14 July 2003 00:00 [Source: ICB Americas]Although overall growth in the US dietary supplements market is expected to slow to between 1 and 3 percent through 2005, specialty supplements-which include non-herbal/botanical products such as glucosamine, probiotics, lutein and essential fatty acids-are outpacing the market, with certain products reaching double-digit growth. By contrast, annual growth of only 1 to 2 percent is projected for herbals/botanicals, the largest sector in the US dietary supplement market.
The global nutrition market reached $160 billion in 2002, with the US claiming roughly one-third, or $56.5 billion, of this market, estimates Tom Clough, managing director of Health Strategy Consulting LLC, a Providence, R.I.-based consultancy. Within the US, dietary supplements account for roughly 33 percent of the nutrition market, or $18.5 billion, followed by functional foods ($19.8 billion), natural/organic foods ($13.8 billion) and natural personal care products ($4.4 billion). Dietary supplements in the US are expected to see moderate growth of between 3 and 5 percent over the next two years, compared to growth of 8 to 12 percent for natural/organic foods and 6 to 8 percent for functional foods, according to Health Strategy Consulting.
The dietary supplement market is divided into six major sectors: vitamins (which includes multi-vitamins), herbals/botanicals, sports nutrition, minerals, meal supplements and specialty/other supplements, says Mr. Clough. Within the US, vitamins/multi-vitamins account for the largest piece of the market, 33 percent, or $6.14 billion in 2002. The second largest segment, herbals/botanicals, accounts for 23 percent of the US market at $4.2 billion. Although vitamins and herbals/botanicals combine for over half of the US market, these two sectors have the slowest growth rates, with growth of 1 to 3 percent for vitamins and 2 to 4 percent for herbals/botanicals projected through 2005, according to Health Strategy Consulting.
Specialty supplements, along with sports nutrition and meal supplements, are the bright spots in the US dietary supplement market, says Mr. Clough. Growth through 2005 ranges from 6 to 9 percent for sports nutrition and meal supplements and between 6 and 10 percent for specialty supplements. The US specialty supplement market was valued at $2.3 billion in 2002 or roughly 12 percent of the US dietary supplement market.
Among specific specialty supplements, glucosamine/chondroitin is the largest product area and one of the strongest growing. In 2002, the US market was estimated at $755 million, or roughly one-third of the US specialty supplement market. Growth for glucosamine peaked at 36.4 percent between 1997 and 2002, and although slowing, growth is still healthy with projections at 10 to 12 percent through 2005, estimates Health Strategy Consulting.
Glucosamine is isolated from shellfish, and the majority of glucosamine manufactured today is made in China. Last month, Cargill Inc. launched a new, shellfish-free glucosamine product, Regenasure, which addresses the purity and allergen issues sometimes linked to shellfish-derived product. The Cargill glucosamine product is derived from corn by a fermentation and purification process. Last month Cargill brought on line a $10 million manufacturing expansion at its Eddyville, Iowa, facility to produce the Regenasure glucosamine. The Cargill Eddyville facility produces corn sweeteners, citric acid and other acidulants, ethanol, feed ingredients and, through a joint venture with Roche, vitamin E. In addition, Cargill Eddyville supplies dextrose (corn sugar) to three neighboring businesses, Ajinomoto, Walker Biochem and Heartland Lysine.
"The demand for glucosamine, Regenasure, will only continue to grow as the population ages and becomes more concerned with joint health," says Bill Gruber, vice president worldwide sales and marketing, Cargill's acidulants business unit. In addition to its new glucosamine product, Cargill has also launched OptaFlex, a solvent-free chondroitin sulfate product, late last year.
Biopolymer Engineering Inc. (BEI), an Eagan, Minn.-based biotechnology company, continues its R&D efforts around a non-shellfish-based production process for n-acetyl-glucosamine. However, the company has shifted its manufacturing and sales focus to opportunities it sees in yeast beta-1,3/1,6-glucan, an immune-enhancing dietary supplement and function food ingredient. Biopolymer Engineering has more than 200 US and international patents around the compound, which it sells in bulk as well as through its own dietary supplement products, Life Source Basics and Imucell WGP.
Essential fatty acids (EFAs), which include fish oils and plant oils, are another high-growth segment in the US specialty supplement market. The US market for EFAs in dietary supplements was valued at $270 million in 2002, or 12 percent of that market. Of that total, fish oils, such as omega-3 and omega-6 fatty acids, accounted for $216 million. Overall growth for EFAs in the US dietary supplement market is estimated at between 15 and 18 percent through 2005.
Demand for omega-3 fatty acids has been helped by the American Heart Association's recommendation of their use to reduce the risk of cardiovascular disease through the consumption of fish containing omega-3 fatty acids or other food sources such as dietary supplements containing omega-3 fatty acids. In May of this year, the Office of Management and Budget provided an additional boost to the market when it recommended that the Department of Agriculture and the Department of Health and Human Services take into account new evidence for the benefits of omega-3 fatty acids when revising the nation's dietary guidelines and food guide pyramid. The Food and Drug Administration is also planning to recommend listing the amount of omega-3 fatty acids contained in food products on nutrition labeling.
"The largest growth for EFAs is now being seen in the food area, where food companies are adding omega-3 fatty acids into their products," says Rick Pope, senior manager, sales and marketing, Ocean Nutrition Canada Ltd,which offers the omega-3 fatty acids eicosapentaenoic acid (EPA) and docosa-hexaenoic (DHA). Ocean Nutrition Canada is more than doubling its manufacturing and concentration capacity (molecular distillation and fractionation) of omega-3 fatty acids by the end of 2003 at its plant in Nova Scotia, Canada. The company has also commissioned a new pilot plant for proprietary microencapsulation technology that is designed to deliver a high payload of bioactive omega-3 fatty acid, in a minimum volume of free flowing food grade powder while keeping the long chain fatty acids, which are prone to oxidation, stable, with no impact on taste or texture. The company will also launch by end of 2003 a new super-deodorized bulk fish oil for dietary supplements and food grade applications.
Suppliers of omega-3 fatty acids and other EFAs include large companies such as Roche, DSM, Croda, Celanese's Nutrinova and Norsk Hydro's Hydro Pronova as well as specialty producers such as Omega Protein Corp., Loders Croklaan and Martek Biosciences.
Nutrinova Nutrition Specialties & Food Ingredients GmbH, a wholly owned subsidiary of Celanese AG, introduced DHActive in the US market with the acquisition of Celanese Ventures' bio-technology unit, Protos-Biotech, in July 2002. DHActive is a natural vegetarian oil with high contents of DHA (around 45 percent) produced by microalgae (protists). DHActive is currently under regulatory review. Nutrinova expects to introduce the product in Europe this year.
Omega Protein Corp. is building a new, $16 million, 100 metric ton-per-day fish oil processing facility at its Reedville, Va., location to increase production of its OmegaPure omega-3 oil and refined feed and industrial oils. The new facility will triple Omega's processing capacity and enable the company to offer customized fish oils to food producers. It will also include a pilot unit to produce several types of fish oils with varying levels of nutritional value and will have a new fully equipped lipids laboratory to enhance the development of Omega-3 oils in food products. Construction began in May and is expected to be completed by May 2004.
Recent launches in the EFA concentrates market include a new high potency DHA product, Incromega DHA700E SR, introduced by Croda in May of this year. The company says the product is a purer concentration of DHA (700mg/g) and targets supplements for eye and brain health. Earlier this year, Croda announced its decision to significantly expand lipid production at the company's Leek site in Staffs, UK. The planned development will take place over the next 12 to 18 months and will double manufacturing capacity of marine and plant lipid concentrates, in particular omega-3 and -6 polyunsaturated fatty acids for nutritional and pharmaceutical markets. Roche launched a high concentration omega-3 ethyl ester oil in 2002 for soft gelatin capsules.
Probiotics is another growing area in the US specialty supplements market, with growth of between 8 and 10 percent through 2005, according to Health Strategy Consulting. The US market is pegged at $132 million. Probiotics are bacteria-based products, so-called "healthy bacteria," which aid in the proper functioning of the digestive system. The most popular strains are Lactobacillus acidophilus, Bifidobacterium bifidum, Bifidobacterium longum, Lactobacillus bulgaricus and Streptococcus thermophilus. Probiotic strains are used in supplements as well as functional foods.
"The awareness of probiotics is certainly rising," says Bryan Halfhide, marketing director with Chr. Hansen, a manufacturer of probiotic-based products. "The value of today's European market is around 25 million, so we are talking serious business." Earlier this year Chr. Hansen, with the Central American ice cream maker Dos Pinos, developed a solution with yogurt cultures, color (carmine) and two probiotic strains known to stimulate the immune system.
In April, Rhodia Food launched two probiotic blends under its FloraFit product line-FloraFit Balance and FloraFit Boost-for use in supplements, nutritionals, dairy and other nutritious food products.
Degussa, through its bioactives business, offers a range of probiotic cultures, including various strains of Lactobacillus acidophilus, Lactobacillus casei and Bifido-bacteria species. DSM's Lafti products are second-generation probiotics specifically developed for dietary supplement applications. Other manufacturers of probiotic strains include Institut Rosell, Biogaia Biologica and Valio.
Lutein, a carotenoid recommended for eye health, is a small but rapidly growing supplement for the US market. US sales reached $65 million in 2002, and growth through 2005 is projected at 10 to 12 percent, according to Health Strategy Consulting. Roche, BASF, Cognis and Kemin Foods are major producers of lutein.
In April, Roche introduced lutein 5 percent CWS, a cold-water-dispersible form specifically developed for the fortification of foods and beverages and for effervescent tablets, and lutein 5 percent TG/P, a new tablet-grade form for a range of tableting applications.
Kemin Foods provides Roche exclusively with FloraGLO Lutein, its patented, purified, crystalline lutein from which Roche manufactures various lutein product forms at its Sisseln and Village-Neuf, Switzerland, plants. In 2000 Kemin Foods brought on stream two new production lines at its Des Moines, Iowa, plant, doubling nameplate capacity for lutein. FloraGlo has attained GRAS (generally regarded as safe) status for a variety of food categories, and recently helped Hain Pure Foods launch two new vegetable and carrot juice products containing 1 mg of FloraGLO per eight ounce serving.
Cognis's nutrition and health business unit offers Xangold natural lutein esters for use in functional foods and dietary supplements, says Paul Allen, group vice president, Cognis Nutrition & Health. Lutein esters are one specialty supplement product offered by Cognis, which also offers conjugated linoleic acid (CLA), natural mixed carotenoids and phytosterols. Cognis gained its CLA product line from Sandvika, Norway-based Natural ASA, a company specializing in naturally-sourced nutritional substances, in addition to the exclusive license to Natural ASA's CLA intellectual property, technology, marketing and use of the capacity at its facilities in Illertissen, Germany, where Tonalin CLA is produced. The company also started up a phytosterol manufacturing plant in January 2002 in Boussens, France, with a capacity of 1,600 metric tons per year.
In addition to its lutein and lycopene products, Roche introduced new forms of the carotenoid zeaxanthin in 2001 and zeaxanthin 20 percent FS earlier this year. The company also opened a Teavigo epigallocatechin gallate (EGCG) manufacturing plant in March in Shanghai, China, with annual capacity of 40 metric tons. EGCG is the active ingredient in green tea, and Roche plans to market the product for use in dietary supplements, beverages, solid foods and pharmaceutical products.
In addition to EGCG, another new entry for Roche is genistein, an isoflavone found in soy products. Roche recently developed a new process for making genistein, which is now under patent review, and which will be implemented at the company's Sisseln, Switzerland, facility. Roche plans to have genistein in pure form available in 2004 for the dietary supplement and food industries.
Isoflavones and soy-based products are an important part of the product portfolio of the large agribusiness concerns Archer Daniels Midland Company (ADM) and Cargill Inc. As part of its Novasoy range of isoflavones, ADM recently introduced Novasoy Daily, a sustained-release formula of isoflavones. ADM also offers soy proteins, including its newest-NutriSoy Wholebean Powder made from 100 percent organic whole soybeans and designed for incorporation into beverages, ice cream and other dairy-like products. ADM, a supplier of natural source vitamin E, recently launched a completely transparent form for inclusion in beverages. It is also a large producer of phytosterols, offering fat- and water-soluble phytosterols for incorporation into capsules and functional foods. Other key product offerings include lecithin, a source of dietary choline, and Fiberol-2, a water-soluble dietary fiber. ADM continues to develop flax lignan technology for potential use in functional foods, nutraceuticals, pharmaceuticals, animal feed additives and pharmaceuticals under a licensing agreement with the Flax Consortium, a research collaboration between Agriculture and Agri-Food Canada, the University of Saskatchewan Technologies Inc., and William Clark of the University of Western Ontario and the London Health Sciences Center.
Cargill Health & Food Technologies, a business unit of Cargill, introduced its new CoroWise brand phytosterols, which incorporate both phytosterol esters and free phytosterols, in February 2003. "Plant phytosterols, such as CoroWise phytosterols, have been found in clinical studies to be effective in decreasing total blood and LDL cholesterol as part of a diet low in saturated fat and cholesterol," says Steve Snyder, Cargill H&FT director of sales and marketing for nutraceutical ingredients. "The recent action by the FDA provides a unique and immediate opportunity to incorporate CoroWise phytosterols into new heart healthy consumer products. In February 2003 the Food and Drug Administration allowed for a broader range of food products and dietary supplements to bear the heart health claim in labeling when formulated with 0.65 grams of phytosterol esters or 0.4 grams free phytosterols per serving.
Cargill also introduced in November 2002 its AdvantaSoy Compress-high concentration soy isoflavones specifically formulated for the dietary supplement market.
Also slated for moderate growth is coenzyme Q10, or ubiquinone. The US market for CoQ10 is valued at $212 million, or 9.2 percent of the US specialty supplements market, with growth estimated at between 7 and 8 percent through 2005. Kyowa Hakko and Nisshin Flour Milling Company Ltd. are the two main suppliers of CoQ10.
Kyowa Hakko has introduced a water soluble version of CoQ10 that uses a newly patented processing system. "There is tremendous interest in this new water-soluble version that should result in wider use of CoQ10," says Don Blaine, general manager, Kyowa Hakko USA. In addition to dietary supplements, CoQ10 can also be found in personal care products such as lotions and toothpaste.
A new entry in the dietary supplement market for Kyowa is Citicholine (cytidine 5'-diphosphocholine, or CDP-choline). Kyowa Hakko developed a new fermentation technology to manufacture the product and has recently initiated an aggressive campaign to bring awareness of citicholine to the marketplace by conducting a clinical trial, says Mr. Blaine.
Amino acids are another major product area in the dietary supplement market. Kyowa Hakko, which manufactures its amino acids via fermentation and other biological routes through its Biochemicals division in Japan, is running at high levels of capacity and is considering expansion and other investments at this juncture, says Mr. Blaine.
Ajinomoto, another major amino acid producer, is also evaluating major investments in capacity for its food-grade amino acids, says David Yarley, technical service manager with Ajinomoto Amino-Science LLC. Ajinomoto formed an alliance with Stauber Performance Ingredients, which will act as the sole distributor of amino acids for Ajinomoto's dietary supplements.
Methylsulfonylmethane (MSM), which accounts for only 5 percent of the US specialty supplements market, is another fast-growing product area, with growth of 15 to 20 percent projected through 2005, according to Health Strategy Consulting. In 2002, the US market was valued at $116 million. MSM, also known as dimethyl sulfone, is a naturally occurring organic source of dietary sulfur.
Chinese manufacturers have eroded the price of MSM over the past several years. There are now only two North American manufacturers of the product-Greenville, Pa.-based Halton Health and Vancouver, British Columbia, Canada-based Cardinal Health. "While it is still experiencing growth as a dietary supplement, the greatest potential for MSM today lies in its use in functional foods and cosmetics," explains Brad Lang, registered dietician with Halton Health. The product can be used topically in skin, hair and nails, and also in functional foods as a dietary source of sulfur.
Although most of the specialty dietary supplements are expected to see moderate to strong growth through 2005, there are some exceptions. Melatonin, which has seen its US sales decline steadily since 1997, is expected to experience negative growth of between 5 and 8 percent through 2005. Dehydroepiandrosterone (DHEA), which was valued at $46 million in 2002, is also expected to see negative growth of 5 and 10 percent.
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