Brazil continues to dominate South American health & wellness market
The markets have experienced significant growth over the last five years, with the Brazilian dietary supplements market growing from US$306.3mn in 2007 to US$473.2mn in 2012. Growth for the fortified and functional packaged food market has been even more impressive, growing from US$5bn in 2007 to US$9.8bn in 2012, an increase of 96%.
The actual market size may be much larger, however, explained Meika Nakamura, research analyst for Euromonitor International in Brazil, given the challenging bureaucracy behind registering functional packaged foods and beverages with ANVISA (Health Surveillance Agency).
“Manufactures need to present a Scietific Technical Report (Relatório Técnico Científico) at ANVISA, which will be analyzed by a special committee. Until ANVISA approves, companies cannot classify products as functional and use health claims,” she said.
“The process is very bureaucratic and it takes time to get the approval from ANVISA. It is common that manufactures do not register a product as functional due to the long process and many of them release the product as a standard packaged food or beverage without using health claims or promoting as functional.”
Vitafoods South America
The market remains incredibly appealing to many companies, and EAS will host a workshop at the upcoming Vitafoods South America to educate attendees on regional and global health claim and regulatory frameworks that will impact new product launches in South America.
The workshop is designed to provide companies with crucial information for ensuring a successful product launch in South America in the region’s key markets, including Brazil, Argentina, Chile and Mexico.
While many of the countries in the region pale in comparison to Brazil, they do still have vibrant markets, with the fortified and functional packaged food markets in Argentina and Venezuela both worth over US$1bn (see figure below).
Argentina, Brazil, Colombia and Venezuela all have dietary supplements markets worth over US$50million (see figure below).
While there are regulatory differences between the countries, there are similar market trends, said Fatima Linares, research manager for South America, Euromonitor International.
“There are several trends present in various countries like Chile, Perú and Argentina: fast growing middle class, more demanding and well-informed consumers, changing lifestyles, new beauty stereotypes and ageing population,” she said.
“Specifically in Brazil, with the growing disposable income, manufactures have been investing to promote health and wellness products to socio-economic strata C and D.
“Danone is one of the companies that has adopted strategies to cater a wider base of middle-class consumers by offering Activia with suggested price stamped on the packaging of spoonable and drinking yoghurt, avoiding retailers to establish their own prices with higher margins.
“The company also has been investing in the northeast regions, where lower-income brackets account for the bulk of population. Great efforts is mainly to offer health and wellness products at wider base of population.
“In some sectors in both packaged foods and beverages, the price difference between better-for-you and fortified/functional is minimal or the same of standard product.”
New product launches
For the first time, Vitafoods South America will host a Finished Products Zone, showcasing many of the region’s leading dietary supplement and functional food and drink companies, including Allivictus, Bio Minerals, Hankintatukku, Florais de Saint Germain, and Life-On Health Care.
“We’re looking forward to building on the success of last year’s debut with an event entirely unique to South America, offering cutting-edge insights into trends and developments in the world’s fastest growing nutraceuticals market,” said Chris Lee, Vitafoods Portfolio Director.
Around 125 leading global nutraceutical ingredients companies will take part in the exhibition, including Graminex, Nexira, Croda, Fortitech and Copalis, as well as first-time exhibitors hailing from across the world, including Bionov, Kemin, Plantex, Rousselot and Tovani.
Euromonitor’s Linares added that digestive health products lead sales in the South American health and wellness sector, driven mainly by sales of pre/probiotic yoghurts.
“Danone was pioneer with Activia and a success story due to the strong investment in advertising to promote Activia with Dan Regularis.
“Also, concerns about overweight and obesity, especially in children and teens, is a major driver for sales of products such as: better-for-you, reduced fat and sugar, fortified/functional, especially those with digestive claims and high-fiber products.”
Additional data from Euromonitor about the region will be presented during the Vitafoods South America Conference by Nakamura, who will speak on whether the Latin American functional food industry will follow the American or European model.
Other presentations will include Gisele Bannwart, Unilever R&D specialist, and Gisele Vidal, Consumer and Technical Insight at Unilever, explaining how manufacturers can create claims that drive sales; while Nestlé Regulatory Affairs Manager Marcos Pupin will examine how to meet the challenges involved in cooperating with R&D, marketing and regulatory affairs departments.
Additional speakers include Peter Wennstrom, President at The Healthy Marketing Team, Luisa Kiperos, General Nutrition Manager at the Health Ministry of Chile, and David Pineda Ereño, Regional Director at EAS Latin America.
A separate scientific stream has been coordinated by the University of Sao Paolo’s Professor Franco Lajola, who is a member of the ANVISA functional and novel food advisory board, and will act as joint chair, alongside Danone Regulatory Affairs Manager Alexandre Novachi and EAS Latin America Regulatory Affairs Manager Clara Giudice.