The Nutritional Supplement Market Tops 1.1 trillion

The Nutritional Supplement Market Tops ¥1.1 trillion*

Japanese nutritional supplement product sales rose to ¥1.1 trillion ($10 billion) in 2003, a 7 percent sales increase over the year before, according to Japan’s leading industry newspaper, The Health Industry News (HIN).

Direct Sales Makes up 71 Percent of Total Sales

$7.2 billion came from direct sales channels that include multi-level marketing, door-to-door, mail order, the Internet and TV shopping. In 2003, sales through direct sales channels increased 8 percent over the year before. Direct sales channels share the largest portion (71 percent) of total nutritional supplement sales. As people feel more comfortable shopping through the Internet, mail order and TV showed significant sales increases in 2003.

Drug Store Channels Gained 8 Percent

Drug store channels also showed an 8 percent increase in sales from the year before taking the channel from $1.54 billion in 2002 to $1.8 billion in 2003. Drugstore channels benefit as more people become knowledgeable about self-medication. Discount and self-service drugstores continue to increase sales in the nutritional supplement market. Unlike the US, the number of nutrition specialty stores in Japan is still small (less than 500), but its numbers are increasing steadily at a pace of about 100 units a year.

Food Store Channels Gained Only 4 Percent

Sales of nutritional supplements in food channels gained the least – 4 percent among the 3 channels from a year ago, taking sales to $1.0 billion. HIN explained the lackluster sales increase by stating that, “there were no hit products in 2003.” The industry needs new health ingredients to stimulate the market. Rosehip, CoQ10 and allergy supplements did well in the food channels, according to HIN. Convenience stores continue to expand nutritional supplement sections in their stores.A new type of health-oriented C-store, Natural Lawson, is set to open 10-15 stores a year. Fancl, a leading nutritional supplement company, plans to open 150 new stores in 3 years. C-stores and specialty stores will become an important part of the nutritional supplement distribution network.

FOSHU Reaches$4.5 billion

Functional foods with health claims FOSHU (Foods for Specified Health Use) continue to increase in both number of approved products and sales. In 2003, the number of FOSHU-approved products reached 398, an increase of 20 percent and sales increased 10 percent from a year ago to $4.5 billion. In the health benefit category, gastrointestinal health still has the lion’s share but dental health, high blood pressure, and high blood sugar products are gaining.

The Market Thrives in 2004

In 2002, the nutritional supplement market grew 4 percent under a difficult economic situation. In the end of 2003 the Japanese economy started to show some improvement. The nutritional supplement industry reflected the improvement too by growing 7 percent in 2003, with a 10 percent growth observed inFOSHU. During the same time, Japanese GDP grew only 2.5 percent.

It has taken almost 10 years to double the nutritional supplement market, with 50 percent of that growth taking place in the last 3 years. The growth momentum iscertainly there, and as the Japanese economy continues to improve, both nutritional supplements and functional foods markets will continue to thrive in 2004.

* 1.1 trillion yen ($10 billion) does not include $4.5 billion FOSHU.

I’ll talk about more about the current nutraceutical environment in the next issue.

Stay tuned.

Paul Yamaguchi is president of Paul Yamaguchi & Associates, Inc., Tarrytown, NY.

His company publishes a number of Japanese nutrition market reports, including Nutraceutical Japan 2003, Nutritional Supplement Japan 2003, Functional Foods and FOSHU (Foods for Specified Health Use) Japan 2003. For details and information on the reports, visit: or contact Paul at [email protected]

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