The gut-health market is a story of promise and peril, with probiotics being the marqee player. The powerful market punch of probiotics will continue to dominate the category. According to Innova Market Insights, 43 percent (1,396 new products) of gut health products launched between January 2009 and April 2010 contained probiotics.
Sales of probiotic ingredients have been accelerating. In the U.S., they went from $644.1 million in 2008 to $763.8 million in 2009 to $1.1 billion in the most recent year ending Aug. 2. Continued growth along that steepening curve could send sales into the $1.4 billion range in 2011.
The real story, though, is overseas; the U.S. market, while growing, is still a drop in the bucket. The global market is estimated by Global Industry Analysts to grow to $28.8 billion by 2015 to more than $32 billion by 2014 according to a recent MarketsandMarkets report.
The first flowering of probiotics as an ingredient came in Japan, where the market is said to be approaching maturity. But it was in Europe that probiotics really spread like, well, germs. The EU now accounts for about 45 percent of the global market, with Asia coming in second at about 30 percent.
Probiotics and the gut-health sector as a whole has held up well through the recession; it's one of the issues that people need help with now, making it less likely that they'll put off the purchase. And it's an ingredient that can become part of a customer's long-term habits.
"The good news in our area of expertise — probiotics — there are no long- or short-term side effects to long-term use," said Tim Gamble, vice president of sales and marketing for probiotics supplier Nutraceutix. And whatever the economy does, "People are always going to eat," said Demetrius Bledsoe, marketing director for National Enzyme Co., which makes an array of digestive enzymes. "Your gut health is going to be a foundation for your overall health as a whole."
Gut health is the foundation for overall health
That's the good news. On the flip side, it is becoming increasingly tricky to communicate to consumers the specific benefits of probiotics in finished products. An article in the October issue of Functional Ingredients laid out how studies on probiotics could cross the regulatory lines in the U.S. if FDA looks askance at the endpoints of clinical trials as constituting drug-use endpoints. This makes the crafting of label language an exercise in tightrope walking. Even giants like Nestlé, with (presumably) unlimited resources to devote to getting labels right, has fallen. FDA recently ordered the company to pull the health claims off of its BOOST Kid Essentials line of functional beverages.
"You see that the claims are getting vaguer and vaguer," said Armin Salmen, vice president of research and product development at NextFoods, which manufactures the Good Belly line of probiotic drinks.
And the pressure will still be on to be careful about strain selection. The studies out there are strain-specific; throwing in a strain or two from column A and some more from column B and trying claim the benefits laid out in a strain-specific study won't cut the mustard anymore.
The label-language picture is even murkier in Europe, where probiotics have fared extremely poorly in the EFSA health-claims process. Both dairy giant Danone and Dutch probiotics supplier Winclove have withdrawn their probiotics dossiers from consideration in protest. The difficulty lies in the science; in the view of EFSA regulators (and indeed, the view of the companies that have funded the research) results from a study of the action of one strain cannot be generalized to similar strains. Many dossiers submitted to EFSA have failed to make that distinction, though in defense of the companies that put the dossiers together EFSA did a poor job of communicating beforehand exactly what it wanted.
But tacking on to the coattails of high-profile marketing campaigns like that for Activia yogurt should continue to be a rising tide that floats all boats. And in Europe, consumer acceptance should continue to drive sales even if marketers may have to remain mute.
But the choice of delivery system seems crucial to success. Salmen said the farther a formulator strays from the tried-and-true drinkable and spoonable delivery systems, the riskier a probiotics product launch seems to be.
"If products stray away too far from the traditional forms, I don't see them succeeding in the marketplace," he said. "One example would be a breakfast cereal from Kashi (which contained probiotics) that failed in the market."
Another big story in the gut-health market arena is the rise of prebiotics. Again citing Innova, 27.6 percent of gut-health products launched in the gut-health category contained prebiotics (895 products).
Then there's the tried-and-true fiber category, with its long-accepted connection to intestinal health. Innova tracked 781 product launches, or 24.1 percent of the total, with a fiber claim. Few Americans consume enough fiber, and fewer still consume enough fiber-rich vegetables. A recent report from the Centers for Disease Control found that only 26 percent of Americans consume at least three servings of vegetables a day. Fiber supplements and added fiber in food products won't bridge that health gap, but it's a start. The challenge is to continue to link term "fiber" with health and de-link it with the term "bad taste."
Other players in the field are green tea catechins (86 product launches), licorice root (41), prune (28) ,and fig (16).
Chart: Global product launches with gut health ingredients