Last week, Peter Zambetti, director of global business development at Capsugel and chairman of the International Alliance of Dietary Supplement Associations (IADSA), discussed the impact of GMPs on the global health & nutrition (H&N) sector. In part 2 of this Q&A, he examines the impact of health claims laws that have gone through great change in many parts of the world in recent years.
How is the trend toward limits on labeling claims affecting business development in the H&N industry?
As with GMPs, the impact of labeling claims varies from market to market; however, it’s important to view stricter regulations as added assurance to savvy H&N consumers. The industry has a hand in helping explain labeling changes to consumers, showcasing increased safety and transparency that may, in fact, create stronger loyalty to certain products. There may be momentary stagnation while this education process takes place, but history shows that market growth equalises once revised labeling claims lose their novelty.
Regardless of changes, the great news is that worldwide demand for vitamins and dietary supplements is escalating steadily. According to Euromonitor, global sales in 2012 grew to €60bn ($82 billion), up from €57bn ($77bn) in 2011, an increase of 6.5%. This multi-year trend of accelerating growth is powered by consumer health knowledge, a growing global middle class, regulation advances and the entry of pharmaceutical and consumer packaged goods companies into the industry.
What impact have labeling changes had on the H&N market in Europe?
What Europe needs is regulatory flexibility in the labeling arena, so there can be a balance between protecting consumers on the one hand, and preserving entrepreneurship in the H&N industry on the other. Recently, the pendulum has swung toward more stringent labeling, which has contributed to suppressed sales growth.
For example, out of the many thousands of dietary supplement labeling claims originally submitted to the European Food Safety Authority (EFSA), the authority rejected all but 222 [now 229 - editor] last year, mostly for vitamins and minerals. The market grew more slowly than in past years with only 1.3% growth in 2012 compared with 14% growth in 2006.
The need for more enlightened regulation is especially clear in the case of the fast-growing probiotics category. Scientific evidence supports the effectiveness of these products. Yet the word 'probiotic' was ruled an illegal labeling term because it was deemed an implied health claim. As a result, companies marketing such products will be permitted only to name the bacteria contained in the product, e.g., Lactobacillus acidophilus.
While the labeling changes are well intended, the changes do not make the product safer and, instead, may contribute to misinformation for the consumer.
What are the opportunities for H&N companies in China today?
Sales have been robust in China, totaling €8.8bn ($12bn) in 2012, a 9% increase from 2011. This strong sales growth should continue, allowing China to overtake Japan this year to become runner-up to the US as the largest market for vitamins and dietary supplements. One reason for this growth is China’s ever-expanding middle class. With chronic diseases becoming increasingly prevalent, Chinese consumers have become more aware of the research showing that certain foods and supplements can help ensure good health.
With the complete restructuring of the Chinese FDA, now called CFDA, we are awaiting the outcome of the call for comments on the revision of the food safety law and the future introduction of a potential notification system in China for health foods
Can you update us on the H&N situation in the rest of Asia?
The 10 countries belonging to the ASEAN make up the world’s largest trading bloc, encompassing 600m consumers. IADSA has been heavily involved in the effort to harmonise dietary supplement regulations throughout ASEAN countries. By the end of 2015, we hope to have a very good set of regulations that H&N companies can use to market their products across Southeast Asia, providing a major boost to dietary supplement sales in that region.
New information out of Japan suggests that substantial changes may be on the horizon for claims legislation. After a workshop held in October, it appears likely that a model close to the US approach to Structure/Function claims may be coming soon. It is no secret that the Prime Minister in Japan, Mr Shinzo Abe, is industry-friendly and looking to boost Japan out of a decade-long recession. This tactic may reverse the negative trend in the supplement market that has taken hold the past five years.