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8 Nov 2007

Industry

Food Supplements, 2008: Changing Consumption Amid Rising Cost of Living(Business Brief No.2065)

The food supplement market in Thailand is very interesting. Despite the economic slowdown, the dietary supplements have barely felt the pinch. The prevailing health protection trend has had much to do with the popularity of food supplements. Although no clear medical evidence about its medicinal effects on human health has been confirmed, most consumers believe that regular intake of dietary supplements can have added health benefits, enabling them to avoid medical bills. In the environment of a changing pace of urban life, numerous economic and social woes, many people become stressed and a great number of them become health-conscious. They are more willing to turn to dietary supplements for the sake of their good health.
KASIKORN RESEARCH CENTER (KResearch) has recently conducted a poll entitled, ;Spending Behavior of Bangkok Residents”. The findings showed that consumers become more economical as higher fuel prices have pushed up prices of goods and services in tandem. When it comes to health-related expenses, 25.7 percent of those polled said that they have shifted to domestically-produced food supplements in lieu of costly imported products while 12.6 percent reduced/avoided dietary supplements definitely.
The result from Bangkok respondents turning to thriftiness in health-related expenses presents a good opportunity for domestically-produced food supplements. Producers should thus adjust their product lines in terms of packaging and product accountability, i.e., highlighting the products certified by Food and Drug Administration under the Ministry of Public Health. The fact that Bangkok respondents have turned to herbal drugs instead of modern medications has been a boost for the herbal drug business. Formerly, herbal ingredients were mainly appealing to consumers who wanted to avoid synthetic chemicals. Moreover, entrepreneurs in other herbal products, i.e., herbal dietary supplements, also benefit from this trend as a portion of the consumers believe that herbal food supplements can enhance the body's immunity and prevent consumers from falling sick easily. This notion is considered a preventive health care as Bangkok residents see that using these products will help them pay less than getting medical treatment in hospitals. However, the point that operators of dietary supplement businesses should not overlook is that the group of consumers whose income is more than THB50,000 per month (B+) still have unchanged behavior in food supplement consumption. Most of them still prefer imported types due to their trust in the product quality.
KResearch projects that the overall supplementary food market in 2008 will be valued at around THB18 billion, an increase of 7.0 percent, close to the 2007 projection. Looking at the market breakdown, 42.0 percent will go to health drinks, 35.0 percent will be general supplementary food products (both tablets and powder, excluding vitamin), vitamins, 16 percent, and food supplementary products for children, 7 percent. The markets for general supplementary food products and vitamins tend to show a high growth where competition is set to be tougher. Marketing activities of these two products have been launched steadily while a wide variety of products have been introduced to the market. Emphasis has been placed on products earmarked for different targeted groups according to their ages and lifestyles.
Over the next three to five years, bright prospects seem to lie ahead for the food supplement business in Thailand thanks to the continued health-conscious trend. Consumers are thus expected to spend more for health protection purpose. Many people believe that dietary supplements can keep them fit. Under these circumstances, the food supplement business is set to grow further both in terms of product lines and new producers in the market. The increased competition will thus be beneficial to consumers as it will lead to upgrade in product quality and more reasonable product prices.
On the global front, the food supplement business is expected to thrive rapidly, mainly supported by the popularity of nutraceuticals, the term used to refer to foods claimed to have a medicinal effect on human health. Presently, the nutraceutical market is quite large and challenging. Many countries have seriously undertaken research and development in order to boost their production capacities to cash in on this market trend. Among the key markets for nutraceutical products are the US, Japan and the European Union. A recent study on impact of the regulatory and demographic changes on consumer behavior showed that specialty products will likely record healthy growth over the next five years while the conventional products, i.e., minerals, vitamins, herbal products as well as sports nutrition may experience moderate growth. This trend is soon expected to be the main thrust for the growth in the dietary supplement industry here, alike.

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