The leader of the pack

The Japanese market for functional foods and beverages is the most sophisticated and mature in the world, argues Paul Yamaguchi. Here, he looks at some of the key functional categories, from cooking oils to yoghurts containing beer yeast

The race to become the most developed market for functional foods is on, and it is Japan and the US leading the pack. Currently, the US holds the top spot in crude financial terms, but it can be argued that Japan, where annual per capita consumption of functional foods is 30 per cent higher than in the US, is the true leader. Japanese consumers have a greater awareness of functional foods and are willing to pay premium prices for them.

There are several reasons why the US and Japan are dominant. Their large population sizes are one obvious reason, but both countries? functional foods industries are also more loosely regulated than their European counterparts. According to Nutrition Business Journal, the global functional foods industry notched up sales of around $50 billion in 2002. The world?s largest market was the US, which was worth $18.5 billion. At the same time, Japan raked in $11.5 billion in sales, says Japan Nutraceutical, while Germany, the third largest market, managed $5.9 billion.

Another war for oil
In Japan, spotting functional foods trends is probably easier than the rest of the world because competition is tougher. Like the fashion industry, if a style is successful, every other company will bring out something similar. The market quickly becomes saturated with ?me-too? products, making it large enough to form a new category and to identify a new fashion. Kao?s Econa product, for example, single-handedly changed the image of cooking oil from bad to good in Japan, selling four million bottles in six months—and a deluge of similar products.

In 2000, food giant Ajinomoto launched a cholesterol-lowering cooking oil called Kenko-Sara-Sara, which uses oil from soybean germ and contains tocopherols. Like Econa, it was granted FOSHU status. Ajinomoto has also introduced a canola cooking oil fortified with vitamin E.

Another major cooking oil producer, Nisshin Oil, brought three oils to market under the brand name Oillio. One of these was Healthy Resetta, which contains canola oil fortified with 10 per cent medium-chain fatty acids. These do not accumulate as body fat but are transformed into energy. It was granted FOSHU status in 2002. The two other oils under the brand, which are not FOSHU approved, are Healthy E Diet, also containing medium-chain fatty acids, and Choleste with plant sterols.

Functional cooking oils are categorised as ?premium cooking oils? and are worth nearly $300 million with annual growth of 12 per cent. Further cooking oil products with added health benefits are expected to hit the shelves over the coming months. Most of them will probably follow similar paths to current products on the market with cholesterol-lowering properties or with added vitamins.

Many of the companies behind these cooking oils have also transferred the functional concept to the mayonnaise category. Kao, Ajinomoto, Nisshin Oil, as well as Kewpie, have all launched either reduced-calorie or cholesterol-lowering mayonnaise products in recent years.

Adding aminos
Another interesting functional product trend in Japan stems from the stresses of modern living. The bottled water aisles in today?s Japanese supermarkets are stacked with products containing amino acids, which are said to aid weight loss and help people regain energy or just maintain good health. These beverages are particularly popular among young people in Japan. Amino acids first surfaced in the Japanese market among athletes like Olympic marathon gold medal winner Naoko Takahashi, who used amino acid drinks in her race in Sydney.

For general consumers, Kirin Beverages introduced Amino Supli in 2002 and sold 14 million cases that year. Amino Supli is called ?near water?, containing eight kinds of amino acids: asparagine, arginine, lysine, alanine, glutamine, leucine, isoleucine and valine. There is a total of 1,000mg of amino acids in each 500ml bottle. Today, more than 20 brands compete in the amino acid beverage market. Some of the water drinks from major brands are Charge and Concept-San from Asahi Beverages, Amino-Shiki from Suntory, Amino-Calpis from Calpis, Amino Vital from Ajinomoto, and Amino Acid Diet Water from Pokka. Meanwhile, Pocket Doctor and Aquarius are made by Coca-Cola Japan. Almost all these brands contain a standard 1,000mg combination of seven to nine different amino acids in a 500ml plastic bottle.

Water is not the only amino acid drink on offer. Morinaga?s drink Amino Yogurt, for example, is a yoghurt drink with six kinds of amino acids and active, live yoghurt cultures. Kagome introduced active bifidobacterium with three kinds of amino acids in a yoghurt drink. Amino Vital fruit gel drink from Ajinomoto contains the highest amino acid content of them all (1,500mg) in an aluminium pouch with a built-in drinking straw.

In Japan, amino acid drinks are not targeted at athletes—they are for the general public who purchase them as ?thirst quenchers?. Consumers don?t want a great deal of health benefits from the drink. ?Adding 1,000mg of amino acids is just the right amount,? says Asahi Beverages. ?If you add more than 1,000mg, it becomes more like a medicine than a beverage,? said Suntory in a recent interview in Nikkei?s Trendy magazine.

The Japanese functional water market reached $1 billion when at its peak in the early 1990s. Now the market is down to $800 million. According to Health Industry News, a Japanese trade newspaper, the amino acid beverage market is worth $208 million and growing at a rate of 150 per cent per year.

A new generation of yoghurts
Traditionally, yoghurt contains active probiotic organisms and has been known to improve the intestinal microbial balance and improve gut health. But Japanese manufacturers have recently developed yoghurts that have other benefits thanks to the discovery of new functional ingredients.

Koiwai, a medium-sized milk processor, has introduced Beer Yeast Yogurt, which is said to combat high blood pressure, diabetes and even cancer. Beer yeast (brewer?s yeast) is also high in vitamin Bs and a variety of enzymes. It was discovered back in the 1950s, but it is only recently that Kirin Beer defined the yeast and made it suitable for dietary supplements. Each 130g cup of Beer Yeast Yogurt contains 5g of beer yeast. The company promotes it as a nutritional and diet supplement yoghurt. Lactoferrin?s best-known role is as an iron-binding protein. It is a versatile bioactive milk protein that plays an important role in the immune system and helps protect the body against infections. It also promotes bifidus bacteria in the intestine and improves glycemic index health. Morinaga Milk?s Lactoferrin Yogurt contains 100mg of lactoferrin in a 120g cup. Morinaga calls it a new ?biotics? yoghurt. Lactoferrin Yogurt also contains patented live bifidobacterium BB536 that can survive the acidic conditions in the body.

Lactobacillus reuteri, developed by Swedish company BioGaia, is an anti-microbial substance that kills and inhibits the growth of several harmful bacteria. The prophylactic and therapeutic effect of reuteri decreases the occurrence of diarrhoea, increases nutritional uptake and bolsters the immune system. BioGaia?s reuteri has been formulated into a variety of products and marketed in the UK, Finland and other European countries.

Furthermore, Japanese scientists in Hiroshima University found that Lactobacillus reuteri may prevent tooth decay. This led to Chichiyasu Milk, a midsized milk processor, introducing Reuteri Bacteria Yogurt, a yoghurt that is promoted as ?anti-cavity?. According to a study published by Hiroshima University, 90 per cent of tooth decay bacteria die when Lactobacillus reuteri is applied. The study also showed that consuming yoghurt containing reuteri for two weeks reduces tooth decay bacteria in the mouth by one third.

The latest product from Calpis, one of the leading fermented milk companies, is Ameal Drink Yogurt. The name Ameal is already established in Japan as a high blood pressure control beverage, which was introduced in 1999 and granted FOSHU in 2000. Ameal is one of a small number of successful FOSHU products. Sales of Ameal were worth over $90 million in 2002 and both the original and the yoghurt drink contain lactotori peptides, proven to lower blood pressure. However, the product has not yet been granted FOSHU status.

Another innovative product from Calpis is Interbalance L-92, a liquid yoghurt designed to fend off allergies. Over 1.5 million people suffer seasonal allergies in the spring and autumn in Japan. According to Calpis, after consuming Interbalance L-92 for six weeks during high allergy season, eight out of 12 subjects in its study showed reduced or no allergy symptoms. The bacterial species developed by Calpis for this product is Lactobacillus acidophilus.

Taste is everything
In Japan, functional products are, first and foremost, seen as foods—their functional properties are of secondary importance. Indeed, consumers don?t even use the term ?functional foods?. As all foods must taste good, functional foods are no exception. People will not compromise on taste because they know that functional foods are not medicines. Producing a good-tasting product is the key to success in the Japanese marketplace, as it is anywhere else.

Paul Yamaguchi is president of Paul Yamaguchi & Associates, Tarrytown, NY. The company publishes Japanese nutrition market reports, including Nutraceutical Japan 2003, Nutritional Supplement Japan 2003, and FOSHU Japan2003.
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