Japan’s Nutraceuticals Today - Functional Foods Japan 2006

薬食同源 Japan’s Nutraceuticals Today

By Paul Yamaguchi

Functional Foods Japan 2006

A Sign of Maturity?
The functional foods market in Japan has been growing at an average of 12 percent a year for the past 10 years. In 2005, the growth rate slowed to 6 percent. The fastest growing category, FOSHU, grew only 11.1 percent in the last 2 years, (JHNFA (Japan Health and Nutrition Food Association) conducts this market survey every 2 years) compared to 32 percent growth from 2001 to 2003.

Has the functional foods market reached maturity? Or is this just a temporary slow down?

About 500 new functional products are introduced in Japan on average each year; 600 products were introduced last year. An average, 70 new FOSHU products are approved each year; 94 were approved last year. The number of new products introduced increased 27 percent last year, yet sales of functional foods increased only 6 percent. This suggests people are less interested in functional foods than the producers themselves are. Like many other industries, the market can’t grow forever; it must eventually slow down. So as it turns out, we can’t say with any certainty if this market has reached maturity or whether this is just a temporary slow down.

An absence of Hit Products and New Ingredients
Last year’s slow growth could be attributed to the absence of big hit products and an under-stimulated market. The market requires fresh new products to stimulate consumers in order to grow. Big hit products bring customers to stores and generate sales. When there are no big hit products, consumers lose interest in the industry and sales slow down. Hit products and hot ingredients are essential for growth in our industry. In the past, probiotics, health teas, healthy oils, vinegar drinks and amino acid beverages have driven the market. Most recently, it was catechin-rich green tea drinks, CoQ10 and ALA. But in 2005 there were no hit products or ingredients that significantly drove the market upward.

Two Types of Functional Foods
There are two categories of functional foods in Japan. One is regulated, (known as FOSHU or Tokuho in Japanese) that can claim health benefits, and the other is unregulated or non-FOSHU which can’t make any heath claims. Most of sports beverages, energy drinks, meal replacements, snacks, juice, and confectionary all belong to this latter category.

Figures for 2005 Japanese functional foods were just published in a report, Functional Foods Japan 2006, Product Report. (www.functionalfoodsjapan.com) The report indicates that the Japanese unregulated functional foods market has expanded only 6 percent from a year ago. According to the Tokyo based Japanese nutrition organization, Japan Health and Nutrition Food Association (JHNFA, www.jhnfa.org), the FOSHU market has now grown to $5.8 billion and the Japanese functional foods market reached $17.5 billion in 2005.

Something to Look Into
Several interesting products were introduced in 2005. One of categories that the West has so far overlooked is the category of functional foods for seasonal allergy. 40 million people suffer from runny noses, itchy eyes to sneezing, according to the Functional Foods Japan 2006 report. In the U.S, nearly 36 million suffer from seasonal allergic rhinitis, also known as "hay fever", according to the American Academy of Allergy, Asthma and Immunology (AAAAI). I wrote about the Japanese allergy market, entitled “Functional Foods for Allergies in Full Bloom in Japan” in this column back in 2004. Since then, there have been a few new developments in this market. Probiotics seem effective for seasonal allergy relief. Morinaga (www.morinaga.co.jp) introduced a yogurt called BB356. It contains a new strain of bifidobacterium, called Bifidobacterium 356, and it may be effective for seasonal allergy relief. It is sold only during allergy season.

Koiwai’s (www.koiwai.co.jp) probiotic, lactobacillus KW strain also may help seasonal allergies. They introduced KW yogurt and a yogurt drink. KW strain has also been formulated in a tea drink. Kirin’s Taishitu cha, was developed in corroboration with Kirin and Koiwai. It is a green tea drink with a KW strain for allergy relief.

Allergy season is just about underway; TV commercials and print ads are full of OTC and prescription allergy relief products. If you listen or read carefully, they list more side effects than benefits. Is it time for functional foods to take on allergy relief?

Probiotics for seasonal allergy: Kirin’s Green tea with KW strain, Koiwai’s KW yogurt, Morinaga’s BB536 yogurt

Paul Yamaguchi is president of Paul Yamaguchi & Associates, Inc., Tarrytown, NY.
His company publishes a number of Japanese nutrition market reports. His latest report is Nutritional Supplement Japan 2005, Inside of $11.1 billion Japanese dietary supplement market. Other report is Functional Foods and FOSHU Japan 2004, Market & Product Report.

For details and information on the reports, visit: http://www.functionalfoodsjapan.com/ or contact Paul at [email protected]
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