April 13, 2010
by Keith Nunes
North American food and beverage manufacturers have seen the digestive health market grow as companies have introduced new products featuring fiber, probiotics and prebiotics, and consumers have become more comfortable with and knowledgeable about the concept. As the trend continues to evolve, it may be helpful for U.S. companies to keep a close eye on regulatory events that have occurred during the past six months in the European Union.
In October 2009, the European Food Safety Authority (E.F.S.A.) published a series of opinions on a list of “general function” health claims gathered by European Union member states. The European Commission, experts on the E.F.S.A.’s Panel on Dietetic Products, Nutrition and Allergies evaluated the scientific evidence of more than 500 claims.
For one-third of the claims evaluated, the news was positive. Dietary fibers and fatty acids, for example, were approved for maintenance of cholesterol levels. On the other hand, the claims related to the benefits of probiotics received an unfavorable review, according to the panel, because there was a lack of information on the substance on which the claims were based.
In a conference call with financial analysts shortly after the announcement, Pierre-Andre Terisse, the chief financial officer of Groupe Danone, Paris, the parent company of the Dannon Co. in the United States, said the review process of the claims conducted by the E.F.S.A. was relatively new and it was simply a matter of providing the E.F.S.A. with the information it needed to approve the claim.
“… We have this confidence in our science,” Mr. Terisse said. “And the name of the game today is to adapt to regulations, which are changing and which, as I said, are new and complex. And that’s very much the process in which we are. And that’s very much a process which I agree, I think, will at the end strengthen our position.”
In February, as the E.F.S.A. continued its progress of evaluating the list of health claims submitted by food manufacturers, it once again rejected claims related to the use of probiotics due to a “lack of information to identify the substance on which the claim was based, e.g. ‘probiotics.’”
Ewa Hudson, the head of nutrition and wellness research for Euromonitor, London, said the E.F.S.A.’s rejection of claims related to probiotics has had an effect on the market.
“E.F.S.A.’s rejection of the probiotic claims, all the generic claims, is now slowing down the market in Europe significantly,” she said. “The leading manufacturers need to prove, need to show studies, showing the products do what they claim.
“This is quite a big slow down on the growth (of products featuring) probiotics in Europe. But the first issue they (manufacturers) must deal with is if they can use the health claims. Establishing a link between probiotics and their health benefits will be a big first step.”
Ms. Hudson said the regulatory actions being taken in the European Union may have an effect in the United States if the Food and Drug Administration follows the lead of the E.F.S.A.
“It would not surprise me if the F.D.A is watching what E.F.S.A. is doing,” she said. “But that isn’t the real issue; the real issue is providing the studies that support the claims.”
Ms. Hudson said that while the regulatory issues relating to the benefit of probiotics on the digestive system have had an effect on product introductions in Europe it has not slowed consumption of the products that probiotics are traditionally featured in.
“In Europe and Eastern Europe, cultured products like yogurt, sour milks and butter milks, products that probiotics are frequently featured in, are a part of their diet,” she said. “The products are not so traditional in the U.S. and people have to add them to their diet.”
Survival of the fittest
As the digestive health trend continues to evolve, it remains to be seen which ingredients consumers will choose. Lisa Sanders, senior scientist with Tate & Lyle, Decatur, Ill., said currently probiotics are “ahead of the game” due to education campaigns initiated by companies like The Dannon Co., maker of the Activia brand.
“Prebiotics will catch up,” she said. “As companies educate consumers awareness will rise. It will also become well known that for probiotics to survive a prebiotic effect is needed.”
She added that probiotic survivability will become a greater issue as companies try to differentiate themselves in the market.
“I know of some companies that are already doing that and we will see more of it, especially if more regulations are put in place,” she said. “Consider what is going on in Europe with E.F.S.A. The issue is not necessarily about survivability, but they are questioning effectiveness. A probiotic benefit relies on the survivability of the bacteria and there may be a time when regulations are put in place to ensure effectiveness.”
Ms. Hudson said a time when all companies selling products featuring probiotics declare on the label the number of colony forming units of bacteria per serving is “still on the horizon.” But she concurred with Ms. Sanders’ assessment that as regulators continue to scrutinize functional health claims and effectiveness, it may become more of an issue in the future.
Digesting the numbers
In December, the market research firm Frost & Sullivan, London, estimated the digestive health ingredients market in the European Union may reach $536.5 million in 2015, which compares with $245 million in 2008. The market segments included in the study include prebiotics, probiotics and digestive enzymes. The digestive health product segment accounted for 68% of sales in 2008 in the European Union approved functional food market. “The European market for digestive health ingredients is at the growth stage, and new product launches are frequent and numerous,” said Sridhar Gajendran, an industry analyst for Frost & Sullivan. “Products for digestive health are available in both the functional foods and the dietary supplement segments, with the former having a relatively larger share in terms of both volume and value in 2008.” Mr. Gajendran added that potential in penetrating different application sectors has the category poised for healthy growth, according to Frost & Sullivan. “Increased prices have positively impacted market revenues,” he said. “The extension of applications to meat and fish categories has further stimulated growth.” The prebiotics segment likely will drive the digestive health ingredients market. Dairy accounts for 50% of prebiotic products in the E.U. market, and a growing number of breakfast cereal manufacturers use prebiotics. The relatively high cost of probiotics may prove to be prohibitive, especially as E.U. consumers adjust to the economic recession. “Nevertheless, the growing trend for digestive health and consumers’ keenness to offset rising health care costs will likely counterbalance the negative effects of the economic recession,” Mr. Gajendran said. “Moreover, as demand and production volumes for probiotic products grow, manufacturing costs will decrease.” The high cost of clinical trials presents another challenge. “Drawing attention toward informative marketing tactics to educate a wide range of consumers about the benefits of digestive health products will effectively boost consumption,” Mr. Gajendran said. “At the same time, all available opportunities should be assessed to make more expansive claims when marketing products with strong digestive health credentials.”