Consumer awareness regarding the health benefits of omega-3 and an increase in application profiling and existing applications finding new markets are projected to drive the growth of the omega-3 industry.
The global omega-3 market is estimated to be valued at USD 4.1 billion in 2019 and is projected to reach USD 8.5 billion by 2025, recording a CAGR of 13.1%. Consumer awareness regarding the health benefits of omega-3 and an increase in application profiling and existing applications finding new markets are the factors that are projected to drive the growth of the global omega-3 market.
Geographical Prominence
The omega-3 market in Asia Pacific is projected to witness high growth due to rising awareness about its health benefits and increasing disposable income of the population in the Asia Pacific countries. With the growing inclination toward healthy aging in the region, the adult population prefers consuming dietary supplements, including omega-3, as per the recommendations by the Global Organization for EPA & DHA Omega-3 (GOED). Moreover, in Asia Pacific countries, the governments are also focusing on and promoting fortified foods, and many big brands such as BASF (Germany) and Croda International (UK) have expanded their operations in these countries to cater to the growing demand for omega-3. Key manufacturers prefer expanding in the Asia Pacific region, as it provides cost-effective benefits during production and processing. The high demand for omega-3 and low cost of production are the major factors that are projected to encourage suppliers and manufacturers to invest in this market. In addition, Asia Pacific has the highest growth potential due to factors such as high economic growth and the increase in income of individuals in the region. The high population growth and increase in FDI are factors that are driving the growth of the omega-3 market.
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Key Players:
The key players in this market include Cargill (US), BASF (Germany), DSM (Netherlands), Croda International (UK), and Epax (Norway). New product and technology launches, expansions & investments, agreements, and partnerships were some of the core strengths of the leading players in the omega-3 market. These strategies were adopted by the key players to increase their market presence. It also helped them diversify their businesses geographically, strengthen their distribution networks, and enhance their product portfolios. Some of the other players in the omega-3 market include Lonza (Switzerland), Orkla Health (Norway), Corbion (Netherlands), KD Pharma (Germany), GC Rieber (Norway), Guangdong Runke Bioengineering (China), Nordic Naturals (US), Golden Omega (Chile), Biosearch Life (Spain), Pharma Marine (Norway), Polaris (France), Sinomega (China), Kinomega (China), and Huatai Biopharm (China).
Market Dynamics
Driver: Pet food and feed
Omega-3 in pet nutrition is also emerging due to its therapeutic ability to improve immunity and prevent degenerative conditions such as arthritis and inflammatory bowel disease in cats and dogs. Omega-3 is used to fortify animal feeds, treats, and supplements and can be fed to fish and production animals, thereby enriching the meat, eggs, and milk they produce. Manufacturers are investing in products such as treats and supplements or pets.
Flaxseed is an omega-3-rich source used as a nutrient in animal feed. A new regulation in Europe (Regulation 767/2009 of the European Parliament and the Council on the market placement and use of feed) requires substantial evidence that an ingredient imparts health benefits as it claims. Omega-3 is one such ingredient with significant benefits. Therefore, there is an increase in the incorporation of omega-3 in pet food. The pet food industry is expected to grow in the future as pet owners continue to demand health & wellness products for their pets.
Restraint: Lack of clarity among consumers about the daily recommended intake
The market for omega-3 in the form of dietary supplements and fortified foods & beverages is facing a significant restraint in the form of absence of official recommended doses. Despite extensive scientific research conducted by governments and non-government organizations, a specific standard dose of omega-3 for daily intake is not clear. This has resulted in a negative impact on the growth of the market due to increasing confusion among consumers. It is well-known that omega-3 is an important food supplement that can help in preventing heart attacks, improve brain function, and also help with other auto-immune diseases. Non-standard doses result in improper dosage, leading to very few or no health benefits. The situation is more critical in developing countries such as India, China, Brazil, and Argentina, where consumer awareness is low, and they do not have a robust primary healthcare infrastructure.
Opportunity: Research for the development of alternative sources to obtain omega-3
Anchovy is the leading source of omega-3 and constitutes around 70% of the market. End users in some parts of the world avoid fish-based products due to the taste, smell, and dietary preferences. Therefore, fish oil manufacturers are considering new algae, new zooplanktons (krill), and genetically modified (GM) plants as alternative sources to produce omega-3. To meet the increasing demand for EPA & DHA, research is further developing large-scale cultivation of microalgae by studying various strains to develop viable and cost-effective omega-3 products further. New algae suppliers such as Algae Biosciences (US), Aurora Algae (US), and Lonza (Switzerland) are entering the market.
Challenge: Highly Unstable Fish Oil Prices
The cost of fish and other marine oils that are used to derive omega-3 is high and highly unstable. This factor is posing a challenge for the growth of the omega-3 market. The fluctuating prices of raw materials are adversely affecting the omega-3 industry. The sudden rise in the prices of these raw materials is due to the increase in the cost of aquaculture. The feed is the primary input for aquaculture, and the prices of feed are continuously changing due to which aquaculture is expensive to maintain. The cost of imported or purchased fish is also increasing significantly. The increase in the cost of labor, energy, and power and restrictions on fishing in high sea areas are further slowing the growth of the industry. Thus, the rising prices of raw materials are creating a challenge for the growth of the market.
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By application, the dietary supplements segment is projected to dominate the omega-3 market during the forecast period
The dietary supplements segment is projected to account for the largest share in the market during the forecast period. Though there are many food products that are naturally rich in omega-3, since the amount of omega-3 in such products is not enough, consumers these days have started consuming capsules for omega-3. By consuming such supplements, a sufficient amount of omega-3 can be consumed and regulated. Also, they are easy to consume so as to ensure the requisite amount of daily intake is met.
By type, docosahexaenoic acid (DHA) accounted for the largest market size in the omega-3 market during the forecast period
Docosahexaenoic acid (DHA) held the largest share in the omega-3 market in 2018. This is due to increased cognitive functionalities of omega-3 that are gaining consumer attention. DHA plays a vital role in the growth and development of the infant brain and also for the normal functioning of adult brains. Due to these factors, it is amongst the most favoured types of omega-3.
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