Joerg Gruenwald07.01.06
The European market for supplements and herbal products is valued at approximately €7 billion, and it is growing at a rate of 3-5%. A lot of the strong growth is coming from Scandinavian countries, as compared to Central and Eastern Europe where the supplement market is developing strongly from a lower baseline. In Germany, the market for vitamins, minerals and herbals is very complex, even though most herbal products are regulated as drugs. The herbal drug market in Germany took a hit a couple of years ago when restrictions were placed on reimbursements. However, initial losses have been recovered almost completely and the market is starting to grow again.
There are three major growth areas on the European supplement market today. These include, broadly speaking, risk reducers like probiotics and prebiotics, cholesterol reducers, and supplements promoting bone and heart health; an assortment of antioxidants; life-stage and gender nutrition products tailored to specific needs; and slimming solutions. Other growth areas include energizing and relaxing supplements, various brand extensions, and products offering multiple benefits.
These areas of growth reflect the consumers' growing interest in intrinsically healthy products, as well as the fact that a growing population is faced with increased risk of disease, like those that stem from circulatory issues and obesity. Also, the population is aging-in a matter of 25 years, one in five Europeans will be over 65 years old. Consumers are focused on extending middle age and improving quality of life during those years, which in turn aids growth in supplement and herbal products markets.
In general, the economic state of Europe has been dominated by consolidation. As a result, the main market channels, retail, pharmacy and supermarkets, show little growth. However, newer market channels like multilevel marketing, mail order, and Internet sales are clearly growing at a faster rate.
The European supplement market will have to undergo major changes over the next five to 10 years due to a continuing harmonization process of the different regulations in the European member states.
Historically, dietary supplements and natural products were regulated very differently from country to country, leading to a situation where the majority of products could not be sold in all European member states in the same formulation. In some countries, the dosages of vitamin and mineral products were very much restricted, while in other countries very high dosages, comparable to the situation in the U.S., were possible.
The most extreme situation occurred in herbal products where some countries like the U.K. and The Netherlands had a very liberal attitude and allowed practically all herbal products as unlicensed or supplement products on their markets. However, in other regions, predominantly Germany and France, most herbal products were regarded as drugs.
Two main regulations are trying to harmonize this situation. On the one side, there is the Supplement Directive 2002/46/EC, which dictates what vitamins, minerals and other well-defined ingredients can be regulated as supplements, but herbal products are not part of the existing regulations. A problem that remains unresolved relates to dosages that are permitted for the individual vitamins and minerals; these dosages need to be defined on a national level.
The other regulation, the Traditional Herbal Medicinal Products Directive (THMPD) 2004/24/EC, was supposed to be implemented by member states in October last year. This directive says herbal products, which have been on the market for at least 15 years, with an additional 15 years outside of Europe, must be regulated under this directive. They require a drug registration file (drug master file) with a complete quality dossier including analytics, stability testing, GMP production, etc. While there is no need to prove efficacy, safety and traditional use must be documented on a literature basis.
Since the THMPD will change the entire market for herbal products in Europe, specifically in those countries where herbal products are currently regulated as supplements or are non-licensed (i.e., in the U.K., in The Netherlands, and several other member states), the producers of herbal products will need to develop drug quality files and complete drug registration dossiers, both of which are costly and time consuming. Companies' will have to go through the registration process in order to legally keep their products on the markets long-term.
Unfortunately, many products will probably disappear because manufacturers can only invest in a limited amount of products. As a consequence, many interesting combinations of products from other hemispheres, like Traditional Chinese Medicines or Ayurvedic medicines, will likely disappear after a transition period, or by 2011.
In addition to a complete restructuring of the natural products and vitamins/mineral markets in Europe, the claims for food products and, accordingly, food supplements will be harmonized based on the newly agreed upon Food Labeling Directive 2000/13/EC. Basically, the directive states that all claims need to be scientifically proven in well-controlled, peer-reviewed published studies. Therefore, various interpretations of supplement claims in Europe will be harmonized on a very stringent level, demanding clinical trials for the exact product or formulation, which intends to make the respective claim.
Certainly, the harmonization in Europe will be hard on those manufacturers that have experienced easy access to the markets with their products, saving on things like documentation. On the other hand, manufacturers in countries that had more strict requirements will be in a better position long-term since the quality of their products has already been documented and proven on a higher level, often requiring a drug dossier.
Specifically in the herbal products market, Germany has always been a dominant country in Europe, with approximately 45% market share. This is a result of high acceptance of herbal drugs not only by consumers but also by pharmacists, physicians and the entire medical community. This experience in the development of drug files can help other European countries learn to adapt their products to those requirements.
There is also the issue of Novel Food regulation. Most recently, there have been discussions related to changing those regulations. It is hoped this new discussion period will change the present situation and bring more innovation to European companies producing novel food products and ingredients (See Nutraceuticals World's June issue, page 32, for more details on Novel Food regulation.)
Claims restrictions and the subsequent need for clinical trials to substantiate claims will lead to more research in the field of supplements and natural products. In the end, this will certainly spur new growth for the whole market segment, especially since consumers will more firmly believe that the claims on product labels are grounded in solid science. For the future, expect increasing demands in quality dossiers for natural products, as well as more companies conducting clinical trials to substantiate claims.NW
About the author: Dr. Joerg Gruenwald is president of analyze & realize ag, a specialized business consulting company for herbal medicine, dietary supplements and functional foods, and author of the PDR for Herbal Medicines. He can be reached at Waldseeweg 6, 13467 Berlin, Germany; 49-30-40008100; Fax: 49-30-40008500; E-mail: jgruenwald@analyze-realize.com; Website: www.analyze-realize.com
There are three major growth areas on the European supplement market today. These include, broadly speaking, risk reducers like probiotics and prebiotics, cholesterol reducers, and supplements promoting bone and heart health; an assortment of antioxidants; life-stage and gender nutrition products tailored to specific needs; and slimming solutions. Other growth areas include energizing and relaxing supplements, various brand extensions, and products offering multiple benefits.
These areas of growth reflect the consumers' growing interest in intrinsically healthy products, as well as the fact that a growing population is faced with increased risk of disease, like those that stem from circulatory issues and obesity. Also, the population is aging-in a matter of 25 years, one in five Europeans will be over 65 years old. Consumers are focused on extending middle age and improving quality of life during those years, which in turn aids growth in supplement and herbal products markets.
In general, the economic state of Europe has been dominated by consolidation. As a result, the main market channels, retail, pharmacy and supermarkets, show little growth. However, newer market channels like multilevel marketing, mail order, and Internet sales are clearly growing at a faster rate.
The Impact of Harmonization
The European supplement market will have to undergo major changes over the next five to 10 years due to a continuing harmonization process of the different regulations in the European member states.
Historically, dietary supplements and natural products were regulated very differently from country to country, leading to a situation where the majority of products could not be sold in all European member states in the same formulation. In some countries, the dosages of vitamin and mineral products were very much restricted, while in other countries very high dosages, comparable to the situation in the U.S., were possible.
The most extreme situation occurred in herbal products where some countries like the U.K. and The Netherlands had a very liberal attitude and allowed practically all herbal products as unlicensed or supplement products on their markets. However, in other regions, predominantly Germany and France, most herbal products were regarded as drugs.
Two main regulations are trying to harmonize this situation. On the one side, there is the Supplement Directive 2002/46/EC, which dictates what vitamins, minerals and other well-defined ingredients can be regulated as supplements, but herbal products are not part of the existing regulations. A problem that remains unresolved relates to dosages that are permitted for the individual vitamins and minerals; these dosages need to be defined on a national level.
The other regulation, the Traditional Herbal Medicinal Products Directive (THMPD) 2004/24/EC, was supposed to be implemented by member states in October last year. This directive says herbal products, which have been on the market for at least 15 years, with an additional 15 years outside of Europe, must be regulated under this directive. They require a drug registration file (drug master file) with a complete quality dossier including analytics, stability testing, GMP production, etc. While there is no need to prove efficacy, safety and traditional use must be documented on a literature basis.
Since the THMPD will change the entire market for herbal products in Europe, specifically in those countries where herbal products are currently regulated as supplements or are non-licensed (i.e., in the U.K., in The Netherlands, and several other member states), the producers of herbal products will need to develop drug quality files and complete drug registration dossiers, both of which are costly and time consuming. Companies' will have to go through the registration process in order to legally keep their products on the markets long-term.
Unfortunately, many products will probably disappear because manufacturers can only invest in a limited amount of products. As a consequence, many interesting combinations of products from other hemispheres, like Traditional Chinese Medicines or Ayurvedic medicines, will likely disappear after a transition period, or by 2011.
In addition to a complete restructuring of the natural products and vitamins/mineral markets in Europe, the claims for food products and, accordingly, food supplements will be harmonized based on the newly agreed upon Food Labeling Directive 2000/13/EC. Basically, the directive states that all claims need to be scientifically proven in well-controlled, peer-reviewed published studies. Therefore, various interpretations of supplement claims in Europe will be harmonized on a very stringent level, demanding clinical trials for the exact product or formulation, which intends to make the respective claim.
Certainly, the harmonization in Europe will be hard on those manufacturers that have experienced easy access to the markets with their products, saving on things like documentation. On the other hand, manufacturers in countries that had more strict requirements will be in a better position long-term since the quality of their products has already been documented and proven on a higher level, often requiring a drug dossier.
Specifically in the herbal products market, Germany has always been a dominant country in Europe, with approximately 45% market share. This is a result of high acceptance of herbal drugs not only by consumers but also by pharmacists, physicians and the entire medical community. This experience in the development of drug files can help other European countries learn to adapt their products to those requirements.
There is also the issue of Novel Food regulation. Most recently, there have been discussions related to changing those regulations. It is hoped this new discussion period will change the present situation and bring more innovation to European companies producing novel food products and ingredients (See Nutraceuticals World's June issue, page 32, for more details on Novel Food regulation.)
Conclusion
Claims restrictions and the subsequent need for clinical trials to substantiate claims will lead to more research in the field of supplements and natural products. In the end, this will certainly spur new growth for the whole market segment, especially since consumers will more firmly believe that the claims on product labels are grounded in solid science. For the future, expect increasing demands in quality dossiers for natural products, as well as more companies conducting clinical trials to substantiate claims.NW
About the author: Dr. Joerg Gruenwald is president of analyze & realize ag, a specialized business consulting company for herbal medicine, dietary supplements and functional foods, and author of the PDR for Herbal Medicines. He can be reached at Waldseeweg 6, 13467 Berlin, Germany; 49-30-40008100; Fax: 49-30-40008500; E-mail: jgruenwald@analyze-realize.com; Website: www.analyze-realize.com
