A new strategic analysis of the European Vitamin B Market by Frost & Sullivan reports that the market was worth €415m (£280m) in 2005. This is anticipated to grow to €901m (£607m) by 2012, equivalent to a compound annual growth (CAGR) of 11.7 per cent for the sector.
"The most important factor driving the growth of B-complex vitamins is the consumer interest towards self-medication," said Frost & Sullivan Research Analyst Ms. Nithya.
"With burgeoning healthcare costs and reductions in reimbursement of healthcare expenditure by the Government, people have exhibited a growing interest in consuming nutritional supplements in order to maintain their health," she said.
However, the outlook is not all rosy with the market being restrained by increasing prices for B vitamins due to increased energy, raw materials and production costs.
This has seen the likes of DSM, Lonza, and US-based Reilly Industries all raising prices for B vitamins this year, particularly for niacin (vitamin B3). The main raw materials required for niacin production are derived from petrochemicals.
Coupled with increased competition from Asian manufacturers, the already saturated market is feeling the strain.
Indeed, less than 15 manufacturers are reported to be active in the European market, with only DSM and BASF providing a range of B vitamins for different application segments, including food and beverage, dietary supplements, animal feed, pharmaceutical and personal care.
The Asian producers, mainly from China and India, are putting the squeeze of the Euro players with products that benefit from cheap labour, favourable exchange rates and financial assistance from their governments.
The Frost & Sullivan report recommends taking the approach of 'if you can't beat 'em, join 'em' where Asia is concerned.
"Working in conjunction with the Asian manufacturers is an effective means of minimizing competition," states the report.
DSM is already taking such action, having entered into joint ventures with Chinese vitamin makers, and announcing at the tail-end of last year the opening of its first research and development centre in China, giving the Nutritional Products division production resources in the region.
Another alternative is to diversify and not focus solely on a niche market, said the report.
"Generating products with different characteristics to suit different applications is an effective way to reach our and meet the needs of all customers," the Frost & Sullivan analyst recommends.
And Nithya said that European-based companies should also look at developing technologies to reduce production costs.
"Such advances in technology will enable European manufacturers to remain competitive in the global market," she said.