The Asian market is poised for huge growth in natural products, fueled primarily by a hot interest in organics. Just a few years ago, Asia was more a supplier's haven, offering low-priced herbs and nutraceuticals as well as exciting Eastern supplement formulas designed to meet the needs of Western consumers. But since about 2000, the consumer trend in Asia has been growing steadily, and recently, astronomically.
"From 2000 to 2004, the market grew a total of almost 80 percent," says Edmund Lo, managing director of Rainbow Asset, a marketing and distribution company in Hong Kong. "But in the past three years, the market has grown 100 percent."
Lo estimates recent yearly growth rates at 20 percent to 30 percent, and sees no slowing in the near future. The driving force behind this growth is the organic foods market, with several factors brewing a perfect storm for increased sales.
First, in developed areas of Hong Kong, Macao, China and Taiwan, as well as Japan, average incomes have been on the rise, particularly for the middle class. This allows consumers to opt for premium on all purchases, including organic foods, which are considered best quality. But more than just buying top shelf, consumers are driven by real health concerns.
"The organic movement has taken off due to a variety of factors, including threats such as mad cow disease, bird flu and SARS," says Pat Chu, chairwoman of the Hong Kong Organic Farming Association. "Also, last April's discovery of poisonous vegetables [with unsafe levels of pesticides] in the supermarket as well as the continuous revealing of hormones, toxins and carcinogens in mainstream pork, fish and eggs, has led the general public to become more aware of health risks and food safety."
"There is a significant lack of trust with products from mainland China, as the government [there] is seen to have weak food-safety controls," Jebson says. "There are also food scares almost daily, including Sudan dyes in eggs and malachite green in fish."
Sudan dyes are red dyes that are used to color solvents and are considered carcinogenic to animals and humans. Malachite green is also used as a dye as well as an anti-bacterial in fish and fish eggs, but is toxic to humans and may cause liver tumors in higher doses.
Consumers, particularly in Hong Kong, are also opening up to the general health and environmental benefits of buying organic. Lo says education is key as curious consumers investigate and discover the benefits of organic goods. This curiosity also applies to other natural products.
Flaxseed oil, for example, is selling well for Lo. "We educate people on how to use it in food and as a daily supplement, and that generates sales," he says. "People in Hong Kong are eager to learn, so we do lots of promotions that include education. Once they try a product and are comfortable with it, they can justify the price and will continue to buy."
Price scrutiny is imbedded in consumers' buying attitudes in Asian markets, so organics, supplements and other natural products need to have consumers' confidence before they will comfortably open their wallets. However, price is not a barrier to growing sales. Lo says supplements are also experiencing steady growth, and consumers are buying natural specialty items.
More than food
The organic trend has grown beyond the farm and fridge to include household items as well. Textiles such as bedding, blankets and undergarments are now the rage among trendy Japanese consumers.
"Since magazines have recently popularized LOHAS [lifestyle of health and sustainability] as the new lifestyle in the United States, organic textiles have been more in demand by Japanese people who want to identify with this trend," says Shihoko San, assistant manager at Heart Co., a manufacturer of organic household products in Japan. "Currently, they are not as conscious as Americans or Europeans of the impact on the environment and where the materials come from, but are buying organic textiles because it's cool."
While not everyone can afford a coveted organic mattress that costs the equivalent of $1,000, many are paying $20 for an organic towel versus the average $5 for a comparable nonorganic product.
Despite the hipness factor, San says health and environmental awareness is growing and has spurred increased consumption of organic versions of staple foods such as soy and miso in Japan. She says a developing trend in general health consciousness also exists, and that detoxification and macrobiotic diets are currently popular trends.
Awareness and Western envy have also been spurred by mainstream media and advertising, as American movie stars frequently associate with or promote products in Asian markets. Otsuka Pharmaceutical, maker of health supplements and energy bars, is seeing Hollywood-style sales after partnering with actor Kiefer Sutherland and creating a "24"-esque spot for its popular energy bar, CalorieMate.
This kind of marketing works well for big campaigns, but on an individual product basis, many items are still too Westernized and therefore have limited appeal to the mainstream markets, according to Jebson. Instead, a small but growing stand of loyal consumers, in concert with the retailers, distributors and associations devoted to organics and natural products, is driving the powerful trend.
This base of buyers and sellers will drive the first big wave of the natural trend in Asia on the prow of the U.S.S. Organic. The need for organic and natural products is real and has been identified, but the true market explosion will depend on the momentum of consumer education and awareness. And, in time, the wake of this unstoppable organic trend will draw into the Asian market supplements, nutraceuticals, household items, health and beauty aids and the whole gamut of natural products that have grown from obscurity to commonplace in U.S. and European markets over the past 15 years.
For more information on the Asian market for natural and organic products go to www.naturalproductsasia.com.
Chris O'Brien is a Boulder, Colo.-based freelance writer.
Natural Foods Merchandiser volume XXVIII/number 3/p. 68, 70