Much has been discussed and written about the potential promise omega-3 fatty acids may deliver

to the functional food and beverage market, but growth within the industry has been slow. Merger and acquisition activity during the past year indicates the much hyped promise may be on the cusp of being realized.

In June, BASF Corp. acquired Cognis, which has a position in the omega-3 segment through its Omevital brand, and in December DSM N.V. acquired Martek Biosciences Corp., a manufacturer of omega-3 fatty acids derived from algae.

“I think part of the activity is because the industry has been in the incubator stage and we are now seeing a lot of forward movement, which has prompted some of the larger companies, such as BASF and DSM, to buy leadership in the category,” said Christopher Shanahan, a research analyst for the firm Frost & Sullivan, San Antonio.

Mr. Shanahan estimated omega-3 ingredient market sales to be $1.4 billion. His estimate includes ingredients intended for the food, pharmaceutical and other market segments.

“It is still relatively small compared to other mature markets, but it offers opportunities for several long term strategies,” Mr. Shanahan said.

Mr. Shanahan and David Sprinkle, research director for the market research firm Packaged Facts, Rockville, Md., both said the interest in omega-3s is rooted in the science supporting the ingredient’s effectiveness.

“There are a whole variety of claims for omega-3,” Mr. Sprinkle said. “It is associated with heart health, brain development, vision — it is even associated with mental health. It appears to have an effect on everything from memory loss to depression to dementia.

“Omega-3 has a lot of positive science behind it. It is emerging as having an almost therapeutic drug-like strength as a supplement.”

But Mr. Sprinkle added that the ingredient “gets into choppy waters with regards to regulatory claims.”

In the short term, both market analysts see several opportunities within the food and beverage industry for omega-3 fortified products to gain an additional foothold.

Through his research Mr. Shanahan has identified the dairy market as the segment set to hold the largest slice of the pie for products featuring omega-3.

“We are seeing a lot more milk products with fortified DHA (one kind of omega-3 fatty acid) that is algae based,” Mr. Shanahan said. “It is a fully commercialized and successful product in the market, and I think dairy will continue to go forward and further support the market.”

In terms of potential market opportunities Mr. Sprinkle said he sees a lot of large companies slowly stepping into the market.

“You will see Kellogg promoting omega-3s in its Gardenburger and Kashi products, but not in many of its more mainstream products,” he said. “Unilever is marketing a high-omega claim in its dressing and mayonnaises, but not in its health and beauty care products. Mars is doing something similar in that it is marketing a high-omega claim in some of its pet foods, but not other products.”

Mr. Sprinkle also believes it will not be long before omega-3 claims start appearing on food service menus. In the food service segment, Mr. Sprinkle added that the products may not be fortified with omega-3s, but derived from ingredients naturally high in the fatty acids.

“I don’t see why they aren’t doing it already by marketing menu items such as high omega tuna melts,” he said. “Sandwiches featuring foods that are natural sources of omega-3 seems as if it would make sense to consumers.”

But a challenge for the marketers of omega-3 ingredients has been getting consumers to understand the differences

between the various types of omega-3s, whether they are sourced from fish oil, algae, flaxseed or even krill.

Elizabeth Rahavi, associate director of health and wellness for the International Food Information Council, said that when her group has asked consumers about functional benefits related to heart health or cognitive health they have noted that fish, fish oil and seafood play a positive role, but not omega-3s.

“When we prompt them and ask them specifically about an ingredient like omega-3, the food source it comes from and its relationship to a health benefit — then we see a high awareness,” she said.

She said at this point consumers are not differentiating between the types of omega-3s and their specific benefits and that any effort to communicate such a message would require a “more sophisticated conversation with consumers.”

Mr. Shanahan said as the market for omega-3 fatty acid fortified products continues to grow and evolve, suppliers of the ingredients will continue to look for segments within the food business with which to establish a niche, much like Martek has done with infant formula.

“The science is there and the products have been accepted by consumers,” he said. “The next stage is for suppliers to grow market share.”