The APAC probiotics market is predicted to grow from US$17.5bn in 2018 to more than US$25bn by 2025, while the prebiotic market is set to grow at a double-digit CAGR over the same period.
The panel discussion was part of our Growth Asia 2020 edition on Prebiotics and Probiotics. (Listen on demand here)
The six-person panel consisted of Dr Satoshi Arai, Senior Research Associate at Morinaga Milk Industry, Dr Elisabet Nordstrom, Scientific Communication & Sales Support at Probi, Ewa Hudson, Lumina Intelligence’s Director of Insights, Charles Diao, Regulatory and Sourcing Manager at Health Products Association-China, Luke Horton, Global Director of Sales and Marketing for Life-Space and Ramesh Krish Kumar who is Co-founder and Managing Director at Asmara.
It was hosted by Gary Scattergood, editor-in-chief of FoodNavigator-Asia and NutraIngredients-Asia.
As an interactive broadcast series, the session also included a one-on-one interview with George Paraskevakos, executive director at the International Probiotics Association (IPA) and Nathan Cheong, CEO at Life-Space.
Market analysis
The speakers all agreed that China was the leading probiotic powerhouse in Asia.
Paraskevakos said Asia accounted for almost half of the global probiotic market. Within APAC, China represents 55% of the probiotic market, and the growth is only set to continue.
He added China is the third biggest market globally for probiotics dietary supplements, slowly overtaking Italy in second place. The biggest country is the United States.
For Life-Space, which was acquired by Chinese supplement giant By-Health in 2018, Cheong echoed that China’s appetite for probiotic supplements continue to be strong: “We're seeing compound growth of around 60%.”
From a global perspective, Paraskevakos said UK is the fastest growing market at 18% year over year, followed by Malaysia at 14%, Vietnam at 13% and China at 11%.
Hudson explained that the interest can be seen in the number of online reviews left by consumers on probiotic products.
In China, consumers were active and engaged in the online space, with more than three million reviews.
South Korea was another growing market with close to half a million online reviews of probiotic supplements, juices, kombucha and cosmetic-related products.
She added India might be the next big probiotic market, where e-commerce reviews rose to 40,000 from just 7,000 earlier in the year.
While the numbers cannot compare to China, India’s numbers were more than that of France and Japan.
South East Asia was another growing market. Hudson said SEA’s online consumer engagement had grown 60% in H1 2020, which was more than the overall average of Asia at 28%.
Within SEA, Hudson called for local companies to enter the probiotic space: “If we look at the online space, pretty much all the products are international.”
E-commerce is being increasingly used by firms amid the pandemic, with many consumers preferring – or having no choice – to shop online.
For example, Hudson said conditions such as UTIs usually required a trip to a health practitioners, which may not now be possible due to movement restrictions. Therefore, consumers may opt to purchase products online to address their health concerns.
Horton added that there was a big opportunity for e-commerce in the 655 million South East Asia population, but cautioned traditional trade still varied in the highly fragmented market.
“If you look at a market like Vietnam, there are 27,000 pharmacies, and many mom and pop stores, so if you've got a supplement and you want to go to market in Vietnam, there's no real modern trade. Then you got another market like Singapore, which is an incredibly mature market with a strong category definition and understanding.”
Regulations
The panel discussion also touched on regulations which continue to be the biggest hurdle for the probiotic and prebiotic industry globally.
Nordstrom said the APAC region was a complex and fragmented environment unlike the EU and US where one single authority was ruling.
“The lack of standardised regulations is impacting safety standards. We also see some challenges coming from the new taxonomy for import and export, where there's a risk of a mismatch of the actual product name.
“If you want to commercialise products, you have to know the regulations in all the countries in the world,” Paraskevakos said.
IPA is currently working on harmonising probiotic guidelines at the Codex level. The proposed initiative will be reviewed in 2021.
In China, Diao explained that probiotics regulation was categorised into food, health foods and infant formula..
He added there was a recent major regulatory development regarding health foods in China, which requires materials to based on the strain level, which is one step further than the species level. In addition, the research and scientific literature will also need to be on the strain level.
In terms of market claims, a common claim found in probiotic products was CFU count. Horton said CFU count was easy to make, but if brands were reliant on it, they would be left behind.
“We see that with our consumers in China, they are very discerning, and want to know what strains and why those strains are included in the product.
“Any focus only on CFU probably won’t get picked up from a consumer perspective.”
Beyond gut health and immunity
The panelists also discussed the use of probiotics and prebiotics beyond gut health properties and reviewed potential in cognitive, infant, men and senior health especially in the Asia-Pacific region.
For Probi and Life-Space, the firms have seen a huge interest in immune health contributed by the ongoing pandemic.
Hudson shed light that secondary conditions linked to Covid-19 such as inflammation, bloating, anxiety and depression were increasing gaining attention.
In relation specifically to India, she added that skin health and UTI concerns were growing: “I think people suffer more from the outbreaks linked to having to wearing masks or potential constraints around their environment.”
In Japan, weight management products are especially popular.
She added there were opportunities for probiotics targeting the first 1000 days (infant), men’s health, and senior health given the rapidly ageing APAC population.
Cheong agreed saying the mother and baby segment will continue to drive adoption in probiotics use.
Paraskevakos said 70% of probiotic users in APAC are millennials (55% women, 45% men), followed by Gen Xs and baby boomers.
Synbiotic as a category was also gaining interest. Arai said while its growth is rapid, in terms of market size, they are still at their infancy.
He cautioned that the combination must be favourable and work together to confer the health benefits. For instance, prebiotics must be able to increase the good bacteria in the gut when combined with probiotics, or it may result in an upset stomach.
He said the combination of human-residential bifodobacteria (HRB) and human milk oligosaccharides was one example of a compatible synbiotic.
Morinaga Milk Industry’s HRB is present in a healthy infant gut, however as the infant ages, the abundance of bifidobacterial starts to decrease, before stabilising in adulthood, and decreasing again in old age.
Research has shown that HRB species are capable of certain physiological functions, unlike non-HRB species. For instance, HRB species can produce folate, a cofactor for cell growth and metabolism, can eliminate harmful food-derived opioid peptides which are associated with many health complications including celiac disease, type 1 diabetes and atopic dermatitis.
For Ramesh whose company Asmara sells a range of functional beverages containing prebiotics, said awareness of prebiotic and its health benefits are growing in Singapore and Malaysia.
“Consumers always neglect the prebiotic part and put emphasis on the probiotic aspect. But in Singapore, there are increasing number of products incorporating prebiotics which increases the awareness.”
Horton added: “The more people that are talking about it, the better the awareness.”
Formats: How do you like it
Looking at product formats, Paraskevakos explained it was difficult to compare preferences in terms of product formats in different markets.
“I believe that taste and preferences are cultural dependent. For example, western part of Europe is a largely yoghurt market but we're starting to see a rebound in supplementation. Whereas in eastern part of Europe, you're starting to see sour and fermented milks.”
Hudson said the space between foods, drinks and supplements were getting blurry. In China, sachets and chewable tablets are popular. Liquid formats and gummies would be the next trend in APAC.
For Ramesh, he chose the beverage route over the traditional capsule format.
“We found that people were leaning towards lifestyle products rather than supplements, to incorporate as part of their diet.”
Next steps
Paraskevakos said APAC consumers were knowledgeable on their intension when buying probiotics,
“Probiotic users in APAC understand what drives them to purchase probiotic supplements are the science behind them, safety, and recommendation from the healthcare provider.”
Cheong added: “Consumers understand that most of the immune system sits in the lining of the gut and maintaining a healthy gut micro flora is important to ensure immune response is optimally moderated.”
Paraskevakos is expecting with more research done in different health conditions, age groups, and gender specific will open the door to personalised nutrition.
Cheong echoed that probiotics will become incredibly personalised to support an individual’s unique microbiota, while Paraskevakos and Nordstrom predicted their would soon be probiotic applications in the pharma space.
The Growth Asia interactive broadcast series is one of six held over the course of October and November.
You can watch the first edition, our healthy ageing broadcast on demand here.
The next broadcast series on plant-based innovation will air on October 27, followed by infant nutrition (November 3), active nutrition (November 10), and reformulation and fortification (November 17).