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Global Market for

EPA/DHA Omega-3 Products


September 2012

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Global Market for EPA/DHA Omega-3 Products


September 2012

Global Market for EPA/DHA Omega-3 Products has been prepared by


Packaged Facts. This report is based on research commissioned by The
Global Organization for EPA and DHA Omega-3 (GOED)
Packaged Facts serves consumer product and service companies and allied
businesses in the United States and internationally with a complete line of
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Our market intelligence reports are designed to aid the executive decisionmaker by providing essential data and concise analysis with a focus on
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David Sprinkle

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Publication Date

September 2012

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Global Market for EPA/DHA Omega-3 Products

Table of Contents

Table of Contents

Chapter 1:Executive Summary .................................................. 1


Scope of Report ...................................................................................... 1
Report Methodology............................................................................... 1

Market Size and Composition .......................................................... 3


Market Composition by Geographic Region .................................................... 3
Table 1-1: EPA/DHA Omega-3 Products: Global Market Size and
Share by Region, 2011 ............................................................................... 3
Figure 1-1: EPA/DHA Omega-3 Products: Global Market Share
by Region, 2011.......................................................................................... 3
Market Composition by Product Category ....................................................... 4
Table 1-2: EPA/DHA Omega-3 Products: Global Market Size and
Share by Category, 2011 ............................................................................ 4
Figure 1-2: EPA/DHA Omega-3 Products: Global Market Share
by Category, 2011 ...................................................................................... 4

Factors to Market Growth ...................................................................... 5


Projected Market Growth ....................................................................... 8
Table 1-3: Global Market for EPA/DHA Omega-3 Products,
2011 vs. 2016 ............................................................................................. 8
Projected Growth by Geographic Region ........................................................ 8
Table 1-4: EPA/DHA Omega-3 Products: Projected Global Market Size
and Share by Region, 2016 ........................................................................ 8
Figure 1-3: EPA/DHA Omega-3 Products: Projected Global Market
Share by Region, 2016 ............................................................................... 9
Projected Growth by Product Category ........................................................... 9
Table 1-5: EPA/DHA Omega-3 Products: Global Market Size and
Share by Category, 2016 .......................................................................... 10
Figure 1-4: EPA/DHA Omega-3 Products: Global Market Share
by Category, 2016 .................................................................................... 10

September 2012

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Table of Contents

Global Market for EPA/DHA Omega-3 Products

Chapter 2:Market Review .......................................................... 11


Global Market Size and Composition ................................................. 11
Table 2-1: EPA/DHA Omega-3 Products: Global Market Size and
Share by Region, 2011 ............................................................................. 11
Figure 2-1: Share of EPA/DHA Omega-3 Products by Global Region,
2011 .......................................................................................................... 12
Market Composition by Product Category..................................................... 12
Table 2-2: EPA/DHA Omega-3 Products: Global Market Size and
Share by Category, 2011 .......................................................................... 13
Figure 2-2: Share of EPA/DHA Omega-3 Product Sales by
Global Region, 2011 ................................................................................. 13

Category Focus: Infant Formula ........................................................ 14


Category Value by Region ............................................................................ 15
Table 2-3: DHA/ARA-Fortified Infant Formulas: Global Market Size
and Share by Region, 2011 ...................................................................... 15
Figure 2-3: Share of DHA/ARA-Fortified Infant Formula Sales
by Global Region, 2011 ............................................................................ 15
U.S. Market Trends ....................................................................................... 15
Emerging Market Trends ............................................................................... 16
Figure 2-4: Birth Rates by Global Regions, 2010 .......................................... 16
Figure 2-5: Birth Rates for Selected Countries, 2010-2015 .......................... 17

Category Focus: Fortified Foods and Beverages ............................. 18


Category Value by Region ............................................................................ 18
Table 2-4: EPA/DHA-Fortified Foods & Beverages: Global Category
Size and Share by Region, 2011 .............................................................. 19
Figure 2-6: Category Share of EPA/DHA-Fortified Food &
Beverage Sales by Global Region, 2011 .................................................. 19
Dairy Products ............................................................................................... 19
Beverages and Juices ................................................................................... 22
Baby Food and Pediatric Juices .................................................................... 23
Breads and Bakery ........................................................................................ 23
Processed Meats........................................................................................... 24
Cooking Oils .................................................................................................. 24
Figure 2-7: Estimated Average Daily Intakes of EPA/DHA by Country
(in mg/day based on 2,000 kCAL diet) ..................................................... 25
Prepared Products ........................................................................................ 26
Other Foods .................................................................................................. 27

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Global Market for EPA/DHA Omega-3 Products

Table of Contents

Category Focus: Nutritional Supplements ......................................... 28


Category Value by Global Region ................................................................. 28
Table 2-5: EPA/DHA Nutritional Supplements: Global Category Size
and Share by Region, 2011 ...................................................................... 28
Figure 2-8: Category Share of EPA/DHA Omega-3 Nutritional
Supplements by Global Region, 2011 ...................................................... 29
Category and Regional Trends ..................................................................... 29

Category Focus: Pharmaceuticals ...................................................... 32


Lovaza ........................................................................................................... 32
Epadel ........................................................................................................... 33
Category Value by Region ............................................................................ 33
Table 2-6: EPA/DHA Pharmaceuticals: Global Category Size and
Share by Region, 2011 ............................................................................. 34
Figure 2-9: Share of EPA/DHA Pharmaceutical Sales
by Global Region, 2011 ............................................................................ 34
Category Perspective .................................................................................... 34
Table 2-7: Omega-3 Fatty Acid Pharmaceutical Products
in Development .................................................................................... 35-36
Source: GOED (Global Organization for EPA and DHA Omega-3) .............. 36
Table 2-8: Potential Generic Drug Manufacturer Market Entry ..................... 37

Category Focus: Clinical Nutrition..................................................... 38


Category Value by Region ............................................................................ 39
Table 2-9: Clinical Nutrition Products with EPA/DHA: Global Category
Size and Share by Region, 2011 .............................................................. 40
Figure 2-10: Share of Sales for Clinical Nutrition Products with
EPA/DHA by Global Region, 2011 ........................................................... 40
Established and Emerging Markets ............................................................... 40
Figure 2-11: Population Aged 65 or Older by Country: 2010 vs. 2015 .......... 41

Category Focus: Pet Food, Treats and Supplements ...................... 42


Category Value by Region ............................................................................ 43
Table 2-10: EPA/DHA-Fortified Pet Food, Treats, and Supplements:
Global Category Size and Share by Region, 2011 ................................... 43
Figure 2-12: Share of Sales for Pet Food, Treats, or Supplements
with EPA/DHA by Global Region, 2011 .................................................... 44
Market Scales Up and Expands Out ............................................................. 44
Projected Sales and Shares by Geographic Region ..................................... 46
Table 2-11: EPA/DHA Omega-3 Products: Projected Global
Market Size and Share by Region, 2016 .................................................. 46

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Table of Contents

Global Market for EPA/DHA Omega-3 Products

Figure 2-13: EPA/DHA Omega-3 Products: Projected Global


Market Share by Region, 2016 ................................................................. 47
Figure 2-14: Projected CAGR for EPA/DHA Omega-3 by Region,
2011-2016 ................................................................................................ 47
Projected Sales and Shares by Product Category ........................................ 48
Figure 2-15: Projected Global Market Shares for EPA/DHA Omega-3
Products by Category, 2016 ..................................................................... 48
Table 2-12: Projected Market for DHA/ARA-Fortified Infant Formula:
Overall and by Global Region, 2011-2016 ............................................... 48
Table 2-13: Projected Market for EPA/DHA-Fortified Food & Beverages:
Overall and by Global Region, 2011-2016 ............................................... 49
Table 2-14: Projected Market for EPA/DHA Nutritional Supplements:
Overall and by Global Region, 2011-2016 ............................................... 49
Table 2-15: Projected Market for EPA/DHA Pharmaceuticals:
Overall and by Global Region, 2011-2016 ............................................... 50
Table 2-16: Projected Market Clinical Nutrition Products with EPA/DHA:
Overall and by Global Region, 2011-2016 ............................................... 50
Table 2-17: Projected Market for EPA/DHA-Fortified Pet Food, Treats,
and Supplements: Overall and by Global Region, 2011-2016.................. 51

Summary of Factors to Future Growth .............................................. 52

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Global Market for EPA/DHA Omega-3 Products

Chapter 1

Chapter 1: Executive Summary

Executive Summary

Scope of Report
This report focuses on the global market for EPA / DHA omega-3 packaged products by
category and global region. Products included in this study are fortified with eicosapentaenoic
acid (EPA) or docosahexaenoic acid (DHA). Traditional sources of EPA and/or DHA
omega-3s include fish oils from anchovy or cod livers but new sources include krill, squid (or
calamari) and algae. Excluded from scope of this study are non-fortified fish/ fish products as
well as products that only contain alpha linoleic acid (ALA) omega-3.
The geographic scope of this report is global, broken out into four regions: North America
(United States and Canada); Europe (Scandinavia, Western Europe, Eastern Europe and
Russia); Asia Pacific (China, Japan, South and Southeast Asia, Australia, New Zealand and
Oceania); and Rest of World (Latin America, Middle East and Africa).
Six categories of packaged consumer products are covered by this report: infant formula;
fortified foods and beverages; nutritional supplements; pharmaceuticals; clinical nutrition
(enteral and parenteral) products; and pet food, treats and supplements.
The base year for market sizing is 2011, with projections for 2016.

Report Methodology
The information contained in this report was obtained from primary and secondary research.
Primary research entailed approximately one hundred interviews with industry insiders across
geographic regions and product categories. Representatives from ingredient suppliers and
consumer product manufacturers were interviewed, including special and much-appreciated
cooperation by members of the Global Organization for EPA and DHA Omega-3 (GOED).
Consultations with other industry players and on-site examination of retail products also
formed part of this study.
Secondary research included extensive Internet canvassing and data gathering from relevant
business and industry media; company information in annual reports, press releases,
conference calls and investor presentations; product profiles in trade and consumer
publications; GOED presentations and databases; published reports and studies; and related

September 2012

Packaged Facts

Chapter 1: Executive Summary

Global Market for EPA/DHA Omega-3 Products

food and nutrition market reports by Packaged Facts. Sales estimates and forecasts are based
on analysis of data and information from the above sources.
All market size figures and projections are calculated in U.S. dollars.

Packaged Facts

September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 1: Executive Summary

Market Size and Composition


Global consumer spending on EPA/DHA fortified products across the six product categories
covered by this report reached $25.4 billion in 2011.
Market Composition by Geographic Region
By geographic region, North America (U.S. and Canada) accounted for 42.6%, or $10.8
billion of these consumer sales. Europe and Asia-Pac each claim 26.2%. The rest of the
world accounted for 5.0% of total spending, or $1.26 billion. [Table 1-1; Figure 1-1]
Table 1-1
EPA/DHA Omega-3 Products: Global Market Size and Share by Region, 2011
Region

Dollar Sales (Billions)

Dollar Share

Overall

$25.42

100.0%

North America

10.83

42.6

Europe

6.67

26.2

Asia-Pacific

6.66

26.2

Rest of World

1.26

5.0

Source: Packaged Facts

Figure 1-1
EPA/DHA Omega-3 Products: Global Market Share by Region, 2011
2011 Market Value
$25.4 B

5.0%

NorthAmerica

26.2%
42.6%

Europe
AsiaPac

26.2%

RestofWorld

Source: Packaged Facts

September 2012

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Chapter 1: Executive Summary

Global Market for EPA/DHA Omega-3 Products

Market Composition by Product Category


By product category, infant formula anchors the market.

Approximately 87% of infant

formula is EPA/DHA fortified, creating a $10.2 billion dollar market, or 40.0% of the total.
Fortified foods and beverages follow at $7.9 billion, or 31.0%. Nutritional supplements place
third at $3.2 billion, or 12.7%, followed by pharmaceutical products at $1.9 billion and
clinical nutrition products at $1.4 billion. The smallest of the product categories covered by
this report is the pet food, treat, or supplement arena, at $0.9 billion in EPA/DHA fortified
products. [Table 1-2; Figure 1-2]
Table 1-2
EPA/DHA Omega-3 Products: Global Market Size and Share by Category, 2011
Category

Dollar Sales (Billions)

Dollar Share

Overall

$25.42

100.0%

Infant Formula

10.18

40.0

Food and Beverage

7.88

31.0

Nutritional Supplements

3.22

12.7

Pharmaceutical

1.90

7.5

Clinical Nutrition

1.35

5.3

Pet Food, Treats, & Supplements

0.89

3.5

Source: Packaged Facts

Figure 1-2
EPA/DHA Omega-3 Products: Global Market Share by Category, 2011
2011 Market Value
$25.4 B
FoodandBeverage
7.5%
5.3%

31.0%

PetFood,Treat&
Supplements
NutritionalSupplements
InfantFormula

40.0%

3.5%
12.7%

ClinicalNutrition
Pharmaceutical

Source: Packaged Facts

Packaged Facts

September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 1: Executive Summary

Factors to Market Growth


The central factor to growth in this market is, of course, the growing range of health benefits
attributed to EPA/DHA omega-3. EPA/DHA omega-3s play important roles in both primary
and secondary prevention of chronic diseases, as well as general nutrition. More than 2,000
clinical trials on the effects of omega-3s have been conducted in humans, including four
large, prospective long-term, randomized, controlled trials. Additionally, multiple evidencebased reviews and meta-analyses have shown significant reductions in chronic disease risk
with increased consumption of EPA and DHA.
Within this overarching context, each geographic region and category within the global
market for EPA/DHA products brings its own dynamics.
The infant formula market is the worlds fastest-growing packaged food category, primarily
due to the development of markets in Asia (particularly China) and Eastern Europe, and to a
lesser extent in the Middle East and Latin America. Market development is linked with the
economic growth of those countries and the growing number of working women who want
premium products and the convenience of infant formula. The need for infant formula
enrichment with DHA and ARA for non-breast-fed infants has been recognized by various
official bodies including the United Nations FAO/WHO (Food and Agriculture
Organization/World Health Organization), which recommends that all infant formula should
contain DHA and ARA. An estimated 87% of infant formula sold in 2011 was fortified with
DHA and ARA.
Factors contributing to growth in the fortified food and beverage category include changes
in consumers diet and lifestyles and more proactive interest by consumers in their own
health; scientific studies detailing multiple benefits of EPA/DHA omega-3s; awareness raised
by the omega-3 supplement category; and expanding technological capabilities to incorporate
fish and algae oils into the full range of food products and beverages. Omega-3 beverages are
among the expanding product segments, as reported in FoodBusinessNews.net (August 14,
2012); according to Mintels Global New Products Database, 34 new beverages with omega3 fatty acids were introduced in 2011, up from 26 in 2010 and 16 in 2009. Asia will be the
fastest-growing market (15% projected CAGR for 2011-2016) for this category.
The nutritional supplements category continues to though, though at a slower rate than the
previous five boom years. The market is not fully saturated nonetheless, and producers are
using new formulas to grow market size and shares. Developed country dynamics include a

September 2012

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Chapter 1: Executive Summary

Global Market for EPA/DHA Omega-3 Products

favorable demographic shift and focus on health and wellness. In emerging economies, the
focus is on addressing nutritional deficiencies and fulfilling the needs of an expanding middle
class.
While supplements are targeted at the prevention and maintenance market segments,
pharmaceutical products are targeted at treatment of severe dyslipidemia. In this contextin
contrast to Rx-to-OTC switchesthe two product categories are complementary, each
boosting awareness of the other, and serving as a positive factor to overall market potential.
Currently there are only two approved omega-3 pharmaceutical products on the market.
The first product is commercialized in 57 countries and sold under the brand names of
Lovaza (U.S.), Omacor and Zodin (Europe and Asia), and Eskim, Esapent and Seacor (Italy).
The second product is produced by Mochida Pharmaceuticals (Japan) and sold under the
trade name of Epadel. Over the next five years these prescription products will be introduced
to additional national markets, including Brazil and Argentina, and are expected to be wellreceived. In addition, several new competitors will enter the omega-3 drug market over the
next few years, including Amarin Corp., Catabasis Pharmaceuticals, and Omthera
Pharmaceuticals. Amarin submitted a New Drug Application to the U.S. Food and Drug
Administration (FDA) in September 2011 for the use of its drug Vascepa as an adjunct to diet
to reduce triglyceride (TG) levels in adult patients with severe ( 500mg/dL)
hypertriglyceridemia, and announced FDA approval in July 2012. Generic manufacturers, in
addition, are attempting market entry as patents expire. The cardiovascular/metabolic market
is the largest pharmaceutical drug segment and market opportunities are increasing due to
westernization of lifestyles, aging populations, and increased access to healthcare.
Products in the clinical nutrition category, which includes enteral (oral or tube fed) as well
as parenteral (fed through an IV) formulations, benefit from the addition of omega-3 fatty
acids because these have anti-inflammatory properties and are beneficial to trauma patients
and those with chronic wounds. Clinical nutrition is also provided to cancer patients and
patients with general malnutrition. Factors driving growth include aging populations and
increased use of enteral products in homecare settings.
Growth in the pet food, treats and supplements category will be driven by the recent
humanization trend in companion animal products and services. Label claims and
ingredients found in human diets, such as EPA/DHA omega-3s, attract pet owners who want
to provide the very best for their pets, which are increasingly viewed as members of the
family. The global expansion of pet superstores will create more opportunities for

Packaged Facts

September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 1: Executive Summary

EPA/DHA fortified pet foods, especially in developing market like Asia-Pacific, Latin
America, and Eastern Europe. In more developed markets, additionally, private label pet food
is becoming more premium, including through fortification with fish oils.

September 2012

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Chapter 1: Executive Summary

Global Market for EPA/DHA Omega-3 Products

Projected Market Growth


Packaged Facts projects market value of EPA/ DHA omega-3 packaged products to reach
$34.7 billion in 2016, representing a compound annual growth rate (CAGR) of 6.4% and a
dollar gain of $9.3 billion over 2011. [Table 1-3]
Table 1-3
Global Market for EPA/DHA Omega-3 Products, 2011 vs. 2016
Year

Dollar Sales (Billions)

2011

$25.42

2016

$34.72

Source: Packaged Facts

Projected Growth by Geographic Region


Sales in North America will reach $13.0 billion in 2016, and this region will continue to
account for the largest slice of the market, although its share is projected to notch downward
from 42.6% in 2011 to 37.6% in 2016. Asia-Pacific will jump to a close second-place
position by nearly doubling in market value between 2011 and 2016, increasing its market
sales to $12.5 billion and its global share from 26.2% to 35.9%. Market value in Europe will
grow to $7.6 billion in 2016, although the relative global share held by this region will edge
downward to 21.9%. Packaged Facts estimates that market sales in Rest of World, including
Latin America, Middle East and Africa, will reach $1.6 billion in 2016, with global market
share dropping slightly to 4.7%. [Table 1-4; Figure 1-3]
Table 1-4
EPA/DHA Omega-3 Products: Projected Global Market Size and Share by Region, 2016
Region

Dollar Sales (Billions)

Dollar Share

Overall

$34.72

100.0%

North America

13.04

37.6

Asia-Pacific

12.45

35.9

Europe

7.61

21.9

Rest of World

1.62

4.7

Source: Packaged Facts

Packaged Facts

September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 1: Executive Summary

Figure 1-3
EPA/DHA Omega-3 Products: Projected Global Market Share by Region, 2016
2016 Market Value
$34.7 B
4.7%
NorthAmerica
37.6%

35.9%

Europe
AsiaPac
RestofWorld

21.9%

Source: Packaged Facts

Projected Growth by Product Category


Packaged Facts projects that the consumer market for DHA-fortified infant formula will
reach $14.2 billion in 2016, reflecting a CAGR of 6.8% for the 2011-2016 period. AsiaPacific will post the highest regional five-year growth rate, at 14%.
The market value of EPA/DHA fortified foods and beverages is projected at $10.2 billion in
2016, for a CAGR of 5.4% over the five-year period. Asia-Pacific will post by far the highest
regional growth rate in this category, at 15%.
The value of the EPA/DHA nutritional supplements market is expected to reach $4.6 billion
in 2016, reflecting a five-year CAGR of 7.3%. Asia-Pac will post the highest regional
growth at 13%, trailed by North America at 5.5%.
The EPA/ DHA pharmaceuticals market is projected at $3.1 billion in 2016, reflecting a
five-year CAGR in dollar value of 10%. Volume growth, moreover, will outstrip dollar
growth as generics become a factor in the category. Anticipated dollar growth in Asia-Pac is
12.5%, followed by North America at 10%. Several companies will enter the omega-3 drug
market over the next few years; some are in advanced clinical trials. Category growth will be
framed by new market entrants, including the introduction of generics, based on the interplay
of regulatory approval, patent expiration, and legal action related to patent protection.
The value of the clinical nutrition market for products with EPA/DHA fortification is
projected to reach $1.7 billion in 2016, reflecting a five-year CAGR of 4.3%. Asia-Pacific

September 2012

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Chapter 1: Executive Summary

Global Market for EPA/DHA Omega-3 Products

should post the highest regional growth rate at 5%, but will be followed closely in growth rate
by the other global regions.
Market size for the EPA/DHA fortified pet food, treats and supplements is projected at
$1.05 billion in 2016, reflecting a five-year CAGR of 3.4%. Rest of World will have the
highest regional growth at 8%, due largely to activity in Brazil. [Table 1-5; Figure 1-4]
Table 1-5
EPA/DHA Omega-3 Products: Global Market Size and Share by Category, 2016
Category

Dollar Sales (Billions)

Dollar Share

Overall

$34.72

100.0%

Infant Formula

14.12

40.7

Food and Beverage

10.25

29.5

Nutritional Supplements

4.58

13.2

Pharmaceutical

3.06

8.8

Clinical Nutrition

1.67

4.8

Pet Food, Treats, & Supplements

1.05

3.0

Source: Packaged Facts

Figure 1-4
EPA/DHA Omega-3 Products: Global Market Share by Category, 2016
2016 Market Value
$34.7 B

8.8%
4.8%

FoodandBeverage
29.5%

PetFood,Treat&Supplements
NutritionalSupplements

40.7%

3.0%
13.2%

InfantFormula
ClinicalNutrition
Pharmaceutical

Source: Packaged Facts

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September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 2

Chapter 2: Market Review

Market Review

Global Market Size and Composition


The market for eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) omega-3
products has been very dynamic over the past few years. Packaged Facts estimates global
consumer spending on EPA/DHA fortified products at $25.4 billion in 2011 for the six
categories covered by this report: infant formula; fortified foods and beverages; nutritional
supplements; pharmaceuticals; clinical nutrition; and pet food, treats and supplements.
North America represents the largest share (42.6%) of the market, with $10.8 billion in sales
in 2011, followed by Europe and Asia-Pac, each at nearly $6.7 billion. Combined sales in
Latin America, Middle East and Africa reached $1.3 billion in 2011. [Table 2-1; Figure 2-1]
Table 2-1
EPA/DHA Omega-3 Products: Global Market Size and Share by Region, 2011
Region

Dollar Sales (Billions)

Dollar Share

Overall

$25.42

100.0%

North America

10.83

42.6

Europe

6.67

26.2

Asia-Pacific

6.66

26.2

Rest of World

1.26

5.0

Source: Packaged Facts

August 2012

Packaged Facts

11

Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Figure 2-1
Share of EPA/DHA Omega-3 Products by Global Region, 2011
2011 Market Value
$25.4 B

5.0%

NorthAmerica

26.2%

Europe

42.6%

AsiaPac
RestofWorld

26.2%

Source: Packaged Facts

Market Composition by Product Category


The three largest of the six products categories covered by this report account for 83.7% of
the total market: infant formula, fortified foods and beverages, and nutritional supplements.
Infant formula anchors the market both in sales and in introducing many consumers and
primary household shoppers to EPA/DHA fortification.

Approximately 87% of infant

formula is EPA/DHA fortified, creating a $10.2 billion dollar market, or 40.0% of the total.
Fortified foods and beverages follow at $7.9 billion, or 31.0%. Nutritional supplements place
third at $3.2 billion, or 12.7%. The remaining three categories are pharmaceutical products at
$1.9 billion, clinical nutrition at $1.4 billion, and pet food, treat, or supplements at $0.9
billion in sales. [Table 2-2; Figure 2-2]

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September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 2: Market Review

Table 2-2
EPA/DHA Omega-3 Products: Global Market Size and Share by Category, 2011
Category

Dollar Sales (Billions)

Dollar Share

Overall

$25.42

100.0%

Infant Formula

10.18

40.0

Food and Beverage

7.88

31.0

Nutritional Supplements

3.22

12.7

Pharmaceutical

1.90

7.5

Clinical Nutrition

1.35

5.3

Pet Food, Treats, & Supplements

0.89

3.5

Source: Packaged Facts

Figure 2-2
Share of EPA/DHA Omega-3 Product Sales by Global Region, 2011
2011 Market Value
$25.4 B
FoodandBeverage
7.5%
5.3%

31.0%

PetFood,Treat&
Supplements
NutritionalSupplements
InfantFormula

40.0%

3.5%
12.7%

ClinicalNutrition
Pharmaceutical

Source: Packaged Facts

September 2012

Packaged Facts

13

Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Category Focus: Infant Formula


The infant formula market is the worlds fastest-growing packaged food category, primarily
due to the development of markets in Asia (particularly China, with an annual growth rate
close to 20%), Eastern Europe, and, to a lesser extent, the Middle East and Latin America.
Market development is linked with the economic growth of these countries and the growing
number of working women who want premium products and the convenience of formula.
Algae oils have a high DHA content and dominate in DHA infant formula fortification.
The need for infant formula enriched with DHA and ARA for non-breast-fed infants has been
recognized by various official bodies including the United Nations FAO/WHO (Food and
Agriculture Organization/World Health Organization), which recommends that all infant
formula should contain DHA and ARA. An estimated 87% of infant formula sold in 2011
was fortified with DHA and ARA. As one industry participant contacted for this study
commented, With regard to infant formulas, it is kind of standard to have DHA these days.
If you dont have it, they want to know why.

In the near future, many expect non-

DHA/ARA infant formula to become virtually extinct, unless some specific consumer
demand keeps it in play.
In 2011, the top five global players in the infant milk formula market were Nestle, Mead
Johnson, Danone, Abbott Laboratories and Pfizer. In April 2012, Nestle agreed to buy
Pfizers infant nutrition business, illustrating the industrys rapid consolidation with
manufacturers expanding their share of developing world markets. While the top five brands
account for 20.8% of the global market, the top five manufacturers have a commanding
57.6% market share.

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Category Value by Region


In 2011, North America represented the largest share (34%) of the category at $3.46 billion,
followed by Asia-Pac at $3.36 billion and Europe at $2.75 billion. The Rest of World
accounted for approximately 6% or $611 million in sales. [Table 2-3; Figure 2-3]
Table 2-3
DHA/ARA-Fortified Infant Formulas: Global Market Size and Share by Region, 2011
Region

Dollar Sales (Billions)

Dollar Share

Overall

$10.18

100%

North America

3.46

34

Asia-Pacific

2.75

33

Europe

3.36

27

Rest of World

0.61

Source: Packaged Facts

Figure 2-3
Share of DHA/ARA-Fortified Infant Formula Sales by Global Region, 2011
2011 Market Value
$10.2 B
6%
34%

33%

NorthAmerica
Europe
AsiaPac

27%

RestofWorld

Source: Packaged Facts

U.S. Market Trends


The U.S. market is dominated by three brands with a combined 90% share of sales: Mead
Johnson Nutrition Cos Enfamil (40% of the market), Abbott Laboratories Similac (40%),
and Nestls Good Start (10%). These infant formula manufacturers have shrewdly developed
longstanding relationships with U.S. health-care providers such that new parents often leave

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Chapter 2: Market Review

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the hospital with free samples of infant formula. The perceived endorsement by health-care
providers is key in developing brand awareness and in having consumers establish a
relationship with these products during the first week of an infants life.
Even though doctors and hospitals are placing greater emphasis on breastfeeding, infant
formula often becomes a more convenient option when mothers return to the workplace
following maternity leave. And while the high cost of formula is a consideration for some
parents who favor breastfeeding, the U.S. market is actually heavily subsidized through such
governmental programs as food stamps and the Special Supplemental Nutritional Program for
Women, Infants, and Children (WIC).
Emerging Market Trends
In emerging markets, high birth rates are spurring the infant formula market. In Africa,
notably, the number of live births per 1,000 in population is 36.20, roughly three times the
rate as in Europe (10.31) or North America (13.45). [Figure 2-4]
Figure 2-4
Birth Rates by Global Regions, 2010
Number of Live Births per 1,000 Population

Africa

36.20

Lessdevelopedregions

22.24

World

20.27

LatinAmerica

18.96

Asia

18.71
13.45

NorthAmerica
Moredevelopedregions

11.01
10.31

Europe
0

10

20

30

40

Source: United Nations Statistics Division, www.data.un.org, accessed June 2012

Increasing urbanization and a burgeoning middle class support further growth in sales of
infant formula. As with their developed world counterparts, women in the developing world
are increasingly returning to work after childbirth, fostering greater reliance on infant formula

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Chapter 2: Market Review

versus breastfeeding. Chinese mothers also place a premium on


top foreign brands and imports, especially after mainland Chinas
2008 scandal involving milk powder tainted with the toxic
chemical melamine. Although Chinas one-child policy means
that its birth rate slightly lags the U.S., analysts estimate that its
middle class already roughly the size of the entire U.S.
population could reach 700 million people by 2020. The
volume of infant formula sold in China is thought to be larger
than that in the U.S., though the U.S. market has a higher retail
sales value due to higher price points.
Indias birth rate exceeds Chinas by over 10 live births per 1,000 in population. With
roughly 25 million babies born each year, the subcontinent has the fastest growing infant
nutrition market in the world. At an estimated $400 million, Indias baby food market is just a
fraction of the Chinese market, but the Indian market is expected to grow to $700 million by
2015. [Figure 2-5]
Figure 2-5
Birth Rates for Selected Countries, 2010-2015
Numer of Live Births per 1,000 Population

India

22.83

Mexico

19.91

Brazil

15.75

UnitedStates

13.72

China

12.55

France

12.32

UK

11.90

RussianFederation

10.97

Spain

9.94

Italy

8.40

Germany

8.06

Japan

7.80

10

15

20

25

30

Source: United Nations Statistics Division, www.data.un.org, accessed June 2012

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Global Market for EPA/DHA Omega-3 Products

Category Focus: Fortified Foods and Beverages


Several forces have propelled the growth of functional food and beverages, including changes
in consumers diet and lifestyles and an increasingly pro-active interest in personal health.
The incorporation of EPA and DHA in particular into functional foods has exploded due to a
range of factors including the growing range of scientific research on the benefits of
EPA/DHA omega-3, the popular reputation of salmon as a superfood, and awareness raised
by the omega-3 supplement category.
Expanding technological capabilities have also contributed to fortification of food and
beverage products with EPA/DHA omega-3s. Through the leveraging of various ingredient
sources, encapsulation and emulsification technologies, and product formats, the range of
applications and product choices is multiplying. Food applications were once limited to lipid
friendly spreads and yoghurts because of flavor and stability considerations. However, recent
technological advances have made the use of omega-3s in other food categories more
common including dairy products, beverage and juices, infant nutrition products, breads
and baked goods, processed meats, cooking oils, and various prepared foods.
At the same time, health and wellness are priorities held and marketed by many of the
worlds largest food and drink companies. Nestle, notably, bills itself not as the worlds
biggest food company but as the worlds leading Nutrition, Health and Wellness company.
With global food and beverage leaders looking to the functional food category for growth
opportunities, success depends on the creation of a differentiated product benefit that fits
within their brand portfolios. While there are ground-breaking smaller companies in each
region that offer EPA/DHA fortified foods, the potential for significant category expansion
lies largely in might of multi-national food corporations, the rate at which they bring these
new products to market, and the brand equity and marketing clout they devote to these
efforts.
Category Value by Region
In 2011, North America represented the largest share (51%) of the EPA/DHA fortified foods
and beverages category at $4.0 billion. Products enriched with EPA/DHA were introduced in
mainstream U.S. supermarkets in 2006, giving Americans an early opportunity to adopt these
products into their diets. Ranking second in category size is Europe at $2.05 billion and AsiaPacific at $1.4 billion.

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Chapter 2: Market Review

Table 2-4
EPA/DHA-Fortified Foods & Beverages: Global Category Size and Share by Region, 2011
Region

Dollar Sales (Billions)

Dollar Share

Overall

$7.88

100%

North America

4.02

51

Europe

2.05

26

Asia-Pacific

1.42

18

Rest of World

0.39

Source: Packaged Facts

Figure 2-6
Category Share of EPA/DHA-Fortified Food & Beverage Sales by Global Region, 2011
2011 Market Value
$7.9 B
5%
18%

NorthAmerica
51%

Europe
AsiaPac

26%
RestofWorld

Source: Packaged Facts

Dairy Products
Dairy products have proven to be particularly suitable for fortifying with omega-3s, in terms
of both ingredient compatibility and popularity with consumers. In addition, fortified dairy
products have been available for many decadesin the U.S., fortification of milk with
vitamin D dates back to 1933and many consumers are comfortable with the concept of
dairy product fortification, whether with vitamins/minerals, probiotics, or omega-3. In the
U.S. market, additionally, dairy products are usually sold and stored cold and have a short
shelf live, which helps to maintain the stability of the omega-3.

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Typical omega-3 fortified dairy or dairycase products include:

yogurt (spoonable or

drinkable), milk drinks, fresh and UHT milk, and margarines and spreads. The U.S. and
Europe are the strongest markets for dairy products, but differ in their segmentation. Europe
has a much stronger yogurt market (four times larger than the U.S.), while the U.S. has a
stronger milk market.
A representative from one research institute said, The micro encapsulation technology that
we developed is naturally suited for dairy products; therefore, we have seen that market
become very active. Many of the products are branded towards children at this time as EPA
and DHA are well known among consumers to be a benefit for young brain development. It is
only natural for a parent who would spend extra for a DHA fortified formula to want to
choose a DHA fortified milk or yogurt as the child grows beyond formula. Any food that is
made with the dairy product can easily be fortified using our technology as we encapsulate
the fish oil with dairy proteins. Breads and cereals are another area in which we are seeing a
high-growth in omega-3 fortification.

A U.S company that sells an omega-3 milk product revealed the growth of our omega milk
product [is] higher than our average growth rate. This assessment was echoed in statements
from an organic dairy product supplier: fortified products will grow approximately 2 to 4%
faster than unfortified. Fortified yogurts represent a higher volume.

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Chapter 2: Market Review

Soy milks also tout DHA omega-3 claims through fortification with DHA algal oil.

Spains omega-3 fortified-milks sector has been developing for a number of years, and in fact
makes up the majority of the heart-health milks sector, which accounted for nearly 6% of
total milk sales through Spanish food channels in 2011. Puleva, now part of Lactalis,
pioneered the market in the late 1990s. Its original Puleva Omega-3 UHT milk product line
has now been expanded to include Puleva Omega-3 with walnuts; both formulas are fortified
with fish oil. The sector has expanded to encompass a wide range of branded and own-label
products, with most major dairy companies having at least one omega-3 line in their
portfolio.
In China, DHA could formerly only be incorporated into infant formulas, but in January 2010
DHA as well as EPA ingredients won novel foods approval from Chinese authorities to enter
the mainstream food supply. Chinas largest dairy, claiming approximately 35% of the
domestic market, is Mengniu.

Its Future Star Kid Milk, available nationally at major

retailers, now uses algae oil DHA and has won several product awards.

In addition, EPA/DHA omega-3s can be easily added to butter and spreads. Many consumers
expect margarines and spreads to be enriched with additives or to offer special benefits, such
as plant sterol enrichment for lowering cholesterol. In the U.S., Smart Balance spreads are the
number 3 player in $1.3 billion spread category; EPA/DHA fortified spreads are key products

September 2012

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Chapter 2: Market Review

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for the company. In Spain, Puleva has introduced Burgos Omega 3, a dairy product with fresh
cheese made from semi-skimmed milk.
Beverages and Juices
In the past, beverage manufacturers found it challenging to fortify drinks with omega-3 fish
oils due to the ingredient's 'fishy' taste and smell. However, through technological advances,
omega-3 ingredients with a neutral sensory profile are now available. This means that omega3 can be added to various beverage products, with one of the most popular being fruit juice.
In the U.S., market leaders in the fortified juice category include Minute Maid Enhanced Pom
Blueberry and Tropicana Pure Premium Health Heart Orange Juice. Indian River offers a
fortified grapefruit juice. Genesis Today introduced a line of orange juice, Omega Orange
that is fortified with algae oil. In Canada, A. Lassonde produces a variety of juices fortified
with microencapsulated fish oil. In the U.K, Big Shotz, described as a super-vitamin health
drink, offers over 70% of the new European recommended daily adult level of omega-3 in
one 120 ml bottle. In Norway, Smartfish Recharge is a fresh juice based drink for children
and adults fortified with marine fatty acids.

Globally, the market for omega-3 enriched drinks is growing steadily. A key marketing
advantage is that these products can be targeted to consumers of either gender and all ages.

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Chapter 2: Market Review

Baby Food and Pediatric Juices


The popularity of DHA-fortified infant formulas has given rise to toddler and pediatric foods
and drinks fortified with DHA. Gerber DHA and Probiotic Cereal (in two varieties, oatmeal
and rice) and 2nd Foods Smart Nourish Purees (in various fruit and vegetable varieties) are
fortified with tuna oil. PBM Nutritionals, the largest producer of store brand infant formula,
produces its Bright Beginnings pediatric drink with DHA algal oil. DrSEARS Cool Fuel uses
refined fish oil from anchovies and sardines.

A leading company spokesperson said, Nearly all infant formulas contain DHA fortification
for all brands. This is true globally as well as in the U.S. Baby food fortification is a newer
area. We anticipate broadening our line of DHA fortified children's products. An organic
baby food manufacturer indicated that among baby foods, DHA fortified products are
growing in the high single digits because it is a newer area of fortification.
Breads and Bakery
Bread plays a central role in the Western diet, and innovative ingredients such as omega-3 are
used by the bakery industry to offer products with added health benefits. High-quality
fortified breads are increasingly popular with consumers for addressing dietary priorities or
deficiencies. They're a good vehicle for providing EPA and DHA at adequate levels.
Breads and cereals are another area in which we are seeing a high growth in omega-3
fortification, commented one industry insider. An industry consultant agreed, stating, Dairy
products are a good match, as well as breads. A European Bakery spokesperson said, We
have a lot of bread that is targeted for 4 to 12-year-olds which contains microencapsulated
omega-3 fish oil. Product acceptance for this line of bread has been better than expected.
Our market truly appreciates our national concern for our children.

September 2012

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23

Chapte
er 2: Market Rev
view

Glob
bal Market for EP
PA/DHA Omega
a-3 Products

Westoon Bakeries Limited


L
of Canada,
C
for exxample, offerrs Wonder+ Headstart
H
1000% Whole
Wheaat Loaf, with
h 15 mg of omega-3 DH
HA in two slices.

Webssite copy expplains that

Wonnder+ Headstaart bread nouurishes kids tummies AN


ND their mindds! Wonder+
+ Headstart
breadd contains DH
HA, an Omegga-3 fatty acidd which suppports the norm
mal developm
ment of the
brain,, eyes and nerrves.
Proc
cessed Meatts
A hanndful of manu
ufacturers offe
fer fortified prrocessed meaat products wiith omega-3s. In Spain,
Fonteecha offers Ceerillo Omega Chorizo Picaante Extra, forrtified with faatty fish oils. In Poland,
the Kutno
K
Poultry
y Plant EXD
DROB SA produces
p
a Pooultry Ham deli
d meat (Drrobiusz Fit
Szynkka Kurczat + Omega 3).
In Jappan, the Maru
uha Nichiro Group
G
has foccused on the development
d
of functional foods and
releassed the DHA Resara Sausaage in 2005.
Cook
king Oils
Fortiffication of cooking
c
oils is a newerr trend in the
t
ever-exppanding
EPA/D
DHA omegaa-3 food annd beverage products.

China is a prime

opporrtunity here: its the worlds largest consumer


c
of edible oils, at
a more
than 24
2 million ton
ns per year foor a market vaalue of over $9
$ billion, and has a
very low
l level of EPA/DHA
E
inttake. [Figure 2-7]
Cookiing oils are one
o way to help
h
bridge thhis nutrition gap.
g
COFCO
O Food
Sales and Distribu
ution in Chinna introducedd in 2010 thhe first cookking oil
fortifiied with algae sourcedd DHA. Wiithin the saame year, Wilmar
W

24

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Global Market for EPA/DHA Omega-3 Products

Chapter 2: Market Review

International launched its Arawana 3A+ premium cooking oil in China, fortified with fish oil.
In less than nine months, an estimated 25 million bottles had been sold, according to a
company spokesman.
Fortified cooking oils in the U.S. include Crisco Puritan Canola Oil and Pompeian Olive
Extra Plus with Omega 3 DHA.
Figure 2-7
Estimated Average Daily Intakes of EPA/DHA by Country
(in mg/day based on 2,000 kCAL diet)

Iceland
Japan
Malaysia
Norway
Finland
Korea
Portugal
Spain
Jamaica
NewZealand
Canada
UAE
Chile
Sweden
Denmark
France
Russia
Israel
Australia
Greece
USA
UK
Switzerland
Italy
Netherlands
Ireland
Germany
Austria
CzechRepublic
SouthAfrica
Poland
Argentina
Brazil
Colombia
Hungary
Romania
China
Bulgaria

783
673
614
439
410
392
365
306
288
283
263
259
259
250
250
245
214
212
203
198
185
185
173
173
164
162
151
128
126
124
119
95
94
83
77
74
49
41
0

100

200

300

400

500

600

700

800

900

Source: GOED (Global Organization for EPA and DHA Omega-3), derived from Hibbeln JR et al .(2006), American
Journal of Clinical Nutrition (83): 1483S-93S.

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Chapter 2: Market Review

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Ragasa, one of Mexicos largest providers of raw and refined oil products and makers of
Mexicos leading consumer cooking oil brand, Nutrioli, offers the Nutrioli DHA product
fortified with algae oil. While these products have not enjoyed the phenomenal success as
their Chinese counterparts, they are making solid inroads as niche products.

Prepared Products
Modern, fast-paced lifestyles have resulted in the more frequent consumption of prepared,
processed meals. Food manufacturers continue to capitalize on this trend by developing more
appealing and healthier products. Processed foods are often fortified to restore nutrients lost
in their production, while others are fortified to increase a product's added nutritional value or
to create a differentiated new product.
Infants and young children are one of the groups at risk of dietary deficiencies. They need a
high level of nutrients, but their food choices are limited and the amount they consume is
relatively low. At the same time, prepared products such as chicken nuggets or fish fingers
are very popular with children. In the United Kingdom, both of the leading frozen fish finger
brands, Birds Eye and Youngs, include an omega-3 fish fingers product in their ranges, and
the Birds Eye version is now the number-three frozen-fish brand line in the UK. The fish are
a natural source of omega-3s, and the batter is fortified with refined fish oil. Similar products
are offered throughout Europe, including Captain Iglo Omega-3 Fish Fingers in the
Netherlands. By offering EPA/DHA omega-3 enriched products, parents can help ensure that
their children are receiving their nutritional needs.

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Other Foods
There are many other products targeted at children that provide good
sources of omega-3 DHA. Prime examples of other foods types that
lend themselves to fortification include peanut butter and breakfast
spreads. In the U.S., Smucker offers its Jif Peanut Butter brand in
both Creamy and Crunchy varieties with omega-3 DHA and EPA
from anchovy and sardine oils.
Australian company Natures Blend launched a new omega-3
breakfast spread aimed at children in late 2011. The yeast spread,
Omegamite, contains fish oils.
Fortified snacks are also designed to attract nutrition-conscious parents. Farm to Table
Canada developed an Omega-3 Kettle Corn fortified with fish oil. The product meets
nutrition guidelines of Ontario schools, and individual serving size packages are promoted to
children as great for lunches or as a snack. DrSEARS Family Essentials entire product line
is fortified with omega-3 DHA. Products include Omega-3 DHA Fruit Chews, Cool Fuel
Kids Bars, Popumz (natural whole grain crisps), and Cool Fuel (nutritional beverage).

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Global Market for EPA/DHA Omega-3 Products

Category Focus: Nutritional Supplements


The global nutritional supplement industry is estimated at $92 billion in 2011, with 18% or
$16.5 billion represented by the specialty/other category (in distinction to vitamin/mineral
and multi-formulas). In terms of specialty supplements, the single largest category is fish oil
products, accounting for approximating $3.2 billion in retail sales 2011. Fish oil edges out
homeopathics, glucosamine/chondroitin, and probiotics for the lead among these specialty
supplement types.

Category Value by Global Region


In 2011, North America represented the largest share (42%) of the $3.2 billion supplement
market at $1.35 billion, followed by Asia-Pacific (28%) at $900 million, Europe (25%) at
$810 million, and the Rest of World at $161 million. [Table 2-5; Figure 2-8]
Table 2-5
EPA/DHA Nutritional Supplements: Global Category Size and Share by Region, 2011
Region

Dollar Sales (millions)

Dollar Share

Overall

$3,220

100%

North America

1,350

42

Asia-Pacific

900

28

Europe

810

25

Rest of World

161

Source: Packaged Facts

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Chapter 2: Market Review

Figure 2-8
Category Share of EPA/DHA Omega-3 Nutritional Supplements by Global Region, 2011
2011 Market Value
$3.2 B
5%
NorthAmerica

28%
42%

Europe
AsiaPac
RestofWorld

25%

Source: Packaged Facts

Category and Regional Trends


Consumers are becoming more proactive in self care and using various types of nutritional
supplements to maintain help health, reduce risk of illness, or address sickness and disease.
Currently the U.S. generates the majority of global supplement sales, Western Europe is
second, and Japan third.

However, China is expected to overtake Japan in nutritional

supplement sales due to the growing interest of its emerging middle class in nutrition and
supplements. Other growing markets include Brazil, India, and Eastern Europe.
Another global industry insider provided this overview: The North American market has
begun to plateau. It is still growing but not nearly at the rate that it initially had. Higher
grade supplements are definitely growing faster than low-grade within that market. Europe
has very slow growth. There is a very difficult regulatory process involved that will continue
to hinder growth. Asia-Pacific is growing by far the fastest but there are many difficulties;
mainly because there is no standard in regulation within the region. However product
acceptance is very strong.
Developed country dynamics include a favorable demographic shift and focus on health and
wellness. Even so, the North American market has slowed due to saturation of these types of
products among the group who readily buy supplements. There is now strong competition
between supplement manufacturers to highlight their products within the category. In 2011,
in the U.S. food/drug/mass merchandiser channel, fish oil supplement sales showed growth of
4%, while the newer segment of krill supplements surged by 72%.

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Krill supplements

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Chapter 2: Market Review

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currently hold a market share of approximately 8% in the U.S. omega-3 supplement segment.
There is a general movement towards krill oil and higher strengths in fish oils, using
descriptive terminology such as triple strength and pharmaceutical grade. Combination
products with benefit claims such as Triple Strength + Brain Support, Triple Strength Fish
Oil + Reservatrol, and Triple Strength Fish Oil 1400 + Skin Support are populating the
shelves. Multi-vitamin/mineral formulas are also incorporating and touting the benefits of
EPA and DHA.
Europe is experiencing the slowest growth due to regulatory issues and a sluggish economy.
In emerging economies, the focus is on addressing nutritional deficiencies and fulfilling the
needs of an expanding middle class. Regionally, according to one contact, Latin America is
sluggish due to lack of consumer awareness when it comes to Omega 3s. There is a serious
lack of education on the benefits of Omega 3s there. Whey protein is big, but Omega 3s
haven't caught on. In relation to Latin America, an ingredient supplier noted that In South
America and Central America, we typically have a diet that is high in Omega 3s naturally
because of the amount of fish that we eat; therefore, these supplements are not a strong
market here.
Additional product trend comments from supplement manufacturers and ingredient suppliers
follow:
Nutritional supplements have been the focus of fish oil suppliers because of the
amount of ingredients used in these products. Many of these supplements have
become commodity type items and so the focus is now on differentiating products by
premium formulations. This product group has slowed down significantly over the
last few years; however it continues to grow.
The largest overall trend that we've observed is producers moving from a low-grade
to a high-grade omega-3 concentrate. Part of our business strategy has been to help
develop and encourage this trend. Our profit margin is very low in low-grade omega3s. In fact, the market will be shifting more and more toward South America in the
low-grade concentrates because the crude oil suppliers have been developing
refining capability to produce low-grade concentrate. They are able to market a lowgrade oil at a significantly better cost than any European refinery. In high-grade
concentrates, we are able to make a respectable profit and the technology is not
nearly as accessible to other companies before us in the supply chain. So what we see
is a significant trend in the supplement market away from low-grade Sam's Club or

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Chapter 2: Market Review

Walmart commodity products towards specialty stores and direct marketing of higher
quality concentrated fish oils.
Marine derived omega-3s are very important to the nutritional supplements
category. If you look on the shelf, you will see product after product of a
concentrated single ingredient, whether it be fish oil or cod liver oil or krill oil.
However, supplements that are multivitamins will also contain an EPA and DHA
omega-3 at some level.
It is by far the hottest ingredient in that market and so you see many multivitamins,
which are the largest single segment, incorporating omega 3s.

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Category Focus: Pharmaceuticals


While supplements are targeted at the prevention and maintenance market segments,
pharmaceutical products are targeted at treatment of severe dyslipidemia. In this contextin
contrast to Rx-to-OTC switchesthe two product categories are complementary, each
boosting awareness of the other, and serving as a positive factor to overall market potential.
Currently there are only two approved omega-3 pharmaceutical products on the market. The
first product is commercialized in 57 countries and sold under the brand names of Lovaza
(U.S.), Omacor and Zodin (Europe and Asia), and Eskim, Esapent and Seacor (Italy). The
second product is produced by Mochida Pharmaceuticals (Japan) and sold under the trade
name of Epadel.

Over the next five years these prescription products will be introduced to additional national
markets, including Brazil and Argentina, and are expected to be well-received. In addition,
several new competitors will enter the omega-3 drug market over the next few years.
Lovaza
The first product, from Pronova, is commercialized in 57 countries and sold under the brand
names of Lovaza (U.S.); Omacor and Zodin (Europe and Asia); and Eskim, Esapent and
Seacor (Italy). It is the first U.S. and European Union approved omega-3 prescription drug,
and is currently in use by an estimated 1.4 million heart patients around the world. An
estimated 1.2 billion capsules are consumed annually, resulting in end-user sales of $1.4
billion
The drugs success is attributed to its strong efficacy and an extensive network of commercial
partners with world class marketing, sales and distribution capabilities. These include Abbott
Laboratories, Kuhnil, Prospa, Pfizer, Grupo Ferrer, Pierre Fabre, GlaxoSmithKline and
Takeda. Pronova BioPharma exclusively provides the oil for the softgel capsules that are
manufactured in the U.S. by Catalent Pharma Solutions.

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Lovaza, also known as omega-3-acid ethyl esters, is a prescription form of fish oil that's
highly concentrated. Each 1-gram capsule contains 463 mg eicosapentaenoic ethyl ester
(EPA) and 375 mg docosahexaenoic ethyl ester (DHA). As a result, it provides the optimal
dose for treating high triglycerides and requires fewer pills than with supplements available
over the counter. As a prescription medication, Lovaza underwent rigorous testing and
clinical study to demonstrate its safety and efficacy before being approved by the Food and
Drug Administration (FDA). This is not the case with omega-3 supplements found at the
health food store. Pronova BioPharmas oils are manufactured at the groups pharmaceutical
plants in Scandinavia, using a unique and complex proprietary process involving the removal
of most other fatty acids, cholesterol and environmental pollutants.
The pharmaceutical drug is approved in the U.S. and many European and Asian markets, as
an adjunct to diet and other lifestyle changes for the treatment of elevated levels of
triglycerides. Triglycerides have been linked to cardiovascular diseases and are included in
the American Heart Association and European and Asian treatment guidelines. The drug has
also been approved in several European and Asian markets for the secondary prevention of
post-myocardial infarction in the period following the initial survival of a heart attack. In
addition, the drug has been shown to be complementary to other lipid-lowering agents, such
as statins. Statins are some of the most commonly used medications for patients with
cardiovascular disease and high triglycerides.
Epadel
The second approved product is produced by Mochida Pharmaceuticals and sold under the
trade name of Epadel. The generic name is ethyl icosapentate. It is approved in Japan and
estimated 2011 sales are $485 million. Epadel was the first drug in the world in which EPA-E
(ethyl icosapentate: one of the poly-unsaturated fatty acids contained in fish oil) was
successfully extracted and purified to a high degree. It is used for treating arteriosclerosis
obliterans and hyperlipidemia.
Category Value by Region
In 2011, North America represented the largest share (53%) of the market at $1.0 billion,
followed by Asia-Pac at $490 million and Europe at approximately $400 million. Rest of
World sales are negligible to date due to lack of product availability. [Table 2-6; Figure 2-9]

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Table 2-6
EPA/DHA Pharmaceuticals: Global Category Size and Share by Region, 2011
Region

Dollar Sales (millions)

Dollar Share

Overall

$1,900

100%

North America

1,010

53

Asia-Pacific

490

26

Europe

400

21

Source: Packaged Facts

Figure 2-9
Share of EPA/DHA Pharmaceutical Sales by Global Region, 2011
2011 Market Value
$1.9 B
<1%
25%

NorthAmerica
Europe
53%

Source: Packaged Facts

21%

AsiaPac
RestofWorld

Source: Packaged Facts

Category Perspective
The cardiovascular/metabolic market is the largest pharmaceutical drug segment. Over 270
million people suffer from dyslipidemia in the seven largest markets, of which 100 million
have been diagnosed. Market opportunities are increasing due to westernization of lifestyles,
aging populations, and increased access to healthcare.
During the next 5 years, Pronova has big plans for the Lovaza product. It is on track for
launch in Japan in 2013, Japan being the worlds second largest pharmaceutical market.
Geographical expansion into emerging markets will continue as well. In 2011, the product
received regulatory approval in Brazil, Argentina and Macedonia plus launch in Venezuela.
Regulatory approval is expected by 2012 in India, Hong Kong, South Africa, Malaysia and
other nations.

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Overall end user sales (by weight) of Pronova BioPharma oils into major markets increased
7% from 2010 to 2011. Sales in the U.S., the largest market, increased by 4%. The highest
sales growth rates, ranging from 5% to 33%, occurred in European countries.
The success of Lovaza has inspired other companies to develop various types of omega-3
fatty acid pharmaceuticals for disorders affecting large numbers of people. Amarin Corp.
submitted a New Drug Application to the U.S. Food and Drug Administration (FDA) in
September 2011 for the use of its drug Vascepa as an adjunct to diet to reduce triglyceride
(TG) levels in adult patients with very high triglycerides (severe hypertriglyceridemia of
500mg/dL), and announced FDA approval in July 2012. Vascepa is also in Phase III clinical
trials for patients with high triglycerides.

In addition, as of August 2012, Omthera

Pharmaceuticals product Epanova had completed enrollment of Phase III clinical trial; and
Catabasis Pharmaceuticals is linking a form of omega-3 fatty acid to salicylate in hopes of
creating a synergistic effect beneficial to treatment of diabetes and other disorders with
inflammation as an underlying cause. [Table 2-7]
Table 2-7
Omega-3 Fatty Acid Pharmaceutical Products in Development
Company

Drug

Acasti Pharma

Capre

High triglycerides

Capre

Mixed Dyslipidemia

Amarin Corp.

Catabasis
Pharmaceuticals

Indication

Stage
Phase II
Pre-clinical

Vascepa

Very high triglycerides

NDA Approved

Vascepa

High triglycerides

Phase III

AMR101

High triglycerides w/ dyslipidemia

Phase III

AMR101

Prevention of cardiac events

Phase I

CAT 1002

Inflammatory Diseases

Phase I

CAT 1000

Type 2 Diabetes with Inflammation

Phase II

CAT 2000

High triglycerides with dyslipidemia

Preclinical

CAT 2003

Severe hypertriglyceridemia

Preclinical

CAT 4000

Psoriasis

Preclinical

CAT 4000

Multiple sclerosis

Preclinical

CAT 5000

Ultra orphan inflammatory disease

Discovery

(cont.)

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Table 2-7 [cont.]


Omega-3 Fatty Acid Pharmaceutical Products in Development
Company

Drug

Epax AS

AKR 963

Endeavor Therapeutics

Endeav101

Hanmi Pharmaceuticals

HCP1007

Indication

Stage

Very high triglycerides

Phase III

Speech disorders in autism


spectrum

Phase I

Mixed dyslipidemia

Phase I

Mochida
Pharmaceuticals

MND-21

Non-alcoholic fatty liver disease

Phase II

Omthera
Pharmaceuticals

Epanova

Very high triglycerides

Phase III

Epanova

High triglycerides w/ dyslipidemia

Phase III

Epanova

Prevention of cardiac events

Pronova Biopharma

Resolvyx
Pharmaceuticals

Pre-clinical

PRC-4016

Mixed Dyslipidemia

Phase I

PRC-4016

Atherosclerosis

Pre-clinical

Unknown

Chronic inflammatory diseases

Discovery

RX-10045

Dry eye disease

Phase II

RX-10045

Retinal disease

Phase I

RX-10001

Asthma

Phase I

RX-10001

Irritable bowel disease

Phase I

RX-10001

Rheumatoid arthritis

Phase I

RX-10001

Cardiovascular Disease

Phase I

RX-20001

Multiple Indications

Pre-clinical

Resolvin Analogs

Multiple Indications

Pre-clinical

Source: GOED (Global Organization for EPA and DHA Omega-3)

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Further diversifying the omega-3 drug market will be the global entry of generic omega-3
drugs. Lovazas patent protection was lost in Europe in August 2009, but no generic products
have entered the EU market yet. In the U.S., the patent is protected until 2017. [Table 2-8]
Table 2-8
Potential Generic Drug Manufacturer Market Entry
Company

Description

Apotex Inc.

Independent Canadian pharmaceutical company with exports to 115 countries.

Chiesi Farmaceutici

Based in Italy and engaged in R & D of pharmaceutical solutions focusing on


respiratory diseases and neonatology

Endo
Pharamceuticals

Offering high value branded pharmaceuticals plus manufacturer and distributor


of generic drugs and OTC products. Also provide medical devices primarily to
urology community.

Institut
Biochemique

Privately owned, pharmaceutical company headquartered in Lugano,


Switzerland. 1800 employees and sells its products covering 7 main therapeutic
areas in 4 continents and more than 70 countries.

Nissui Group

Based in Tokyo, Japan, business centered on research, development,


production and sales of culture media and diagnostics for medical institutions,
research organizations and food industries; Development production and sales
of pharmaceuticals and health foods for pharmacies and drugstores.

Sandoz (Novartis)

Generic pharmaceuticals division of Novartis and second-largest generics


company in the world, employing approximately 24, 000 people across the globe.

Teva
Pharmaceutical
Industries

Among the top 15 pharmaceutical companies in the world and the leader in
generic pharmaceuticals. Teva operates in 60 countries with ~40,000 employees
worldwide.

Par Pharmaceutical

Acquired by Teva in July 2012, Par Pharmaceutical develops, manufactures,


markets and distributes pharmaceuticals through two divisions: Par
Pharmaceutical (generic), and Strativa Pharmaceuticals, (proprietary). Employs
> 600 professionals in the US

Generic manufacturers filed a Paragraph IV challenging the listed patent to see if it is valid
and enforceable. However, as reported by Pharma Times on May 31, 2012,
GlaxoSmithKline and partner Pronova BioPharma are celebrating after the latter beat off a
patent challenge to their fish oil heart drug Lovaza from Teva and Par Pharmaceuticals.
Generics are nonetheless in the works, whatever the schedule of market entry.

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Category Focus: Clinical Nutrition


Clinical nutrition includes enteral and parenteral nutrition products. Enteral nutrition is
ingested both orally and through tubes such as PEG (percutaneous endoscopic gastrostomy),
and delivered into the digestive system as a liquid. Parenteral nutrition feeds an individual
intravenously, bypassing the usual process of eating and digestion. The first option for
feeding is oral, of course, with enteral feeding a second choice. Parenteral nutrition is usually
the third option used to achieve good nutrition.
Clinical nutrition can be delivered in an inpatient setting such as hospital, nursing home and
rehabilitation centers and also as outpatient home care under a doctors supervision.
The clinical nutrition market is conservative in pace of development because formula changes
and new product introductions require clinical trials and must go through a rigorous
regulatory approval process, usually country by country.

Even so, one area that has sparked new developments in enteral formulas has been the
addition of omega-3 fatty acids, which have anti-inflammatory properties and are good for
trauma patients and those with chronic wounds. Elemental enteral formulas are prescribed
for patients with impaired digestive and absorptive capacity and feature partially or fully
hydrolyzed proteins. Elemental enteral formulas including EPA/DHA omega-3s include
Abbott Laboratories Optimental, Pivot 1.5 and Vital AG 1.2 Cal. Nestle Nutrition products
include Impact Glutamine, Impact Peptide 1.5 and Peptamen AF.

Abbotts Optimental

formula is used for acute conditions such as trauma, surgery, burns, pancreatitis, and multiple

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Chapter 2: Market Review

fractures and for chronic conditions such as irritable bowel syndrome (IBD), Crohns
Disease, radiation enteritis and malnutrition.
Specialized enteral formulas are designed to meet the nutrient needs of patients with specific
illnesses. Specialized enteral formulas that have EPA/DHA omega-3s include Abbott
Laboratories OXEPA and several formulas within Nestls Impact product line. B. Braun and
Fresenius Kabi also offer clinical nutrition products with fish oil.

Nestls Impact is

formulated to help support the bodys immune defense for a faster recovery and is given to
surgical and trauma patients. Although some clinical nutrition products may not be prescribed
solely for the benefits of EPA/DHA omega-3 but for others like arginine, these products are
used extensively.
Smartfish is a Norwegian biotech company developing synergistic omega-3 based pharmaconutrition products. Its patented technology is the basis for the product range of orally applied
liquid emulsions. Smartfish clinical nutrition product NutriFriend 1100 is especially
developed for cancer cachexia patients and NutriFriend 600 for general malnutrition. These
products are partially reimbursed under state health schemes in the Nordic countries.
According to one U.S.-based physician, In Europe, interestingly, they have IV preparations
of Omega 3s, which are very intriguing, and that may be the way that we end up needing to
go.
An ingredient supplier notes that clinical nutrition is an interesting space. Its a small space
right now, but I think its got a lot of potential and certainly a lot of benefits for people who
are recovering from a stroke or who are recovering from a severe concussion.
Category Value by Region
In 2011, North America represented the largest share (35%) of the market at $470 million,
followed by Europe (33%) at $450 million and by Asia-Pacific (27.5%), led by Japan and
Australia, at $450 million.
Rest of World accounted for approximately 4.5% of the global market, or $61 million.
[Table 2-9; Figure 2-10]

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Table 2-9
Clinical Nutrition Products with EPA/DHA: Global Category Size and Share by Region, 2011
Region

Dollar Sales (millions)

Dollar Share

Overall

$1,355

100%

North America

470

35

Europe

450

33

Asia-Pacific

370

27.5

Rest of World

61

4.5

Source: Packaged Facts

Figure 2-10
Share of Sales for Clinical Nutrition Products with EPA/DHA by Global Region, 2011
2011 Market Value
$1.4 B
4.5%
27.5%

NorthAmerica

35%

Europe
AsiaPac
RestofWorld

33%

Source: Packaged Facts

Established and Emerging Markets


Several factors influence growth in most markets. These include growing and aging
populations, higher incidence of chronic disease, government involvement, increased lifeexpectancy, and shifting in facility types from in-patient hospital care to home care. Mature
markets such as the United States, Japan and Western Europe are penetrated with products
from market leaders including Abbott Laboratories, Nestle, Danone (Nutricia), Mead
Johnson, Fresenius Kabi, and B. Braun. These regions host a large percentage of older
populations and have established reimbursement guidelines in place. [Figure 2-11]

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Chapter 2: Market Review

Figure 2-11
Population Aged 65 or Older by Country: 2010 vs. 2015

China

CAGR 3.4%

India

70,462
60,278

CAGR 3.2%

UnitedStates

46,949
40,534

CAGR 3.0%

33,109
28,707

Japan

19,072
18,297

RussianFederation

CAGR 2.9%

CAGR .8%

Germany

17,506
16,775

CAGR .9%

Brazil

16,495
13,652

CAGR 3.9%

13,312
12,322

Italy

CAGR 1.6%

France

12,010
10,544

CAGR 2.6%

UK

11,499
10,290

CAGR 2.2%

2015
2010

Spain

8,555
7,820

CAGR 1.8%

Mexico

8,445
7,201

CAGR 3.2%

129,928
109,845

20,000 40,000 60,000 80,000 100,000 120,000 140,000

Source: United Nations Statistics Division, www.data.un.org, accessed June 2012 and Packaged Facts

Developing regions are showing increased interest in enteral nutrition products, and have
continued to expand as reimbursement policies are enacted and medical professionals are
educated in their applications. While demand for enteral products remains steady in the
United States and Japan, markets in less developed regions of Europe, Asia Pacific and Latin
America are increasing significantly. One factor driving growth is the increased use of enteral
products in home care settings, which is continuing to grow worldwide.

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Category Focus: Pet Food, Treats and Supplements


The recent humanization of companion animals has been a strong driver in the way
consumers generally perceive pet products and brands. Label claims and ingredients found in
human diets, such as EPA/DHA omega-3s, attract pet owners who want to provide the very
best for their pets, which are increasingly seen as members of the family.

Global retail sales of pet food, treat, and supplement products are estimated at nearly $60
billion in 2011. Packaged Facts estimates that approximately 1.5% of this market, or $0.9
billion, is fortified with EPA/DHA omega-3s. (Fish meal is excluded from this sizing.)

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Chapter 2: Market Review

Key products include many puppy and kitten foods; select premium dog and cat food
formulas; and dog treats and dietary supplements marketed as solutions for improving skin
and coat or fur.
Puppy and kitten foods tout the benefits of DHA as an important nutrient for healthy brain
and vision development, and in some instances also reference it as a nutrient also found in
mothers milk.
Adult food formulas associate fish oil fatty acids with enhanced active mobility plus bone/
joint cartilage support.
Supplements come in multiple formats such as softgel capsules, soft chews, chewable tablets
and liquid oil, and usually promote glossy, silky coats. Fish oil supplements represent
approximately 10% of all pet supplement sales.
Category Value by Region
In 2011, North America represented the largest share (58%) of the market at $510 million,
followed by Europe (25.5%) at $230 million and Asia-Pac (12.5%) at $110 million. Rest of
world accounted for another $35 million in EPA/DHA-fortified pet product sales. [Table 210; Figure 2-12]
Table 2-10
EPA/DHA-Fortified Pet Food, Treats, and Supplements: Global Category Size and
Share by Region, 2011
Region

Dollar Sales (millions)

Dollar Share

Overall

$887

100%

North America

510

58

Europe

230

25.5

Asia-Pacific

110

12.5

Rest of World

35

Source: Packaged Facts

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Figure 2-12
Share of Sales for Pet Food, Treats, or Supplements with EPA/DHA by Global Region, 2011
2011 Market Value
$0.9 B
12%

4%
NorthAmerica
Europe

26%

58%

AsiaPac
RestofWorld

Source: Packaged Facts

Market Scales Up and Expands Out


In the U.S., the overall market for pet products and services has been premiumized by
several forces, including the economic crisis, which has caused some lower-income
consumers to forgo pet ownership (ceding the territory to the more prosperous), and the
humanization of companion animals, which raises the bar on the quality and range of
products and services that pet owners consider appropriate and even necessary as
expenditures. Therefore, though U.S. pet food sales rose just 1.8% in 2011 in the massmarket sector of supermarkets, drugstore and mass merchandisers, they have grown at a much
faster pace in the generally premium-priced pet specialty channel, including a 7% increase in
2011.
The global expansion of pet superstores will create more opportunities for EPA/DHA
fortified pet foods, especially in developing market such as Asia-Pacific, Latin America and
Eastern Europe. In more developed markets, private label pet food is becoming more
premium, including fortification with fish oils. In the developing world, as the middle class
emerges and expands, a combination of disposable income and development of a Western
middle-class mindset develops about companion animals. The nutritional profile of pet
foods, treats, and supplements becomes more of a priority as and pets move from outdoor to
indoor animals and become regarded as part of the family. As one reflection of this trend,
specialized pet food formulas have been introduced in rapidly growing markets like Brazil
and China, addressing issues such as sensitive skin, arthritis relief, and mental development.

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A global pet food manufacturer assessed the market as follows, North America is definitely
the biggest market for pet food, followed by Western Europe and Japan. We break out Japan
separately. Japan is the major force driving most of Asia, as Brazil drives most of South
America. Another major pet food manufacturer stated, We're a global company with a
presence in North America, Latin America, Asia and China. We're increasingly seeing
interest from the Middle East in the form of companies and individuals there wanting to be
distributors.

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Projected Market Size and Growth


Packaged Facts projects market value of EPA/ DHA omega-3 packaged products to reach
$34.7 billion in 2016, representing a compound annual growth rate (CAGR) of 6.4% over
2011.
Projected Sales and Shares by Geographic Region
Sales in North America will reach $13.0 billion in 2016, and this region will continue to
account for the largest slice of the market, although its share is projected to notch downward
from 42.6% in 2011 to 37.6% in 2016.
Asia-Pacific will jump to a close second-place position by nearly doubling in market value
between 2011 and 2016, increasing its market sales to nearly $12.5 billion and its global
share from 26.2% to 35.9%.
Market value in Europe will grow to $7.6 billion in 2016, although the relative global share
held by this region will edge downward from 26.2% in 2011 to 21.9% in 2016.
Packaged Facts estimates that market sales in the Rest of World, including Latin America,
Middle East and Africa, will reach $1.6 billion in 2016, with global market share dropping
slightly to 4.7%. [Table 2-11; Figure 2-13]
Table 2-11
EPA/DHA Omega-3 Products: Projected Global Market Size and Share by Region, 2016
Region

Dollar Sales (Billions)

Dollar Share

Overall

$34.72

100.0%

North America

13.04

37.6

Asia-Pacific

12.45

35.9

Europe

7.57

21.9

Rest of World

1.62

4.7

Source: Packaged Facts

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Figure 2-13
EPA/DHA Omega-3 Products: Projected Global Market Share by Region, 2016

2016 Market Value


$34.7 B
4.7%
NorthAmerica
37.6%

35.9%

Europe
AsiaPac
RestofWorld

21.9%
Source: Packaged Facts

Forecast growth over the five-year 2011-2016 period will be highest in the Asia-Pacific
region, due to growing product acceptance in this region, and particularly in China. [Figure
2-14]
Figure 2-14
Projected CAGR for EPA/DHA Omega-3 by Region, 2011-2016
2011-2016 CAGR of 6.4%
14%
13.4%

12%
10%
8%
6%
4%
2%

5.1%
3.8%
2.6%

0%
NorthAmerica

Europe

AsiaPac

RestofWorld

CAGR = compound annual growth rate


Source: Packaged Facts

September 2012

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Projected Sales and Shares by Product Category


Infant formula is projected to continue as the largest EPA/DHA omega-3 product category,
claiming a market share of 40.7% in 2016. Fortified foods and beverages are projected to
follow at a 29.5% share in 2016, such that these two leading categories will account for seven
out of ten dollar sales in the market. [Figure 2-15]
Figure 2-15
Projected Global Market Shares for EPA/DHA Omega-3 Products by Category, 2016
2016 Market Value
$34.7 B
FoodandBeverage

8.8%
4.8%

29.5%

40.7%

3.0%
13.2%

PetFood,Treat&
Supplements
Nutritional
Supplements
InfantFormula
ClinicalNutrition
Pharmaceutical

Source: Packaged Facts

Packaged Facts projects that the consumer market for DHA-fortified infant formula will
reach $14.1 billion in 2016, reflecting a compound annual growth rate (CAGR) of 6.8% for
the 2011-2016 period, for total dollar gains of nearly $4 billion in the category. Asia-Pacific
will post the highest regional five-year growth rate for infant formula, at 14%, for over $3
billion in dollar gains over the five-year period. [Table 2-12]
Table 2-12
Projected Market for DHA/ARA-Fortified Infant Formula: Overall and by Global Region,
2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$14,117

6.8%

$3,937

North America

3,780

1.8

320

Asia-Pacific

6,470

14.0

3,110

Europe

3,050

2.1

300

817

6.0

207

Rest of World

CAGR = compound annual growth rate


Source: Packaged Facts

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The market value of EPA/DHA fortified foods and beverages is projected to exceed $10.2
billion in 2016, for a CAGR of 5.4% over the five-year period and dollar gains of nearly $2.4
billion. Asia-Pacific will post by far the highest regional growth rate in this category, at 15%,
for dollar gains of $1.4 billion over the five-year projection period. [Table 2-13]
Table 2-13
Projected Market for EPA/DHA-Fortified Food & Beverages: Overall and by
Global Region, 2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$10,249

5.4%

$2,365

North America

4,660

3.0

640

Asia-Pacific

2,850

15.0

1,430

Europe

2,260

2.0

210

479

4.0

85

Rest of World

CAGR = compound annual growth rate


Source: Packaged Facts

The value of the EPA/DHA nutritional supplements market is expected at $4.6 billion in
2016, reflecting a five-year CAGR of 7.3% and dollar gains of nearly $1.4 billion over the
five-year 2011-2016 period. Asia-Pac will post the highest regional growth for nutritional
supplements at 13%, for nearly $1.7 billion in dollar gains over 2011-2016, trailed by North
America with a CAGR of 5.5%. [Table 2-14]
Table 2-14
Projected Market for EPA/DHA Nutritional Supplements: Overall and by
Global Region, 2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$4,581

7.3%

$1,360

North America

1,770

5.5

420

Asia-Pacific

1,660

13.0

760

Europe

960

3.5

150

Rest of World

191

4.0

30

CAGR = compound annual growth rate


Source: Packaged Facts

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Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

The EPA/ DHA pharmaceuticals market is projected at $3.1 billion in 2016, reflecting a
five-year CAGR of 10%. Anticipated CAGR will be highest in Asia-Pac at 12.5%, followed
by North America at 10%. North America, therefore, will account for over half of the dollar
gains in this category over the 2011-2016 period. [Table 2-15]
Table 2-15
Projected Market for EPA/DHA Pharmaceuticals: Overall and by Global Region,
2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$3,058

10%

$1,158

North America

1,622

10

615

Asia-Pacific

890

12.5

396

Europe

540

6.25

141

Rest of World

CAGR = compound annual growth rate


* Because products were unavailable as of 2011, all sales in this region represent new market growth.
Source: Packaged Facts

The value of the clinical nutrition market for products with EPA/DHA fortification is
projected at $1.7 billion in 2016, reflecting a five-year CAGR of 4.3%, for dollar gains of
$310 million in the global category over the 2011-2016 period. Asia-Pacific should post the
highest regional growth rate at 5%, but will be followed closely rate of gain by the other
global regions. [Table 2-16]
Table 2-16
Projected Market Clinical Nutrition Products with EPA/DHA: Overall and by
Global Region, 2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$1,664

4.3%

$310

North America

580

4.2

110

Europe

550

4.2

100

Asia-Pacific

460

5.0

90

Rest of World

74

4.5

10

CAGR = compound annual growth rate


Source: Packaged Facts

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Chapter 2: Market Review

Market size for the EPA/DHA fortified pet food, treats and supplements is projected at
$1.1 billion in 2016, reflecting a five-year CAGR of 3.4%, for dollar gains of $160 million
over the five-year period. Rest of World will have the highest regional growth at 8%, due
largely to activity in Brazil. Nonetheless, the U.S. market will continue to account for the
majority of sales and of dollar gains in this category. [Table 2-17]
Table 2-17
Projected Market for EPA/DHA-Fortified Pet Food, Treats, and Supplements:
Overall and by Global Region, 2011-2016
Region

Projected
2016 Sales (Millions)

Projected 2011-2016
CAGR

Projected 2011-2016
Dollar Growth (Millions)

Overall

$1,050

3.4%

$160

North America

630

110

Europe

250

20

Asia-Pacific

120

10

Rest of World

52

20

CAGR = compound annual growth rate


Source: Packaged Facts

September 2012

Packaged Facts

51

Chapter 2: Market Review

Global Market for EPA/DHA Omega-3 Products

Summary of Factors to Future Growth


Expanding public awareness of EPA/DHA omega-3 health benefit through positive media
coverage of scientific research findings, as well as developments in regulatory markets, will
contribute significantly to continued growth in the global market for EPA/DHA omega-3
products. Other factors that will continue to create a positive growth environment for
EPA/DHA omega-3 packaged products include:

Consumer interest in functional food and fortified product line expansions;

Increasing demand for fortified infant formula due to population growth and rising
middle class in emerging economies;

Continued popularity of EPA/DHA omega-3 nutritional supplement products,


including krill oil and vegetarian algae-based supplements;

Introduction of pharmaceutical-grade products into South America and approval of


generic forms in existing markets.

Expanding clinical nutrition market opportunities for disease- and disorder-specific


formula applications, created through additional R & D and aggressive marketing by
ingredient suppliers; and

Premiumization of pet foods due to humanization of companion animals;

Growth in North America will vary widely among the different product categories and
segments.

Packaged Facts projects that the highest growth rates will be seen in the

pharmaceutical market due to large number of Americans with heart diseaseat 27.1 million,
according to the Centers for Disease Control and Prevention. In addition, nutritional
supplements are expected to experience solid growth as the population becomes more aware
of the benefits of EPA/DHA omega-3s and enjoy the convenient format of a pill. Innovations
such as triple strength fish oil, the overwhelming acceptance of krill oil alternatives, inclusion
in multi-vitamin/mineral formulas, and algae-based vegetarian alternatives are driving growth
in this category. Awareness of EPA/DHA omega-3 benefits is carrying over to the pet food
segment as people want to provide premium nutrition for their companion animals.

52

Packaged Facts

September 2012

Global Market for EPA/DHA Omega-3 Products

Chapter 2: Market Review

Nutritional supplements will be a key growth segment in Asia-Pacific. Japan is already a


leader in product use and acceptance, and China is expected to outpace Japan going forward
due to the growing interest of its large middle class in nutrition and supplements. In addition,
Asian cultures are less sensitive to concentrated fish oil supplements, as they have diets that
are high in fish products.
For one ingredient supplier, The Asian market is less sensitive to tastes and smells; therefore
a micro encapsulation is not as important to that region as the Western world. Algae-based
products, moreover, will open up important markets among vegetarian consumers, including
in India.
An industry consultant summarized the market opportunity in this region with the following
assessment, Asia is the fastest-growing market now that regulation barriers are being
established and overcome. It is becoming much simpler for products to be introduced in that
part of the world. The demand is very high and consumer response is very good. In that
region, price is more of a concern than taste where in other regions, taste and smell are the
primary concerns for introducing fish oils and other marine products into foods.
Europe will post relatively low market growth rates over the forecasted period.

The

pharmaceutical and clinical nutrition product categories are projected to post solid increases
in this region, although they represent a smaller portion of the overall consumer packaged
goods market. Due to universal health care policies throughout Europe and aging populations,
sales of these medical products should continue to climb. Eastern Europe in particular offers
new areas of opportunity.
Key growth areas in the rest of the world include infant formula, as increasing urbanization
and a burgeoning middle class support further growth. EPA/DHA pharmaceutical sales will
also expand as current and new products in a very active pipeline are introduced into markets
after regulatory approval. Pet food, treats and supplements will be a high growth area as well
with pet superstores entering the Latin American market and with distribution becoming
more prevalent in the Middle East.

September 2012

Packaged Facts

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