omega-3s: state of the market, challenges and opportunities€¦ · in infant formula and...

Joachim Scholderer

Omega-3s: State of the market, challenges and opportunities

MAPP Conference 2008

MAPP Conference 2008 - Joachim Scholderer: Omega-3s

State of the market


The global market for omega-3 enriched FMCGs

Infant formula73%

Dietary supplements

16%

Other2%

Foodsand

beverages9%

58% Dairy

17% Spreads

5% Fruit juice12% Bakery

8% Other

(% retail value; data source: Euromonitor GMID, 2008)


Launch activity in world regions

0

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Cu

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es

Europe

North America

Asia Pacific

Latin America

Middle East and Africa

(Data source: Mintel GNPD, 2002-2008)


Launch activity in Europe

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France

UK

Spain

GermanyItaly

NetherlandsSwedenFinlandNorwayBelgiumC

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Key trends

World

New product launches in Europe have already peaked: omega-3s have become mature. North America is at its peak right now

Asia-Pacific is currently in the take-off phase. Latin America is accelerating. Middle East and Africa exhibit slow growth

Europe

NPD activity in UK, France, Spain and Germany is decreasing

Late-mover markets such as Italy, Netherlands and Norway are still on the rise


Average life cycle of an omega-3 enriched food

0

100

200

300

400

500

600

0 3 6 9 12 15 18 21 24 27 30 33 36 39

Months after launch

Avera

ge v

olu

mes

sale

s p

er

pro

du

ct(I

nd

ex:

Mo

nth

1 =

10

0)

(Data source: Mintel GNPD/IRIS, 2005-2008)

Trend


Infant-digestive-brain

cluster

Dairy-spread-cardiovascular

cluster

Categories, claims and ingredients

Cardiovascular

Low fat

Low cholesterol

Digestive

No Additives

Brain and nervous systemNo transfat

Low allergen

ALA

Antioxidant

Calcium

DHA

EPAIron

Magnesium

Phytosterol

Prebiotic

Probiotic Vitamin A

Vitamin B1

Vitamin B2

Vitamin B3

Vitamins B5, B7, B8

Vitamin B6

Vitamin B9

Vitamin B12

Vitamin C

Vitamin DVitamin E

Vitamin K

Zinc

CLA

PUFA

MUFA

Omega 3

Omega 6

Infant formula

Bakery

Breakfast cereals

Dairy

Ready meals

Processed fish, meat and egg products

Sauces and seasonings

Spreads

Side dishes

Snacks

-1.5

-1

-0.5

0

0.5

1

1.5

-1 -0.5 0 0.5 1 1.5 2



Positioning trends

In dairy and spreads, products are increasingly positioned generically (“with omega-3”), often without a health claim that refers to the effects of the omega-3s

Instead, omega-3s are often paired with phytosterols in such products, piggybacking on the cholesterol-lowering effects of phytosterols

In infant formula and functional drinks, products are increasingly positioned on brain and cognitive ability, in particular in the US and Asia

Algae-sourced DHA is the typical omega-3 ingredient in infant formula. Strong efforts are being made at ingredient branding


Out of the dairy ghetto and into the ready meals market


SCANomega/SEAFOODplus Choice Study

Sample sizes

N = 1688 (Germany)N = 1668 (UK)

Categories

LasagneBurgersAsian noodlesSandwiches

Factors

PriceMain protein ingredientOmega-3 enrichment

(SCANomega/SEAFOODplus Choice Study; Scholderer, 2008)


Consumer willingness to pay for omega-3 enriched ready meals

24%

17%12%

16%

7%2%

7% 9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Germany

UK

Imp

lici

t p

rice

(%

pre

miu

m)

(SCANomega/SEAFOODplus Choice Study; Scholderer, 2008)


Challenges and opportunities


Omega-3 ≠ Omega-3

Most consumers are unaware that the term omega-3 refers to a family of compounds and that only some of them (mainly EPA and DHA) have substantial health benefits

ALA is by far the most frequently used compound. However, ALA is poorly converted to EPA and DHA, rendering its health benefits negligible in practice

EPA and DHA are catching up. Despite great advances in encapsulation technology, they are still used only hesitantly in products in which a fishy off-flavour might be a problem


Tough times for claims


Generification

Increasing penetration by private labels. Of all omega-3 enriched foods launched globally between 2002 and 2008, 7% were private-label products

− UK: 22%− France: 10%− Germany: 6% − Spain: 6%− US: 5% − Italy: 0%

Increase in direct sales via the internet, not always in line with good marketing practice


New sources, old troubles?


More info?

Contact:

Prof. Joachim Scholderer

MAPP, Dept. of Marketing and Statistics,Aarhus School of Business, University of AarhusHaslegaardsvej 10DK-8210 Aarhus V, Denmark

e-mail: [email protected]

omega-3s: state of the market, challenges and opportunities€¦ · in infant formula and...

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