expo milan_final presentation_september 2015

© Euromonitor International 1

FederSalus Conference BOTANICALS: FOODS OR MEDICINAL PRODUCTS? State of art and perspectives for the use in food supplements Thursday, 17 September 2015 Theatre of the Earth, Biodiversity Park EXPO 2015

http://www.euromonitor.com/

HERBAL AND TRADITIONAL PRODUCTS: GLOBAL MARKET TRENDS EUROPEAN TRENDS

Salla Korpivaara

Research Analyst

2015-09-17

INTRODUCTION

GLOBAL OVERVIEW

EUROPEAN TRENDS

LOOKING AHEAD


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INTRODUCTION London

Singapore

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Vilnius

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Santiago

Tokyo

Sydney

Chicago

Bangalore

London

Chicago

Singapore

Shanghai

Dubai

Vilnius

Cape Town

Santiago

Tokyo

Sydney

Bangalore

Sao Paulo


INTRODUCTION

GLOBAL OVERVIEW

EUROPEAN TRENDS

LOOKING AHEAD


What are herbal/traditional products?

GLOBAL OVERVIEW

Roughly, plants valued for its

medicinal or therapeutic properties,

flavour, and/or scent. Herbal products

are sold as food supplements, dietary

supplements and as remedies.

EXCLUDES:

Medicines containing both plant material

and chemical ingredients. Unpackaged

unprocessed remedies such as roots,

barks or herbs are excluded.

DISTRIBUTION:

Varies across globe: depends on

classifications & legislation.

LEGISLATION:

Legislation across the globe varies.

Most countries have different regulation

for food products (food supplements) &

pharmaceuticals (dietary supplements &

remedies).

DIVISION:

Into herbal/traditional remedies and herbal/traditional

dietary supplements



Herbal/traditional products show strong growth in many countries

GLOBAL OVERVIEW

Herbal/traditional products

retail value growth 2010/2015

10+

5-9

1-4

0

<0

Not represented

Figures: Herbal/traditional products, 2010/2015 CAGR

retail value (RSP) – € mn fixed ex rate

Key Point: Recent official recognition of the

health benefits of some herbal/traditional

healing therapies boosts growth in many

markets.

CAGR: The Compound Annual Growth Rate

(CAGR) is the mean

annual growth rate over a

specific time period.


© Euromonitor International

9

9.2

1.6

-0.8

0.8

-1.1

4.2

10.4

3.1

1.7

-1.4

-2

0

2

4

6

8

10

12

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

China US Japan SouthKorea

Germany Taiwan Thailand India Italy UnitedKingdom

% C

AG

R 2

01

0/2

01

5

Bill

ion

€

2010 2015 % CAGR 2010/2015

Top countries - herbal/traditional products 2010/2015 retail value

GLOBAL OVERVIEW

Figures: Herbal/traditional products, 2010/2015 CAGR retail value (RSP) – € mn, constant fixed ex rate


INTRODUCTION

GLOBAL OVERVIEW

EUROPEAN TRENDS

LOOKING AHEAD


Division between Western and Eastern Europe

EUROPEAN TRENDS

Per capita consumption

higher in West

Few dominating markets

Saturation vs dynamism

Consumer trends

Trust in traditional

products/role of science



Entire health and wellness packaged food industry in the

United Kingdom 2014,

23 billion €

Estonia GDP in 2014, 23 billion €

Sports nutrition market size in Sweden 2014, 131 million €

Germany’s budjet for aid in 2014, 14 billion €

How big is the European market?

EUROPEAN TRENDS

The approximately 6 billion euro

industry in Europe is only a marginal

part of all consumption on health, but

growing



Consumer Health 2015

€30 billion

Vitamins and Dietary

Supplements €8 billion

Herbal/Traditional products

€5 billion

OTC drugs €19 billion

Retail value of consumer health three times bigger in Western Europe

EUROPEAN TRENDS

Consumer Health 2015

€10 billion

Vitamins and Dietary

Supplements €3 billion

Herbal/Traditional products

€1 billion

OTC drugs €6 billion

Western Europe Eastern Europe



22%

77%

Western Europe

Herbal/traditional dietary supplements

Standard dietary supplements

Herbal/traditional vs. standard dietary supplements in 2015, value sales

EUROPEAN TRENDS

17%

83%

Herbal/traditional dietary supplements

Standard dietary supplements

Eastern Europe



Great differences in per capita spending

EUROPEAN TRENDS

Per capita

spending in

Estonia

~ 3 EUR Per capita

spending in

Norway

~ 26 EUR

26€

10€

3€

0 5 10 15 20 25 30

Norway

Switzerland

Sweden

Germany

Finland

Austria

Netherlands

Denmark

WE average

Lithuania

Latvia

Hungary

Poland

EE average

Russia

Estonia

Georgia

Per capita spending of herbal/tradtional products, retail value €



Germany

Italy

United Kingdom

France

Russia

Rest of Europe

0

10

20

30

40

50

60

70

80

90

100

2015

Germany Italy United Kingdom France Russia Rest of Europe

64% Combined retail value share of five largest markets in 2015

% Growth projection (CAGR) 2015-2020 period:

Italy 2%

France 1%

UK -0.5%

Germany 1%

Russia 4%

Western Europe total 1%

Eastern Europe total 3%

A few countries dominate value sales in herbal/traditional products

EUROPEAN TRENDS %

Herbal/traditional products, 2015 retail value (RSP) – € mn,

constant fixed ex rate



0

1

2

3

4

2010 2015 2020

Herbal/traditional remedies Herbal/traditional dietary supplements

Herbal/traditional remedies facing dynamic growth in Western Europe

EUROPEAN TRENDS €

Bill

ion

• In Western Europe,

remedies can expect

more dynamic growht

compared to

supplements

Traditional/herbal remedies vs dietary supplements, retail value €, constant fixed ex rate

• % Growth projection

(CAGR) 2015-2020

period: 2%

(remedies) vs 1%

(supplements)



In Eastern Europe herbal supplements grow faster

EUROPEAN TRENDS

0

100

200

300

400

500

600

700

800

900

2010 2015 2020

Herbal/traditional remedies

Herbal/traditional dietarysupplements

€ M

illio

n

• In Eastern Europe,

supplements grow

faster at CAGR of

4% vs remedies

3%

Traditional/herbal remedies vs dietary supplements, retail value

€, constant fixed ex rate



Self medication combined with busy lifestyles boost up value sales of herbal remedies in Western Europe

EUROPEAN TRENDS

€ B

illio

n

-10

-5

0

5

10

0

250

500

Combination GinkgoBiloba

Garlic Ginseng Echinacea EveningPrimrose Oil

St John'sWort

Gro

wth

(%

)

€ m

illio

n

Value € million 2015 Value CAGR, %, 2015-2020

Biggest Herbal/Traditional Dietary Supplements in Western

Europe: 2015-2020 Actual growth of herbal remedies in retail

value, €

0

0.5

1

1.5

2

Cough, cold &allergies

Sleep aids Digestiveremedies

Topicalanalgesics

Dermatologicals

2010 2015 2020

Actual growth

during 2015-

2020 €141

million



0

50

100

150

200

250

300

350

400

450

500

Cough, cold &allergies

Sleep aids Digestiveremedies

Topicalanalgesics

Dermatologicals

2010 2015 2020

Actual growth of herbal remedies, retail value, €

Biggest growth categories in Eastern Europe within herbal/traditional products

EUROPEAN TRENDS M

illio

n €

0

5

10

0

40

80

120

160

200

Combination GinkgoBiloba

Garlic Ginseng Echinacea EveningPrimrose Oil

St John'sWort

Gro

wth

(%

)

€ m

illio

n

Herbal/traditional dietary supplements in Eastern Europe: 2015-2020

Value € ml 2015 Value CAGR, %, 2015-2020



53%

20%

15%

5% 2%

51%

19%

15%

7%

2%

0

10

20

30

40

50

60

Chemists/pharmacies Grocery retailers Drugstores/parapharmacies Internet retailing Direct selling

2010 2015 2020

Internet retailing growing fastest in Western Europe EUROPEAN TRENDS

Most dynamic growth in Internet retailing

%



84%

4% 4% 3% 2%

80%

5% 6% 5% 3%

0

10

20

30

40

50

60

70

80

90

Chemists&Pharmacies Grocery retailers Drugstores/Parapharmacies Internet retailing Direct selling

2010 2015 2020

Growth in all

other channels

Distribution in Eastern Europe more concentrated

EUROPEAN TRENDS %



Market dominance by TOP3 players

EUROPEAN TRENDS

0% 20% 40% 60% 80% 100%

Germany

Ukraine

Russia

Norway

Belgium

Poland

France

Switzerland

Lithuania

Czech Republic

Slovakia

Romania

Finland

Netherlands

Hungary

United Kingdom

Sweden

Spain

Shares by National Brand Owners (calculated from sales revenues)

Company 1

Company 2

Company 3

Others

Concentrated market in Sweden,

While UK looks fragmented


INTRODUCTION

GLOBAL OVERVIEW

EUROPEAN TRENDS

LOOKING AHEAD


0

5

10

15

20

25

Asia Pacific Australasia EasternEurope

LatinAmerica

Middle Eastand Africa

NorthAmerica

WesternEurope

Bill

ion

€

Regional Performance 2010/2015/2020, € mn, retail value, constant fixed ex rate

2010 2015 2020

Traditional medicine drives growth for herbal/traditional products in Asia Pacific

LOOKING AHEAD



Where are the future consumers?

LOOKING AHEAD

9.0

2.4

1.3

1.2

-0.5

Romania

Russia

Bulgaria

Hungary

Poland

Netherlands

Czech Republic

Latvia

Italy

Lithuania

Spain

Slovenia

Switzerland

Sweden

Austria

France

Finland

Germany

Estonia

Denmark

United Kingdom

Norway

Retail value CAGR, % 2015-2020, constant fixed ex rate 2015 prices

106

90

35

26

Russia

Italy

France

Romania

Poland

Netherlands

Spain

Switzerland

Sweden

Hungary

Belgium

Austria

Czech Republic

Finland

Bulgaria

Lithuania

Latvia

Slovenia

Denmark

Norway

United Kingdom

million €, 2015-2020



Market opportunities

LOOKING AHEAD

• Blue honeysuckle

• Spirulina

• ‘Superdrinks’ such as birch water

Booming trends, ‘clean eating’

• Sleep aids

• Smoking cessation aids

• Digestive products

Westernisation of H/T remedies

Marketing for women

• Plant based protein sources

• Nutrition supplement drinks

• Multi-positioning

Natural & healthy appeal

Superfoods Natural remedies Target groups Use of herbals in

standard products

• Chasteberry

• Slimming



New product development

LOOKING AHEAD

Laktasimum Kids; Bulgaria 2015

Relitrav Herbal Granules; Guatemala

2015

Power Shake Guty Carrera; Peru 2015

Aurita Bio Artischocke; Austria

2014

Nature's Way Super Greens; Australia

2014

Agnufem; Lithuania, 2014



Trends shaping the market in the future

LOOKING AHEAD

Legislation remains as barrier for many players

Varying product quality/lose of reputation

Instability of big markets in Eastern Europe

Negative media attention

Differences between generations

Competition with standard products

Limited distribution

Threats

Opportunities

Holistic health & clean eating

Avoidance of chemical products

Positive media attention

Ageing population

Sexual health in Eastern Europe

Stress, busy lifestyles boost up sales

New product innovations



Strategic thinking and creative solutions

Effective communication strategies

Product diversification – a supplement or a medicine?

Interest towards clean/natural/healthy products continues

Things to consider

LOOKING AHEAD


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expo milan_final presentation_september 2015

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