Legislative Restrictions to Spur as well as Restrain Probiotics Market

January 8 2004--Valued at around $12.9 million in 2003, the total market for probiotic ingredients in applications for human consumption is currently growing at an estimated rate of 14 percent. While the market has witnessed fairly rapid development in the last ten years, uncertainty about recent EU proposals for new legislation on health claims presents a major challenge to market participants.

A recent Frost & Sullivan analysis on probiotics end-users reveals that imminent legislative restrictions are a key concern in the probiotics market. For instance, proposed regulations such as the Health Claims Regulation – presently circulating as a draft within the European Parliament and Council – could severely impact innovation, promotion and competition.

This regulation could become a law as early as 2005. Its approval is likely to strongly impact the probiotics market by preventing vague or unsubstantiated claims while permitting scientifically backed claims. This creates both challenges as well as considerable opportunity for market participants.

As Anna Ibbotson, Food Research Manager with Frost & Sullivan explains, "Most probiotics suppliers already hold a significant body of research highlighting the potential health benefits of their products. Thus, they are likely to have a competitive advantage in a market from which all insufficiently supported claims would be removed."

New legislation will also call for participants to obtain more scientific proof of product efficacy. This is critical for the ultimate benefit of consumers. However, suppliers appear to be divided on the question of who should take responsibility for this issue – the suppliers themselves or the food and supplement manufacturers.

"There is a general acceptance that raising consumer awareness is one of the key challenges facing the probiotics market. Although this is usually considered the responsibility of the finished product manufacturer, supplier companies must be ready and able to support their customers' marketing activities through provision of detailed product and legislative information," remarks Ibbotson.

Probiotics suppliers further identified increased consumer awareness of probiotics and their possible health benefits as a primary market driver. Large marketing spends of companies such as Danone and Yakult were seen as having played a crucial role in enhancing consumer knowledge. Wider consumer choice and growing media interest in probiotics and gut health were the other contributory factors in improved awareness levels.

Distinct market trends were uncovered during the Frost & Sullivan end-user research. For instance, owing to the low stability of the bacteria, probiotics have largely been confined to dairy applications so far, with major probiotics applications for human consumption in yoghurts and fermented milk drinks. The European supplements market, although less developed than that in the United States, is a prospective area of growth.

Efforts to develop other finished products containing probiotics are underway. Manufacturers have identified numerous promising applications including infant formula, fruit juices, cereal, and extensions of existing product lines such as fruit yoghurts. These are anticipated to greatly increase market growth potential.

At the same time, animal feed applications are stated to provide significant opportunities for probiotics, especially after the recent ban on antibiotic growth promoters.

Since the relatively low stability of probiotic bacteria has often negatively influenced consumer perceptions, research institutions and probiotics suppliers are currently attempting to identify more robust and targeted probiotic strains that will help erase consumers' doubts. In doing so, they also hope to boost interest and uptake levels among consumers.

Title: End-User Analysis of the European Probiotics Market
Code: B238

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The following is a list of key industry participants: BioGaia, Chr. Hansen, Danisco / Wisby, Degussa, DSM, Lallemand / Institut Rosell, Probi, Rhodia, Valio.




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