant and thinks there is a marrying of the two in response to consumer demand.

Regardless of age or demographic, Koch said online customers tend to be the most decisive about their omega-3s. They find a brand they like, and they enjoy the convenience of reordering the product and having it shipped to their doorstep.

When a group of consumers was recently asked about the potential benefits of omega-3s, most respondents cited heart health. In addition to heart health, Becky Wright, marketing director at Aker BioMarine, said many consumers are looking for overall well-being and joint support from their omega-3s. And upcoming research in terms of brain health—including cognitive function, memory and depression—holds potential for omega-3 marketing. Combination marketing can also be effective. Koch said Barlean’s is catering to the Baby Boomer generation by offering combination blends in its omega-3 oils, whether for heart health, or to benefit joints or eye health.

The form of an omega-3 says much about not only its marketing potential, but also the market demand for the product. An increasing number of food industries and end consumers are looking for powdered omega-3s. Barlean’s biggest sellers continue to be standard, classic fish oils, fresh-catch fish oil and flax oil, whereas fish oil and capsules trend stronger than other omega-3s in the natural channel. Small pills are popular, as they are easy to swallow, concentrated and at a lower price per dose. Many customers are also looking for easy-swallow options and sometimes choose liquid for its high potency and low dosing, and its ability to be integrated in food.

Adam Ismail, executive director at the Global Organization for EPA and DHA Omega-3s (GOED), said regardless of the form, dietary supplements in general have low barriers to entry compared with other industries. An easy way to combine technology and omega-3s is to put a product on and start selling it directly to consumers.

Ismail said something can be learned from the top-selling omega-3 products on Amazon, though. Generally offered by established retail brands, these products end up generating much more revenue without a similar spend because they have existing brand equity to build their sales on. For comparison purposes, GOED used RankTracer data and applied a regression with transformed variables model to sales ranks of the top 20 omega-3s on Amazon during March 2015, and estimated annual revenues based on their selling prices.

Overall, the key lesson to be learned is that even on the Internet, and Amazon specifically, normal rules of business still apply, despite the low barriers to entry. Companies must advertise and market their products to generate significant sales. The scale of sales in this channel provides ample room for companies to succeed, but they must have the right strategy to drive consumers to their product listings—and without established brand equity, it takes more work.

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