As one of the most highly publicized health ingredients of late, fish oils/omega fatty acids have reached new heights in consumer recognition and acceptance across both health and wellness fortified/functional foods and vitamins and dietary supplements. However, in the light of recently negative media coverage, a strong grasp of the markets, categories and health concerns that fish oils/omega fatty acids operate in will be essential to recapture consumer interest.
Food or Pill? Preferences Vary Widely by Market
Within the consumer packaged goods universe, fish oils/omega fatty acids compete most prominently in health and wellness fortified/functional foods and beverages (tracked by Euromonitor International in the packaged foods industry) and vitamins and dietary supplements (tracked by Euromonitor International in the consumer health industry). When including milk formulaa USD $45 billion category worldwidefortified/functional food and beverages constitute a much larger market than supplement formats. However, the gap shrinks considerably when excluding milk formula. Globally, retail value sales of fortified/functional foods and beverages featuring omega fatty acids as the “key functional ingredient" stood at $2.4 billion in 2014, compared to $3.6 billion for fish oils/omega fatty acids dietary supplements. Milk and spreadable oils and fats have proven to be the most popular food-based omega fatty acids delivery mechanisms, accounting for roughly 28 percent and 26 percent of global sales in 2014. As formulation technology advances, manufacturers are experimenting with a growing number of delivery formats, including bread, juices and even packaged meats such as beef (many fish varieties, of course, are naturally high in omega fatty acids). Fortified/functional foods and beverages offer substantial opportunity for international growth. Unlike supplement formats, which are relatively common in developing markets, retail value sales of omega fatty acid-fortified/functional foods and beverages are largely confined to the world’s most developed markets, including France, Australia, Canada and the United States.
Within consumer health, fish oils/omega fatty acids, along with other high-profile products such as protein and probiotic supplements, have been major drivers of vitamins and dietary supplements in the last five years. The products’ central claims of heart and brain health are front-of-mind for many consumers, and until recently, the products enjoyed a reputation of confirmed efficacy. As negative press coverage erupted in late 2012 on the back of a major study (“Association Between Omega-3 Fatty Acid Supplementation and Risk of Major Cardiovascular Disease Events." JAMA, September 2012) questioning those oft-repeated heart health claims, sales began to slow in the United States, while in Western Europe (the second-largest sales region globally), fish oil/EFAs have struggled to outperform an overall sluggish vitamins and dietary supplements market. That said, the products are still expected to be major growth engines in consumer health’s USD $89 billion global vitamins and dietary supplements market. Driven by strong performances in Eastern Europe, Asia Pacific and an expected return to growth in North America, retail value sales are expected to climb by 4 percent annually to USD $4.4 billion in 2019.
Where to Next? New Product Developments in Fish Oils/Omega Fatty Acids
New product developments in the fish oils/omega fatty acids space will drive not only new end products, but new sources as well. Plant sources in particular are expected to continue to gain steam in the near future. In addition to basic formulation benefits (eructation, fishy taste, etc.), algal and seed sources can make vegetarian and sustainability claims that an increasing number of health-minded consumers in developed market are seeking out. Additionally, grain sources such as quinoa and chia offer marketers a trendy superfood base with other sought-after nutrients, such as protein and fiber. These tailwinds are driving both new brand creation and portfolio expansion, such as the burgeoning chia-based food and drinks brand Mamma Chia and Nordic Naturals’ new line of Algae Omega supplements.
Focusing more closely on the drugstore shelf, category commoditization is advancing in major fish oil/omega fatty acids supplement markets. Though many premium formulations have continued to sell well in the last several years, big multivitamin brands have struggled to keep pace in mass channels such as drugstores/parapharmacies and hypermarkets. In response, a growing number of brands are experimenting with combination formulations that speak to more health concerns. Products such as Schiff’s Mega Red Omega-3 + Multivitamin (launched in 2014) are combining more general wellness positioning with the recognized heart health benefits of fish oils. Looking forward, ingredients with adjacent health claimssuch as cholesterol-lowering soy protein and fierecould provide additional room for expansion in a global vitamins and dietary supplements category that feeds off of novel formulations and strong marketing.
Chris Schmidt is the consumer health analyst to Euromonitor International and can be reached at Chris.Schmidt@euromonitor.com.