Weak omega-3s demand a blemish on FMC's nutritional sector revenues

By Hank Schultz

- Last updated on GMT

Related tags Nutrition Docosahexaenoic acid Omega-3 fatty acid functional beverage beverage

Weak omega-3s demand a blemish on FMC's nutritional sector revenues
FMC Corporation reported revenues in its health and nutrition sector of $828 million for its 2014 fiscal year.  Soft omega-3 demand for the year was a blemish on an otherwise robust sector performance, the company said.

Revenue growth in the sector in 2014 compared to a year earlier was 9%.  In the fourth quarter, though, the revenues were $188 million, an increase of only 1% year-over-year. Fourth quarter revenues were impacted by several factors, the company said in a statement:

“Revenue increases in the quarter were driven by demand in health markets globally and in North American nutrition markets, but were partially offset by the rapid devaluation of the Euro against the dollar, continued softness in the Chinese beverage markets and reduced demand for nutraceutical omega-3 products.”

High end of the market

FMC bet hard on the omega-3 sector in 2013 when it acquired Norway-based fish oil concentrator EPAX for $350 million.  It thus joined DSM and BASF, which had pursued their own high-profile acquisitions (Martek and Ocean Nutrition Canada for DSM and Pronova for BASF), among the heavy hitters in the sector.  Most omega-3 suppliers, large or small, have struggled with weakening demand over the past year as the industry digs out from the cumulative effect of highly publicized equivocal studies and a lack of promotional activity (complacency, perhaps?) on the part of industry. A pilot advertising effort spearheaded by the industry group GOED showed promise in a test market in 2014​ but has yet to impact overall sales.

But FMC says it likes its positioning in the higher concentrate end of the sector. EPAX, before the acquisition, had gained a reputation of being able to deliver high concentrates and specific ratios of EPA to DHA to help customers position products in specific mini niches of the overall omega-3 sector.

“Underlying demand for pharmaceutical-grade omega-3 is demonstrating favorable trends, while demand for nutraceutical products remained weak. We continue to focus our strategy toward the high-concentration application,” ​said CEO Pierre Bondreau in an earnings call with analysts featured on the site seekingalpha.com​.

Supply questions

Interestingly, on the supply end, the company had nothing say about the closure for the season of the Peruvian anchovy fishery, where EPAX has sourced most of its raw material. The company did mention one particular supply bottleneck, however.  Rough sea conditions off Norway completely shut down the gathering of seaweed, from which the company derives alginate, a ingredient used as a gelling and thickening agent. The sales delays caused by the unavailability of the  raw material will cause nutrition sector revenues to be flat for the next six months, the company said.

Related news

Show more

Related products

show more

Harness the power of algae for omega-3 innovation

Harness the power of algae for omega-3 innovation

Content provided by dsm-firmenich | 22-May-2024 | Insight Guide

Algal-sourced omega-3s have limitless potential, able to scale to meet the needs of our planet’s population with twice the potency – naturally – and all...

NAD+ Booster NMNH Proved for Safety and Efficacy

NAD+ Booster NMNH Proved for Safety and Efficacy

Content provided by Effepharm Ltd | 02-May-2024 | Product Brochure

NMNH, short for Reduced Beta-Nicotinamide Mononucleotide, refers to the reduced form of NMN. Preclinical studies show that NMNH demonstrates a remarkable...

Related suppliers

Follow us


View more