New Zealand?s North and South islands are a treasure trove of unique natural resources. So it?s no surprise that the country has a budding functional foods and nutraceuticals industry, says Joanne Lyall
New Zealand is a country of genetic and geological diversity that has developed its own rich mix of plants, animals and micro-organisms over thousands of years. This slow and natural evolution has enabled scientists to build up information on genetics and natural compounds that provides a fertile resource for research.
It?s not surprising then that a range of internationally renowned institutions, together with various companies, are undertaking research into the functionality of foods and their uses to prevent and treat disease. A good example of this is Massey University?s Institute of Food, Nutrition and Human Health, which has embarked on a wide range of research projects into nutrigenomics and functional foods.
But developing functional foods and nutraceuticals is not just a priority focus for the food industry and research institutions. New Zealand Trade and Enterprise, a government-run trade and economic development agency, is also keen to promote the sector. Food and beverage accounts for approximately 50 per cent of New Zealand?s total merchandise exports and around 5 per cent of the national gross domestic product. Indeed, its percentage of world trade in food is not far behind that of its much bigger neighbour, Australia.
The New Zealand functional foods and nutraceuticals market is characterised by geographical clusters of expertise and innovation. For example, two South Island regions, Canterbury and Nelson, have formed a nutraceuticals cluster with more than 100 member businesses offering products and services, including raw materials, extraction services and branded dietary supplements from the botanical, marine, bee and other animal sectors.
Natural Products New Zealand is an umbrella group formed in 2003 to ensure the industry works together to grow exports and raise the global profile of the country as a source of quality natural products. New Zealand?s natural products sector is characterised by hundreds of small companies that must join forces to develop export markets and appropriate product volumes. Chairman Ron Geiger says a key issue for the group is ensuring companies can provide scientific evidence to support claims about their products and navigate increasingly rigorous regulations governing trade in natural products and ingredients.
?More stringent controls on dietary supplements and natural products are making it difficult for small companies to maintain their current business model,? he says. ?It?s extremely expensive to establish a manufacturing operation that meets good manufacturing practice standards, and New Zealand exporters also face higher costs because of their distance from major markets.?
The drive to ensure New Zealand products meet tougher global standards took a major step forward at the end of 2003 when the New Zealand and Australian governments signed an agreement to establish a joint regulatory scheme for therapeutic products.
Legislation is being developed in both countries to set up a single agency to regulate prescription medicines, medical devices, and over-the-counter and complementary medicines, from July 2005.
The legislation is consistent with an agreement between Australia and New Zealand to remove regulatory and trade barriers and integrate the two economies under the Trans-Tasman Mutual Recognition Arrangement. It also provides a much-needed solution to concerns about New Zealand?s existing law covering therapeutic products, which is seen as outdated, unsustainable and unable to adequately manage the public health risks associated with the use of medical devices and complementary medicines.
Geiger says there is acceptance of the scheme in principle, although a number of issues, such as potentially high administrative costs and the need to ensure the scheme does not limit innovation, need to be worked through. Consultation is continuing.
As well as representing the industry on issues like the joint regulatory scheme, Natural Products New Zealand holds a Natural Products Summit in February each year in Nelson and coordinates attendance at natural products trade shows around the world. The different functional foods and nutraceuticals from New Zealand on show at these trade exhibitions tend to fall into several key categories.
New Zealand?s dairy industry has a history of innovation. Leading examples are Fonterra?s Fernleaf Defense, a milk powder to boost the immune system in children, and the A2 Corporation?s genetic variety of cow?s milk, called A2, which it claims may reduce type 1 diabetes and heart disease. BioActive Technologies has pioneered the production of products based on colostrum from calving cows, which are used by athletes to enhance performance.
The Tatua Dairy Co-operative makes spray-dried milk proteins and protein hydrolysates and freeze-dried biologically active proteins.
With pollution-free and nutrient-rich coastal waters, New Zealand specialises in marine products. They include: shark liver oil, which is rich in squalene and alkyglycerols; omega-3 fatty acids; vitamins A, D and E; omega-3 fish oil; abalone; Pacific oyster powder; and shark cartilage. Seatone, a mussel extract from green-lipped mussels, contains a blend of natural proteins, minerals, mucopolysaccharides, glucosamine and omega-3 fatty acids.
New Zealand exports a range of botanical extracts including the native herb horopito, Pseudowintera colorata, traditionally used by Maoris to treat fungal skin diseases, venereal disease, stomach pain and diarrhoea. Today, companies such as Forest Herbs with its Kolorex range produce cream for fungal skin infections, and capsules and tea to maintain balanced intestinal flora.
Red clover is grown widely in New Zealand, producing extracts that are particularly high in antioxidant isoflavones. For example, NZ Vitalife produces an organic red clover extract that can be taken undiluted or mixed with milk or fruit juice. Red clover is a renowned blood purifier and cleanser and may also have the potential to inhibit cancer growth.
A number of companies have established strong export markets for skincare products using manuka and kanuka oil, which have long been valued by Maoris for their healing properties. Both oils are extracted from native trees of New Zealand and are commonly referred to as New Zealand ?tea tree? plant species. Tairawhiti Pharmaceuticals has been supplying manuka and kanuka oil to Europe for nearly 10 years.
New Zealand?s competitive advantage with bee products lies with the unique manuka honey gathered from the wild-growing native manuka. As well as containing antibiotic hydrogen peroxide, scientific discoveries now show that some varieties of manuka honey contain an additional antibacterial compound. This is particularly effective in the treatment of ulcers, wounds, burns and skin disorders. Sold as an antibacterial agent, New Zealand Active Manuka Honey has a ?unique manuka factor? number denoting the potency level of the antibacterial compound in each product. These products are now exported by Healtheries of NZ, Honey New Zealand and Comvita.
Many other novel finished products and ingredients are being produced in New Zealand. NektaLite, for example, is a base ingredient using kiwifruit that is suitable for adding to foods such as frozen desserts and sauces. Epop is an energy lollipop boosted with guarana, taurine, caffeine and seven B vitamins, while BLIS Technologies specialises in products with antibacterial peptides or proteins that are able to kill or control the growth of other closely related bacteria. Fortified beverages from New Zealand include energy drinks such as ?V? from Frucor, fruit smoothies fortified with echinacea and bee pollen from Juice Express, and aloe vera and spirulina drinks from Lifestream International.
As these product examples demonstrate, New Zealand presents opportunities for manufacturers, retailers and importers alike, whether they are looking for novel ingredients and products, partnerships, or distribution rights.
There is also good potential for product development houses to base R&D projects in New Zealand where costs are low compared to similar facilities in other parts of the world.
Joanne Lyall is trade commissioner for New Zealand Trade and Enterprise, London.
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