GOED’s Schutt: Fish oil supply remains challenging

For the past two years, the supply of anchovy oil—the main source used in dietary supplements sold in the United States—has been depressed due to the cancellation of the fishing season this year in Peru and a lower-than-average catch in 2022.

The Peruvian Production Ministry’s (PRODUCE) canceled the anchovy fishing season to preserve the fishing resource that was depleted due to the effects of El Niño.

However, the industry should stay calm and look to other options to supply omega-3s in the short term, said Ellen Schutt, managing director of GOED (Global Organization for EPA and DHA Omega-3s). She said algae is a good option and in line with consumer demand for plant-based products, and at the same time, she acknowledged the algae supply isn’t enough to fully cover the full supply that natural oil once supplied.

Wath the full video to hear directly from Schutt about the supply chain concerns facing the omega-3 industry. She was interviewed in October in Dana Point, California, during an annual conference hosted by the Council for Responsible Nutrition (CRN).

To help brands manage through supply chain concerns, GOED’s GOED Exchange will host a Supply Chain Roundtable to examine the current state of the market and discuss strategies to help the omega-3 industry manage risk. GOED Exchange 2024 will take place at the Grand Hyatt in Athens, Greece, on January 23-25, 2024.

Video transcript: Omega-3 supply chain with GOED's Ellen Schutt

Sandy Almendarez: Hi, I'm Sandy Almendarez and I'm here with Ellen Schutt, who is the managing director of GOED. We are indeed at the ocean. This is not some fake background. But as we are close to the ocean, I wanted to talk to Ellen about, of course, omega-3s and some supply chain challenges that we've seen around the fish oil industry. Can you talk about what those challenges are?

Ellen Schutt: Yeah, absolutely. There's a lot going on right now, and the challenge is really around the supply of anchovy oil, which is the main one that goes into dietary supplements. And there was a cancellation of fishing season in Peru earlier this year and because of that, there's not as much supply as is typically available. This is compounded by the fact that last year it was a lower-than-average catch. So, a lot of the customers of Peruvian anchovy suppliers didn't buy oil waiting for the possibility of a better season, and that didn’t happen.

So those things have really made the situation very tight right now. And everyone is now looking at what's going to happen with the next season, which is supposed to happen next month. And so right now they're doing a sonar survey of the biomass in Peru to understand what the quota could be for this November super season. [There’s] a lot of questions about what's going on.

Almendarez: So in this uncertainty, how would GOED [help] its members get through this?

Schutt: Really what we're trying to do is keep people calm. Because there's other sources. I mean, everyone's talking about algae as an alternative. And algae, of course, has been growing. There's a lot of interest in plant-based nutrition.

The challenge is there's not enough algae to really replace all of the natural oil that doesn't exist right now. But this is a short-term problem. That's what we really are trying to make sure especially the brands and the retailers understand that there's a lot of demand for omega-3s. It's a very solid category; lots of science, consumers want it. So we just need to get through this next short period before things, historically, if there's a low season in Peru, usually the next season is a very high quota.

So we feel like once we get into 2024, things are going to be okay. And we just want people to just not lose faith in the category.

Almendarez: And where can GOED members or others in the industry learn more?

Schutt: We have an event coming up in January called the GOED Exchange, which is a conference that we do every two years. And because of everything that's going on right now, one of the sessions we've organized at the GOED Exchange is a supply chain roundtable. And so, we have a brand involved, we have some of the suppliers involved. We've also brought in the CEO of a company that sells to the aquaculture industry. Because that's not necessarily on the radar of supplement companies, but there's a lot [of] competition from aquaculture also buying the same oil.

So, we want to really help people understand what's going on now; but more importantly, let's think about how we plan for a better industry of the future, where there's stability and just thinking differently about how we might deal with problems in natural supply for the future.

Almendarez: Thank you so much, Ellen. I appreciate you talking with me.

Schutt: Thank you.