It is safe to say that each and every consumer will suffer from digestive system discomfort at some point during his or her lifetime, whether it be a transient complaint or symptomatic of a more serious ailment. No age or ethnic group is unaffected, which makes the digestive health platform one of the most widely applicable of all health and wellness positionings.
Euromonitor International’s health and wellness data shows that, for the 32 markets in which the company carries out in-depth health and wellness research, the digestive health prime positioning focus ranks third in value, behind general wellbeing and weight management. In 2010, digestive health accounted for 10% of total health and wellness sales. Based on current price year-on-year US dollar exchange rates, the category grew by 47% in value over the 2005-2010 review period, amounting to US$63.2bn in 2010 for the 32 markets combined.
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Bakery products with a high fibre content, such as wholegrain bread, and those with added prebiotic fibres, including breakfast cereals, account for just over half of digestive health-positioned products, while (mainly probiotic) dairy products accounted for one third in 2010. Snack bars, rice, noodles and pasta, most of which were digestive health-positioned on account of their high fibre content (eg brown rice, wholegrain pasta and noodles) were also important categories.
The two categories which achieved the strongest growth in the review period were pasta and dairy. Not surprisingly, probiotic yoghurt brands like Yakult and Danone‘s Activia and Actimel featured prominently in the digestive health-positioned brand rankings in many countries, topping several of them.
The BRIC nations, along with Indonesia, emerged as the five most dynamic growth markets for digestive health-positioned foods and beverages, followed by the US and Canada, where the probiotic bacteria concept caught on a little later than in some Asia Pacific countries (like Japan and South Korea) and European markets.
There is plenty of manufacturer activity in these emerging economies, which will ensure that digestive health products maintain their growth trajectory. For example, Yakult Honsha Co., concerned about population shrinkage curtailing growth in its Japanese home market, announced in July that it had set its sights on expanding further in highly populated emerging markets, specifically China, India, Indonesia and Brazil.
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By GlobalDataYakult Honsha’s third Chinese plant in Tianjin became operational in early August. Digestive health-positioned food and beverage sales in China rocketed by an incredible 283% over the 2005-2010 review period. Yakult Honsha plans for production capacity at the new plant, which supplies the north of the country, to expand from an initial 300,000 probiotic bottles of drinking yoghurt a day to 1.46m bottles. It also intends to open eight more sales offices in strategic cities, such as Chengdu in Sichuan province to help it push sales beyond the coastal cities and Beijing, and open up the still largely under-served inland market.
Besides China, India is another key focal point for health and wellness-oriented companies looking to expand. In July, ingredients company Beneo, part of German sugar refiner Südzucker, won governent approval to employ its chicory root-derived oligofructose, a prebiotic fibre which serves to balance the intestinal microflora, promoting digestive health, in a wide range of products. Previously, Beneo was only permitted to add this ingredient to bakery products.
Oligofructose’s natural sweetness makes it ideal for dairy products, frozen desserts, ice cream and confectionery products. Beneo seems particularly interested in the enormous market for traditional Indian sweets. As well as adding fibre and prebiotic functionality, oligofructose can be used as a sugar replacer, affording it plenty of scope for making traditional Indian sweets, which tend to be very high in sugar, just a little bit healthier on several fronts.
India’s market for digestive health-positioned products leapt by 153% over the review period, amounting to INR15.1bn (US$326m) in 2010, and is predicted to gain another 66% in value by 2015. So far, digestive health-positioned products have not yet managed to penetrate the Indian hot drinks, pasta and juice categories, but with a continued push from players such as Beneo, it is only a matter of time before the trend spreads to encompass an increasing number of categories.
Among functional ingredients positioned at improving digestive health, probiotics (besides fibre) are the best known. However, as industry insiders are well aware, the regulatory environment is not all that benignly disposed towards digestive health claims. In its latest health claims review, which concluded in July, the European Food Safety Authority (EFSA) rejected virtually all claims made by probiotic ingredients and products pertaining to digestive health. Claims included that probiotic ingredients and products promote a “healthy and balanced digestive system”, “decrease potentially pathogenic gastro-intestinal microorganisms”, “maintain a normal intestinal transit time” and “reduce gastro-intestinal discomfort” but EFSA rejected these assertions mainly on the grounds that the studies supplied to support these claims had failed to convincingly demonstrate a cause and effect relationship.
EFSA’s stance has stirred up much consternation among industry players and scientists alike. It is expected that the tidal wave of complaints unleashed against the agency, backed by increased efforts to conform to the clinical trial format demanded by EFSA, will eventually lead to some of these claims being permitted, but this may still be some years off. In the meantime, manufacturers’ inability to publicise their claims as part of their marketing and consumer education will be less than conducive to the growth of the digestive health prime positioning platform in the EU. Euromonitor International predicts that value sales of digestive health-positioned products over the 2010-2015 forecast period will grow at a fairly stagnant 1% CAGR in western Europe.
Nestle, the world’s largest packaged food company, is also displaying more than just a passing interest in digestive health matters. This platform fits in perfectly with the company’s objective of creating personalised nutrition strategies for the management and prevention of chronic health conditions.
In May, Nestle acquired US firm Prometheus Laboratories, a company specialising in gastrointestinal diagnostics and speciality pharmaceuticals. Nestle believes the acquisition will accelerate its ongoing research programme in the area of inflammatory bowel disease, including Croh’’s Disease and ulcerative colitis. Both are very painful and incurable chronic conditions for which dietary management, alongside drug treatment, are known to be beneficial. Nestle clearly sees an opportunity here for the development of specialised functional foods and/or beverages.
Nestle took a further step towards its digestive health commitment in July when it bought an 18% stake in New Zealand-based Vital Foods, a company which makes kiwi fruit-based dietary supplements and functional beverages aimed at alleviating constipation, a common symptom of Irritable Bowel Syndrome (IBS). IBS, a condition thought to affect as many as one in five people of all ages, is another important digestive system disorder targeted by Nestlé’s research.
The company stated that its clinical nutrition business arm in Australia would carry out clinical studies on IBS employing Vital Foods’ products, and it hoped for some “cross-fertilisation” to occur between Vital Foods and Prometheus.
The involvement of high-level players like Nestle, Danone, Yakult, Beneo and their willingness to bring much smaller but highly specialised and competent players into the fold, forms the basis for sustained future growth of foods and beverages with a digestive health-positioning focus. The human digestive system is highly complex, which makes digestive health one of the most versatile health and wellness positioning platforms, and Euromonitor International estimates that category value sales for its 32 selected health and wellness markets will grow from US$63.2bn in 2010 to US$73.6bn in 2015.
