However, manufacturers need to deliver high quality products and create effective brand positioning to successfully differentiate from competitors. Nutraceutical manufacturers will also need to focus on innovation and new product development, as well as strategic partnerships or synergistic acquisitions, to achieve success in this industry.
New analysis by global growth consulting company, Frost & Sullivan (food.frost.com), finds that the total Australian and New Zealand Nutraceuticals Market earned revenues of US$2.26 billion (A$3.01 billion) and (NZ$1.47 billion) respectively in 2006 and estimates this to reach US$3.40 billion (A$4.53 billion) and (NZ$ 5.23 billion) each by end 2013.
"There has been a substantial increase in lifestyle diseases such as obesity, diabetes, and osteoporosis, which have affected the Australian and New Zealand population", says Frost & Sullivan industry analyst, Mr. Vignesh Raja. "These chronic conditions are prompting consumers and the food industry to look for food products or supplements, which can help prevent or manage these conditions."
A number of consumers are shifting from a prescriptive health management approach to that of preventative health management. There is also a growing health and wellness consciousness among consumers, and increasing importance is given to fitness and healthy lifestyle choices. The aging demographic trend translates into a greater proportion of aging patients with chronic illnesses. Nutraceuticals will be seen as one way of preventing or managing chronic diseases and infirmity.
However, negative media publicity such as product recalls and unsubstantiated health claims have caused considerable confusion, thereby reducing the consumer confidence in the nutraceuticals industry.
"For example, in the Pan Pharmaceuticals recall in 2003, where a large number of products were recalled from the market by the Therapeutic Goods Act (TGA), consumer confusion resulted in a drastic drop in sales across the entire supplements segment in Australia and New Zealand:, explains Mr. Raja. "In March 2007, GlaxoSmithKline was fined $192,900 ($NZ217,500) by the New Zealand Government for making false claims about Vitamin C content in its ready-to-drink product range, 'Ribena'."
Nonetheless, consumers are being exhorted to realize the importance of preventative health. Industry organizations/associations such as The Omega-3 Centre Inc., National Heart Foundation, The Glycemic Index Limited, Australian Self Medicating Industry along with market participants are emphasizing the importance of healthier food alternatives to improve health condition among Australasian consumers.
With the increasing number of health products being available in the market, manufacturers need to be watchful of their products moving from ‘premium’ to ‘commoditised’ product status.
The Strategic Analysis of the Australian and New Zealand Nutraceuticals Market 2006 – 2013 study is part of Food & Beverage Ingredients subscription, which also includes research in the following markets: Strategic Analysis of the Nutraceuticals Markets in Southeast Asia; Strategic Analysis of the Nutraceuticals Market in China; and Strategic Analysis of the U.S. Nutraceuticals Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Analyst interviews are available to the press.
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Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.