Asia Pacific: Fertile Soil For Functional Foods

At the other end of the spectrum are Asia Pacific's up-and-coming markets, with China leading the way. Here, value sales of fortified/functional foods grew by nearly 20% in 2005 to U.S. $709 million, although this is still a small figure considering China's population size of over 1.3 billion. Indonesia is the runner-up with a 13% growth rate, and fairly respectable fortified/functional food value sales of US$1.1 billion. India, however, despite its huge population of nearly 1.1 billion, is still lagging behind with 2005 value sales of just US$441 million (this is US$46 million less than Taiwan, which has a much smaller population of 23 million inhabitants).

Dairy products are the uncontested top seller in the fortified/functional stakes worldwide. With value sales of US$21 billion, fortified/functional dairy products accounted for over 50% of global fortified/functional packaged food sales in 2005. In Asia Pacific they claimed a 64% share, amounting to US$9.6 billion. The growth potential of this market remains huge – the region's per capita spending on dairy products was only US$12.5 in 2005, compared to US$235.5 in the dairy stronghold of Western Europe. In Asia Pacific, dairy products are increasingly being marketed as prime sources of calcium and vitamins and are even promoted by public health campaigns in some countries, such as China. This has fostered an interest in fortified/functional dairy products.

After dairy, the next biggest selling fortified/functional product type in Asia Pacific is fortified/functional confectionery with 2005 sales of over US$3 billion. Two thirds of this is accounted for by functional gum, and again mostly through sales in Japan of products such as Lotte's Xylitol and Black Black, as well as Meiji Seika Kaisha's Xylish. However, fortified/functional gums have a presence throughout the Asia Pacific region, as does sugar confectionery with its universally popular medicated sweets.

The total fortified/functional packaged food market in Asia will grow by 30% between 2005 and 2010. Fortified/functional bakery products should achieve double that. Now is the time for companies to focus on the region's less developed markets, and introduce products for which there is a long-recognized public health need, such as vitamin-and mineral-fortified dairy and bakery. Product launches tied in with governmental public health initiatives stand a good chance of success. Oils and fats fortified with vitamins D, E and particularly vitamin A, deficiency of which is rife in many parts of Asia Pacific, is another promising area to venture into. The addition of vitamins and minerals to basic foodstuffs is comparatively cheap for manufacturers to carry out, and would potentially reach a large proportion of the region's increasingly urbanized consumer base. [HCP]

Vitamin And Dietary Supplement Trends

• Global sales of vitamins and dietary supplements rose 7% in 2005 to reach US$48 billion.
• Spurred by double-digit growth of dietary supplements, notably co-enzyme Q10, protein powder, and calcium supplements, the global vitamins and dietary supplements market is expected to grow 23% to reach US$59 billion in 2010.
• Product launches and increased consumer education regarding the importance of maintaining strong bones will contribute to strong value growth (31%) in calcium supplements between now and 2010, particularly in China.
• In order to further stimulate sales in maturing vitamins, manufacturers continued to focus on differentiating products through the development of gender- and condition-specific products, such as McNeil Nutritional's Viactiv women-oriented calcium supplement line in the U.S., which was extended in 2005 to include chewable multivitamins in chocolate and tropical fruit splash flavors.

Source: Euromonitor Intl. 2006