Research Overview
End-user Perceptions Pose a Major Challenge
A key challenge facing the Omega-3 polyunsaturated fatty acids (PUFA) industry is the need to
overcome end users negative perceptions about the use of traditional PUFA sources in functional
food and beverage applications. These perceptions range from instability problems and fishy tastes
or odors in end products to quality and safety issues. However, advances in technology and product
innovations are helping change these perceptions. Integrating Omega PUFAs into the food matrix is no
longer the impossible task it once was. In fact, there are some fish oils specifically manufactured
for use in functional food and beverage applications that claim to be tasteless, and can be used as
an ingredient without adversely affecting the functional and sensory properties of the final
product.
This Frost & Sullivan research service provides an objective analysis of end users key
purchasing criteria for Omega-3 PUFAs. This analysis identifies the key drivers for growth as
perceived by end users, thereby helping companies understand whether their critical growth
objectives are in line with the demands of their end users.
Uncertain Regulatory Environment Likely to Hamper Growth
The Omega-3 PUFA industry is governed by legislation that in some countries prevents food
manufacturers from making any kind of health claim on the labels of end products. This obviously
hinders marketing efforts, as companies are unable to communicate the benefits of PUFA ingredients
to end users.
"However, the impact of this challenge is expected to decrease following the recent boost in
consumer awareness about the potential benefits of Omega-3 fatty acid ingredients," notes the
analyst of this research service. "In September 2004, the Food and Drug Administration (FDA)
extended the qualified health claim linking docosahexaenoic acid (DHA) and eicosapentanoic acid
(EPA) to reduced risk of coronary heart disease from dietary supplements to foods."
Threat of Substitution Looms Large
Competition for a share of the lucrative functional food market is increasing, not only from
other nutritional ingredients but also within the Omega-3 category. A case in point is the
substitution of fish oil sources with less expensive vegetable oil sources. Other external
substitutes include: garlic, plant sterols, and grape seed extracts.
"There is very little legislation that exists to differentiate between short- and long-chain
sources," says the analyst. "Companies need to consider adding value to their long-chain
Omega-3 PUFA sources or offering blends that contain other vitamins or complementary ingredients to
differentiate themselves from their competitors." Raising the profile of the brand and
maintaining strong customer relationships are also important.
Frost & Sullivan Growth Partnership Service
Based on extensive and in-depth research, real-world consulting work, and new theories tested in
hundreds of companies across many industries, Frost & Sullivan has evolved its Growth
Partnership Services (GPS) program that provides established and emerging firms with powerful growth
visions. Moving beyond token mission statements, GPS provides an actionable vision to growth
consulting partners by illustrating how key intelligence and strategic research based on defined
goals can guide day-to-day behavior and overall company direction. The foundation of Frost &
Sullivans GPS includes:
- Assisting companies to reach their full potential in the core business
- Providing growth strategies to help companies expand into related businesses
- Preemptively redefining the core business during market turbulence
- Applying the Frost & Sullivan framework to identify and address common mistakes resulting
from misaligned corporate strategies
- Recommending growth management strategies through continuous partnership
To maximize the potential for growth within a firms internal and external environment, Frost
& Sullivan consultants can facilitate the creation of strategic programs that deliver improved
market success. Frost & Sullivans strengths lie in combining strategic understanding with
market expertise and applying these with absolute commitment to its clients growth.
Benefits of this Service
Helps Companies Position their Products Correctly
Based on key findings from interviewing a number of end users, this research service identifies
the major factors that influence their decisions to purchase Omega-3 ingredients. It, therefore,
helps companies in positioning their products by using the most appropriate information channels and
service offerings.
Provides Strategic Analysis of Drivers and Restraints
The research service discusses the specific drivers and restraints that are likely to impact
market growth. This can allow companies to re-focus their research efforts in the application sector
that shows the greatest market potential.
Offers Specific Strategic Recommendations
The research service provides strategic recommendations that aptly address the various challenges
and restraints faced by participants in the Omega-3 ingredients industry. These recommendations are
based on certain key findings of the end-user analysis.
Provides Key Information to Help Improve Customer Service
This research service provides insights into the key trends present in the different end-user
application sectors. This information can help companies adapt their market and sales strategy
according to the application sector they are targeting.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this
research service:
- Dietary supplements
- Pet food
- Beverages
- Bakery sector
- Enteral nutrition
- Pharmaceuticals
- Infant formula
Whats Included
- Introduction to the global omega-3 fatty acid ingredient market
- Insight into industry challenges, market drivers and restraints to the omega-3 fatty acid
ingredient market followed by market forecasts and trends
- Omega-3 fatty acid ingredient end-user analysis
- Omega-3 fatty acid ingredient potential user analysis
- Strategic recommendations -- identification of growth opportunities and provision of marketing
and business recommendations.
- Profiles of selected omega-3 fatty acid ingredient companies
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