Algae, plants and now krill

Well, things are certainly on the move. Frost & Sullivan estimated back in 2004/5 that the European market for omega-3 oils was worth $195M, accounting for 28% of global volume, which puts the world market close to $700M in 2005. Dietary supplements are said to account for 65%-70% of this market, with mainstream food and beverages accounting for 10-15%, and the remainder divided between infant formula and petfoods.

Forecasts made since then have put the global market for the oils themselves in excess of $1.2bn by 2010, with Europe accounting for over $300M by that date.The market opportunity for omega-3 enriched food and beverage products worldwide at the end of the decade has been put at about $10bn in retail sales, of which $5bn will be accounted for by North America.

Indeed, there has been no shortage of new product launches. According to Mintel, there were some 450 omega-3 products launched in Europe in 2006, compared to half that number in 2005. The figure so far for 2007 (to mid-year) is over 260. The biggest categories by far are for dairy, fish, meat and egg products.

We don't know how many of these products succeeded; but what we do know is that most suppliers of omega-3 speciality oil products are keen to emphasise that they are still heavily focused on the dietary supplements market.

So what is the potential for omega-3 products in the mainstream food and beverage market, and what does it depend on? According to Frost & Sullivan, the big drivers are public concerns over health and well-being coupled with media coverage. The major restraints include poor consumer understanding and, especially in Europe, the lack of clarity over health claims legislation.

Apart from fish oils, the omega-3 fatty acid DHA (docosahexaenoic acid) in particular (the one associated with brain and eye function) can be made successfully from algae. Indeed, Martek Biosciences is doing just that, and making a point about avoiding the fishy connection in its marketing messages for infant formula.

Meanwhile, Monsanto, Solae and others are hoping to commercialise a genetically modified plant source for EPA (eicosapentaenoic acid) omega-3 and DHA within the next five years, and Croda Health Care announced in April that it had gained Food and Drug Administration (FDA) approval in the US to market a branded product containing SDA (stearidonic acid) omega-3 as a new dietary ingredient. We can surely expect one or two more long-chain omega-3s from a variety of sources in the coming years.

Health claims

According to Adam Ismail, executive director of the Global Organisation for EPA and DHA Omega-3s (GOED), the qualified health claim for EPA and DHA for heart health and cardiovascular benefits, allowed by the US Food & Drug Administration in 2004, was the catalyst for growth of the whole omega-3 market in the US, because it played a critical role in raising public awareness. At first, media coverage was quite inaccurate in terms of the different types of omega-3s and their functions, he says, but now it is much more accurate; and he sees the same thing happening in Europe, especially the UK.

In truth, up to 75% of the early market for omega-3s in food products in the US was taken up by flaxseed-derived ALA (alpha-linolenic acid) omega-3 rather than the longer chain EPA/DHA. However, Ismail considers that the use of ALA was crucial because it had taken so long to solve the taste issues of foods with long-chain omega-3s. "Had there not been a short-chain alternative, the food market for EPA and DHA would be much smaller than it is today," he says.

Some parallels can be drawn with Europe, but there are some differences too. Apart from the qualified health claim for cardiovascular benefits for EPA/DHA, but not ALA, allowed by the UK's Joint Health Claims Initiative in 2005, there are no officially recognised health claims for omega-3s in Europe, although there is a stated intention by the European Food Safety Authority to include some under article 13 of the new European Nutrition and Health Claims Regulation.

And consumers' understanding of the complexities of omega-3 is still poor. "There is no understanding whatsoever among consumers of the different types and sources of omega-3," claims professor Joachim Scholderer of the department of marketing and statistics at Aarhus Business School in Denmark. "Most people perceive health benefits in a rather holistic manner."

His colleague, Kit Hagemann, goes further. While Danish consumers do have a broad interest and understanding of nutrition issues - Denmark, for example, was the first country to ban trans fats in foods - he says they have no detailed knowledge of omega-3s and do not distinguish between different types or sources.

However, he points out, they would be inclined to distinguish between vitamin enriched candy or omega-3 enriched muesli bars (less likely to accept, seen as less healthy) and bread enriched with omega-3 or omega-3 fortified tuna salad or fishballs (more likely to accept, seen as more healthy).

The core consumers of omega-3s, says Hagemann, are women in their mid-50s, already heavily into fish oil supplements. But a heavily marketed omega-3 bread was recently withdrawn from the market in Demark due to lack of sales.

"New strategies are needed to target younger consumers," he says, but the stringent conditions imposed by health claim legislation in Europe make this difficult. As far as marketing is concerned, "it is clear that neutral technical information will not make much sense to most consumers," Scholderer adds. "But branding is extremely important in functional foods."

While it remains unclear what health claims will eventually make it into the article 13 list described above, the quantity of omega-3 that can be incorporated into mainstream foods without affecting the taste is still a significant issue.

Are you getting enough?

"The consumer cannot get enough of the omega-3 oils, by only consuming omega-3 fortified food products, to get the clinical effects," says Gunilla Traberg, marketing manager at Epax. Similar views are expressed by other suppliers. Most consider that consumers switched on to omega-3 enriched foods will still take supplements, and that higher concentration dietary supplements will probably replace lower concentration alternatives.

A threat to the supply of fish oils in the form of the EU's new hygiene regulation (see FIHN, July/August p4) has recently appeared as a potential constraint to growth in omega-3 usage. The regulation calls for stricter hygiene rules in the transport, handling and processing of fish oils used in the EU for the food or dietary supplements markets.

GOED's Ismail sees derogation under the regulation's transitional arrangements as the best way forward for now. In July the EU's Standing Committee on the Food Chain and Animal Health voted in favour of extending the derogation for a further year from October 2007 to October 2008, subject to adoption procedure of the EU parliament.

But what's the problem, exactly? According to Anthony Bimbo, technical consultant at International Fisheries Technology, Virginia, US, human food was the largest single use of fish oils up until at least 1990. Large volumes were imported into Europe to be refined and hydrogenated to make margarines and bakery fats, but then along came the concerns about trans fats. Aquaculture now accounts for at least 85% of usage, he estimates, with only 5% or so used for pharmaceutical or dietary products.

In fact, Bimbo asserts, there are large resources within the edible fish processing industry, still untapped, that could be mobilised if necessary.

And then there's krill, resources of which are said to be quite vast. And then there are the new plant sources, including GM ones, of EPA/DHA and SDA (stearadonic acid).

Technical challenges

Whether they are derived from fish, marine algae or plants, omega-3s are highly unsaturated molecules prone to oxidation, and therefore highly unstable; and issues around stability and rancidity are still arguably the biggest constraint to growth in the food sector.

Marketing can get along without health claims or full consumer understanding; but not without technical developments that deliver foods with high enough levels of omega-3s and acceptable taste. "Notwithstanding progress, the manufacturing of food products rich in EPA/DHA is not a trivial task," says Reto Muggli of DSM Nutritional Products. "It has delayed the introduction of such products to the mass market for almost a decade."

And then there's the whole question of how to ensure that the omega-3 ingredients will still have acceptable taste profiles when eaten in products with longer shelf-lives.

But that's another story ...

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