Growth in the health supplements market

Baldur Hjaltason, Strategic & Key Account Manager, Epax Omega-3, FMC Health and Nutrition, shares his views on market developments in Omega-3s and other health supplements

Health is at the core of many new technologies. This has clearly been the path for the food & beverage industry. Here in Asia, are you satisfied with the rate these trends are unfolding particularly in the ASEAN market?

There isn’t the same push for clean label or organic in Asia as we’re seeing in Europe and North America, with the exception of some of the developed, urban areas. We are witnessing some consumer demand for organic in countries like Japan, South Korea, Australia and Singapore and in some of the major cities in China, and we have seen encouragement of the use of natural alternatives to synthetic colors in countries like Malaysia, Vietnam and the Philippines. We’re also seeing some appetite for health profile improvements, like sugar reduction, and a general overarching trend towards healthier lifestyles, creating demand for health supplements like Omega-3s.

Currently, China, Japan and Australia are the largest marine-based EPA/DHA Omega-3 markets in the Asia-Pacific, but consumers throughout the ASEAN region have been increasingly turning to supplements for a number of reasons. Market drivers for Omega-3s range from supporting the aging population to a general trend towards healthier lifestyles and fully nourished diets. These trends can partially be attributed to an increase in consumer awareness surrounding the health benefits of Omega-3s.

Trade associations, like the Global Organization for EPA and DHA Omega-3s (GOED), have worked diligently with governments, regulatory bodies and ingredient suppliers to spread general knowledge and disseminate the research and science that supports Omega-3s. To help encourage this education initiative, FMC has been holding seminars in Asia to inform brand owners and formulators on the health benefits of Omega-3s. In addition to health supplements in the Asian region, the use of Omega-3 concentrations in pharmaceutical applications also continues to grow, specifically in Japan, creating entirely new opportunities for innovation and product development.

How optimistic are you about the market for omega-3 products in 2016?

In the U.S., we’re witnessing a transition in the market to high and ultra-high concentrations of Omega-3. Until this point, the Asian market has largely revolved around low concentrations, but there are indications that we will see the same trend as in the U.S, with more consumers making the switch to higher concentrations. As a result, the market will be less price-driven and more consumer-driven. For example, the consumer demand for convenience will be addressed with more suppliers offering smaller capsules that deliver the same levels of Omega-3. At FMC, we are working with both regional and global organizations to continue to educate consumers on the benefits of Omega-3s and establish recommended daily intake levels, which should further fuel this trend. In addition, more functional applications of Omega-3s will be explored, making innovation in formulas and delivery methods vital to increasing the market for Omega-3 ingredient suppliers.

How would you assess the ASEAN market in terms of being receptive to the shift to newer ingredients/products?

The overall driving force for innovation, development and success in this market is creativity and the desire of Asian consumers, more than any other region, for new and unique product experiences. To develop these products, manufacturers must have an understanding of regional differences and preferences and the expertise and ingredients to translate their understanding into product formulations that are novel and exciting in texture, color, taste and functionality.

In countries like Japan products can have a lifespan as short as six months, at which point consumers are already looking for the next new texture, color and flavor coming around the bend. Manufacturers are always trying to create something new and buzzy to capture consumer imaginations and appetites and create exciting experiences, while at the same time upholding staple feel good flavors and delivering safe and trusted products. In such a rapidly evolving environment, an understanding of the consumer audience and their unique regional preferences is key to creating products that will delight consumers. Consumer insight must be matched with formulation and ingredient expertise. Naturally derived ingredients and EFA concentrations offer the health and clean label benefits that are becoming more important to customers in the region.

How can we overcome technical hurdles?

Overcoming the technical hurdles that arise during reformulation requires a deep understanding of the product formulation, processing conditions and how different ingredients work together to express texture, color and flavor and an ability to put that understanding to work in service of superior food and beverage products. Within the rapidly evolving Asian market, technical challenges arise when reformulating to meet differing regional preferences for the same product. For example, chocolate milk might be considered a mature product, but in Asia dairy drinks have not traditionally been a part of the diet. We’ve worked with customers on fine-tuning new chocolate milk drinks to meet certain preferences for richness, texture and creaminess using custom blends of our hydrocolloid portfolio. For chocolate milk, customers in Vietnam prefer it lighter while customers in Indonesia would like it heavier. These countries are also more eager for natural ingredients in their products. To deliver formulations that respond to these nuances, we rely on multiple regional lab facilities that allow us to tailor solutions to more expertly anticipate the products and formulations that will be favorably received in the market.

With respect to Omega-3s, stability of the oil and the chosen delivery form can be the most difficult challenge. If the fish oil is exposed to oxygen, it becomes rancid and takes on an unpleasant, overly fishy smell. This processing concern makes the use of fish oil more challenging in functional food formulations. Higher quality crude oils, better production technology, improved antioxidants and novel delivery forms are necessary to solve this problem. In addition to technical hurdles, we’re witnessing some challenges with respect to the regulatory environment in the region. Tight restrictions are placed on health claims of Omega-3s and similar products, making broad education / awareness initiatives more difficult. And while some Asian countries have issued recommended daily intake levels, others have not, making it more complicated for brand owners to provide informed, consistent recommendations to their customers and to develop products that meet these standards.

What will be the focus of your R&D in the next six to 12 months?

FMC will continue to strive to offer the highest quality ingredients through sourcing the best raw materials available, improving production technologies and continuously innovating. At FMC, we pride ourselves on our ability to predict consumer trends and translate those demands into new product offerings for our customers, providing consumers with the products they want before they know they want them. In the ASEAN market specifically, we will rely on our multiple regional lab facilities and our Asian-based Food Experience Institute to analyze regions on a case-by-case basis in order to develop a deep understanding of the market drivers while working closely with our customers to ensure that we’re shepherding them to the most effective solutions that enable their sustained success.