It's no surprise that the omega-3 category is growing. In 2011, fish/animal oil supplements were up 7 percent with $1.2 billion in sales, while plant oil supplements were up 7 percent with $290 million in sales, according to Nutrition Business Journal.
And in a recent Delicious Living study of 750 participants, New Hope Natural Media found that as omega-3 awareness increases, supplement usage increases substantially.
Except here’s the catch, said Adam Ismail, executive director of the Global Organization for EPA and DHA Omega-3 (GOED), the number of customers isn’t actually growing; rather, existing customers are trading up.
Recently, the TABS Group Annual Vitamin Study, now in its fifth year, reported vitamin sales up 2 percent over 2011 to $12.2 billion, while vitamin users in 2012 have decreased from 71 to 66 percent.
The study confirmed that buyer growth in fish oil, an area of high growth over the past five years, had stopped (as had vitamin D, another previously high growth category). In fact, vitamin B was the only category to show customer growth.
Has the omega-3 market hit its limit?
These results marked the biggest shift in purchasing habits the study had noted in its five years of existence, and Dr. Kurt Jetta, CEO of TABS Group, projected that the vitamin category will remain relatively flat over the next 18-24 months. Growth will come from existing customers trading up.
This may be good news for products such as krill and algae—which are taking off—and high-end fish oils, but it’s not so good for entry-level products.
In the omega-3 category, Ismail confirmed that sales of entry-level products, usually the cheapest products, have gone flat. At the same time, he admitted that the industry is likely close to reaching penetration levels.
“At some point, it’s unrealistic to say we’re going to get 100-percent penetration rates. I think we’re nearing the point where penetration rates will slow down.” Even so, he said, “We know omega-3s are more important than [for] just cardiovascular and brain health. They’re vital for how your cells function in general.”
Research can help persuade customers
Citing, a 2009 study supported by the Centers for Disease Control and conducted by researchers from Harvard University, University of Toronto, University of Dresden, and the University of Washington, Ismail said that 84,000 people die annually from a deficiency in omega-3 fatty acids.
“Taking 250 mg a day, or less than one pill a day, would save 84,000 lives,” he emphasized. “The earlier young consumers start getting omega-3s into their diet, the longer term the health benefits will be.”
So now he and his colleagues are asking from where will the new consumers come and how do we attract them to the category? “If you want to bring new consumers into the category, you have to figure out who are the non-users and what will appeal to them,” he said.
Where are the omega-3 neophytes?
From recently commissioned GOED research, the group knows that just more than 53 percent of the adult population is already trying to increase their intake of omega-3s.
New users will have to come from the other 47 percent. Ismail said that age is a strong influencer on whether a person is taking omega-3s because the ingredient has been widely marketed to those managing a health condition such as cardiovascular disease or a brain ailment.
However, the pool of non-users within the Baby Boomer and Silent Generations is relatively small when you consider that a portion of them may never be interested in taking omega-3s.
The real opportunity, said Ismail, is with the Generation X and Millennial consumers, noting that 30 percent of current non-user adults fall within these consumer groups. Ismail said that roughly 71 million potential new consumers are in the younger generations, while approximately 20 million potential new users are in the older generation groups, if you take out those who won’t ever buy omega-3s. And the 71 million is likely larger, considering that younger users are likely to start families.
Targeting the new omega-3 consumer
In a recent consumer focus group conducted by New Hope Natural Media, we asked consumers about their understanding of omega-3s. They recognized the term, all nodded their heads, and one woman spontaneously said, “salmon.”
But when questioned if they understood the term DHA, that same woman said, “I think that’s not good. Is that the one that kills eagles?”
In the survey conducted by Delicious Living, when participants were asked if they understood the term “EPA” many responded “yes,” except the meaning they were thinking of was “Environmental Protection Agency.”
Ismail said that many moms who give their babies formula with DHA, don’t realize that DHA is omega-3.
4 insights into what consumers know about omega-3s
For the New Hope Natural Media focus groups and Delicious Living survey, consumer segmentation was divided into four groups:
- The Not Nows
- Awakened, and
1. The Not Now is just that: They’re consumers who are not interested in omega-3s for whatever reason. On the flip side, the Hardcore are already getting their omega-3s and then some. They are very aware of what they need.
2. The Awakened, however, are customers who are currently purchasing omega-3s and upgrading. The more they know, the more they look for omega-3s, but particularly in a natural form. They’re not as interested in functional foods and yet they intake omega-3s from a variety of ingredient sources and are open to different delivery systems.
3. When the Awakened purchase omega-3s they consider ingredients, the DHA to EPA ratio, quality, bioavailability, price and whether the product is wild caught, mercury, free or vegan. They attribute their awareness of omega-3s to magazine and online articles, medical professionals and books and are self-motivated to learn more.
4. The Basics, on the other hand, are the non-user, new consumer the industry is looking for. Who they are:
- Their basic interests are pill size, cost and DHA to EPA ratio. They predominantly focus on fish oils as the ingredient base of their omega-3 intake, and in a gel/soft capsule form.
- They primarily attribute their awareness of omega-3s to medical professionals and online articles.
- Ultimately, they prefer to be told what to take and are looking for guidance. The latter of course can be problematic if a Basic finds him or herself at a store without anyone to help them navigate.
“We know that when you go to the shelf it’s a maze for consumers," said Ismail. "Some stores put products by brand, so if you have a company with a large portfolio you have to hunt for it, others lump them together by category, but then you get everything.
“As an industry, we’re not doing a very good job of creating a friendly experience at the shelf. I think there needs to be some creative minds set to that problem.”
How are you attracting the new omega-3 customer? Next week, we'll share tips to do just that. Add your voice in the comments.