frost & sullivan analyst briefing: fishing for opportunities in the omega-3 market
DESCRIPTION
With escalating incidence of cardiovascular diseases (CVD) in the U.S., which is estimated to have an economic implication of a staggering $431.8 billion, omega-3 fatty acids have emerged as one of the hottest ingredient categories in the health and wellness market. Omega-3 ingredients are one of the most extensively researched and clinically established functional ingredients available in the market place. Omega-3 ingredients are one of the vital functional ingredients delivering significant health benefits, particularly those related to healthy heart. The universal acceptance of the 'heart health' benefits of omega-3 fish oils is ascribed to the enormous scientific evidence that has translated into rising consumer recognition. Research Analyst, Arthi V., will shed light on the promising growth opportunities for omega-3 ingredients in the application and global markets. She will also analyze the key consumer trends that are influencing the growth of the omega-3 ingredients market.TRANSCRIPT
Fishing for Opportunities in the Omega-3 Market
We Accelerate Growth
Chandrasekhar S, Research AnalystFood & Beverage Ingredients
December 11, 2008
2
Focus Points
� Key Highlights
� Product Segmentation
� Global Omega-3 Market Snapshot
� Challenges
� Key Trends
� Major Industry Participants
� Last Word
� Related Frost & Sullivan Research
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Key Highlights
� The U.S. Omega-3 PUFA ingredients market was valued in excess of $500.0 million in 2007
witnessing a robust annual growth of around 20%. Experiencing healthy demand across
the established sectors, namely dietary supplements and functional foods
�Largely spurred by enormous scientific evidence and heightened media attention,
which has translated into rising consumer recognition and awareness regarding
functional benefits
�The market is also anticipated to witness growth in newly established health markets like
cognitive and immune health
� Highly competitive and relatively concentrated market
� Market participants include Ocean Nutrition Canada, EPAX, Croda, DSM, Cognis, Martek
Biosciences, Lonza, Pizzeys Milling, Bioriginal and Omega Nutrition
4
Product Segmentation
Omega-3 Ingredients
Marine Oil Algal OilFlaxseed Oil
Product Types: Cod, 18:12 / 30%, Concentrates
Application: Feed, supplements,Functional foods, medical foods, pharma
Growth: +++
Competition: High
Application: Feed, supplements,Functional foods
Growth: +
Competition: Medium
Application: Infant formula, supplements,Functional foods, feed
Growth: ++
Competition: Dominated by Martek Biosciences
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Global Omega-3 Market Snapshot
About $500.0 MillionGrowth Rate – Strong
$287.0 MillionGrowth Rate – Robust
$419.0 MillionGrowth Rate – Moderate
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Challenges
U.S. – FDA’s Proposed RulemakingEU – Health claim legislation, Hygiene law
Rising Raw Material Cost
Technology notSupporting Application
Penetration
Growing Threat From Competing Ingredients Fluctuating Raw Material Quality
Very High
High
Medium
Low
7
EconomicTrends Product
Trends
ApplicationTrends
ConsumerTrends
CompetitiveTrends
Key Trends
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Global Economic Upheaval
Economic Slow DownEconomic Slow Down
Consumer willingness tospend on premium products affected
Demand for cost-effective ingredients
Developed economies affected
Opportu
nitie
s
Increased Demand for value –Mass Market Health Products
Mass Market Ingredients Like 18:12 or flaxseed
Less affected markets like APAC, LATAM, BRIC
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Products and Sources
Intense internal Substitution
Growing Condition-specific market
Opportu
nitie
sWidening Fortification
Trends
EPA and DHA have robust scientific evidence
Products with approved scientific claim
- Total US Functional Foods market $27 billion (8-10%)- Ingredients with superior delivery technology
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Application Trends
Animal feed
Dietary Supplements
Functional Food
Medical Foods
Pharma
Higher Value
Opportunitie
s
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Consumer Trends
NutrigenomicsHealth
IngredientsCondition Specific
General Well-being
ONC, DSM, GC Reiber,LYSI, Merck, Bioriginal
EPAX, ONC, Croda,
Solutex, DSM, Martek,Cognis
ONC, DSM, GC Reiber,
LYSI, Cargill, Denomega, Martek,
Merck, Pizzeys
Opportunity
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Competitive Trends
Increased price competition
Pressure on Margins
Attractive growth rates and scope for penetration
Consolidation, manufacturers with better economies of scale at advantage
Vertical Integration (Increased need for integrated supply chain to have control over supplies and quality)
Growth prospects for new entrants, particularly in the vegetarian Omega-3 sector
Opportu
nitie
s
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Key Market Participants
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Last Word
Challenges
Opportunities
High level of consumer awareness
Mounting focus on preventive Healthcare
Widening Application Profile
Technological advances
Firm scientific platform
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On-Going Global Omega-3 & Omega-6 Research
Recent Studies
�Strategic Analysis of the European Omega-3 and Omega-6 PUFA Ingredients Market
� Omega-3 Nutrients: An Emerging Product Additive among U.S. General Consumers (Consumer Research Study)
� Flax-Based Omega-3 Alpha Linolenic Acid – Whitepaper
� Strategic Analysis of the Asia Pacific Omega-3 and Omega-6 PUFA Ingredients Market
Upcoming Studies
�Impact of the Economy on Key Functional Ingredients
� Strategic Analysis of the US Omega-3 and Omega-6 PUFA Ingredients Market
�European Heart Health Ingredients Market
� U.S. Heart Health Ingredients Market
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Next Steps
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)
� Register for the next Chairman’s Series on Growth:
The CEO's Growth Team™: Research & Development Driving Growth and
Innovation (April 7th) (http://www.frost.com/growth)
� Join us at our 5th Annual Customer Contact Executive MindXchange April 19-22 2009, Bonita Springs, FL (www.frost.com/ccs)
� Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. ([email protected])1-877-GoFrost (1-877-463-7678)
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� http://twitter.com/Frost_Sullivan
� http://www.facebook.com/people/Frost-Sullivan/1131686497
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For Additional Information
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