“We are seeing an evolution of probiotics beyond the dairy and supplements that are common place for probiotics” currently, which could push down sales growth of the good bacteria in probiotics even as sales rise, said Eric Pierce, director of strategy and insights at New Hope Natural Media, the host of Natural Products Expo West.
He explained that probiotic supplement sales grew almost 30% year-over-year in 2013, but the compound annual growth rate will slow to a still significant 13% in 2018. This slowdown is less noteworthy, however, in context of the steady upward climb of probiotic supplement sales which will reach $2.5 billion in 2018, up from less than $1.5 billion in 2013, he said at Expo West in March.
He added the growth of probiotic supplements will continue to outpace that of food, even if the sales do not. Sales of probiotics in foods and beverages in the U.S. are expected to reach $10 billion by 2018, but have only a 7% CAGR.
Driving growth of probiotics across platforms is increased consumer interested and scientific understanding of their potential, Pierce said.
Currently, 73% of consumers are at least moderately aware of probiotics, according to data presented by Pierce. Of these, 78% agree probiotics are live and active cultures, he added, noting many consumers described probiotics as good bacteria that can aid immunity and digestive health.
The most well-known applications currently are supplements and yogurt, he said. More than half of consumers say they currently use probiotics, followed by 22% who are lapsed users. Another 27% are non-users who represent growth opportunity, Pierce said.
Another driver of probiotic growth is scientific advancements that are honing in on the role that specific strains play in human health overall, Pierce said.
“This symbiotic relationship is something we are just starting to understand” with new science suggesting that “probiotics play a bigger role in our lives than just digestion,” he said.
For example, new connections are being made between skin care, oral care, weight management and loss, mental health and disease treatment, he said.
New platforms could threaten supplement sales
These advances in science are leading to new applications and delivery platforms that could threaten traditional supplement sales, Pierce noted. For example, in the personal care segment, probiotics are appearing in toothpaste, lotions, cleaners and soaps. In food, they are showing up in infant formula, non-dairy beverages, snack bars, candy and probiotic straws.
Some consumers who are frustrated by FDA’s lack of regulatory action on probiotics are taking the good bacteria farther through do-it-yourself fermentation, such as sauerkraut, kimchi and kombucha, Pierce said.
New advances more closely aligned with supplements, and therefore perhaps a more significant threat, are in the medical space where people are exploring fecal transplants, immune disorders, lactose and gluten intolerance and necrotizing fasciitis, Pierce said.
Cultural trends influencing growth
Several major cultural trends reinforce the potential growth of “probiotics 2.0,” Pierce said.
Among these is personalized medicine based on the greater understanding of individual genetics and mapping personal microbiome, Pierce said.
Related to this, he noted, is the movement to think of food as medicine. “We are currently seeing this fueled interest in probiotics through the better understanding of nutrition and a better and growing desire for consumers to engage in preventive health measures,” he added.
Tied to this is the micro-trend of fermentation and a “new understanding between the connection between gut and brain” health and energy related issues, Pierce said.
The third macro trend propelling probiotics forward is the emergence of “green chemistry,” which is trying to put science to good use in more sustainable ways while also addressing the negative perception of chemicals, Pierce said.
Potential for success
Consumers already are buying into the concepts of new probiotic products even though they could be as far off as five years in terms of production, according to consumer research that Pierce presented.
He noted that consumers gave probiotic products a 82% probability of increased sale in the next year, with even higher chances for probiotic skin cream (94%) and probiotic immunity supplements (88%).
That said, the average purchase intent of buying non-yogurt probiotic product in the next year was much lower at 9.5% of 21.5 million consumers, Pierce said. Although 13% said they would buy a probiotic immunity supplement, probiotic seasoning or probiotic Greek yogurt chia bar, he noted.
Reflecting on this information, Pierce said the real growth potential is about five years out, although there could be more near-term opportunities with more familiar applications.
Firms looking to ride this second growth curve up should invest now in scientific research and understanding of specific strains, Pierce added, emphasizing “opportunity lies in identifying the specific benefits of individual strains.”
Find out more about the next wave of probiotics and the future of microbiome science at Probiota 2015 in Amsterdam Feb. 3-5. The even will also cover the nutrients' effect on mood and anxiety and marketing strategies. Click here for more information.