The partnership will see the setting up of a research institute known as Centennian Lab, located in Kyoto.
In an interview with NutraIngredients-Asia, CEO of Avida Health, Jeff Jiang, outlined the purposes and plans of the joint institute.
First, it aims to provide skin whitening, anti-photoageing, anti-oxidant, anti-glycation, weight management, and hormonal regulation ingredient solutions for the APAC market.
“In the next three years, we aim to develop two to three new ingredients catered to these areas,” Jiang said.
Second, it will explore the different product applications, offering a greater variety of dosage forms, such as beverages, chocolates and snacks, which is a move away from capsules and tablets.
This will help circumvent regulatory limitations and meet market demand.
“Concerning China, formats such as capsules, tablets, and soft gels are more likely to be categorised as health supplements, which involves a long product registration duration and so we try to avoid producing products in these dosage forms."
“Basically, when working on supplements in China, the innovation has many restrictions, you need approvals to get the ‘blue-hat’ registration, but the market cannot wait for such a long time. Thus, what we can do is to provide functional food and beverages, such as the sachets. The registration for functional food is slightly easier to get approved, not only in China but also in other countries."
“In other markets, such as Vietnam, at the moment, the functional beverages market is also booming. So for us, we try to target the premium market, instead of producing capsules and tablets which are commonly seen in the beauty-from-within scene in the West.”
“It is (about adopting) the Japanese image. We try to bring in not only ingredients from Japan via the partnership with PFI, but also adopt product quality and image of Japanese products.”
Third, the lab will conduct clinical trials to support product development. One of the main research areas will be focused on a peptide ingredient meant for skin whitening.
“We are producing new evidence and data for this peptide business every six months."
“Before this collaboration, we have worked with PFI for the past six years on developing peptides for skin whitening and the use of other yeast-based ingredients. They are very innovative science-based company, they have over 40 researchers based in the Kyoto laboratory. This Centennian lab will also use the existing facilities of PFI.”
‘Shots’ most popular in China
Shots, a type of small bottled functional beverage, is the most popular functional food dosage format in China currently, Jiang observed.
“Functional beverage, especially shots, is something popular in China now. It is the main product delivery system that we will be promoting this year. We have already received quite a lot of inquiries from the customers."
“(Shots is popular) because of its taste, product safety and efficacy. Also, the market leaders, such as Fancl, Shiseido, and Pola have already cultivated the habit to consume the product amongst the consumers.”
Products in sachets and jelly forms were also “quite popular”, he said.
While gummies have reached the maturation stage in the Western markets, it is still commonly perceived as a product for children and there are few options for adults in China.
For its health food business in China last year, Avida Health reaped US$8m in sales, which was more than half of its total sales of US$14m in the country.
Elsewhere in South East Asia, the beauty-from-within products is seeing growth in Vietnam.
“The interesting market with volume and dynamic is Thailand but Vietnam has been catching up recently,” Jiang said.
This is due to a burgeoning number of the middle class.
“The Vietnam market has opened up in terms of regulations and consumers’ acceptance of new products. The consumers are also very receptive of new products from South Korea and Japan.”