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Asia Pacific: Partner with companies, agencies, institutions to capitalize on nutraceutical markets, finds FNI

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Amidst the rising costs of healthcare, there is a shift from treatment to prevention via health and wellness achieved through proper nutrition and usage of nutraceuticals.

Globally, Frost and Sullivan says the nutraceuticals market earned US$155 billion in revenue in 2013 and is expected to grow at a compound annual growth rate of 7.0% to reach US$211 billion by 2018. 

Krithika Tyagarajan, senior director, Chemicals, Materials and Food, Frost & Sullivan, Asia Pacific, tells Food News International that partnership with ingredients companies, non-government organizations (NGOs) and tertiary institutions can help food and beverage (F&B) companies expand their footprint in the nutraceutical sector. 

FNI: From your research, how can F&B manufacturers capitalize in the nutraceutical market?

Tyagarajan: There is an increasing trend for consumers to opt for healthier choices of food and beverages they consume on a regular basis.

This is in line with the increasing focus on health and wellness trend observed globally to tackle obesity and other life style diseases.

F&B manufacturers can capitalize on this health and wellness trend and introduce products that have nutraceutical ingredients such as vitamins, antioxidants and Omega 3 ingredients as an example.

Vitamin-enriched fruit juices, tea-flavored beverages and Omega 3 enriched eggs are some examples that have made inroads into Southeast Asia.

FNI asian elderly fish

FNI: Which countries in Asia Pacific would be the best ‘bet’ for food and beverage manufacturers to focus their energies on?

Tyagarajan: There are opportunities in every country in Asia Pacific, but opportunities are different.

While anti-aging ingredients address the aging population needs in Japan, omega 3 ingredients that address heart health are likely to see more acceptance in countries such as India, where cardiovascular health is a major concern.

We see that the population in Thailand are more beauty and weight conscious, so ingredients that are positioned on weight management and beauty such as collagen are likely to resonate more.

Successful entries into any market would depend on how well the F&B manufacturer has understood the local consumers and their needs before launching their products.

Typically large populated countries such as China, India and Indonesia would be attractive due to its size. However, at the same time, it is important to note that the majority may be agrarian or low income and may not be able to afford nutraceuticals that are priced higher than normal F&B products.

It is therefore important for F&B manufacturers to segment the market and have a clear positioning of their products in terms of benefits.

They should also engage with the target audience through building awareness and promotion programs to capitalize on this growth trend towards nutraceuticals.

Manufacturers should also price their products at a reasonable level that the target audience can afford.

As an example, some companies like Horlicks have introduced sachet-based fortified drinks to cater to India’s rural population.

We also see an introduction of products for rural populations through partnership with agencies such as UNICEF, NGOs and micro enterprises to address the micronutrient deficiency needs of this population.

FNI: Who should F&B manufacturers work with to have shorter time-to-market products for this sector?

Tyagarajan: They need to work with ingredient manufacturers who can provide an ingredient that can differentiate their products and help in positioning their products.

Once the formulations and positioning are clear, the companies have to work on a go-to-market strategy comprising advertising and marketing professionals to launch their products effectively.

For products targeted at the bottom of the pyramid population, F&B manufacturers should partner with local NGOs and UNICEF to educate the population complements the roll out of fortified products by the private sector.

FNI laboratory science food

FNI: What are your thoughts on public-private partnerships (PPP) such as manufacturers with universities and institutions to develop products in the nutraceutical sector?

Tyagarajan: Manufacturers can liaise with universities and institutions to spur innovation and develop products.

However, there are already existing ingredient manufacturers who have expertise in nutraceutical ingredients and these companies can provide insights into trends and capabilities, as well as partnering with F&B manufacturers.

In the nutraceutical space, the common partnerships that we see are between F&B companies and ingredient/pharmaceutical/biotechnology companies that can provide scientific capability while the food companies focus on distribution and branding.

In India, PPPs have seen success in targeting rural populations where F&B companies partner with UNICEF, NGOs and other organizations in different states to promote their products.

Partnerships with universities in the nutraceutical space for development of new products are an emerging space and countries like Singapore are looking into this area with greater interest.

FNI: What synergies and breakthroughs would you expect these partnerships to have?

Tyagarajan: Many of the nutraceutical ingredients today require scientific claims and therefore, in this space, universities and institutions can support in providing robust science behind these new ingredients.

For example, the Agency for Science, Technology and Research (A*STAR) in Singapore promotes research and development in food and nutrition to address the nutritional requirements of the modern society.

F&B companies looking to expand in Southeast Asia can leverage on research and development talent and expertise in Singapore.

Some of their projects include functional probiotics, bone health and packaging.

This agency can avail of certain grants and this support is aimed to stimulate the innovation in food and nutrition areas.

Nestle in Switzerland has a research collaboration with A*STAR and other partners to improve human health through the application of epigenetic tools and technologies (Epigen consortium).

This partnership aims to bring scientists from the private and public sectors to develop cutting edge technology.

This is one way of encouraging collaboration between academia and industry.

There are also a lot of ethnic ingredients in Southeast Asia that have health benefits and this is another area where the government research institutes or universities and the private sector can collaborate to understand the science behind these ingredients.

This enables parties to tap into the potential of local ingredients such as herbal and botanical extracts.