- Diventa Socio
The European food supplement market has recorded a significant increase, over the past three years, with average annual growth of around 6.6% in terms of sales. Almost half of the total sales of food supplements in Europe is made by Germany, France and Italy, which represents the first country in terms of per capita expenditure on food supplements.
A market with a strong growth in all countries, but what is this positive development of food supplements due to?
Dr. Volker Spitzer, Global Principal of the IQVIA Consumer Health area, will illustrate the main European trends underlying this important growth.
Demographic and socio-economic changes point towards the prevention and wellness space as a new growth area. What has changed in consumer needs?
Changing demographics paired with socio-economic factors are indeed important drivers of new consumer demands in the nutrition and food supplement area. The World Health Organization (WHO) reported that the proportion of the world’s population over 60 years will nearly double from 12% to 22% between 2015 and 2050. By 2020, the number of people aged 60 years and older will outnumber children younger than 5 years.  At the same time human lifespans are increasing by approximately three years every generation in developed countries.  Consequently, we see a higher incidence of chronic age-related diseases and nutrition can an important supportive pillar for healthy aging.  Science-based food supplements targeting such preventative approaches are needed. This can start with ideally personalized solutions to cope with micronutrient deficiencies or products that can counteract negative oxidative stress and low-grade inflammation processes impacting health on the long term at cellular level.
In parallel, we see more lifestyle triggered health issues (e.g. cardiovascular diseases) caused by smoking, lack of physical activity and unfavourable dietary habits. Consumers are becoming more more aware of these factors and thanks also to public health initiatives we all can witness now increasing health and wellness trends and interest. Nutrition is one of the key health factors and consumers are investing more and more in related offerings providing related health benefits. However, the scientific evidence is not always conclusive, and the industry needs to develop solutions that meet the growing expectations of consumer, regulators and healthcare professionals.
Compared to the last decade consumers are now also much more engaged in managing their own health needs. This has mainly been triggered by the availability of digital platforms providing access to health information and allowing direct interaction between different stakeholders such as specific consumer groups, healthcare professionals and companies. Companies are not owning anymore the product narrative – consumers exchange openly their opinion on product benefits and may base their buying decision more on what other consumers recommend vs. official product advertising.
Moreover, the “naturalness” of a product is gaining more and more importance for consumers. To stay relevant, natural product solutions need to also have strong scientific and safety evidence to prove that the health promises can be delivered. Together with this “naturals” trend there is a rising demand for products that are entirely “free from” man-made or chemically tainted ingredients. “Natural as possible” is a big thing and consumers want to have transparency as to where products and ingredients derive from. Some companies base their product lines with great success on natural ingredients paired with transparent supply chain information.
How can the healthcare industry respond to the increasing interest in prevention and wellness?
Today, the majority of innovation is still coming through product line extensions featuring mainly new product formulations (e.g., lozenges instead of tablets), improved taste / flavours and packaging improvements. These line extensions are providing minor improvements vs. previous product generations and are generally made to mirror some basic consumer needs and preferences. For manufacturers, these tweaks are designed to differentiate their products within an increasingly competitive and crowded market.
In order to respond to the further interest in prevention and wellness, the industry will likely need to come up with more advanced and scientifically meaningful products and solutions that are synchronized with developing consumer needs. The younger generation of consumers, in particular, is no longer satisfied with just what is made available to them. The options to improve their personal nutrition status are growing alongside food supplements and many people will swap to an alternative if they believe it will work better for them. The industry needs to come up with new offerings to be competitive in the long run. This may look very different from what we have seen in the past.
What role does innovation play in the evolution of companies’ strategies? What are the opportunities for Italian SMEs of food supplements?
Without a doubt innovation is a key driver for business growth. However, healthcare companies must adapt their innovation focus and scope to remain at the heart of the evolving healthcare ecosystem.
Companies need to start optimising true consumer-centric innovation strategies fostering strong scientific evidence to support new and meaningful claims and innovations. This also means including consumer-generated insights and ideas within the innovation, development process to better capture what is truly relevant for them. In the pursuit of new scientific evidence, the established model of randomized controlled studies may not always be the best fit and new approaches such as “Real World Evidence” studies can provide new opportunities to develop consumer relevant claims. To be successful, scientific rigor and early engagement with regulators is important to advance new claim strategies.
There is a great opportunity to apply digital health tools such as apps and wearables as they can be a key driver to develop new types of scientific evidence while simultaneously expanding the product eco-system. The integration of validated digital products can be instrumental to support consumers in a more holistic health and wellness approach. As a next step this can finally lead to a higher degree of personalization and self-optimization. This can be a very important factor for future successful innovation strategies.
Within current innovation and production processes, developing more consumer-centric and personalised product offerings is a major challenge, particularly for larger, less agile companies, as it runs contrary to the established industrialization processes characterized by scale, repetition and efficiency.
By contrast, start-ups and SMEs have the opportunity and capability to seize the advantage as they can act in a more flexible way and history shows that breakthrough products or services aren’t often launched with a big bang but start small and scale up as more people adopt them. This has become more pronounced with modern, younger health-focused consumers who are not as concerned with where products come from as long as they match their needs. This demographic shift allows smaller players without huge marketing investments to smartly target relevant consumers through new channels, which makes the dependence on traditional marketing and distribution routes obsolete. There are more and more offerings on the market such as “23andMe,” “Habit,” “DayTwo,” and “MyDNA” etc. underlining this trend. New collaboration models between smaller players and multinationals could help them bring “mass customization” to life at scale. The collaboration of DSM and “MixFit” are one of the examples.
Technology, holistic approach and personalization are the key elements of the healthcare industry of the future? What does the industry need to do to be ready for the change?
It is always challenging to predict the future. However, it is safe to say that the consumer healthcare industry should adapt its innovation strategies to remain at the heart of the evolving consumer needs and healthcare ecosystem.
Companies need to start optimising true consumer-centric innovation strategies fostering strong scientific evidence to support new claims and innovations. Furthermore, applying “de-risking models” will be very important. This means stronger and more flexible external collaboration models allowing for improvements such as better technology integration. Digital technologies including diagnostic tools will gain importance in the future, however, this is not typically considered a core competency of nutrition-oriented or consumer health companies. Organizational structures such as a company’s innovation culture need to be adapted to ensure competitiveness in the future. In a nutshell this means “doing things better than before” – and many of the companies are already on this journey.
The more challenging part is orchestrating the integration of new technologies and health data with a broader group of stakeholders (including regulators) leading to advanced and more holistic innovation models. Further transformational steps could lead to a situation where the health outcome rather than the product is front of mind. Real World Evidence-based approaches combined with smart digital health tools may become the intellectual property of a company instead of a product formula. This type of advance requires “doing things differently” and creating a new role for consumer healthcare in the health and wellness ecosystem.
The business model must also evolve to reflect and support consumers’ objectives, recognizing that digitization, data proliferation, and evolving ecosystems are challenging the status quo. As no industry is safe from disruption it is worth further consideration and planning to prepare for a consumer-centric future that’s rapidly becoming the norm.
 WHO report on Aging and Health (2018), https://www.who.int/news-room/fact-sheets/detail/ageing-and-health
 Wenyun Zuo et al. Advancing front of old-age human survival, Proceedings of the National Academy of Sciences (2018). DOI: 10.1073/pnas.1812337115
 Shlisky Julie et al. Nutritional Considerations for Healthy Aging and Reduction in Age-Related Chronic Disease. Adv Nutr. 2017;8(1):17–26