Ten year ago, nutraceuticals were thought to be a 'western' concept in Asia. However, this trend is changing. Changing lifestyles have led to an increase in diseases like diabetes and there is an increased awareness of the importance of nutraceutical preparations as a part of daily food intake. Both local and multinational pharmaceutical companies are entering this market with a host of nutraceutical products.

Vitamin and natural supplements form 70 per cent of the Asian nutraceuticals market compared 35% to North America and Europe market. However, the Asian market is likely to get skewed in favour of the fortified functional beverages, specialty foods, and fortified foods market in the coming years. Several food markets are likely to witness growth including fortified foods, ready-to-eat meals, convenience foods, natural supplements and specialty foods.

The nutraceuticals market in Asia is dominated by the nutritional supplements market (herbal products), which is largely not organized well. Japan, constitutes approximately 71 percent of the Asian market, and has strong regulations in terms of the Foods of Specific Health Use (FOSHU) system, which has deterred the entry of foreign companies. Also, the Asian diet is considered to be naturally healthy. For instance, many components of the Japanese diet have been shown to provide additional health benefits. However, the arrival of multinational brands is changing this.

With competition increasing, companies have started using attractive packaging and the introduction of customized flavors in Asia. Apart from using bright colours and providing nutrition information on packs, some companies have started packaging their products in anti-bacterial film bags.

Local governments have also begun to undertake measures to promote the use of nutraceuticals. Previously, in Japan, foods approved for FOSHU had to be re-submitted for approval every four years. This rule has been removed to increase the market attractiveness. The development of supermarkets and drug store chains in Asia provide suitable platforms for over-the-counter nutraceutical products. Hence, manufacturers need not fight anymore for shelf space in small chemist shops. They have the choice of displaying their products in more trendy outlets where their target customers are likely to visit.

- Frost & Sullivan Research, Mumbai