The Herb/Botanical Market In Japan
Current market small and fragmented, but potential for growth is increasing.
By Ron Bailey
The original focus of this column was to be on new regulations issued by the Ministry of Health and Welfare covering herbs and botanicals and dietary supplements in general, which were to be effective April 1 of this year. Unfortunately, in spite of a series of announcements by the Ministry earlier in the year indicating that major regulatory changes would be made, very little has happened. In fact, many observers in Japan feel that the Ministry has actually decided to increase the regulatory pressure on the industry, for reasons that are not yet clear. At the present time there is considerable confusion in the marketplace in Japan regarding new herbs and botanicals (and other new food ingredients), apparently at all levels of the government.
In terms of herb/botanical regulations in Japan, there is no separate regulatory category for herbs and botanicals. Some are considered foods and some pharmaceuticals, depending on the history of the ingredient and the known safety and efficacy data. For example, several currently popular Western herbal/botanical ingredients were placed in a regulatory category established in the early 1970’s that allows their use only as drugs (e.g., hawthorn and goldenseal). That same regulatory category, which is sometimes referred to as the MHW 46 Guidelines, also indicated that many herbs and botanicals would be regulated as food ingredients (e.g., reishii mushroom and evening primrose seed oil).
Recently the situation has become even more complex, with the introduction of many new herbs and botanicals of commerce from the West that had previously been relatively unknown in Japan. Those herbs, including popular saw palmetto and St. John’s Wort, for example, were able to escape categorization as drugs and can be sold as food ingredients (usually in dietary supplements) as long as on-label health claims are not made for the products.
Also, until recently all products sold in two-piece hard shell gelatin capsules were considered drugs in Japan, regardless of the contents of the capsules. Pressure from the U.S. embassy supported by a leading overseas capsule maker has led to a change in regulations, however, and now all permitted herbs and botanicals of commerce can be sold in hard shell capsules as well.
Japanese consumers are also allowed to purchase by mail herbal and botanical products from overseas that might be considered drugs in Japan. The purchases are limited to a maximum number of product units (24 is most often mentioned) and are intended for personal consumption and not for resale. This “private import” system has become a factor in the development of new regulations, since private imports are growing and there is genuine consumer interest in purchasing herbal and botanical products by mail.
Herb/Botanical Market Size In Japan
There does not seem to be a reliable source of information regarding the market size and growth trends in Japan, which is usually an indication that the market is still relatively undeveloped or at least is very complex with several regulatory categories and several channels of distribution. For example, there are several herbs and botanicals included in the more than 45 health food ingredients regulated by the Ministry of Health and Welfare and subject to the technical monographs of the Japan Health Food Association, including such popular ingredients as chlorella and ginseng. Estimates of market size for the health foods vary, but as far back as 1995 the U.S. embassy in Tokyo was reporting 1994 sales of chlorella products of $500 million U.S. per year and ginseng sales of $250 million per year, for example.
Similarly the market for traditional Japanese herbal medicines regulated in Japan as Kampoh drugs also must be considered in determining the overall market size for herbs and botanicals. Leading Kampoh medicine manufacturer Tsumura estimates the market size at over $U.S. one billion per year in Japan and growing. Tsumura this year exhibited at the Natural Products Expo West show in Anaheim, CA, for the first time, focusing on a dietary supplement tea using traditional Japanese herbal ingredients with known health benefits.
The formal category of FOSHU (Foods for Specified Health Use) in Japan includes two products with Eucommia leaf extract with on-label claims “suitable for people with mild hypertension.” The sales of the two products, the first from Hitachi Zosen and the second more recently from Yamanouchi Pharmaceutical, are not yet very large, however. Other processed botanical “actives” used in approved FOSHU products include psyllium seed husk, green tea polyphenols and guava leaf polyphenols (unless wheat bran and apple fiber are included), although this is likely to change in the future as consumer interest in such ingredients grows.
As has been mentioned in previous columns, there is a growing interest on the part of Japanese consumers in “self-health management,” including the use of safe and efficacious herbal and botanical products. Not only are the overall costs of health care increasing in Japan, each year Japanese people are being asked to share an increasing percentage of those costs. In addition, the credibility of the traditional health care system has been declining, as the incidence of serious hospital-related diseases and over-prescribing of certain pharmaceuticals (particularly antibiotics) has become public knowledge. This has led consumers to seek alternatives to the traditional health care system and for some health conditions well-researched herbs and botanicals are of interest.
The Japanese government has also been supportive of this trend (the recent confusion about new regulations notwithstanding), as it is in its financial interest to encourage ongoing health maintenance and disease prevention measures in the general population. The growing FOSHU foods category is part of this process and the general acceptance of use of certain Western herbs and botanicals is another. At the same time, government-supported clinical research on popular food ingredients in Japan, such as green tea, ginkgo biloba and konnyaku, for example, is widely publicized and has helped to further stimulate consumer interest in new herbs and botanicals.
Expectations For The Future
As long as herb and botanical sales continue to grow in large overseas markets such as the U.S. and Europe, with positive consumer health benefits demonstrated through the consumption of well-tested safe and efficacious products, there will be increasing interest in such products in Japan. While not all herbs and botanicals allowed for sale as foods in the U.S. are likely to be allowed in Japan (and probably should not be), the expected market opening through changes in regulations will provide the incentive to develop scientific support suitable for the Japanese market. At the present time there is an increasing number of reasonably well-researched herbs and botanicals from Japan being sold in the U.S., either directly or through U.S. agents, and this is likely to increase in the future. As the market for such ingredients in Japan grows, the primary attention of many of the Japanese ingredient suppliers will shift back to Japan in order to compete with expected new entries from overseas. The necessary first step, however, is for the Ministry of Health and Welfare to proceed with the market opening steps that were promised earlier this year.
NW
