Joerg Gruenwald11.01.08
The natural health products market in Europe has a value of approximately €7.4 billion, with a mean growth of 5-7%. This figure includes all categories: supplements, functional food, cosmeceuticals and drugs based on natural substances or precursors. Following decreased growth during the past few years due to the changes in the European health insurance system in 2004, the market has recovered and is showing renewed growth rates.
On the pharmaceutical side of the natural health products scale, no new products have appeared in quite some time and sales growth is very slight. The mature drug market is badly in need of new impulses; however, no new blockbuster natural substance is currently in sight. Familiar plants are dominating the herbal drug scene: ginseng, ginkgo, echinacea, St. John's Wort and others, with their familiar indications and occasional potshots taken at them by the synthetic drug industry. It is obvious that science needs to identify new active substances, possibly new indications for known natural substances or discover plants that are currently growing in one of the many biodiversity hotspots.
The big growth areas for natural health products at the moment include supplements, and even more so, functional foods. The latter is a relatively young segment that is only just beginning to hit its stride in Europe, as consumer skepticism toward the effectiveness of functional ingredients in foods is being overcome. Consequently, the functional food and drinks market rose from $6 billion in 2001 to $8 billion in 2006.
Europe has always been a few years behind the U.S. market where trends are concerned-the obvious exception being herbal remedies. Consumers are becoming aware that some-not all-functional ingredients in foods actually work toward prevention.
Functional beverages represent a rapidly growing segment within functional foods. Some of the latest products include: functional teas, such as Unilever Lipton Elephant Detox Infusions; anti-aging functional drinks, such as the organic herbal tea Caudalie positioned as part of its "vino-therapy skincare brand"; products with antioxidant and/or eye-care claims, such as Ocean Spray's Cranberry & Blueberry Drink; oral hygiene products, such as St Yorre Strong Mint Flavour Water; and L'Or Vitalité, a coffee-based drink enriched with guarana by Maison du Café.
Another new category within functional foods that is only just emerging in Europe is functional confectionery. Until recently, these have been limited to lozenges to soothe a sore throat or breath-freshening chewing gums. Now, new ingredients are finding their way into confectionery-ingredients such as rose oil or echinacea, or familiar ingredients such as ginger, which now carry health claims.
The mature category of supplements is not quite as versatile as functional foods. Worth about $7.5 billion, the European supplement market is extremely fragmented. The largest market, according to a Euromonitor report from 2007, is Italy, followed closely by Germany, and then by the U.K. and France. The biggest growth is currently in Turkey and Ireland, followed by Italy, Norway and the Netherlands. Germany, historically the largest supplement market, is being overtaken by Italy, which also has the largest growth of novel sales channels, most notably Internet sales.
The main positionings of supplements in Europe are: anti-aging/beauty, weight management, cognition/energy, heart health and bone health. Ingredients featured in the weight management segment include green tea extract, lycopene, forskolin, and, more recently, Hoodia gordonii.
The anti-aging/beauty segment has since evolved into the sub-category of cosmeceuticals, where beauty-conscious France is currently the leading market. The most successful formulation in cosmeceuticals in Europe seems to be a combination of topical and internal products, most notably for anti-cellulite and anti-wrinkle applications. These products contain capsules and a lotion, and sometimes even different formulations to be taken at different times of day. Omega 3 fatty acids are strong here, as in other segments, and new indications are constantly being discovered for this ingredient.
On the whole, consumers in Europe are becoming more health conscious. This is in part due to the still-soaring obesity epidemic, which is causing the incidence of a number of health concerns to increase, among them diabetes, joint and bone problems and cardiovascular disease. At the same time, consumers are getting older, but they want to grow to a healthy old age, and they are beginning to understand that they have to take a more proactive approach if they want to see that happen. Also, concerns are being voiced in some regions in Europe, most notably the U.K., over the possible connection of Attention Deficit and Hyperactivity Disorder (ADHD) with artificial substances in food and drinks.
"Free from" foods are also growing, despite the controversy surrounding the question of what substances are considered "natural." Nevertheless, even if the presence of natural substances is a matter for debate, the absence of artificial substances is not. Consumers are reading the labels, and they are more and more likely to put a product that carries one of the dreaded "E" numbers in its ingredient list back on the shelf.
One of the main advantages of positioning a product in the supplement category is the less restrictive regulatory scheme, as compared with drug registration. This may be one of the reasons why the European supplement market continually receives new impulses, as the drug market stagnates. Also, traditionally, it has been possible to market a product as a supplement in some European markets, thus avoiding the drug registration process required for the same product in other markets. With the changing regulations, all of Europe will be harmonized in that respect in the near future.
The European Health Claims Directive governing claims made on food came into effect last year. This means that following a transitional period all of Europe will be harmonized with regard to claims made on food. Claims must not only be approved by the Commission, but also fulfill certain nutritional requirements-hopefully avoiding the paradox of an unhealthy product carrying a health claim. While innovation may slow as manufacturers deal with the new regulation, the advantages clearly are a harmonized playing field throughout Europe. Also, misleading and unsubstantiated claims will be prevented, which, in the long run, will increase consumer confidence in the claims that are made.
There are still opportunities for drugs, however. About two years ago, with a recent change in the legislation, a new category was established-Traditional Herbal Medicinal Product (THMP). This category permits applicants to register international herbal products in Europe with relatively low requirements, particularly since the documentation for safety and efficacy can be based on tradition alone and does not require further toxicological or clinical trials. However, the complete analytical and stability parts according to drug requirements are still necessary. THMP is only possible for plants that have been used somewhere in Europe in reasonable amounts for at least 15 years. This is especially beneficial for remote regions in Europe such as Guadeloupe, Martinique, French Guyana and Réunion, where more exotic plants that have been in use there can now be brought to mainland Europe.
In summary, the regulatory groundwork is now laid for the herbal markets in Europe to go forward. Following a period of re-orientation for the manufacturers, the harmonization throughout Europe will help product development, increase consumer confidence and offer manufacturers greater opportunities. One product registration is now valid for the whole of Europe. And international companies especially have a better plan for bringing products to a population of 500 million with one product registration, in one European market.
Consumer interest in natural products is expected to remain high in Europe, driving demand for natural health ingredients, especially in functional foods, a segment that is expected to keep up its present growth rate during the next several years. Innovation will likely be greatest in functional food as well, with functional beverages and functional confectionery receiving the greatest attention.
On the pharmaceutical side of the natural health products scale, no new products have appeared in quite some time and sales growth is very slight. The mature drug market is badly in need of new impulses; however, no new blockbuster natural substance is currently in sight. Familiar plants are dominating the herbal drug scene: ginseng, ginkgo, echinacea, St. John's Wort and others, with their familiar indications and occasional potshots taken at them by the synthetic drug industry. It is obvious that science needs to identify new active substances, possibly new indications for known natural substances or discover plants that are currently growing in one of the many biodiversity hotspots.
Functional Foods & Supplements
The big growth areas for natural health products at the moment include supplements, and even more so, functional foods. The latter is a relatively young segment that is only just beginning to hit its stride in Europe, as consumer skepticism toward the effectiveness of functional ingredients in foods is being overcome. Consequently, the functional food and drinks market rose from $6 billion in 2001 to $8 billion in 2006.
Europe has always been a few years behind the U.S. market where trends are concerned-the obvious exception being herbal remedies. Consumers are becoming aware that some-not all-functional ingredients in foods actually work toward prevention.
Functional beverages represent a rapidly growing segment within functional foods. Some of the latest products include: functional teas, such as Unilever Lipton Elephant Detox Infusions; anti-aging functional drinks, such as the organic herbal tea Caudalie positioned as part of its "vino-therapy skincare brand"; products with antioxidant and/or eye-care claims, such as Ocean Spray's Cranberry & Blueberry Drink; oral hygiene products, such as St Yorre Strong Mint Flavour Water; and L'Or Vitalité, a coffee-based drink enriched with guarana by Maison du Café.
Another new category within functional foods that is only just emerging in Europe is functional confectionery. Until recently, these have been limited to lozenges to soothe a sore throat or breath-freshening chewing gums. Now, new ingredients are finding their way into confectionery-ingredients such as rose oil or echinacea, or familiar ingredients such as ginger, which now carry health claims.
The mature category of supplements is not quite as versatile as functional foods. Worth about $7.5 billion, the European supplement market is extremely fragmented. The largest market, according to a Euromonitor report from 2007, is Italy, followed closely by Germany, and then by the U.K. and France. The biggest growth is currently in Turkey and Ireland, followed by Italy, Norway and the Netherlands. Germany, historically the largest supplement market, is being overtaken by Italy, which also has the largest growth of novel sales channels, most notably Internet sales.
The main positionings of supplements in Europe are: anti-aging/beauty, weight management, cognition/energy, heart health and bone health. Ingredients featured in the weight management segment include green tea extract, lycopene, forskolin, and, more recently, Hoodia gordonii.
The anti-aging/beauty segment has since evolved into the sub-category of cosmeceuticals, where beauty-conscious France is currently the leading market. The most successful formulation in cosmeceuticals in Europe seems to be a combination of topical and internal products, most notably for anti-cellulite and anti-wrinkle applications. These products contain capsules and a lotion, and sometimes even different formulations to be taken at different times of day. Omega 3 fatty acids are strong here, as in other segments, and new indications are constantly being discovered for this ingredient.
Health Issues
On the whole, consumers in Europe are becoming more health conscious. This is in part due to the still-soaring obesity epidemic, which is causing the incidence of a number of health concerns to increase, among them diabetes, joint and bone problems and cardiovascular disease. At the same time, consumers are getting older, but they want to grow to a healthy old age, and they are beginning to understand that they have to take a more proactive approach if they want to see that happen. Also, concerns are being voiced in some regions in Europe, most notably the U.K., over the possible connection of Attention Deficit and Hyperactivity Disorder (ADHD) with artificial substances in food and drinks.
"Free from" foods are also growing, despite the controversy surrounding the question of what substances are considered "natural." Nevertheless, even if the presence of natural substances is a matter for debate, the absence of artificial substances is not. Consumers are reading the labels, and they are more and more likely to put a product that carries one of the dreaded "E" numbers in its ingredient list back on the shelf.
Regulatory Picture
One of the main advantages of positioning a product in the supplement category is the less restrictive regulatory scheme, as compared with drug registration. This may be one of the reasons why the European supplement market continually receives new impulses, as the drug market stagnates. Also, traditionally, it has been possible to market a product as a supplement in some European markets, thus avoiding the drug registration process required for the same product in other markets. With the changing regulations, all of Europe will be harmonized in that respect in the near future.
The European Health Claims Directive governing claims made on food came into effect last year. This means that following a transitional period all of Europe will be harmonized with regard to claims made on food. Claims must not only be approved by the Commission, but also fulfill certain nutritional requirements-hopefully avoiding the paradox of an unhealthy product carrying a health claim. While innovation may slow as manufacturers deal with the new regulation, the advantages clearly are a harmonized playing field throughout Europe. Also, misleading and unsubstantiated claims will be prevented, which, in the long run, will increase consumer confidence in the claims that are made.
There are still opportunities for drugs, however. About two years ago, with a recent change in the legislation, a new category was established-Traditional Herbal Medicinal Product (THMP). This category permits applicants to register international herbal products in Europe with relatively low requirements, particularly since the documentation for safety and efficacy can be based on tradition alone and does not require further toxicological or clinical trials. However, the complete analytical and stability parts according to drug requirements are still necessary. THMP is only possible for plants that have been used somewhere in Europe in reasonable amounts for at least 15 years. This is especially beneficial for remote regions in Europe such as Guadeloupe, Martinique, French Guyana and Réunion, where more exotic plants that have been in use there can now be brought to mainland Europe.
In summary, the regulatory groundwork is now laid for the herbal markets in Europe to go forward. Following a period of re-orientation for the manufacturers, the harmonization throughout Europe will help product development, increase consumer confidence and offer manufacturers greater opportunities. One product registration is now valid for the whole of Europe. And international companies especially have a better plan for bringing products to a population of 500 million with one product registration, in one European market.
Consumer interest in natural products is expected to remain high in Europe, driving demand for natural health ingredients, especially in functional foods, a segment that is expected to keep up its present growth rate during the next several years. Innovation will likely be greatest in functional food as well, with functional beverages and functional confectionery receiving the greatest attention.
