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China in Focus – Probiotics: From sports nutrition to weight management, the market is booming

By Gary Scattergood contact

- Last updated on GMT

We take an in-depth look at China's probiotic market.
We take an in-depth look at China's probiotic market.
China's probiotics market is going from strength to strength, with suppliers and industry experts reporting rapid growth. Therefore, we have made the sector the subject of the first of our in-depth three-part China in Focus features.

Over the rest of the week, we'll also be shining the spotlight on the nation's sports nutrition and omega-3 markets, but probiotics are increasingly being viewed as China's rising star.

According to industry trade body the International Probiotics Association (IPA), China now accounts for almost half of all probiotic sales in Asia-Pacific, at US$8.3bn. The Asia total stands at US$17.5bn, while the global figure is US$42.5bn.

The figures also show that the APAC market is forecast to grow by a CAGR of 8.3% over the next seven years, but China will continue to track higher than the average, with its market value likely to reach US$15bn by 2025.

China_Probiotics_Market

It's no wonder that IPA executive director George Paraskevakos noted recently: "China is now one of the most important players in probiotics at the global level."

Take a look at George's assessment of the market in this video:

On a recent trip to Shanghai, we spoke with a number of industry insiders and experts who reported similar views.

One was Simon Wang, China business manager at Ganeden, the probiotic firm acquired by Kerry late last year.

The firm has a large amount of clinical data backing its BC30 strain, in addition to more than 135 patents for technologies in the supplement, food, beverage, nutrition, and personal care markets.

Wang said the combination of this research, plus soaring demand in China, meant the firm was now in a strong position to increase sales.

"Until last year, I was a lone ranger here in China,"​ he said. "But now, we are part of a huge group, with much more resources.

"The timing is very good, because we now have a huge opportunity to provide consumers with the new probiotic food concepts they are looking for."

And it is no understatement to say that food is key. Around 96% of all probiotic sales in Asia occur in the food space — largely dairy — with just 4% in the supplement category.

Wang believes this is something that plays to Ganeden's strengths.

"We think we have a big opportunity for BC30 in bakery, because our product is a spore-former that is heat resistant​, shelf-stable, and suitable for a broad range of applications,"​ he said.

"More than 90% of probiotic products in China are still dairy, but based on our market research, we know that consumers want to have functional ingredients through a range of food and beverages.

"We can foresee that sales are going to take off."

There is a similar air of optimism at DuPont, which has been riding the crest of the probiotic wave in China for the past couple of years.

This time last year, the firm's APAC probiotic leader Susan Jin said its probiotic sales had increased by 50% over the last three years. Catching up with her 12 months later, she revealed that new product launches were helping maintain strong growth momentum.

With 30% of the Chinese population overweight and 6% obese, the company recently launched its Howaru shape weight-loss product on the market.

In a study​ published in EBioMedicine​, HOWARU ​Shape (10B CFU B. lactis​ B420​ alone or in combination with 12g of prebiotic fiber Litesse Ultra​ polydextrose) controlled body fat mass, trunk fat mass, waist circumference, and reduced energy intake in overweight adults, compared to placebo.

Jin said the product had been well-received on the market. "It is a good example of how we can combine probiotics and prebiotics to deliver a great product."

And policy is also helping. She added, "The government's Healthy China 2030 plan has received a lot of attention and is a very good initiative to promote exercise and health. That means consumers are looking for products that can help them achieve this."

Another key factor, as witnessed at our recent Healthy Ageing APAC Summit in Singapore, is the region's rapidly ageing population. This led DuPont to launch its immunity-boosting Howaru Protect Senior product in China recently.

Like Wang, Jin said that probiotic yogurt remains by far the biggest category, with "supplements still at a very early stage"​.

"However, the growth for supplements is still fast and the market will further expand,"​ she added.

They both agreed that among Chinese consumers, digestive health remains the most commonly understood health benefit of probiotics. But they are starting to see opportunities emerge in new categories, with a wider range of health claims.

Wang is excited by the potential of probiotics in sports nutrition, though comprehensive data on the exact size of China's sports nutrition market is hard to come by.

Euromonitor values it at around US$206m, with a CAGR of 42% between 2014 and 2017, but that doesn't cover the vast number of products entering the country via cross-border e-commerce channels.

Jeff Crowther, executive director at Health Products Association China, believes this may bump up the value by an additional 50%.

What is not disputed, though, is that the sector is enjoying exponential growth. Take a look at our video interview with Wang to reveal why he thinks probiotics can tap into this trend:

Away from sports nutrition, Jin said there were signs that Chinese consumers were slowly starting to look for probiotic products with immune, allergy, cognitive and heart health benefits, but that for now, the best way to differentiate them was via delivery formats.

"We are looking at gummies, beverages and chewables, while also assessing probiotics in combination with other vitamins and minerals, fruit powders and Chinese herbs," ​she said.

Last year, the company launched its YO-MIX PRO probiotic dairy culture, with fermented vegetables and fruit powders.

"These are all examples of how we are trying to innovate, while also ensuring we meet the very high requirements around taste and mouthfeel,"​ said Jin, adding that ongoing innovation and rising consumer awareness meant the market was primed for ongoing growth.

"Chinese consumers are the most sophisticated in the world, because they have so much choice, so we have to constantly exceed expectations, and that drives innovation,"​ she said.

"We still have a long way to go to educate consumers about the full potential of these products, but as this increases, the market is only going to grow bigger."

And, last but not least, here are three research findings to back up the industry's positive outlook...

74% of Chinese consumers agree it is worth paying more for yogurts with probiotics

42% of Chinese consumers are interested in purchasing drinks with digestive benefits

62% of children in China consume lactobacillus​ drinks several times a week

Related topics: Markets and Trends, Sports Nutrition

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