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Omega-3 Campaign to Turn Tide on Sinking Sales

GOED coalition requires more funds before national rollout can commence.

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By: Sean Moloughney

Editor, Nutraceuticals World

The coalition formed by the omega-3 industry to reverse the decline of omega-3 sales in the U.S. successfully completed a pilot campaign in Charlotte, NC, growing sales in the region by nearly 6% in just four weeks. However, the group needs more funding before it can roll out its integrated marketing effort on a national scale.
 
Prior to the start of the test program, which targeted health-conscious adults 45-65 years old through a variety of media forms and at popular retail locations, sales in Charlotte were lagging behind much of the U.S. However, by the end of the test run, Charlotte was the best performing region in the U.S., according to the Global Organization for EPA and DHA Omega-3s (GOED), Salt Lake City, UT.
 
Campaign efforts included a variety of consumer directed advertisements, including newspaper and digital ads, a TV commercial, a consumer education website (www.AlwaysOmega3s.com), digital and static billboards in eight Charlotte locations, retail activation signage at CVS, Rite-Aid, Walgreens and Walmart, as well as a social media component.
 
In addition, the coalition reached out to journalists to pitch omega-3 related stories, using registered dietitians on local TV to talk about the benefits of omega-3s, and participated with a booth at Charlotte’s American Heart Association walk.
 
Overall, GOED believes positive messages reinforcing the value and importance of supplementation can influence consumers across the nation and reverse a slide in sales. However, the group still needs more than $1 million to move ahead with its planned national rollout—currently targeted for mid-March.


Figure 1: Monthly Charlotte Unit Sales (Compared to 1 Year Prior) 



Source: AC Nielsen, Coalition Market Research Committee analysis

Sinking Sales
From its peak in mid-2013, the omega-3 market has cumulatively lost $149 million in retail sales, per AC Nielsen data, due in part to negative stories in the mass media following the Brasky omega-3 prostate cancer study published in the Journal of the National Cancer Institute, as well as a lack of positive media coverage overall.
 
The market downturn continued into 2014, with each month down 10-12% compared to the same month in the prior year, according to Adam Ismail, executive director of GOED and part of the coalition Steering Committee.
 
Refined fish oils continue to be hit the hardest, he noted, with monthly sales down nearly 30% from their peak in early 2012, but the decline is accelerating. Concentrates began declining later, but have still fallen 25% from their peak monthly sales in less than a year, he added.
 
Turning the Tide
The omega-3 coalition completed two separate consumer surveys before and after the campaign in Charlotte. Based on the survey results, an estimated 28,000-61,000 new users came into the omega-3 category specifically because of the campaign. It is also worth noting that the market research team analyzed the pricing structure in Charlotte and other geographic markets during the month and determined that the increase in sales was not driven by discounts or sales promotions.
 
The campaign in Charlotte also benefited all types of EPA and DHA oils, including 18:12 (30%) fish oil, concentrates, and krill oil, with sales growing an average of 2.2-2.6% per week throughout the campaign. By contrast, these same oils declined throughout the rest of the country.


Figure 2: EPA & DHA Oil Sales by Type (Charlotte vs. U.S.)

Source: Coalition data

“This is an exciting time in the omega-3 business,” said Mr. Ismail. “The Charlotte campaign showed that we can reverse the market decline by coming together as an industry, and going forward, we welcome the participation of everyone, from suppliers to brands to brick and mortar retailers, with a stake in the EPA and DHA business.“
 
Companies interested in joining the coalition can contact GOED for more information at info@goedomega3.com or 801-746-1413.

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