China in Focus – Omega-3: The importance of sport, personalisation and protecting reputation

That's why we have made this topic the subject of our second China in Focus feature, where we gauge the views of industry experts to assess omega-3's prospects in the country.

The first point to note is that the potential is huge, not least because the sector comes from a very low base.

At present, China's per capita spending on omega-3 supplements stands at just US$0.26 — half of the Asia's total average, and far below Japan's total of US$2.06.

Another reason for optimism is that Asia as a whole (11.4%) is forecast to far outpace current market leader USA (0.2%) in the growth of omega-3 finished product sales.

According to Andreas Thorud, China GM at Aker Biomarine, the growth trends across Asia are also being witnessed in China, with consumers eagerly embracing health and wellness initiatives on the back of the government's Healthy China 2030 plan.

"We see that interest in health, sport and wellness has grown a lot,"​ he said. "We also have a growing ageing population that is looking for brain health products, while at the other end of the scale, younger people are also looking for cognitive support due to the pressure of school and exams."​

Indeed, according to trade association GOED, the Chinese omega-3 finished product market is expected to grow by 11.4% this year, significantly faster than the projected global growth of 5%.

But, as in many aspects of the nutrition industry, China is something of an anomaly.

When we assess the global data, it reveals that the vast majority of omega-3 oils (around 67,000MT) are used for dietary supplements, with just 4,200MT going into functional foods or beverages, and 3,200Mt going inTO infant formula.

In terms of finished product sales values in China, however, functional foods and supplements are more or less on par, with the former accounting for US$429m last year and the latter, US$410m.

Sweet spot

According to Jeff Crowther, executive director at Health Products Association — China, much of this can be attributed to regulations.

"Having an ingredient that is suitable for a food really is the sweet spot, because it is much more difficult, time-consuming and expensive for brands to get the required approvals for a dietary supplement,"​ he said.

It is a point that has not been lost on Thorud and his colleagues at AkerBiomarine."The potential here in China is very big and can be very valuable,"​ he said.

In order to tap into this demand, the firm worked with a local micro-encapsulation specialist to create a shelf-stable krill powder suitable for a number of beverage applications.

"We created three concepts,"​ he added. "One is a krill oil with milk powder, which is suitable for the adult powdered milk market. The other is for sports nutrition, where we have the micro-encapsulated krill with whey protein. And finally, we have a ready-to-mix general drink in a number of flavours."​

Thorud says he sees considerable opportunities for the sports nutrition product, but stressed that further consumer education was required, both around omega-3 in general and about krill in particular.

"Sports will not be the only market where we have success, but we do need to position the products where consumers are receptive, and interest in sports in growing quickly," ​he said.

"Consumer education is now key, because today, omega-3 in China is most commonly associated with heart health or helping to lower blood lipids."​

In addition to education, Thorud also identified three overarching themes he believes are crucial for success across all supplements and functional products in China. Take a look at the video to find out what they are:

Another factor that could bolster the standing of omega-3 in the China market is the imminent introduction of the omega-3 index testing kits.

Devised by OmegaQuant, the tests have so far been limited to Australia within APAC, but they will soon be available to Chinese consumers. It is a simple, finger-prick test that is mailed to a lab, with individuals receiving their results within one to two weeks.

Simple dietary changes or supplementation can improve the index results in just a few weeks. According to Dr Bill Harris from OmegaQuant, an EPA and DHA index score of around 8% or above in red blood cells is the desired ratio.

However, in China, the average is around 4% to 6%.

Crowther, who is advising on the roll-out, explained some of the local challenges in bringing the test to the market.

"The main hurdle in China is that you can't ship people's blood tests out of the country for analysis due to government rules. This means we have had to source labs here that can undertake the work.​

"On the plus side, though, this means that people are likely to get their results more quickly."​

Thorud welcomed the development, stating one of the biggest challenges companies faced was the Chinese consumer's need for instant and visible results.

"With this test, we can show them that the supplements or products they are taking are really working, especially in terms of preventive benefits, even if they can't see or feel an immediate difference."​

Away from the consumer level, the main objective for companies like Aker Biomarine is to convince domestic brands that that their premium ingredients are worth investing in.

Within China, there have been concerns raised about the quality of some omega-3 oils available, and Thorud insisted it was the responsibility of reputable companies to protect the sector's reputation.

"There will always be brands that just buy based on price,"​ he said. "And there will always be those who will want the best quality.​

"The challenge now for us is to convince those in the middle to trade up because they, their consumers, and the wider industry will benefit in the long run."​