From big names across the retail, entertainment, and the oil and gas sector, conglomerates across Thailand are taking a greater interest in the health and wellness sector.
In fact, Thailand has been described as “the supplement market” when it comes to introducing new functional ingredients within the South East Asia region by Japanese dairy and functional food giant Morinaga.
Another dietary supplement industry leader, Blackmores, also said that its business in Thailand has held up, although other markets in the region, such as Malaysia and Indonesia, have reported sharp revenue declines in its latest financial results released in end February.
In this series of VitamINSIGHTS, we will look at how conglomerates and smaller players are seeking fortune in the nutraceutical sector, as well as the country’s dietary supplement regulatory landscape.
Part I: Who’s in the game
Central Retail Corporation, which counts supermarket chain Big C, convenience stores FamilyMart as its retailing arms, for example, has launched a vitamins and supplement retail arm known as Tops Vita last September.
Over 1,000 vitamins and supplements, including Australian brands Swisse, Nature’s Way, Blackmores, and Life-Space are listed in Tops Vita.
Designed as an Offline to Online (O2O) platform, the firm had invested THB 200 million (US$5.7m)1500 into the launch of Tops Vita.
Online, the products are sold on its website or via the Chat and Shop in Line Official.
Offline, the stores are located within Tops supermarkets, Central Food Hall’s health and beauty zone, and Tops Care healthy lifestyle store.
With an initial opening of 20 stores, the firm has set out an expansion course to 150 branches by 2024, with office workers as its key target consumer.
By 2027, it aimed to achieve sales of up to THB1.5 billion (US$42m) as Thailand’s number one vitamins and supplement retail.
Prior to Tops Vita, the firm is already operating Tops Care – another retailing arm of Central Retail – that similarly offers vitamins, food supplements, and other health related products.
The health supplement sector, alongside luxury fashion, food supermarket, and lifestyle, has been identified as an area of “The Next Sustainable Growth” by the firm.
Just this month, Central Retail announced that it has invested THB 28bn (US$800m) in “The Next Sustainable Growth” areas and expected a 15 per cent revenue growth or THB 270bn (US$7.7bn).
The decision to invest was not an arbitrary one, but one built on recent success, in view of heightened consumer demand for health products amid COVID-19.
“In 2022, Central Retail implemented ‘CRC Retailigence’ strategy to our integral five-year business plan, resulting in the successful business portfolio and exponential growth in Thailand, Vietnam, and Italy across all business groups: Food, Fashion, Hardline, Property, and Health and Wellness.
“This has generated more than 20 per cent growth in total revenue, which exceeds our performance target for 2022,” CEO Yol Phokasub said.
Another conglomerate that is planning to grow its nutraceutical portfolio is entertainment firm RS Group.
In January, it announced a restructuring where health and wellness has been listed as one of its six main businesses.
Known as RS LiveWell, the portfolio consists of product brands such as well u, Vitanature +, Lifemate, and Camu C, sold via the home shopping channel.
Its other five key businesses are multimedia, music, pet food and nutrition, direct-selling, and merger and acquisition.
In this year’s business highlights, the firm said its brands well u and Vitanature + will be launching 19 new SKUs across food supplements, drinks, and personal care.
Under its direct-selling business ULife, it will be launching a new subscription-based business model for selling food supplements and new supplements under the brand Aviance.
ULife, or Unilever Life, was previously owned by FMCG MNC Unilever and was acquired by RS Group last year.
Like several firms that have dabbled into the CBD sector, the firm launched a CBD krill oil targeted at adults facing knee-related problems last year.
Oil and gas firm PTT Public Company, on the other hand, has set up a life science arm known as Innobic (Asia).
To grow its nutraceutical portfolio, the company has been engaging universities in researching and developing new nutraceutical products.
In January, the firm said it has been working with Thailand Institute of Scientific and Technological Research (TISTR) and Chulalongkorn University’s Faculty of Pharmacy in new product development.
The first two supplements launched were Innobic Pro Beta-Glucan+ and Innobic Probiotics GD.
The former contains beta-glucan mixed with propolis, sulforaphane in broccoli powder, as well as vitamin D3, C, and quercetin for respiratory health. The latter contains local bacteria strains.
Both are sold in LAB Pharmacy and Innobic Official store in Shopee.
The products are designed to meet the needs of the country’s ageing population.
According to Rakuten Insight’s survey on 1,045 Thai respondents last November, 46 per cent of the respondents rated their physical health as average and below, 38 per cent rated it as “somewhat good” and 16 per cent as “excellent”.
At the same time, as many as 85 per cent of them said that the increased cost of living after the pandemic has affected their life.
Part II: Power of celebrity engagement
Another interesting feature in Thailand’s nutraceutical market is engaging celebrities, usually local Thai or K-pop celebrities, in marketing the products.
Doing so has helped brands expand their pool of potential consumers, according to one nutraceutical firm.
“I think Thailand is a very big market for food supplements and cosmetics products. It's a very big market but the key thing is to win consumers' trust.
“I think the key success factor for supplements is efficacy, if consumers feel that the product can solve their problems, they will trust the product, and this will spread via the word of mouth.
“But there are also some consumers who buy a product because their favourite idols have endorsed it,” said Vichai Kemtongkum, managing director of Orient Innovation.
The firm, which is behind a curcumin, vitamin D, and fish oil supplement marketed as Caminia, has signed South Korean singer and GOT7 boyband leader Jay B in endorsing its supplement this year.
“Many people never know Caminia before, but they bought a lot of Caminia, because they love Jay B. This is a new insight which I never knew.
“There is now a new group of customers who are below 30 years old,” Kemtongkum added.
Last November, Brand’s Suntory, which counts Essence of Chicken as one of its flagship products, was the presenter for another GOT7 member, Hong Kong-born singer Jackson Wang’s three-day concert held in Bangkok.
Amado Group is another company that has ride on the appeal of celebrity endorsement in marketing its supplements.
In July 2020, the company signed an agreement with South Korean actor Hyun Bin as the ambassador of the product H-Collagen tripeptide. In an earlier interview, the firm told us that the product became its second bestseller within one month of the actor’s endorsement.
Part III: Regulations
The Food Act 1979 is aimed at protecting and preventing consumers from health hazards occurring from food consumption.
Under the Act, dietary supplements are required to bear labels containing Thai language and are subjected to be approved by the Thai FDA prior to market sale.
Having studied the regulations and success from other countries, such as Japan, South Korea, and China, the Thai FDA went on to introduce the Herbal Product Act 2019.
This has opened up a new regulatory approval process for herbal products that sit between the Food Act and the Drug Act.
“In the countries studied, these products [that are between food and OTC drugs] have done a good job and brought a lot of income to the entrepreneurs of that country. So, the Thai FDA has initiated another pathway to allow the products that are between drugs and food supplements to be registered much more easily,” Dr. Atthachai Homhuan, director of regulatory affairs at Tilleke and Gibsons explained.
Companies are allowed to choose whether they want to register their herbal product via the Food Act 1979 or the Herbal Product Act 2019.
A similarity between both pathways is that health claims will need to be evaluated by the Thai FDA before they could be made, although those registered under the Food Act can make nutrient claims without going through evaluation.
“If the food supplements contain herbal extracts, vitamins, and minerals, the FDA will not allow them to claim health benefits. The FDA will allow them to make certain descriptions, such as fibre is good for gastrointestinal gut, vitamin C is good for antioxidants.
“If they want to claim something more, for example, the herbal extract that the product contains could support sleep, this will need to go through health claim evaluation,” Dr. Homhuan said.
Applicants must provide either clinical or non-clinical evidence to support the claims.
From evaluation to approval, the time needed to assess health claims via the Food Act 1979 has been shortened to less than three months for “straightforward cases”. For those under the Herbal Product Act, the process takes longer at about 200 days.
“The disadvantage of registering products under the Herbal Act, is that it would take a longer time for the Thai FDA to evaluate the product, which is about 200 days.
“As for those registered via the Food Act, the Thai FDA has shortened the duration for evaluation and granting the license. Thus, in terms of facilitating the registration, it is easier for companies to go through the food law.”
Even so, companies might still find it challenging and time consuming to pass the health claim evaluation under the Food Act, Dr. Homhuan pointed out.
“So what they do is that they will not make therapeutic health claims on the product label, but they will have marketing and educational materials, or what we call advertorial to advertise and educate consumers the functions of their products,” he said.
On the other hand, kratom, alongside cannabis and hemp, has been decriminalised in Thailand, opening up new opportunities for their use in nutraceuticals.
In the case of CBD products, the maximum permitted amount of tetrahydrocannabinol (THC) is 0.15 parts per million.
Permitted dosage formats include tablets, capsules, liquid, powder, flavoured drinks, carbonated drinks, energy drinks, beverages, and ready-to-eat cereals.
However, so far, most of the CBD-related products seen in the market are CBD-infused beverages. There are also sublingual CBD oils that have been registered under the Herbal Product Act.
“The trend in Thailand is that CBD infused drinks and beverages are quite popular and are becoming more attractive to the consumers. This is because in terms of the R&D and product development, the infused drinks can be launched into the market easier and can attract consumers easily,” Dr. Homhuan explained.
Watch the video to find out more about Thailand’s CBD laws and product launch trends.
Although Thailand’s CBD rules have relaxed, he emphasised that CBD imports are not allowed into the country and will still be classified as narcotics.
Only locally made sourced products are allowed as the legalisation of cannabis and hemp was meant to provide a new source of income for the country.