By Arthi V

Omega-3 ingredients have emerged as a vital functional ingredient delivering significant health benefits, particularly those related to a healthy heart. Cardiovascular disease (CVD) has been identified as the leading cause of mortality and morbidity in the majority of developed countries. This is especially true in the United States., as around one-third of adults are known to be affected with one or more types of CVD. According to the American Heart Association, the economic implication of this in 2007 was a staggering $431.80 billion, which can be attributed to both direct and indirect costs associated with CVD. Across the Atlantic in the EU, the economic implication was valued at €192 billion in 2007, according to the European Heart Network. As a result of these huge costs, CVD represents one of the biggest challenges faced by the United States and many other nations worldwide.

The effect of the rising healthcare costs and the increased consumer knowledge of CVD has been a dramatic upsurge in consumer interest towards preventive healthcare. Overall, the rising consumer knowledge about the health benefits of various foods and ingredients has triggered a transformation in the way consumers perceive food. An increasing number of consumers have started associating food with health and wellness, and many consumers now rely on nutritional supplements and fortified foods as alternative means to prevent health afflictions such as CVD. Escalating consumer demand for functional foods and supplements is the result of rising self-care trends, staggering healthcare costs and overwhelming scientific evidence on functional ingredients. This demand for functional foods and nutritional dietary supplements has led to the development of an attractive health ingredients market. One critical factor driving the functional foods and dietary supplements sector is the presence of sound scientific support for functional ingredients. Compelling clinical evidence has clearly evolved to be a leading factor determining the commercial success of a product. Although the market has witnessed the entry of numerous functional ingredients in recent times, the scientifically-backed ingredients are those that have been most successful in their establishment. One of the best examples of such an ingredient is the omega-3 fatty acid.

Omega-3 fatty acids are obtained from a number of vegetarian and marine sources. Fish is a major source of omega-3 PUFAs; such as eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA). Flaxseed and algae are important vegetarian sources of omega-3 fatty acids. While fish oils provide a source of DHA and EPA, flaxseed supplies alpha-linolenic acid (ALA). EPA and DHA are long chain omega-3 fatty acids with well-established health benefits, including lowering the triglyceride levels and reducing the risk of arrhythmia. Algae oil is a source of concentrated DHA, and is extensively used in infant formulas.

Omega-3 has become one of the most sought after functional ingredients in recent times. The popularity of omega 3 as an ingredient is not just an upshot of the increased media activity, but it is well substantiated with solid scientific evidence of its health benefits. Strong marketing initiatives have widely increased consumer awareness. Omega-3 fatty acids form one of the most extensively researched and clinically established functional ingredients available in the food and beverage industry in 2009. Though omega-3 fatty acids are obtained from a number of sources, fish oil represents the largest and most popular category in the market. Cod liver, 30% or 18:12 oils (natural fish) and fish oil concentrates are some of the key product sources within the fish oils category. Currently, the fish oils market is largely driven by 18:12 oils. Nevertheless, fish oil concentrates have increased in significance recently within the human nutrition sector. Concentrates are rapidly catching up, with robust growth across the globe and are expected to take a significant share of the fish oils market in the next 5 years up to 2014.

Typically, fish oils have a combined EPA and DHA concentration of about 30% or less. It is the natural fatty acid profile of fish oils and these oils are referred to as natural fish oils. Fish oils with EPA and DHA concentrations ranging between 40-95% are classified as concentrates. Concentrates can further be categorized as low or high concentrates based on the fatty acid composition. Typically, fish oils with over 70% concentration are classified as high concentrates. Low concentrates constitute those with concentrations ranging between 40 and 70%.

Moreover, concentrates are also classified based on the chemical form. There are two forms of concentrates available in the market that includes ethyl ester concentrates (EE) and triglyceride concentrates (TG). While the U.S. market was dominated by the use of EE concentrates, the European market and a vast majority of APAC was dominated by the use of TG forms. Typically, TG concentrates are priced higher than the EE concentrates. The preference for TG form is due to the fact that omega 3 exists in the TG form in nature.

Fish oil concentrates experienced a robust unit shipment growth of over 20% within 2008. The market is anticipated to witness continued growth until 2014. Chart 1 demonstrates the key driving factors of the concentrates market in 2009.

Chart 1 Key Driving Factors in Marine Concentrates Market (Global), 2009

This rising demand for concentrates is attributed to a combination of factors such as:

• Growing consumer interest in condition-specific products: Consumer trends are constantly evolving and food and supplement manufacturers are relentlessly trying to cater to their needs. In general, it has been observed that consumer interest is evolving from being “general” to becoming more “specific”. For example, more and more savvy consumers are shopping for 'solutions' rather than “general or overall wellbeing”. Perhaps, the omega-3 market is running parallel to this trend. For example, omega-3 dietary supplements market has transformed from a "general health and well-being" approach to becoming more “condition specific”. Presently, heart health is one of the most established benefits and the largest market for omega-3 supplements. However, other market sectors such as cognitive health, eye health and mothers' health are gaining impetus.
• Consumer awareness and convenience: Concentrates offer the best solution where volume is an issue. It is the preferred form when two or more ingredients are required to be combined in a capsule/tablet/softgel, usually in a condition-specific supplement where space is a concern. In addition, concentrates also enhance convenience by reducing the number of pills that the consumer might have to take in order to achieve high levels of EPA and DHA through supplements.
• Massive Success of Omega-3 Pharmaceuticals: Typically, pharmaceutical products are formulated with high concentrates of about 85%, and the pharmaceuticals market for omega-3 is largely dominated by Pronova. Pronova's Lovaza/Omacor has experienced considerable success in the U.S. and Europe. In 2008, the end-user sales of this product reached a colossal $778 million globally. The U.S. takes 61% of these revenues. Lovaza is marketed by GSK in the U.S. GSK has deployed significant sales and marketing efforts to educate key opinion leaders such as physicians and nutritionists about the health benefits of fish oil in reducing high triglyceride concentrations. These efforts have resulted in increased awareness amongst key opinion leaders such as doctors, nutritionists and other healthcare professionals, who now recommend omega-3 fatty acids, building credibility around fish oils within a professional audience.

Dietary supplements form the largest application sector for fish oil concentrates globally in 2009. The concentrates market is largely dominated by low concentrates, such as 50-60% oils. Presently, the use of concentrates containing between 60-75% EE or TG is limited to condition-specific supplements. This category represents a small portion of the market, due to higher product pricing, which places these products in the premium category.

Concentrates at over 85% EE or TG are used extensively in pharmaceutical products for the treatment of hypertriglyceridemia, which is a condition resulting from the high levels of triglycerides in the blood. Pronova Biopharm dominates the U.S. and the European markets for Pharma application. Concentrates are also used extensively in Japan, where Mochida/Nissui (EPADEL) is the major omega-3 concentrates producer.

Clearly, the future of omega-3 concentrates is robust, not only in the supplements sector but also in the pharmaceuticals arena. The massive success of existing pharmaceutical products such as Lovaza/Omacor and EPADEL has left a number of ingredient and pharmaceutical manufacturers vying for a share of this attractive high growth market segment. A number of manufacturers are believed to be involved in developing API grade omega-3 concentrates. In fact, some manufacturers are in Phase III clinical trials in the development of concentrated omega-3 pharmaceutical products. Presently, the existence of strong patents (from Pronova) presents significant barriers to the entry of newer participants. However, as these patents begin to expire more companies are likely to enter the market. Moreover, many companies are involved in their own unique research to develop products which are independent of Pronova's patents. Given the volume of credible research, consumer confidence and market success stories, omega-3 concentrates are expected to swiftly move into the pharmaceutical market in the next couple of years. The concentrates are likely to witness a boom as the omega-3 pharmaceutical market opens up. Perhaps, pharmaceuticals could emerge as one of the largest applications for omega-3 concentrates along with supplements in the next 5 to 10 years.