Omega 3 market update Adam Ismail Your essential event for networking and information
OMEGA-3 Market UPDATE IFFO ANNUAL MEETING 2017
Global Growth in omega-3 demand is starting to accelerate again Omega-3 Ingredient Consumption 87,814 88,589 +0.8% +2.0% 90,388 +3.3% 93,375 EPA+DHA Consumption 28,849 +2.0% 29,444 +3.3% 30,412 +4.6% 31,820 2014 2015 2016E 2017P 2014 2015 2016E 2017P
Concentrated forms of omega-3 ingredients are growing fastest Projected New Volumes of Omega-3 Ingredient Consumption in 2017 1581 604 185 42 149 245 249 Concentrates Algal Oil Cod Liver Oil Krill Oil Refined Anchovy Oil Refined Menhaden Oil Refined Tuna Oil All Other Oils -105
Dietary Supplements are adding the most volume Projected New Volume of Omega-3 Ingredient Consumption by Application in 2017 2,068 354 277 139 89 58 2,985 Dietary Supplements Infant Formula Pet Food Pharmaceutical Food and Beverage Clinical Nutrition Total
However, INFANT FORMULA is THE FASTEST growing SEGMENT GLOBALLY Projected Omega-3 Ingredient Volume Growth by Application in 2017 Infant Formula 9.0% Pharmaceutical 6.6% Clinical Nutrition 4.2% Pet Food 3.2% Dietary Supplements 2.9% Food & Beverage 2.1%
ASIA IS NOW CLEARLY THE DOMINANT FOCUS FOR OMEGA-3 INGREDIENTs Projected New Volumes of Omega-3 Ingredient Consumption by Region in 2017 1,406 843 479 335 257 191 165 32 12 China Rest of APAC Japan Rest of Asia S Am Other Mexico Australia Canada US Europe -253-482
CRUDE OIL DEMAND FROM THE OMEGA-3 MARKET IS ACCELERATING AS WELL Omega-3 Ingredient Consumption Crude Oil Consumption 215,547 87,814 88,589 +0.8% +2.0% 93,375 90,388 +3.3% 196,085 +1.4% 198,870 +3.4% 205,548 +4.9% 2014 2015 2016E 2017P 2014 2015 2016E 2017P
Anchovy AND like species STILL DOMINATE THE CRUDE OIL MARKET Projected Omega-3 Market Crude Oil Demand by Species in 2017 157,760 20,213 15,322 7,474 6,403 3,807 2,885 1,682 Anchovy & Sardine Cod Menhaden Salmon Tuna Single Cell Organisms Squid All Other Oils
Squid is the fastest growing source of crude oil, but from small volumes Projected Omega-3 Ingredient Volume Growth by Application in 2017 Anchovy & Sardine 4.8% Cod 5.5% Menhaden 2.8% Salmon -1.4% Tuna 8.0% Single Cell Organisms 8.9% Squid 23.4% All Other Species 6.2%
Supplements are adding the most DEMAND, BUT PHARMA IS SIGNIFICANT Projected New Volume of Omega-3 Market Crude Oil Consumption by Application in 2017 1,395 639 447 153 119 9,998 7,247 Dietary Supplements Pharmaceutical Infant Formula Pet Foods Food and Beverage Clinical Nutrition Total
There are a FEW FORESEEABLE EVENTS THAT COULD IMPACT CRUDE OIL DEMAND Potential Volatility Events 1 Concentrates are banned in the United States dietary supplement market 2 Pharmaceuticals are approved in China. 3 The VITAL Study delivers null results.
AMARIN ITC CASE Amarin Pharma has asked the US International Trade Commission to stop the import and distribution of ethyl ester and triglyceride omega-3 concentrates in the United States Amarin is asserting that concentrates are not eligible for use in dietary supplements and should only be allowed for sale as approved pharmaceuticals If Amarin is successful, it could shift demand to 18/12 and other natural oils, or could cause a significant market contraction It is unlikely, in our view, that current concentrate demand would shift to pharmaceuticals Potential Crude Oil Impact: If market shifted to 18/12: -15,000 tons If concentrate market was eliminated: -27,000 tons
PHARMA APPROVALS IN CHINA Eight companies are seeking approval in China for omega-3 based pharmaceuticals for triglyceride reduction The formulas are based off of existing drugs in other countries, primarily Omacor and Epadel The best estimate says 17.7% of the Chinese population is hypertriglyceridemic, or 244 million people If they are able to gain the same penetration in the Chinese market as in Japan and the US, the omega-3 pharma market in China could exceed $50 billion However, there will be many competitors, which differs from how the US and Japanese pharma markets developed Potential Crude Oil Impact: +50,000 to 300,000 tons
VITAL STUDY DELIVERS NULL RESULTS We have already seen that a large negative trial could result in a significant market decline The VITAL trial could deliver sustained null results due to all the ancillary studies included in the trial There will continue to be positive, supportive science published in other trials, so the impact could be temporary but last a few years similar to the prostate cancer study of 2012 Potential Crude Oil Impact: -10,000 to 20,000 tons
About us How to access this data for yourself This data represents only part of GOED s proprietary research, and is freely available at varying degrees of curation to members of GOED, depending on their level of membership. How to join GOED Please contact Mike Roberts at mike@goedomega3.com with any questions about membership. Questions about this presentation Please contact Adam Ismail at adam@goedomega3.com with any additional questions regarding this presentation.