Joachim Scholderer Omega-3s: State of the market, challenges and opportunities MAPP Conference 2008
Joachim Scholderer
Omega-3s: State of the market, challenges and opportunities
MAPP Conference 2008
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
State of the market
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
The global market for omega-3 enriched FMCGs
Infant formula73%
Dietary supplements
16%
Other2%
Foodsand
beverages9%
58% Dairy
17% Spreads
5% Fruit juice12% Bakery
8% Other
(% retail value; data source: Euromonitor GMID, 2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Launch activity in world regions
0
50
100
150
200
250
300
350
400
Febru
ary
2002
June
2002
Oct
ober
2002
Febru
ary
2003
June
2003
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ober
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ary
2004
June
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ary
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June
2005
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ober
2005
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ary
2006
June
2006
Oct
ober
2006
Febru
ary
2007
June
2007
Oct
ober
2007
Febru
ary
2008
June
2008
Oct
ober
2008
Cu
mu
lati
ve N
of
pro
du
ct lau
nch
es
Europe
North America
Asia Pacific
Latin America
Middle East and Africa
(Data source: Mintel GNPD, 2002-2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Launch activity in Europe
0
10
20
30
40
50
60
70
80
Febru
ary
2002
June
2002
Oct
ober
2002
Febru
ary
2003
June
2003
Oct
ober
2003
Febru
ary
2004
June
2004
Oct
ober
2004
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ary
2005
June
2005
Oct
ober
2005
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ary
2006
June
2006
Oct
ober
2006
Febru
ary
2007
June
2007
Oct
ober
2007
Febru
ary
2008
June
2008
Oct
ober
2008
France
UK
Spain
GermanyItaly
NetherlandsSwedenFinlandNorwayBelgiumC
um
ula
tive N
of
pro
du
ct lau
nch
es
(Data source: Mintel GNPD, 2002-2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Key trends
World
New product launches in Europe have already peaked: omega-3s have become mature. North America is at its peak right now
Asia-Pacific is currently in the take-off phase. Latin America is accelerating. Middle East and Africa exhibit slow growth
Europe
NPD activity in UK, France, Spain and Germany is decreasing
Late-mover markets such as Italy, Netherlands and Norway are still on the rise
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Average life cycle of an omega-3 enriched food
0
100
200
300
400
500
600
0 3 6 9 12 15 18 21 24 27 30 33 36 39
Months after launch
Avera
ge v
olu
mes
sale
s p
er
pro
du
ct(I
nd
ex:
Mo
nth
1 =
10
0)
(Data source: Mintel GNPD/IRIS, 2005-2008)
Trend
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Infant-digestive-brain
cluster
Dairy-spread-cardiovascular
cluster
Categories, claims and ingredients
Cardiovascular
Low fat
Low cholesterol
Digestive
No Additives
Brain and nervous systemNo transfat
Low allergen
ALA
Antioxidant
Calcium
DHA
EPAIron
Magnesium
Phytosterol
Prebiotic
Probiotic Vitamin A
Vitamin B1
Vitamin B2
Vitamin B3
Vitamins B5, B7, B8
Vitamin B6
Vitamin B9
Vitamin B12
Vitamin C
Vitamin DVitamin E
Vitamin K
Zinc
CLA
PUFA
MUFA
Omega 3
Omega 6
Infant formula
Bakery
Breakfast cereals
Dairy
Ready meals
Processed fish, meat and egg products
Sauces and seasonings
Spreads
Side dishes
Snacks
-1.5
-1
-0.5
0
0.5
1
1.5
-1 -0.5 0 0.5 1 1.5 2
(Data source: Mintel GNPD, 2002-2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Positioning trends
In dairy and spreads, products are increasingly positioned generically (“with omega-3”), often without a health claim that refers to the effects of the omega-3s
Instead, omega-3s are often paired with phytosterols in such products, piggybacking on the cholesterol-lowering effects of phytosterols
In infant formula and functional drinks, products are increasingly positioned on brain and cognitive ability, in particular in the US and Asia
Algae-sourced DHA is the typical omega-3 ingredient in infant formula. Strong efforts are being made at ingredient branding
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Out of the dairy ghetto and into the ready meals market
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
SCANomega/SEAFOODplus Choice Study
Sample sizes
N = 1688 (Germany)N = 1668 (UK)
Categories
LasagneBurgersAsian noodlesSandwiches
Factors
PriceMain protein ingredientOmega-3 enrichment
(SCANomega/SEAFOODplus Choice Study; Scholderer, 2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Consumer willingness to pay for omega-3 enriched ready meals
24%
17%12%
16%
7%2%
7% 9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Germany
UK
Imp
lici
t p
rice
(%
pre
miu
m)
(SCANomega/SEAFOODplus Choice Study; Scholderer, 2008)
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Challenges and opportunities
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Omega-3 ≠ Omega-3
Most consumers are unaware that the term omega-3 refers to a family of compounds and that only some of them (mainly EPA and DHA) have substantial health benefits
ALA is by far the most frequently used compound. However, ALA is poorly converted to EPA and DHA, rendering its health benefits negligible in practice
EPA and DHA are catching up. Despite great advances in encapsulation technology, they are still used only hesitantly in products in which a fishy off-flavour might be a problem
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Tough times for claims
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
Generification
Increasing penetration by private labels. Of all omega-3 enriched foods launched globally between 2002 and 2008, 7% were private-label products
− UK: 22%− France: 10%− Germany: 6% − Spain: 6%− US: 5% − Italy: 0%
Increase in direct sales via the internet, not always in line with good marketing practice
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
New sources, old troubles?
MAPP Conference 2008 - Joachim Scholderer: Omega-3s
More info?
Contact:
Prof. Joachim Scholderer
MAPP, Dept. of Marketing and Statistics,Aarhus School of Business, University of AarhusHaslegaardsvej 10DK-8210 Aarhus V, Denmark
e-mail: [email protected]