Five trends that will shape APAC's nutraceutical and supplements industry in 2019
1. Probiotics in Japan: Gut health, affordability and convenience driving demands
Consumer demand for probiotics will continue, thanks to its benefits for gut health. As such, intestinal flora and gut health will be the focus of innovation, Japanese probiotics specialist Morinaga told us.
The Bifidobacteria longum BB536 strain, which promotes gut and skin health, along with weight management and colon cancer prevention, will be the focus of the firm's product innovation strategy next year.
"We will continue to develop products using the Bifidobacteria longum BB536 strain. Also, we will stress the health functionality of our BB536 strain and respond to consumers' health concerns," a spokesman at the firm said.
Isolated from healthy infants almost 50 years ago, the BB536 strain also won the Most Innovative Health Ingredient prize at the Gulfood Manufacturing Industry Excellence Awards last month.
Cost-savings and convenience factors such as "drinking in the house and relaxing" were other selling points consumers would consider when buying a supplement, the spokesman added.
As such, the firm will focus on developing its top-selling convenient food products, including cheese, ice-cream and infant food in the next year.
2. Millennials and education to drive India's nutraceutical market
Growing affluence and higher levels of education in India have increased consumer knowledge of the health benefits of supplements and health foods, with millennials driving a large portion of the market.
Tech savviness among millennials also affords this particular set of consumers easy access to information surrounding health and nutrition, and a desire to avoid diseases like diabetes and heart disease (both highly prevalent in India) motivates them to seek healthy alternatives to their usual diets.
CEO of Indian nutraceutical brand OneLife, Gaurav Aggarwal, told NutraIngredients-Asia: "The nutraceutical industry as a whole is growing rapidly, as demand is increasing on account of consumer awareness of preventive healthcare. Exposure to global trends and wellness products among millennials is driving them to seek out supplements and health foods."
However, he added that such awareness was concentrated in urban India. Consumers in Tier 2 and Tier 3 cities are still largely unaware of such products, and require plenty of education on their own nutritional needs.
Urban millennials "understand their nutrient deficiencies and want to use nutritional supplements to solve that".
Aggarwal said, "As marketers educate consumers about the benefits of these nutraceutical products, acceptance will increase even faster."
Emboldened by this trend, nutraceutical companies in the country have begun to innovate more extensively.
“Nutraceutical firms in India are integrating all the aspects of the health and wellness sector to place greater emphasis on the nutraceutical space," said Aggarwal, "The category is still nascent and nutraceutical firms are developing products based on ever-evolving consumer needs."
3. Australian supplements to continue to take centre-stage in China
Australian supplements are well-loved by Chinese consumers for their quality and high production standards, and will continue to take centre-stage in China.
This is according to H&H, a Chinese health supplement company that bought over Australian supplement firm Swisse Wellness last year.
During the recent Double 11 annual sales event in China, its newly acquired flagship brand Swisse topped the charts, putting up a close fight against leading Japanese brands Kao and Moony.
Australian brands like Bio Island and Blackmores raked in a total of USD$30.7bn (RMB$213.5bn) at this year's Double 11 event, a 27% increase from last year. H&H, the Chinese owner of Swisse, told us that the firm's recent sales performance was a testimony to the popularity of Australian products in China.
"As we saw on 11-11, with Swisse being the number one imported brand overall and number one supplement brand, our brand and products are seen as 'best in class', reflecting the premium, proven and aspirational aspects of our consumer offerings, and leveraging the clean, green, safe and secure reputation of Australian-made products," said Severine Brichard, H&H Group Director (Marketing).
Moving into 2019, Swisse will focus on product development around gut health, beauty-from-within, cognitive function and stress support. Brichard noted that the Chinese market was especially quick to pick up new trends, since its customer base was younger and more digitally savvy.
Witnessing the attractiveness of Australian supplements, Chinese e-commerce giant JD has also signed an exclusive strategic agreement with Australian brand AuMake early last month.
Through the deal, JD.com will channel customer inquiries for Australian and New Zealand products. In addition, the two will develop a co-owned brand manufactured in Australia and New Zealand for Chinese consumers.
4. The constant evolution of innovations for seniors in Japan
Industry experts have pointed to Japan as the leader in health and nutrition innovations for older consumers, with other countries falling far behind.
At the recent DSM Health Academy in Tokyo, Gita de Beer, DSM Nutritional Products' Global VP of Marketing (Food & Beverage), said only 1% of such innovations globally was meant for seniors.
In contrast, 41% of Japan’s health and nutrition innovations are targeted at seniors, which she said presented a "huge opportunity to export that knowledge to the West".
The Japanese are also "celebrating ageing" and as such, want to be healthier for longer.
Based on this, industry is looking at not just age group, but mindset and lifestyle to inform its product development. This approach will allow brands to better cater to specific groups of older consumers.
In addition, companies are also focusing on developing traditional foods with a nutritional twist, so seniors can maintain a healthy diet without drastically changing their eating habits.
Convenience is another factor manufacturers are taking into account, and innovations for seniors will feature easily accessible packaging, as well was easy-to-consume formats.
5. Weeding out the benefits: CBD's rising popularity in Asia
Hemp and cannabinoids (commonly known as CBD, in reference to the phytocannabinoid cannnabidiol) are being used in an increasing number of supplements and functional foods and beverages in the APAC region.
Swiss firm Creso Pharma has been one of the more prominent market players in APAC, most recently signing a commercial agreement to bring its CBD hemp-based nutraceutical cannaQIX50 to New Zealand.
CEO and co-founder Dr Miri Halperin Wernli said APAC was "a region where projections suggest 23% of the worldwide spend on CBD products will take place by 2022".
New Zealand's Ministry of Health revealed that there were as many as 235,000 medical cannabis users in the country, where CBD is a class B1 controlled drug. Since 2017, medical practitioners have been permitted to prescribe CBD products to patients. Regulators are also in talks to remove CBD’s controlled drug status, a change likely to result in more prescriptions and a surge in sales.
In neighbouring Australia, medical marijuana has been thoroughly researched for use in supplements and pharmaceuticals. BioCeuticals recently invested $500,000 in a medical cannabis trial to investigate its effects on brain tumours and symptoms common in patients.
Earlier this year, former Swisse executive George Livery joined supplement firm Bod Australia to oversee the development of its 'sustainable cannabis business'.
Elsewhere in APAC, Japanese consumers have taken a liking to imported CBD products: in February, Canadian CBD firm Phivida received approval from Japanese authorities to sell its products in the country.
This included its Nano-CBD Iced Tea, a beverage formulated to treat the gastrointestinal tract, and maximise the body's absorption of orally ingested cannabinoids.
Earlier this month, Aussie manufacturer Elixinol discussed the success of its hemp oil products in Japan with NutraIngredients-Asia.
Founder and CEO Paul Benhaim called Japan "the leading country" in Asia with regards to hemp usage and added, "There is an increased acceptance this year, and that's why we are confident that 2019 is a year of success in Japan."