Omega 3 — look how far we’ve come

By Ellen Schutt, Communications Director, GOED

As Vitafoods celebrates its 20th anniversary, it’s interesting to take a look back at various segments of the industry to reflect on how much things have changed. The Omega 3 category is a perfect example of a segment that has evolved tremendously over the last 20 years.

ellen schuttWhile cod liver oil has been around for centuries, the modern Omega 3 market began back in the early 1980s with 18:12 ‘natural’ fish oil products – named for the ratio of EPA to DHA in the oil. The market evolved to include ethyl esters, a form of Omega 3s that require additional processing, and both 18:12 triglyceride and ethyl ester products remain on the market today, along with phospholipid forms like krill.

Speaking of krill – krill products didn’t exist 20 years ago, although in recent years this is a category that has grown substantially. Similarly, there were no high-concentrate products on the market, reflecting both technological developments and consumer preferences.

Growth in the Omega 3 market was also influenced by the regulatory environment. Twenty years ago, there were no government-approved health claims, and no recommended intakes for EPA and DHA anywhere in the world. Today more than 30 countries have recommended intakes and a variety of health claims have been approved around the world (you can see these here). This is primarily due to the large body of science that Omega 3 enjoys, for indications including cardiovascular health, cognitive health and prenatal & maternal health, among others.

The market today is worth $1.4 billion at the ingredient level and while growth in more mature markets like North America and Europe has slowed in recent years, the global market continues to grow, supported by increases in China, Southeast Asia and other emerging countries.

Here are five more facts about the evolution of the Omega 3 market:

 

  • Twenty years ago, algae were used to fortify chicken eggs. That changed when Martek (now owned by DSM) successfully petitioned the US FDA for the addition of algal DHA to infant formula. The company received GRAS status in 2001 and a whole new market was born.
  • The infant formula market is now a 3.3 million metric ton market, fuelled primarily by growth in South America and Southeast Asian markets.
  • Despite the popularity of high-concentrate products, there has also been a resurgence of ‘natural’ fish oils – with pollock oil and virgin salmon oil, for example, emerging as new categories.
  • In 1996 there were only a couple of Omega 3 fortified functional food products. Interestingly, one of the most successful was Puleva Omega 3 fortified milk, which debuted in Spain in the mid-1990s and is still successful today. The brand just rolled out several line extensions earlier this year.
  • There was one Omega 3 based pharmaceutical on the market in 1996 – Epadel in Japan. While now there are still only four approved pharma products, global sales exceed $1.2 billion. There are also more than 80 new Omega 3 pharmaceuticals in the drug discovery pipeline.

Looking ahead, while the Omega 3 market has been an industry darling for much of the last 20 years, we must prepare for the 20 years ahead. Negative media stories questioning neutral science have affected industry growth and consumer trust has been eroded by irresponsible claims and a lack of transparency. Our industry needs to band together to reaffirm the quality of Omega 3 products for consumers and continue to educate people about the strong body of science behind Omega 3s for cardiovascular, cognitive and prenatal & maternal health.

Interested in Omega 3s? Make sure you visit the Omega 3 Resource Centre in association with GOED at this year’s Vitafoods Europe. To find out more about GOED’s work, go to www.goedomega3.com.

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Tesco’s NutriCentre failure speaks volumes about the food-medicine divide

By Shane Starling, senior editor, NutraIngredients, FoodNavigator and FoodNavigator-Asia

‘Let food be thy medicine and medicine be thy food.’ Nice idea, one uttered by Greek doctor Hippocrates centuries ago, but best not to mention it at the next Tesco ‘future investments’ pow-wow. It seems the mainstreaming of nutrition is an idea whose time is, as ever, yet to come.

www.lateliersophoto.frLike many investors in functional foods, food supplements and nutrition, when retail giant Tesco – then making shedloads of profit unlike now – paid about £3 million (€3.7m) for a 50.1% stake in supplement vendor NutriCentre in 2001 it seemed like a pretty good idea. The nutrition and health end of the food industry was outperforming the regular food sector by significant margins.

The retail behemoth gained a bunch of supplement and health-focused retail outlets, an online business and the know-how to integrate NutriCentres into some of its own real estate in the form of nutrition ‘concessions’.

Increasingly health-conscious consumers would gobble up the super-convenient opportunity to top up their whole food purchases with Omega 3s, vitamins and minerals, botanicals and more. A no-brainer, right?

Wrong.

It hasn’t panned out and after 15 years, Tesco is bailing on NutriCentre and the whole venture is being binned after its losses blew out four-fold last year from about €2.75m to over €10m. That has not yet been fully explained in isolation but tallies with Tesco’s across-the-board slide into lossmaking in recent years (an €8bn loss last year).

The closure is a little surprising at a time when Euromonitor International figures show specialist healthcare retailers such as Boots and NBTY-owned GNC, Holland & Barrett and De Tuinen brought in sales of €9.78bn in western Europe in 2015, up nearly 8% from €9.08bn in 2012.

However Italy, Germany and France accounted for the main chunk of these 2015 sales, at €3.64bn, €1.46bn and €1bn, respectively. The UK was seventh in line at €396m.

So a smaller market and a somewhat crisis-hit retailer downsizing; a retailer that has shed other non-core assets like coffee chains and garden centres since the accounting scandal of 2014.

The question is this: is the demise of this 25-year-old business bad news for the European supplement sector in general or did Tesco just tank the operation? Maybe it is a little of both.

Certainly, as the above figures show, the health food channel remains in overall growth and NBTY CEO Steve Callihane recently affirmed the strength of its UK-focused Holland & Barrett chain, refuting divestment rumours and calling H&B “a core brand” for the US-based healthcare giant.

Some would argue the blame should be laid at the door of the EU’s strict health claim laws, which have stripped claims from thousands of products, and placed about 1,500 botanical products in claim-making limbo while Brussels decides how to treat them scientifically. But that’s another story…

A breakdown of sales between the 12 high street NutriCentres and the 11 Tesco store concessions is not available but perhaps part of the issue here is that a majority of people who buy food supplements still prefer to buy them from specialty outlets like health food stores and pharmacies.

They might be called food supplements or dietary supplements or nutritional supplements, but in the minds of most that might buy them, they retain a medicalised edge. And people don’t tend to want to buy drug-like products from a food shop.

It’s for this reason that many functional foods – which have for so many decades offered so much promise based on the ancient sage of Hippocrates – have remained largely niche, energy drinks and probiotic yoghurt excepted.

In the meantime, NutriCentre is offering 75% off everything until it officially closes its doors for good and 140 people require new aisles to staff.

Let food supplements be thy medicine…

NutraIngredients will provide regular news updates from this year’s Vitafoods Europe. It is also the organiser of the Nutraingredients Awards, which highlight and recognise the best innovations in the European and global nutrition industry. Winners will be announced at Vitafoods Europe on 11 May 2016. Tickets are still available here.

 

The biggest changes begin microscopically

By Pedro Escudero, President, Buggypower

The future of mankind – and our nutrition – lies not on the land, but in the oceans. This is a bold claim to make, but it is one supported by compelling evidence.

alguimya lisboa portugal

Consider this, for example – microalgae have existed on Earth for three billion years and they are responsible for generating up to 75% of the oxygen we breathe. Without them, we would be doomed. They are, in effect, nature’s biggest life-support machine.

Beyond this, however, microalgae also offer endless possibilities in areas such as biofuel, healthcare, cosmetics, and animal and human nutrition. They are rich in proteins, minerals, vitamins, antioxidants and polyunsaturated fatty acids such as Omega 6 and Omega 3.

They offer a magical formula that can help to improve eye and brain function, reduce inflammation, stimulate the immune system, increase cells’ antioxidant abilities, inhibit cancer and prevent heart disease. I’m speaking here from the heart, since I myself had a cardiovascular condition. Microalgae was a powerful (and tasty) ally that helped me through it.

According to 2012 figures, the cost of cardiovascular disease to the EU economy is estimated at €196 billion a year. Meanwhile, the EU Public Health report from 2015 found that the EU’s healthcare bill for chronic disease is €700 billion, the equivalent to 70-80% of total healthcare costs.

None of us wants to be a part of these statistics. I’m sure instead that we would like to be among the growing number of people around the world who, according to a National Geographic 2014 Greendex survey with Globescan, are making positive changes to ensure their lifestyles are more sustainable.

Microalgae is a great way to achieve this. At Buggypower, our goal is to contribute to the future of mankind by harnessing the immense power of marine microalgae. You see, the biggest changes can begin microscopically. Microalgae is a case in point, and that’s why I believe it is central to mankind’s future.

Buggypower is a Portugal-based biotechnology company that produces marine microalgae biomass, and will be exhibiting at Vitafoods Europe 2016 on Stand M112.

‘Food as medicine’ will drive explosive growth in functional foods

By Steve French, Managing Partner, NMI (Natural Marketing Institute)

Steve French, Managing Partner, Natural Marketing Institute (NMI)Powerful forces are converging along the wellness continuum to catalyze explosive changes in health and nutrition.

One such trend that is clearly evident indicates that consumers are showing greater personal responsibility for their own health and wellness through ‘food as medicine’.

Driven in part by emerging food fortification technologies and discoveries of nutrient benefits, consumers are choosing to make the most of their caloric intake. Hence, the growth of functional foods is set to outpace the growth of conventional foods around the world – across both developed and emerging markets globally.

NMI research shows that the top drivers of functional and fortified food use are to ensure overall health and to increase consumption of certain nutrients – almost like a nutritional insurance policy. In fact, three-quarters of US consumers believe healthy foods and beverages can be used to increase the quality of their lives.

In addition, more than quarter of Americans believe that functional foods and beverages can be used in place of some medicines. It may not be surprising, then, that a majority of consumers would use foods and beverages to prevent and treat many health conditions, including heart disease, high blood pressure, lack of energy, intestinal irregularity and even cancer.

The trend for ‘food as medicine’ is a strong sign of consumers’ growing need to take more responsibility for their health and a contrary indication of a widely held belief within the industry that functional foods are reaching a plateau as a future market opportunity – when, in fact, functionality is poised to be a key driver of future growth.

Steve French will give a talk on the hottest trends in functional foods at the Vitafoods Europe Conference, at 11.30am on Wednesday 11 May 2016. He will also address the subject of healthy ageing in the new Vitafoods Europe Life Stages Theatre on Thursday 12 May 2016, from 11am.

Start-ups and entrepreneurs in the driving seat

By Julian Mellentin, Founder & Director, New Nutrition Business

Mellentin 2.jpg

The good news for would-be entrepreneurs – and even for executives inside big companies who long to create something new – is that when it comes to health and wellness, it is small new brands and new businesses that are increasingly taking the lead in redefining markets.

One big reason is because entrepreneurs are much more willing than giant corporates to take a calculated risk. One example is Way Better, an American brand that has jumped from zero to $25 million in retail sales within three years. Its proposition is simply the “naturally functional” benefits of sprouted grains, an ancient way of consuming grains that Way Better has simply re-packaged as a snack for the on-the-go health-conscious consumer.

The small new brands begin by targeting the “lifestyle” consumers – the 20%-30% of people (depending on which country you are in) who are willing to pay a premium for something that delivers health and wellness benefits. This is a smart move, because most brands who attempt to jump straight into the more price-driven mass market fail.

The lifestyle consumer can be reached by all kinds of alternative distribution channels, which are better suited to low volume products than the traditional supermarket.

And happily for the would-be entrepreneur, consumers’ beliefs about what “health” means have become even more fragmented than they were 15 years ago, when New Nutrition Business first pointed out that very individual definitions of health – personalised nutrition in effect – were rapidly taking root.

This fragmentation of belief is producing a massive fragmentation of markets and the proliferation of niches which small companies are perfectly placed to serve, but which will usually be dismissed by the managements of big companies as being too low volume. The proliferation of healthy brands is itself feeding consumers’ interest in personalised nutriton and creating even more niches.

The end point is that big companies are going to have to start behaving like entrepreneurs and create new start-up brands of their own if they want to have a place in the new world.

New Nutrition Business will be giving a talk on ‘Staying competitive as a start-up’ on the Vitafoods Europe Centre Stage, at 1.05pm on 11 May 2016.

‘Functional’ foods: a concept with a split personality?

By Dr David Mela, Senior Scientist, Unilever R&D Vlaardingen, the Netherlands

Mela headshot cropped Ob Soc 2012

The concept of ‘functional’ foods and ingredients with specialised health benefits became widespread in the 1990s, accompanied by highly optimistic projections of the future market size for such products. But are functional foods really a single, coherent category?

Depending on which report one reads, the current global functional foods market value is anywhere from approximately US$2 billion to more than $240 billion[1][2].

Such wildly varied estimates of market size, as well as projected growth, reflect differing definitions of ‘functional foods’, capturing very different market segments.

Indeed, from the perspective of scientific underpinning and consumer positioning, it often feels the market is largely split between different ‘personalities’.

One part of the market is traditionally more introverted, dominated by basic nutrients (vitamins, minerals, essential fats), foods with improved nutritional compositions (protein, fibres, carbohydrate and lipid quality), and small number of other ingredients where physiological effects are well established (eg plant sterols).

These categories benefit from a substantive body of research underpinning causal, structure-function relationships between defined components and health functionality. It is largely based upon, and makes use of, the tools and rules of rigorous science. The quality of evidence and cautious claims should make this part of the functional foods market the most credible, yet it may struggle to motivate consumers.

Another side of the functional foods market includes a more extroverted, exciting mix of the Wild West and health evangelism, where claims are limited more by imagination than science. Despite doubts about efficacy[3], products and claims in this sector often enjoy remarkable success and belief with consumers. Is this because they cast off the modesty imposed by science and marketing constraint?

A challenge for major manufacturers is therefore to marry the ‘science’ and ‘religion’: to bring together credible propositions that also excite and motivate consumers. This means moving with trends, communicating on values relevant to consumers, while adhering to strong principles in nutrition and communication that build and maintain long-term trust in brands.

Dr David Mela will be participating in a panel discussion on the topic of functional nutrition at the Vitafoods Europe Conference on 11 May 2016. To find out more about the conference, go to www.vitafoods.eu.com/the-vitafoods-europe-conference/about-the-conference.

References:
[1] http://www.marketsandmarkets.com/Market-Reports/functional-food-ingredients-market-9242020.html
[2] http://www.prnewswire.com/news-releases/functional-foods–nutraceuticals-market-forecast-2015-2025-opportunities-for-leading-companies-300061152.html
[3]  Marik PE, Flemmer M. Do dietary supplements have beneficial health effects in industrialized nations: what is the evidence? J Parenter Enteral Nutr 2012;36(2):159-68.

 

 

Healthy ageing is big – but how do you connect with someone in denial?

By Peter Wennstrom, Founder & Expert Consultant, The HealthyMarketingTeamPeter Wennstrom.jpg

Right now, healthy ageing seems to be on everyone’s agenda – including my own! But, for the nutrition industry, there is a challenge: namely that the target group for healthy ageing products is a demographic that doesn’t really want to be reminded of why it is being targeted. “Are you getting older?” is not a question we enjoy answering with a “yes”.

So what does the perfect product look like for a healthy ager? The perfect dietary supplement? The perfect dairy product? The perfect diet? And most importantly – how do you ensure that you employ the perfect communication and branding, so that your product resonates with older consumers, instead of alienating them?

To answer these questions – while avoiding the pitfalls of normal consumer research (consumers tend to lie) – the HealthyMarketingTeam has linked up with the Faculty for Applied Cultural Analysis at the universities of Lund and Copenhagen. Their approach, cultural analysis, involves combining standard research methods such as interviews and focus groups with other techniques such as observation, active participation and a toolbox of methods based on cultural understanding.

With the help of a multinational research group, we are looking into drivers for the purchase of healthy ageing products across four different countries on two vastly different continents. We are comparing Denmark and the Netherlands in Northern Europe, where the welfare systems are highly developed, with Thailand and the Philippines in South East Asia, where they are under-developed. We will explore the cultural factors, as well as the socio-demographic trends, that are influencing the attitudes and behaviour of healthy agers in these countries. By doing this, we will be able to understand better the differences (as well as the similarities) between senior consumers in both developed and emerging markets.

In a preliminary discussion within our own team of consultants it became clear that we needed to avoid viewing healthy ageing as a purely western phenomenon. In fact, in emerging markets, the rapid growth of an affluent middle class – in combination with declining birth rates – has freed a whole generation from the burden and duty of caring for a large family. With this trend has come an attitudinal change that permits the older generation to invest in its own pleasure.

So, ‘Life 2.0’ is an idea that is globally attractive. Nevertheless, we must also remember that while it may be taken for granted in a Northern European country, it is still only accessible for the tip of the socio-demographic pyramid in South East Asia. This means it will be critical to understand how to segment healthy agers based on both attitudinal and economic factors. How are they influenced by health trends? What will motivate changes in their purchasing habits? What attributes and benefits will attract them to products, categories and brands? Our aim is to find out.

The results of this work will be compatible with our FourFactors® Consumer Segmentation approach, and we hope that it will help us answer the question of how best to target healthy agers all over the world. We plan to present the first report from our research at Vitafoods Europe 2016. We’re very much looking forward to sharing the learnings – and we’re confident they will give you a fresh and unique perspective into the way older consumers shop for, and purchase, nutrition products.

The HealthyMarketingTeam will present the initial findings of its healthy ageing project at the Vitafoods Europe Conference on 10 May 2016. To find out more about the conference, go to www.vitafoods.eu.com/the-vitafoods-europe-conference/about-the-conference