The rate of new product development in the European dietary supplements sector is slowing, and functional food manufacturers are switching to softer product claims.
That's according to Netherlands-based analyst Innova Market Insights, which says the European Nutrition & Health Claims Regulation is starting to have a real impact on the industry's outlook.
Innova researched the European supplements sector and found that in the first half of 2010 there were 384 new products launched, compared with 405 in the same period the previous year – a decline of 5 percent.
In the food sector, meanwhile, launches of products with an 'active' health positioning declined by 10.5 percent from 2,189 in 2009 to 1,960 this year. By contrast, launches of products with a ‘passive' health positioning (such as ‘low in fat') rose 18 percent from 8,747 to 10,350.
What do these trends tell us? Innova has no doubt. "Apart from generic claims of vitamins and minerals, the European Food Safety Authority's assessment of health claims so far has resulted in mainly negative opinions," said Lu Ann Williams, the company's head of research. "Manufacturers seem hesitant to launch new products with a strong health benefit claim if there is a chance that they will have to make a change to their labeling in the near future."
Innova's findings were released in early November, just a few weeks after EFSA published another batch of opinions on Article 13.1 health claims. These are the claims that will go on to form the so-called Community List of generic health claims that any company can use, provided strict conditions of use are satisfied.
The latest batch – the third and penultimate – consisted of 808 claims, of which 733 (91 percent) were rejected. In the main, as stated by Innova's Williams, the positive opinions were for essential vitamins and minerals, with just a handful relating to other substances.
The industry, which has already endured two previous batches containing overwhelmingly negative opinions, was unsurprised by the latest raft of rejections.
"It's not fundamentally different from the previous batches," said Peter van Doorn, who is chairman of industry group the European Federation of Associations of Health Product Manufacturers (EHPM). "For what we call ‘other ingredients', which means anything other than vitamins and minerals, the picture was as grim as it was for the previous two batches. There were hardly any positive opinions."
Van Doorn agrees with Innova's reasoning that the regulation is affecting companies' willingness to launch new products with active health benefits. Indeed, a recently published Impact Assessment, commissioned by the European Health Claims Alliance (of which EHPM is a member) predicted the regulation would cost the dietary supplements industry $1.4 billion (€1 billion) in retail sales and 13,000 jobs.
"Companies are uncertain what to do, especially when it comes to capital-intensive launches," said Van Doorn. "They have to take into consideration what the future is for an ingredient." The high level of negative opinions blighting the Community List will hit smaller companies particularly hard, he added, because many won't have the resources to apply individually for claims approval via the Article 13.5 process, which is designed for claims based on proprietary and newly emerged scientific evidence.
Stefanie Geiser, regulatory affairs manager at Brussels-based consultancy EAS, says that with the Article 13.1 evaluation process set to draw to a close next June, manufacturers should now be making the most of the time they have left before negative opinions are adopted into law by the European Commission and, therefore, banned.
"Companies should try to benefit as long as possible from the Article 13.1 transition period," she said. "Once the transition period is over, and from recent European Commission discussions it would appear that this could expire as of mid to end 2012 or later, it will become a requirement for companies to have submitted a specific [Article 13.5] dossier for their ingredients and generic health claims if these have not been approved during the Article 13.1 process."
Anyone marketing botanicals looks set to have even longer than that. The European Commission has opted to remove botanical ingredients from the Article 13.1 evaluation process because of concerns that the way in which such components are treated under the health claims regulation is at odds with the their treatment under the separate EU Directive on Traditional Herbal Medicinal Products.
"The principal issue is the discrepancy between the criteria to demonstrate efficacy under medicinal law and food law," explained Patrick Coppens, secretary general of the European Botanical Forum. "Traditional herbal medicinal products can be put on the market without the need to prove medicinal efficacy if they have been on the market for 30 years. Botanical food supplements on the other hand would need randomized controlled trials before a health claim can be approved.
"This is not possible for most of the botanicals and the fact that medicinal products are subject to less demanding rules is clearly an inconsistency the European Commission wants to address before all health claims for botanicals are rejected."
This move has been welcomed by the industry. However, much remains uncertain. For example, it isn't even known yet how the Commission will define a 'botanical'.
"This is a good development for food supplement manufacturers but at the moment it is not clear how it will be resolved," said Coppens. "The European Commission is now reflecting on how to proceed, but has not yet given us any indication of what it will do."
Glimmer of hope
The latest batch of EFSA opinions did contain a glimmer of hope on two ingredients outside of the vitamins/minerals realm: wheat bran fiber and omega-3s. The agency ruled in favor of wheat bran fiber connected to digestive-health claims of fecal bulking and faster intestinal transit times. And the agency ruled positively on eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA). in connection with heart health, brain health and vision.