Jan 28, 2021
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ROTTERDAM, THE NETHERLANDS
Wellness & immunity – Insights and market outlook
2020 was an unprecedented year for many and it has changed the way we live and work.
The nutraceutical market has seen a spike in demand as more people are in the lookout for health boosting food or supplements.
Though wellness and immunity have been a growing trend for the past years, it has escalated dramatically in the past year. The APAC region in particular has seen a shift in the way that consumers behave towards food and beverage products. This posts a greater need to understand the local markets and the needs of the consumers.
Cameron Richardson, Head of Nutraceuticals for IMCD APAC, shares his insights about global and APAC markets, and how IMCD is partnering with customers and suppliers to respond to the consumers’ demands in the nutraceutical industry.
How has the industry evolved since the outbreak of COVID-19?
The nutraceutical market has seen a surge in sales for immune health products in Q1-Q3 2020, following the coronavirus (COVID-19) outbreak. However, immune supplements are more than just a trend. Prior to the pandemic, the global immune supplement market was predicted to achieve CAGR 9% from 2019–2025. Asia-Pacific is forecast to have the fastest growth in nutraceuticals market over this period, and not just in the immune health category.
Increased demand for traditional immune health ingredients such as Vitamin C, Vitamin D3, Zinc, Echinacea and Elderberry has put pressure on the supply chain. Brand marketers are looking to secure their position with these ingredients while researching alternatives to meet consumer needs.
We have also seen a significant rise in digital health and e-commerce. This presents many challenges for traditional supplement brands who may have relied on ‘brick and mortar’ retail. What is clear, is that for those brands that succeed, the reward will be significant. The nutraceuticals sector is due to double to $135bn in Asia in the next four years.
We have seen that particularly in APAC plant-based alternatives and clean label have become an emerging trend. How has this impacted the ingredients used in formulations?
Consumer concerns about the environment and clean-label products mean that plant-based health market is scheduled to grow significantly. The global market is predicted to be $21bn by 2025 and Asia-Pacific will make up the largest region. Vegan vitamins and minerals combined with herbal extracts, and even probiotics can deliver innovation in this trending area of the market. However, developing a finished product with only vegan ingredients is a major challenge for formulators. The goal is to achieve a functional finished product while adhering to clean-label principals. Performance and effectiveness of the product are key when it comes to clean-label excipients.
Do you see any difference in demand in the various countries in APAC?
APAC is a region where the cultural diversity provides a wide range of consumer demands for nutraceutical end products. While particular ingredients such as vitamins, Panax ginseng, probiotics and omega-3 oils are ubiquitous, each market’s consumer preferences vary by ingredient combination, dosage form, and health application. This is a complex challenge. However, we see that the markets in Asia Pacific are increasingly connected. IMCD’s global scope because market specific focus allows to provide insights to local companies looking to expand into export markets. For example, the finished product concepts developed by our teams in China, Japan or Indonesia will be relevant to our Australian customers looking to export to those markets. IMCD’s ability to deliver relevant product concepts in line with current trends is integral to our strategy.
Do demographics play a part in what type of products are stronger in demand?
[Demographics are increasingly influencing the demand in products through APAC. Rising incomes, increased urbanization and an aging population means that consumer demands are ever evolving. The result is more consumer awareness around efficacy and an emphasis on quality. Chinese consumers have been very diligent in selecting quality supplement brands over the last five to ten years.
What do you foresee in market development post-COVID?
The demand for immune health ingredients will more than likely return to pre-COVID levels. However, the category is not going away. Globally, it is one of the best-selling segments for the natural health industry. In China, immune health was the largest supplement segment in 2018-2019. I believe that science-based innovation will be the key to meeting the demands of consumers who are interested in maintaining a healthy immune system.Cognitive health focusing on stress and mental wellbeing will also be a major post-COVID consumer trend. As consumers emerge from lockdown, any assistance with adjusting to the new work and social dynamic, will be welcomed.
What challenges are there for producers to keep up with consumers’ demands?
Nutraceutical ingredients’ supply chains have been significantly tested during COVID-19. Raw material manufacturers have been impacted in unforeseen ways. Major manufacturing hubs such as India and China have experienced delays in securing raw materials to produce nutraceutical ingredients. This means they have had to be nimble to prioritise production of in-demand product lines. Beyond manufacture, the logistics of shipping ingredients around the world to reach consumers, has been a huge challenge. Increased costs amidst scarcity of access to freight options, means everyone in the supply chain has had to find innovative solutions to keep up.
How does IMCD support its customers to overcome the challenges?
IMCD supports its customers through the development of market ready product concepts. Specifically, we combine our active nutraceutical ingredients (e.g. herbal extracts, vitamins, omega-3 oils, probiotics) with our excipients (binders, fillers, coatings and flavours). Then, we utilise our global pharmaceutical technical centre network and internal formulation expertise to develop product concepts or finished product prototypes. These concepts are designed to be ready-to-launch and reduce the time to market for our customers. All concepts are designed to perform well, meet consumer trends, and are scientifically justified.
Innovation is critical to success. What is IMCD’s approach in innovation?
IMCD has an innovative portfolio of active nutraceutical ingredients based on science and speciality functional excipients. IMCD’s specialist herbal extract division, Network Nutrition vertically integrates our supply chain to the source of the raw materials. Further to this, IMCD and Network Nutrition have invested in innovative clinical research. The scientific outcomes will help meet existing consumer demands for science based raw materials. The synergy of actives product lines combined with our investment in technical centres and formulation expertise, mean that IMCD can create value from the nature’s source to dosage form to deliver innovation for our customers.
Could you cite an example?
The latest APAC wide immunity campaign combines multiple active immune health ingredients in two innovative dosage forms, a low excipient vegan tablet, and a vegan gummy. Designed to deliver immune benefits to vegan and clean-label conscious consumers, we have utilised our South East Asia technical centre in Jakarta to deliver excellent formulation and sensorial performance. The tablet contains a unique combination of medicinal mushrooms, herbal extracts and vitamins and minerals, using speciality excipients for a smaller tablet. The gummy delivers vegan vitamins and minerals in an innovative dosage form with speciality vegan excipients.