After a successful PR test market campaign showed a 5.8 percent increase in sales of omega-3 products, all that’s missing from a national roll-out campaign is the money to fund it.
The campaign, run by Global Organization for EPA and DHA Omega-3s (GOED), used a “surround sound” approach by using TV and digital ads, print ads and billboards, and in-store promotions.
“The question mark is when will we have the money we need. We are still $1 million short of what we need,” said Ellen Schutt, GOED’s communications director. “If we don’t get the $1 million, do we push the campaign to the fall?”
The GOED campaign so far has raised north of $5 million from industry players and would like to have a $10 million war chest, but it can at least get the campaign off the ground with $6.5 million, said Schutt.
Ingredient supplier DSM, which commands both the leading fish oil and algae oil DHA/EPA, has said it will match the next $800,000 raised.
Some major consumer packaged goods companies pledged support contingent on a successful test market campaign. Now that the test market campaign, in Charlotte, N.C., has been shown to be successful, where are they?
Schutt said GOED will make the determination on the timing of the campaign based on money raised by the end of this week.
In Charlotte, while TV and digital ads were strong influencers of consumer behavior, Schutt said, in-store promotions were the largest driver of consumers saying they’ll take action – which could include talking to one’s doctor, making a purchase, starting an omega-3 routine, or at least researching omega-3s online.
Of the sample size of 1,000 consumers who responded to follow-up surveys, 2.6 percent said they would become new users, thanks to the PR campaign.
Print ads and billboards did not perform as well.
“Positive, proactive communication is the way to manage the decline,” said GOED executive director Adam Ismail. “You have to do it proactively, not reactively, or else it sounds like you’re making things up in response to the negative news. There’s a need for positive, proactive communication. That’s what we’ll be focusing on in the next three to four years.”
Something fishy about the market
The decline in the once-invincible omega-3 market began in 2011. It really tumbled after a 2013 study alleged that fish oil causes prostate cancer. And while the practitioner and network marketer channels are still experiencing growth, some market segments are seeing a marked drop-off, said Ismail.
The primary demographics turning their backs on omega-3s are women aged 25 to 45, men over age 55, and entry-level supplement takers.
That’s a public health concern because the women’s group is squarely in the child-rearing years and could lose a cognitive benefit for neonatals while men of that certain age are at increased risk for cardiovascular disease.
The other piece of market intel is that the decline is predominantly in supplements – the largest omega-3 category.
“Why are consumers leaving? Why are they forgetting the category? What’s missing is new consumers are not coming into the market,” said Ismail. “Fishy burp taste is the No. 1 reason people leave the category. We see problems in the soft-gel part of the category. There’s a lot of great soft-gel manufacturers out there, but also some who treat it like any other product, and fish oil needs to be isolated from light or heat. This causes oxidation and leads to the fishy burps. So consumers don’t just switch brands, they leave the category altogether.”
Globally, market declines were seen in the United States – the world’s biggest market – as well as Canada and Australia. Meanwhile, Europe and China saw market upticks.
The omega-3 ingredient market runs to $1.7 billion, which accounts for $22 billion in consumer products containing EPA or DHA.
About 20 percent of fish oils are used for human nutrition, with the rest for industrial or aquaculture purposes.
For new ingredient innovations, new product launches, essential science, plus an exclusive look at what industry thought leaders are thinking about the omega-3 market, check out the Nutrition Business Journal / Engredea report here.