siaceutical nsights

http://www.herbridge.com · 1Asiaceutical Insights / 10th Issue 2017

Quarterly siaceutical

Building Health Bridge Between Asia and the World 10th Issue nsights

Media

2 · http://www.herbridge.com 10th Issue 2017 / Asiaceutical Insights


CONTENTS10th Issue 2017

4 Asia Nutrition Industry Newsflashes:

10 China Consumer Spending $29 Billion on Health Food Annually

12 Japan Health Food Markets Classified on the Basis of Functional Claim, the Market Size of Intestinal Tract Regulation and Obesity Prevention and Oral Health are Expanding

14 Market Views for Milk Thistle Extract(Silymarin)2017

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Herbridge Media Co;Ltd

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16 Prebiotics inulin, creating a new world for snacks

19 Luo Han Guo(Monk Fruit) Extract—— Hypoglycemic Star

22 What are the challenges faced by FSMPs (Food for Special Medical Purpose) in China?

27Yunnan Aims to Create a “Healthcare Products Kingdom”

28Beverage Companies Step on the “Healthy” Route, Wahaha & Master Kong Taking the Lead

30China Pharmaceutical Enterprises Transform to Healthcare Products Manufacturing

31Jingdong has once again bagged two Australian brands: targeting health care and meat products!

32Mannatech established cross-border E-commerce platform in China

32BigStylist, an India beauty care O2O platform, plans to collect $400 million through financing

33VIPSHOP holds hands with Blackmores

33Marriage of Global and Jamieson promotes a younger health care market?

34Beijing Consumers Association: cross-border E-commerce has become a severely-afflicted area for sales of counterfeit health care food products

35Jamieson health care products settled in Vipshop

36CFDA released Detailed Regulations for Health Food Products Registration


Asia Nutrition Industry Newsflashes:

Shandong Dong-E E-Jiao Healthcare Operating Revenue Reached ￥700 Million

Dong-E E-Jiao (000423) released its performance as of

2016. During the reporting period, Dong-E E-Jiao’s gross

revenue increased by 15.92% on year-on-year basis, realizing

about ￥6,317 million; and its net profit saw a year-on-year

growth of 14%, reaching ￥1,852 million. Its subsidiary

Shandong Dong-E E-Jiao Healthcare Products Co., Ltd.,

mainly engaged in manufacturing and marketing of healthcare

products, reached ￥714 million of operating revenue in 2016.



CR Pharmaceutical Launch Healthcare Products in 2017

In 2016, CR Pharmaceutical realized ￥8,981 million of

operating revenue with a year-on-year growth of 13.69%; whereas

the net profit decreased by 4.11% on year-on-year basis, realizing

￥1,197 million. Among which, the operating revenue of the self-

diagnosis field relying mainly on OTC and business relevant to

comprehensive health reached ￥4,689 million with a year-on-year

growth of 7.06%. One of the key measures that the company plans

to take in 2017 is to make vigorous efforts in the comprehensive

health industry, including developing the healthy products extended

on the basis of the core therapy area such as ginger tea with brown

sugar, peppermint candy, etc., the mainstream dietary nutritious

supplements in the healthcare product market such as vitamins

and minerals, etc., as well as tonic herbal medicine and the herbal

medicine can be taken as both a food and medicine etc. based on

traditional medicinal materials.

JZJT Pharmaceutical’s Revenue from Healthcare Products Decreased by 20%

In 2016, JZJT (600750)’s operating revenue decreased

by 39.87%, realizing ￥1,562 million; whereas its net profit

reached ￥380 million with a year-on-year growth of 3.47%.

Regardless of the impact brought by the external transfer

of Jiangxi Jointown Pharmaceutical in 2015, the operating

revenue decreased by 12.09% on year-on-year basis.

Among which, the area of “healthcare food and others”

relying mainly on Chuenu series and Shenlingcao Oral Liquid

etc. realized annual operating revenue of ￥240 million which

decreased by 23.33% year-on-year.

Yiling Pharm Realized ￥3,800 Million of Annual Revenue in 2016

Yil ing Pharmaceut ica l

(002603) published its annual

report of 2016. In 2016, the

company realized an operating

revenue of ￥3,820 million with

a year-on-year growth of 19.95%; and its net profit saw a year-

on-year growth of 25.91%, realizing ￥542 million.

The company showed that, it has developed a series

of healthcare food and nutritious health food aiming at the

medicinal and edible plant nutrition area, children nutrition

area and sub-health area, providing the rich product reserve for

the company’s sustainable development in the future.

Shanghai Pharmaceuticals Got ￥120.8 Billion Revenue in 2016

Shanghai Pharmaceuticals

(601607.SH; 2607.HK) released

its performance report of 2016. In

2016, Shanghai Pharmaceuticals

realized an operating revenue of

￥120,765 million with a year-on-year growth of 14.45%; and its

net profit saw a year-on-year growth of 11.10%, reaching ￥3,196

million. After entering the comprehensive health area through

international M&A, the company has completed the privatization

project of the Australian listed company, Vitaco Holdings Limited

(“Vitaco”), and acquired 60% stock rights of Vitaco at the cost

of ￥930 million in cash. The acquisition was a key measure

for Shanghai Pharmaceuticals to enter the comprehensive

health industry, which not only brought the company the future

revenue from the industry development, but also promoted the

international development of the company.


6 · http://www.herbridge.com 10th Issue 2017 / Asiaceutical Insights6 · http://www.herbridge.com 10th Issue 2017 / Asiaceutical Insights

Harbin High Tech Realized ￥6 million from Healthcare Products

Annual performance of Harbin High Tech

(Group) Co., Ltd (600095) in 2016: the company

showed a 3.92% year-on-year decline in operating

revenue which realized ￥254 million; its net profit

reached ￥15,377,300 with a year-on-year growth

of 5.49%. In the area of soybean deep processing,

healthcare products realized ￥5.99 million of revenue

which accounted for 2.36% of the company’s gross

operating revenue, and gained ￥710,000 of net profit.

In 2016, for the sake of integration of resources and

complementary of advantages, Harbin High Tech

integrated the business of its soybean food subsidiary

and nourishment subsidiary. After the integration, in

the area of soybean deep processing, the company,

based on producing existing isolated soy protein

products, developed a series terminal products taking

isolated soy protein as the raw materials and “Su Mei

Liang” (respectively means simple, beautiful and

pretty) as the brand.

CR Pharm Operating Revenue from Nutr i t ional Heal thcare Products Increased by 40%

2016 annual performance of CR Pharmaceutical

(03320): the company gained HKD156,705 million of

revenue with a year-on-year growth of 6.9%; and it saw

a 1% year-on-year decrease in net profit which realized

HKD2,821 million. Among which, the revenue from

nutritional healthcare products reached HKD524 million

with a year-on-year growth of 37.1%, mainly due to the

increasing market requirement of nutritional healthcare

products and the enhancement of terminal promotion.

North China Pharmaceutical Gained ￥8 Billion of Operating Revenue

North China Pharmaceutical (600812)

released its 2016 annual performance: the

company saw a year-on-year growth of

2.28% in operating revenue, realizing ￥

8,082 million; and gained a net profit of

￥54 million which decreased by 13.42% on year-on-year basis. Among

which, the operating revenue from vitamin and nutritional healthcare

products saw a year-on-year decline of 13.54%, realized ￥229 million.

The subsidiaries Hebei Welcome Pharmaceutical Co., Ltd. and North

China Pharmaceutical Victor Co., Ltd. started to remove and halted the

production in 2015 as required by the government, thus the company’s

revenue from vitamin decreased greatly; the general pharmaceutical

factory started to remove and halted the partial production as required by

the government in 2016, giving rise to the sharp decrease in the revenue

from chemical raw medicine and nutritional healthcare products.

Baiyun Mountain Launch Probiotic Products for Children

2016 annual performance of Baiyun

Mountain (600332): the company realized

￥20,036 million of operating revenue with

a year-on-year growth of 4.76%; and the

net profit decreased by 15.97% on year-

on-year basis, realizing ￥1,508 million. The company possesses four

business areas, among which the area of comprehensive health is mainly

engaged in production, R&D and marketing of drink, food, healthcare

product, cosmeceutical and other products and the main products include

Wanglaoji Herbal Tea, ganoderma lucidum spore oil capsule, lozenge,

turtle jelly, etc. In 2016, its business of comprehensive health achieved ￥

7769 million of operating revenue with a year-on-year growth of 0.01%.

On March 12, Wanglaoji Pharmaceutical announced that it would conduct a

strategic cooperation with DuPont USA in the area of probiotics in terms of

technology, supply chain, market, etc., including launching “Three Dolls”

active probiotic products for children which were divided into two series:

products for children aged from 0-3 and from 3-12.


Kingdomway Terminated the Acquisition of Shenzhen Youkeshu

Previously, Kingdomway announced

that its company shares were suspended due

to planning of the major issue, namely the

acquisition of 100% stock share of Youkeshu,

the enterprise listed in the New OTC (Over

the Counter) Market. On March 12, the

company received the letter of terminating the

transaction signed by the actual controller

Xiao Siqing from Youkeshu, showing

that Xiao Siqing decided to unilaterally

and irrevocably terminate the transaction.

Therefore, Kingdomway decided to

terminate the planning of this major issue

and not to plan for the acquisition of assets

within one month.

Infinitus Hired Winner of Nobel Prize as Science Consultant, Paying Much Attention to Herbal Medicine

activities, such as anti-infection, anti-

tumor, anti-inflammation, anti-aging, etc.

Prof. Jules A. Hoffmann was once

elected as a member of academy of

sciences of several countries such as

America, France, Germany, Russia, etc.,

and he discovered Toll-like receptors

where are of vital importance to innate

immunization. This revolutionary

discovery provided a basis for the

understanding of the innate immunization

activating the adaptive immunization

and found a new path for the prevention

and treatment of major diseases relevant

to immunization. Hence, Prof. Jules A.

Hoffmann was awarded the 2011 Nobel

Prize in Physiology or Medicine.

The team led by Prof. Jules A.

Hoffmann is subordinate to the supreme

scientific research institute of France –

French Academy of Science. The team

is a strong performer in the research

of the innate immune system, mainly

studying the innate immune resistance

and recovery mechanism during the

process of fungal and virus infection

and paying attention to the study of

transformation from model organism to

human body and its application.

Prof. Jules A. Hoffmann found

in studies that, China has a history of

Chinese herbal medicine for thousands

of years, and the fast development

of the modern immunology theory

and t e chno logy i n r ecen t yea r s

also provides a technological and

methodological reference for the

modern immunopharmacology research

of Chinese herbal medicine. Serving

as an eminent expert of the research

area of immunization, Prof. Jules A.

Hoffmann showed to the reporter:

nowadays, Chinese herbal medicine’s

effect is attracting increasing attention,

and the important role of herbal

medicine in regulating the immune

system has drawn the interests of the

global academic circles.

On March 6, the French winner

of 2011 Nobel Prize in Physiology

or Medicine Prof. Jules A. Hoffmann

received the invitation from Infinitus

(Ch ina ) Co . , L td . and began to

serve as a Science Consultant of the

company. Both parties will promote the

transformation of basic immunological

research into application of health

products based on Chinese herbal

medicine, so as to provide consumers

with health products with better effects.

Increasing studies show that a

lot of Chinese herbal medicine and its

chemical components have distinctive

immunoregulatory activity. For example,

polysaccharide extracted from Chinese

herbal medicine can activate through

TLR the important immune cells from

the innate immune system – dendritic cell

and macrophage, and thus activate the

innate immune system of the organism

and regulate the adaptive immune

system, showing multiple biological

French Winner of Nobel Prize in Physiology or MedicineProfessor Jules A. Hoffmann


China Consumer Spending $29 Billion on Health Food Annually



Published by Beijing Daily: the

2017 Top Health Industry Trends and

Issues released by PWC a few days ago

showed that, in the comprehensive health

and relevant industries, the China market

is a Blue Ocean Market, which is still

small in comparison to the global market

size of USD1,490 billion; however, the

China market has been increasing rapidly

at annual double-digit growth in recent

years, and the market size is estimated to

reach USD80 billion in 2020.

N u t r i o l o g y i s b e c o m i n g

increasingly important in the field of

comprehensive industry. At present,

health food consumption of the China

market has reached RMB29 billion

annually. Data further shows that, China

consumers are willing to pay 30% of

product premium or even higher for

healthier and superior food. However,

merely claiming that the product is a

“healthy food” cannot attract consumers,

and China consumers are more likely to

trust manufacturers’ qualification and

the products of big brands.

O n t h e o t h e r h a n d , m a n y

problems exist in the t radi t ional

health-seeking and medical payment

process of domestic hospitals, such as

the complicated payment links, slow

payment speed, etc. In recent years,

people have been exploring optimum

proposals for the medical payment

system, and the new modes of payment

represented by mobi le payment ,

hospital patient ID card and social

security IC card have emerged as the

times require. But the appearance of

these new modes of payment is also

accompanied by several problems. For

example, lacking the overall planning

and coordination mechanism of the

cross-hospital payment system, “one

card for one hospital” brought patients

inconvenience when seeking medical

advice; the coexistence of multiple

payment modes in one hospital caused

pressure for information integration

and system coordination; besides, the

independent construction of the third-

party payment platform in cooperation

with the hospitals lacks of unified

management, showing security risks.


Japan Health Food Markets Classified on the Basis of

Functional Claim, the Market Size of Intestinal Tract Regulation and Obesity Prevention and Oral Health are Expanding

Japan health industry professional media ‘Health Industry

Magazine’ released investigation of Japan health food markets

classified in accordance with raw materials, and released the data of

the size of the top 15 markets with different functional claims, such as

“regulation of intestinal tract · intestinal environment”, etc.

The market of ‘regulation of intestinal tract · intestinal

environment’ ranking first by size increased greatly in comparison

to the last year, reaching JPY550 billion. The market of ‘obesity

prevention · losing weight’, ‘improvement of looks · skin care’

and ‘decayed tooth · oral cavity’ also saw a rapid growth.

However, the market of ‘joint · preventing inflammation’ and

‘vigor · nourishing the body’ didn’t see an obvious growth.

In 2015, the market of ‘regulation of intestinal tract

· intestinal environment’, which ranked first in the market

classified on the basis of functional claim, reached JPY550

billion. What promoted the market development were the relevant

products (including processed food) of lactic acid bacteria and

Bifidobacterium. Especially, the market of lactic acid bacteria

has formed the size of JPY510 billion. Consumers’ awareness of

intestinal health has improved and lactic acid bacteria has become

easily bought and eaten, and its relevant commodities have also

become the driving force of the entire market of health food.

The market ranked second was ‘overall body balance’,

including green juice, plant fermentation extract (enzyme),

nucleic acid, vitamin, healthy vinegar, etc. Benefiting from the

expansion of the tourists’ “explosive shopping” market since

2014, the market of ‘body balance’ has maintained a rapid growth

and reached JPY317 billion.

Both the market of ‘obesity prevention· losing weight’,

which ranked third with JPY160 billion, and ‘improvement of

looks · skin care’, which ranked fourth with JPY146 billion, have

seen a remarkable growth compared to the last year.



No.1 ‘regulation of intestinal tract · intestinal environment’

Market size: JPY550 billion

Principal raw materials: lactic acid bacteria, Bifidobacterium, etc.

No.2 ‘overall body balance’


Principal raw materials: green juice, enzymes, vitamin, black

vinegar, nucleic acid, etc.

No.3 ‘obesity prevention · losing weight’


Principal raw materials: meal substitutes, herb, partial amino

acid, etc.

No.4 ‘improvement of looks · skin care’


Principal raw materials: collagen, placenta extract, hyaluronic

acid, royal jelly, etc.

No.5 ‘joint ·preventing inflammation’


Principal raw materials: glucosamine, chondroitin sulfate, MSM,

type-II collagen, proteoglycan, etc.

No.6 ‘improvement of blood flow’


Principal raw materials: ginger, onion, natto, earthworm kinase,

etc.

No.7 ‘eye health’


Principal raw materials: blueberry, lutein, etc.

The market of ‘decayed tooth · oral cavity’ also increased greatly, ranking 13th with JPY35 billion. For the sake of preventing

consumers’ oral problems, there is increasing food favorable for oral health in the market. Besides the special protective food, the

requirement for tablet products based on plant extract is also increasing, which is inseparable from the formative market education of the

huge impact the oral health has on people’s physical health.

However, the market of ‘joint · preventing inflammation’ and ‘vigor · nourishing the body’ didn’t see an obvious growth,

maintaining basically the same as that of the last year.

No.8 ‘vigor · nourishing the body’


Principal raw materials: Lepidium meyenii, allicin, soft-shelled

turtle, etc.

No. 9 ‘diabetes prevention · blood glucose level’

Market size: JPY49.5 billion

Principal raw materials: Salacia chinensis, guava leaf, resistant

dextrin, etc.

No.10 ‘immunization’


Principal raw materials: mushrooms, bee glue, brown seaweed, etc.

No.11 ‘exercise · muscular strength’


Principal raw materials: albumen powder, partial amino acid

No.12 ‘liver function’


Principal raw materials: turmeric, ornithine, liver of pig, etc.

No.13 ‘decayed tooth · oral health’


Principal raw materials: xylitol, etc.

No.14 ‘brain health · mental health · sleep’


Principal raw materials: ginkgo leaf, PS, GABA, theanine, etc,

No.15 ‘blood pressure’


Principal raw materials: oligopeptide, etc.


Milk Thistle, which was launched

on the mainland since 90’s in last

centuryhas been around for 40 years. It

was introduced to the area of Hanzhong

in Shaanxi, Weinan and Panjin, liaoning

province by professor Huang Shouxing

worked in Xi’an Arboretum, and

succeeded in planting.

The processing of Milk thistle

extract is contacted by “Panjin Milk

Thistle Synthesizes Plant ”, “Jiangsu

Apocynum Factory ” and “Shaanxi Hua

County Shaohua Mountain Refinery

Factory ”, and at that time, the plant

area of Milk thistle is small, the farming

and harvesting are all artificial, planting

technology is not mature and the produce

capacity of the manufacturer is small,

less specifications of extract, also the

quality needed to be raised.

With 40 years effort, manufacturers

do a lot of work on the hi-tech innovation

and R&D, in the new situation of the

global promotion, the demand of Milk

thistle extract has greatly increased.

The milk thistle extract manufacturers

increased to at least 30 or more, most

of them distributed in Panjin, liaoning

province and Dongtai, jiangsu province.

The planting base of Milk Thistle has

transferred to Panjin area, Suihua area in

Hei Longjiang provice, and Hai la’er area

in Nei Menggu province. The planting

field management and harvesting has

realized the mechanization in this

period which improved the quality of

Market Views for Milk Thistle Extract(Silymarin)2017Wu Changjun, LIVERD PHARMA CO., LTD.


raw material and reduced the cost, thus,

the raw material can satisfy the need of

marketing and get relatively stable price.

The total quantity of raw material has

reached 35000 tons in 2016, the cultivated

area of 2017 will reach 50000 to 60000

Mu, estimated yield will be 40000 tons, the

quantity can totally meet market demand,

the price of the milk thistle extract will be

stabilized. If there is no natural

disaster in the plant base, the

price will be no big fluctuation

over two to three years.

Main Specifications for Milk Thistle Extract/Silymarin

According to the different

extract solvents used, Milk

thistle extract fall into three

classes: Silymarin extracted

by Acetone, Silymarin extracted by

Ethyl Acetate and Silymarin extracted by

Ethanol. Ethyl Acetate and Acetate are

the traditional extract solvents used in the

process of milk thistle extract producing.

Since 2008, Ethanol has applied to milk

thistle extracting, and technical progress

solved the problem of low content if use

ethanol to do extract, and till now, this

product has been widely used because of

its non-toxic and no side effects.

According to the standard, Silymarin

got from different extract solvents has

different contents and can meet different

pharmacopoeia requirements, such as EP,

USP, DAB and each specification with

different extract solvents running into

more than 30 contents.

Separation and purification of Silybin

As the new products continuously

developed, the market of Silybin is

increasing, and the contents can be done

from 75% to 99%.

Silymarin water soluble and Silybin

water soluble, can be absorbed by human

body fully and usually work better.

Nowadays, silymairn water soluble

series products have been developed and

launched, and has been widely used.

Price for Milk Thistle extractsThe price of raw material is the

main determinant for the milk thistle

extract, 2014-2016, the price of milk

thistle seeds has down from CNY 12000

- 13000 per Ton to CNY8500 - 9500 per

ton. The main reasons for falling prices

as follows:

The improvement of farming

techniques boosts yields and makes

lower cost.

The ac r eage i nc r ea sed , and

excessive production.

Development of down stream products

They basically separate into two

types, one is Drug for protecting liver,

and the other is health care products.

Develop in increments: Health-care

food and health beverage and so on.

Future market trends predicted2014-2016, the global demand of

Milk thistle extract is around 1000 Tons,

thereinto, in china, the domestic demand

is around 50 Tons. Within the next five

years, this demond will be growing by

about 10% to 15% annually. The price

of Silymarin will be in the abyss from

2017 to 2018, stability, has no lurches.

The price of raw material will

hover from CNY 8000 to

10000 per ton.

Application for Milk Thistle Extract

Milk Thistle Extract

play a role in protecting liver,

antioxidant properties and

anti fibrosis. It can protect

the liver cell from toxicant

substance abuse, especially

for ethanol and environmental pollutants

(Pesticides,Heavy Metals and so on);

Silymarin has the Powerful antioxidant

function to protect the liver cells from

free radical damage, and which of

function far exceeds VE; Silymarin

can promote protein synthesis, speed

up the new liver cells of manufacturing

or promote the injured liver cells of

self-repair. So, Silymarin is also be

named of “the Natural liver-protection

product”. Silymarin can resist radiation

and aging. In addition, Silymarin has

the abundant nutrition, for example: 15-

19% plant protein, 22-26% grease, 35%

dietary fiber and many Vitamin, mineral

substance. It is 100% plant extract with

no side or toxic effects, many new

products in the field of Medicine, Health

Products, Cosmetics and food have

been developed, broad prospects for

development.


Prebiotics inulin, creating a new world for snacks

For most consumers, probiotics is no longer a strange industry term,

and people’s awareness of the health benefits of probiotics is also constantly

improving. When it comes to the function of probiotics, the first thought

of most people is “intestinal health”, which has already been verified by

scientific experiments and researches. In fact, the function of probiotics is not

that simple, and its biggest role is to affect the balance of intestinal flora, the

imbalance of intestinal flora will induce a series of diseases, such as intestinal

disease (constipation, gastroenteritis, and diarrhea), immune health, diabetes,

angiocardiopathy, cognitive health, metabolic disease (adiposity), etc.

The reasons for the imbalance of intestinal flora are complex, including

lifestyle, eating habits, drugs (especially antibiotics) and age, etc., and how to


maintain the balance of intestinal flora has

become people’s focus of attention. As the

high-quality “food”, when people supplement

active flora, they pay more attention to the

intake of prebiotics. Prebiotics is not only

the food for intestinal probiotics, but also has

many physiological functions, such as increase

the original intestinal probiotics and activate

intestinal motivity, so people should pay

attention to the rational intake of prebiotics in

the daily diet.


Prebiotics inulin, creating a new world for snacks

active materials, and it is easily added

into dairy products, food and beverage

products without affecting the taste of

products, and the compound annual rate

of growth of this kind of product will

be the highest in the future. Let’s take

Chinese dairy products as example, the

products from milk powder (excluding

infants) to yoghourt, cheese, and ice

cream more or less are added with inulin,

the reason is that inulin has excellent

solubility, and its combination with water

can produce a fat-like taste and greatly

reduce the use of fat in products. The

most important is that inulin can improve

the absorption and utilization of nutrients

in dairy products, especially calcium. In

addition, the ice cream products have

very wide consumer groups, and the

application of inulin gives these products

a new growth point: low sugar and low

fat, and there will be more and more ice

creams containing inulin in the future

market.

Now bakery products are very

popular with the consumers around the

world, this trend also appears in the Asia-

Pacific region. The breakfast with milk

and bread begins to be popular in China,

especially in the big cities with fast pace

of life. Relevant data has shown that the

number of consumed bakery products

per capita per year in China is 92, which

is much lower than Germany’s 731

per capita, the change of lifestyle and

westernization of eating habits promote

the development of bakery products in

China. The application of inulin fiber

can replace the use of some sugars and

fats, and in general, 0.25g of fat inulin

can replace 1g of fat, and also increase

the fluffy texture and taste of bakery

products, especially the bread products.

Low fat and high fiber are the future

trends of bakery products, and the

application of inulin fiber can solve this

problem.

The role of inulin is variable from

dietary fiber to prebiotics and then to

natural sweetener, it has a faint sweet

In the big family of prebiotics,

“inulin” can be the most shining

member, because it has the properties

of dietary fiber and prebiotics. Inulin

belongs to oligosaccharide, it is not

hydrolyzed by gastric acid or absorbed

by small intestine in human body, but

it is directly fermented by the action

of microorganisms in large intestine,

and it has the functions of preventing

constipation, lowering cholesterol,

lowering blood glucose, controlling

appetite, promoting mineral absorption

and improving intestinal health. Recently,

the Research Center of University

of Newcastle in Australia has first

discovered that inulin fiber can relieve

the symptoms of asthma and reduce

inflammation phenomena of respiratory

passage through acting on intestinal

flora, which undoubtedly opens up a new

application area for prebiotics inulin.

Inulin, better matched with snacks

At present, snacks have changed

from the embellishment food in life into

a kind of necessity, and they are rapidly

increasing in the world, for example, the

majority of consumers in the West have

treated snacks as dinner. At the same

time, consumers have more requirements

on snack products, and they show more

interested in healthy, natural, nutritious

snack products, so the emergence of

prebiotics and inulin provides a practical

solution to this demand.

From the perspective of application,

the most widely applied field of inulin

is food & beverage, followed by dietary

supplement and animal feed. The

characteristics of inulin are stable, so

there is no absorption problem of other


taste, its heat is only half of the sugar,

and it does not cause an increase in

blood sugar. “Reduce sugar” is one of

the trends in food industry, and many

product developers are in the demand

for natural sweetener, inulin fiber

can replace the use of some sugars in

products without affecting the taste

and sensory quality. Meanwhile, two

experiments conducted by researchers

of Oxford Brooks University show that

food containing inulin can reduce blood

glucose response, prevent and reduce

the risk of chronic metabolic disease. In

addition, inulin can also be mixed with

other natural sweeteners, for example,

mixing with sugar stevia leaf can cover

the delayed bitterness.

Inulin, unwilling to be the “minor role”

Transparent Market Research

Market Report shows that inulin market

capacity in 2011 is 204 thousand tons,

market value is 890 million dollars, and

its market capacity is expected to reach

366 thousand tons in 2018, and market

value will reach 1 billion 870 million

dollars, and the compound annual rate of

growth is 11.1%. Inulin can replace sugar

and fat in food, especially the processed

food and functional food, and it has

become the “popular minor role” in food

world.

Trans-boundary is one of the trends,

the inulin unwilling to be the “minor

role” also begins trans-boundary, and

tries to mix and match with a variety

of natural functional ingredients to

maximize its own health advantages,

of course, this shall depends on the

research & development and innovation

of terminal enterprises. At present,

Chongqing Joywin Natural Products Co.,

Ltd has tried to develop the products

with inulin as the “leading role”, hoping

to push it to the position of leading role.

As China's largest production base

for Jerusalem artichoke and inulin,

Chongqing Joywin starts the layout of

big health industry chain with strong

technical advantage and advantage

of comprehensive control on plant

materials, and now it becomes an

excellent raw material manufacturer

of natural products in China, such

as inulin and plant protease, and it is

forming a new pattern covered by the

whole industry chain from raw materials

to terminal. In the future, Chongqing

Joywin will promote the application of

inulin to broader and deeper fields with

its own advantages.


Luo Han Guo(Monk Fruit) Extract —— Hypoglycemic Star

Monk Fruit, as one of Chinese endemic and first approved by the state,

medicinal & edible protected plants, has over 300 years of history of cultivating

and using as Chinese Traditional Medicine in south of China. With many

functions such as clearing heat, moistening lung,relieving sore throat and relaxing

bowel. The fruit is rich in nutrition and known as "Oriental Magical Fruit". The

secret of sweet taste in Luo Han Guo - is from Mogroside V.,which is a natural

non-sugar sweet substance, its sweetness is 300 times than that of sucrose, no

calories, safe for eating, is an ideal sugar substitute and natural sweeteners.

Since Mogroside V came into the US market,

the products using it as a natural sweetener

showed explosive growth, and it has become a

new hot spot for growth of Food and beverage

industry in USA, with hundreds of billions

dollars of market development space.

In recent years, as the representatives

of the synthetic sweeteners,aspartame and

sucralose has been questioned for their

safety. Although EFSA had reevaluated

the harmfulness of aspartame in 2013,

the conclusion is: “Aspartame is safe for

consumers.”But it seems that consumers

don’t agree with it. With the improvement of

consumers' health consciousness, it has entered

the consumer's vision that Monk Fruit Extract,

which with double properties of healthy and

zero calorie, will definitely be welcomed by

the consumers,and will bring more sweet

feelings to everyone.

Hunan Huacheng Biotech, Inc.


promote health." Professor Gibb , the co-

leader of the research team also said that

the impact of levying sugar tax will have a

positive impact, particularly for children.

Not long ago, Pepsi announced that

they will carry out the most strict sugar

control plan in history. By 2025, Pepsi's

two-thirds of the calories of 12-ounce-

drinks(about 354 ml) will be controlled in

less than 100 calories. In January of this

year, Pespsi has just launched a high-end

water brand LIFEWTR, and also launched

another 2 new drinks -- "IZZE Fusions"

and "Lemon Lemon" in USA. These 2

new products are aim at healthy, not only

reduce the sugar but also give up using

artificial sweeteners. The main ingredient

is Stevia. It is learned that the R&D Dept.

of Pepsi is is actively exploring and trying

a new generation natural sweetener --

Monk Fruit Extract, which has a better

taste. It’s expected that it will come to the

market in the nearly 2 years.

In February 2017, Starbucks

spokesman also said that Starbucks has

promised this year, they will reduce

sugar content in their drinks by 25%

before 2020. And a type of green sugar

pack (this "natural sweet" sweetener is

a combination of Stevia and Monk Fruit

Extract) has emerged as a new option in

9000 stores of Starbucks in America and

Canada.

In 2017, Nestle announced that the

sugar content of confectionery products

in UK and Ireland will be reduced 10%,

including Kit Kat, Aero, Milkybar and

other hot selling chocolate sugar. While

reducing sugar content in the food

formulations, Nestle is also looking for a

much better “new sugar”. By the end of

2016, Nestle invented a new

type of sugar formula, under the

premise of not changing its taste, its

sugar content can be reduced by 40%

maximum, and it’s expected to be used

in Nestle food in 2018 or so.

As the representatives of the new

generation of zero calorie, pure natural

sweeteners, Stevia Extract and Monk Fruit

Extract are favored by more and more big

companies. It’s learned that during the

period of 2015-2016, American market

has more than 1000 kinds of new products

which have used Monk Fruit Extract.

Nestle and Tesco, as the representatives

of the European big companies are also

actively exploring new product lines.

It’s speculated that Nestle will become a

pioneer and practitioner in promoting the

improvement of EU regulations, and will

become one of the first European food

companies to use Monk Fruit Extract to

reduce sugar!

Monk fruit extract, as a high

sweetness, low calorie, pure natural and

Governments and people gradually

realize that the harm of excessive sugar

intake, so some governments have taken

measures to control the sugar intake. As

per the reports, due to Thai people's sugar

intake ranking in the world, with high

prevalence of obesity and cardiovascular

disease, the medical expenses are

increasing, Thai government decided to

levy sugar tax, and the prices of sugary

drinks will rise by about 20%, i.e. levy

sugar tax on those companies whose

sugary drinks exceed certain standards(6

grams of sugar per 100 ml) to curb the

excessive sugar intake. The retail prices

of soft drinks or fruit drinks and other

drinks will rise about 20% to 25%.

Now, Mexico has also implemented

levying sugar tax to effectively reduce

the sale of sugar-containing beverages.

In the United Kingdom,they also plan to

implement it in April 2018. Philippines,

Malaysia and Indonesia of the Asian

countries are also interested in following-

up it. If Thailand is the first one to levy

sugar tax, it will be the first country to do

so in Asia. Professor Briggs of Oxford

University said that the impact of sugar

tax on people's health, depending on what

measures will be taken by the relevant

enterprises. "The good news is that our

research shows that all the measures may

taken by the companies are helpful to


healthy sweetener, has been allowed to

be used as food additive by USA FDA

from 2009, the global demands and

the online search frequency are rising

sharply.

(The images is from Google Trend).

The comprehensive influence of

global sugar reduction and clean label

trends have better promoted the wide

use of natural sweeteners like Monk

Fruit Extract and Stevia Extract. Among

which, the global demands of Monk

Fruit Extract is growing at an annual rate

of 5%. According to the Euromonitor

Global Overview Report company’s

prediction, the global yield of Monk

fruit will be more than 300 MT(based

on Mogroside V 50%) in 2017. China

is the largest production and export

country,while 90% of Monk Fruit Extract

will be exported to USA and Japan. The

Innova data shows that around 50%

of their products will contain Stevia

Extract and Monk Fruit Extract in USA.

The Customs Export Data show that

USA imported about 50 million USD of

Monk Fruit Extract in 2014 and about

55 million USD in 2015, with a year-

on-year growth of 10%. In China, the

national standard of Monk Fruit Extract

Mogrosides V 20% (GB1886.77—2016)

has been issued on Aug 31st, 2016 and

has carried out formally on Jan 1st, 2017.

Chinese market will become the huge

cake for Monk Fruit Extract market.

Monk Fruit Extract hasn’t been allowed

to be used as a sweetener or food

additive in Europe, Australia or other

countries, but with the health concept

of natural sweeteners and consumers’

demands for natural health, we believe in

the next few years in these regions and

countries,related laws and regulations on

Monk Fruit Extract will be recognized,

and its market is immeasurable.

With the development of living

standards, organic products are favored

by more and more manufacturers

and consumers, the global 1st and

unique Crganic Certificate for Monk

Fruit Extract has been obtained by

Hunan Huacheng Biotech,Inc(HC) in

2016. Currently, there are still some

manufacturers worrying about the supply

of its raw materials. Monk Fruit was

originally planted in Guilin, Guangxi

in China, the suitable planting areas are

only about 0.3~0.4 million Mu. To this

problem, HC said:“The growth of Monk

Fruit is indeed difficult, but after 5 years’

trial and large-scale planting, HC has

enlarged another 6 million Mu of suitable

areas in 14 districts adjacent to Guilin,

which equivalent to the raw materials

required for similar sweetness for 1500

MT of sugar”.

With the explosive growth of Monk

Fruit Extract consumption, Monk Fruit

Extract has been the new hot spot in the

new type of healthy food and beverage

industry’s growth at home and abroad

with the sharp increase of its consumption.

The domestic production enterprises

are now facing a severe test, although it

possesses an unprecedented opportunity.

Reducing the cost and improving the

quality of Monk Fruit Extract sweeteners

becomes the most important challenge.

Now,most of the main producers are

expanding planting areas,improving

the production efficiency,optimizing

varieties,using biological pesticide,no

pesticide residue to improve and develop

Monk Fruit’s value. They are also

focusing on research and development

of terminal product formulations to

provide customer solutions. Besides,

developing other sweetless ingredients

in Monk Fruit (dietary fiber,pectin,etc.)

is an important trend in future. Sewerage

drainage was reduced by recycling Monk

Fruit residues. Monk Fruit sweetener will

bring a new climax once the European

market open.


What are the challenges faced by FSMPs (Food for Special Medical Purpose) in China?

In China, the application of FMSPs has been more than 30 years, and

the gross output value of domestic FMSP market increased from RMB

120 million in 2004 to RMB 2 billion in 2015. National Health & Family

Planning Commission of P.R.C. released GB 29922-2013 National Food

Safety Standard: General Rules for FMSPs and other relevant normative

standards. However, the current development of FMSP industry is still

insufficient, especially the lack of systematic research on this industry.

Through the utilization of the framework for industry innovation system, this

paper analyzes the current situation of FMSP development promoted by local

enterprises in China, and the development of local research institutions and

policies, hoping to provide suggestions for FMSP development in China.

Summary of the proportion of Chinese-funded enterprises and foreign-

funded enterprises

Foreign-funded enterprises:

A number of multinational companies, including Nutricia Pharmaceutical

Co. Ltd., SSPC (Sino-Swed Pharmaceutical Corp. Ltd.), Abbott Laboratories,

Nestle Corporation, have monopolized more than 90% in the domestic FMSP

market. Most of the products of these companies are marked with “OTC”,

including a total of 69 domestically registered products, and 19 categories

involved. The products introduced into China are mainly developed around

1980s. In addition, Abbott “full ansul” has been marked as a new standard

FMSP and the pilot sale has started. Both Nutricia and SSPC have large-scale

production bases established in Wuxi, Jiangsu of China, their products are

available for use abroad, yet their R&D departments are not within China.



Table 1 Basic situation of foreign FSMP in China

Company name Year of entry Ownership system Main products

SSPC (Sino-Swed Pharmaceutical Corp. Ltd.) 1982 Joint venture Fresubin Energy Fibre, Fresubin, Suppor-tan, Fresubin MCT 750, Fresubin Diabetes

Ajinomoto Pharma Co.,Ltd. 1984 Wholly foreign-owned Elental

Novartis Pharma AG 1996 Joint venture Impaet

Abbott Laboratories 1998 Wholly foreign-owned Jevity, Ensure, Gluerna SR®, Pulmocare

Nutricia Pharmaceutical (Wuxi) Co. Ltd. 2000 Wholly foreign-ownedNutrison Fibre, Peptisorb Liquid/ Powder, Diason®, Nutrison MCT, Nutrison, Neo-

cate

Nestle Corporation - Wholly foreign-owned Nutren,Vivonex

Note: Mark“-”means that the year of entry remains unclear

mainly used in nutriology departments

of various hospitals. At present, due to

the late entry time into industry, most of

domestic enterprises mainly imitate foreign

products, and they share such common

characteristics as small market share, small

proportion of independent intellectual

property rights, lags in technology, small

investment, and lack of brand influence.

However, it is worth noting that some

progresses of new product developments

have been made in some local enterprises

since the promulgation of new national

standards. For example, Compound

Nutrition Suspension and Enteral

Nutritional Suspension newly developed

by Shanghai DAISY FSMP have received

the approval number approved by SFDA.

Domestic enterprises:Domest ic enterprises mainly

comprise Qingdao Haihui Biochemical

Pharmaceutical Co., Ltd, Guangzhou

Liheng Clinical Nutrition Co., Ltd.

and other enterprises, accounting for

about 10% of domestic market. Product

approvals of these enterprises are marked

with “Health care food product” and

Table2 Basic situation of representative enterprises in China

Company Year of establishment Ownership system Main products

Qingdao Haihui Biochemical Pharma-ceutical Co., Ltd. 1958 Limited liability company

(private) Compound Nutrition Suspension

Xi' an LI BANG Clinical Nutrition Co., Ltd. 1999 Company limited Leskon in-house products

Shanghai Richen Nutrition Products Technology Co., Ltd. 1999 Company limited Richen compound nutrient supplement

Zhejiang Hailisheng Biotech 2000 Limited liability company (private)

Homogenized diets/Fish collagen poly phthalocyanine/ Deep-sea fish collagen

powder/Dedicated for hospitals

Guangzhou EnterNutr Bio-Technology Co., Ltd. 2008 Company limited

Enternutr compound protein powder/ Enternutr homodiabet/Semi-Digested/ Enternutr Peptide/Enternutr Homoge-

nate/Enternutr whole/GLN/FIBER/OLIGO/

Guangzhou BOSSD - Enterprises directly under Sanjiu Group

Homogenate diets/ TRENSINE Composite Strengthening Nutrition

Powder

Daisy FMSPCompound 2013 Company limited Vegetable Protein Peptide Composite

Note: Mark“-”means that the year of entry remains unclear


Hubei, Zhejiang, Jiangsu, Shandong and Beijing, and some progresses have been

made. At present, FMSP developments of China are mainly in its early stages. FMSPs

mainly provide nutritional support for patients and closely related with clinical uses.

However, FMSP-related clinical and basic research data in China are inadequate.

More relevant researches are still needed as to whether newly-developed products can

be more suitable for clinical applications and patients in China.

Domestic enterprises in China have also begun to try to cooperate with

scientific research institutions for joint product developments. For example,

Guangzhou Liheng Clinical Nutrition Co., Ltd versus Institute of Sericulture and

Agricultural Products Processing, Guangdong Academy of Agricultural Sciences;

Tianjin Zhongen Technology Co., Ltd versus Institute of Biophysics, Chinese

Academy of Sciences.

Table 3 FMSP-related Research institutions

Location unit (institutions) Research contents

BeijingCFSA (China National Center for Food Safety Risk As-

sessment)Institute of Nutrient Source

Researches on FMSPs standard and management

Beijing Sun Yat-sen Hospital Analysis and development of FMSPs Clinical effect

Guangdong Province SYSUWuhan Tallyho Biological Product Co., Ltd. comparisons of specific FMSPs

Hubei Province Hubei Peptide Material Engineering Technology Research Center

Prospect researches on the application of foodborne peptides in FMSPs

Zhejiang ProvinceBeingmate Baby & Child Food Co., Ltd.

Zhejiang Key Laboratory of Chemical and Biological Processing of Agricultural Products

Domestic and foreign researches on standards for FMSP infant formula foods

Jiangsu Province Wuxi Jiante Pharmaceutical Co., Ltd.Using the flame atomic absorption spectrometry to research on the determination of interference and elimination of potassium and sodium in FMSPs

Shandong Province Baolingbao Biology Co. Ltd.Research Institute of Agricultural Products,

Researches on the application of dietary fiber in FMSPs

Shandong Province Shandong Academy of Agricultural Sciences Current situation of FMSP industry

Analysis of products and research institutions

FMSPs mainly comprise amino acid

pattern, short peptide pattern and intact protein

pattern. There are balanced type and disease

specific type if classified by types, and there

are diabetes type, tumor type, burn type,

liver disease type and kidney disease type

if classified by disease specific types. In the

current domestic market, FMSP products from

foreign-funded enterprises mainly comprise

intact protein type enteral nutrition agents, i.e.

Nutrison Fibre, Nutrison, Supportan, Fresubin

Diabetes and Anso, short peptides and

amino acids types, i.e. Elental, Peptison, and

Peptisorb, and disease specific preparations,

i.e. Fresubin Diabetes, Diason and TP HE

mainly used for people with diabetes. The

product types of domestic enterprises basically

follow that of foreign-funded enterprises.

Currently, FMSP-related researches and

product developments have been conducted by

scientific research institutions in Guangdong,


Policy environment is closely

related to the development of medical

food industry. Looking back the

developments of FMSP-related policies

in China, we can mainly divide them into

the following three stages.

Stage I (1970-2000): Initial stage

of policy. At this stage, along with the

development of clinical nutrition, there

are some knowledge about the clinical

effect and social value of FMSPs. For

example, there are reports on the clinical

applications of FMSP in Beijing, China

in 1974. In 1980-1990s, the unique

position of nutrition and specialty in

medical health system was clearly

proposed.

Stage II (2002-2009): Stage of

gradual attention: In 2002, Chinese

Medical Association took the initiative

to classify FMSPs, while government

agencies began to gradually clarify

their health insurance policies. In 2006,

the importance of correct nutrition

consumption on health was clearly

proposed in the Action Plan for Chinese

Nutrition Improvement. Moreover,

guidance scheme for systemic parenteral

& enteral nutrition was formulated in

Clinical “Guidance” Series for Systemic

Parenteral & Enteral Nutrition, which

assisted physicians in considering the

adoption of appropriate nutritional

support program and corresponding

operation specification for parenteral

& enteral preparations according to the

patients’ clinical conditions.

During this period, China reflected

certain requirements for technologies and

functions of FMSP, and also pointed out

problems brought about by unmatched

policy packages, which provided the

scientific basis for the adjustment and

perfection of FMSP-related policies.

Stage III (2009-2015): Stage of

policy refinement. The “food” identity

of FMSPs was specified in the new Food

Safety Law. Before that, FMSPs were

managed according to the chemical drug

registration management prescribed in

the State Pharmaceutical Administration

Law, which affected the product

development of FMSPs in China and

also restricted the entry of products from

foreign-funded enterprises.

In order to solve the problems

arising from product developments

and clinical demands, National Health

& Family Planning Commission of

P.R.C. put forward the “2 + 1” standard

management program. State Food &

Drug Administration also released the

Regulatory Measures for the Registration

of FMSPs (trial implementation), so

as to provide institutional guarantee

and technical support for control and



Secondly, foreign companies dominate the market, and local enterprises

are facing barriers to entry. At present, foreign brands have occupied a dominant

position in the market, while domestic brands account for only about 10% of

the market. More local enterprises want to enter the FMSP industry, but they

have to face with all kinds of difficulties. As a result, the majority of enterprises

hold the attitude of wait-and-see. In particular, new entrants need to re-establish

a production line in conformity with relevant provisions of food production,

and also need for more investments in test and inspection, which means a huge

challenge for domestic enterprises.

Thirdly, at present, the relevant national policies, regulations and standards

are still imperfect, and such links as product

approval and regulation of production and market

are not standardized. Although the newly-released

standards allow consumers to make a major shift

in the understanding of FMSPs, and also define the

distinction between functional foods and health

care products, yet sports food, health food or

functional food are still included under the FMSP

directory of some enterprises, which shows that

many efforts in policy implementation are still

required during the fulfillment and enforcement of

new standards.

In addition, the health-seeking behaviors

among people and the mindset in doctors’

treatment also affect the application of FMSPs. On

one hand, it is still difficult for doctors to accept

products under the name of “food”. On the other

hand, the treatment conception among patients

also tends to be dominated by doctors. i.e. too much

emphasis on drug treatment, with negligence of the role of FMSPs in treatment

and rehabilitation. Moreover, FMSPs can’t be supplemented into the medicare

system, and consumers can’t be reimbursed, which is also an influencing factor.

It is precisely because of the above problems that FMSP developments in

China still lag behind the developed countries in Europe and the U.S.A. In view

of the huge population and the increasing demands for nutrition and health,

FMSPs are sure to have a very good prospect in the future. FMSPs are still in its

initial stage of industrial development in China, and it is required to start from

the perspective of industrial innovation system and make collaborative efforts

in terms of three aspects, i.e. knowledge & technology development, enterprise

& network construction, and policy construction. Only in this way, positive and

further development can be obtained in Chinese FMSP industry.

surveillance over FMSPs, enable the established

regulations to be in conformity with the law,

the realistic demands of regulatory authorities

and manufacturers, fundamental needs for the

quality safety of FMSPs, and clarify registration

conditions, enterprise production capacity,

clinical trials, etc.

Through the retrospective analysis of the

development of Chinese medicine formula

food industry, it can be found that there are

3 c ha l l enges i n t he

development of Chinese

medicine formula food.

First of all, limited

s c i e n t i f i c r e s e a r c h

suppor t and lack of

evidence-based medicine

h a v e r e s t r i c t e d t h e

industry development to

some extents.

F o r e x a m p l e ,

foreign brand products

sold in the market are

compounded by use

o f s ing l e nu t r i en t s ,

resulting in high osmotic

pressure, incompetence

fo r ga s t ro in t e s t i na l

tolerance among Chinese

people and easy occurrence of diarrhea

among patients. On the other hand, domestic

brand products are featured with low pre-

digestibility, scattered brewing and poor

nasal-feeding liquidity. These technical

problems have become obstacles for FMSP

developments in China. Furthermore, as

FMSP does not provide single physiological

function with clear direction, it is also difficult

to evaluate during the clinical trial stage.

Therefore, clinic should be coordinated with

scientific developments.

26 · http://www.herbridge.com


Yunnan Aims to Create a “Healthcare Products Kingdom”

Recently, Yunnan Province made a three-year action plan on the

development of Yunnan’s biological medicine and comprehensive health industry,

aiming to reach a prime operating revenue of around RMB380 billion as of 2020,

of which about RMB100 billion is to be realized in the manufacturing sector.

Yunnan will encourage the construction of a batch of R&D centers

specialized in healthcare food, domestic cosmetics for special purposes, etc.,

develop a series of healthcare food and domestic special-purpose cosmetics

and lay emphasis on R&D and production of a number of food with special

formula for medical purposes by taking the common varieties (such as pseudo-

ginseng, gastrodia elata, erigeron breviscapus, dendrobium nobile, Yunnan Paris

polyphylla, etc.) and the biological resources with Yunnan’s characteristics (such

as haematococcus pluvialis, Lepidium meyenii, horseradish tree, walnut, tea leaf,

flowers and plants, konjak, blueberry, etc.) as the raw materials, establish a batch

of brand-name products with Yunnan’s characteristics reaching a sales revenue

of over RMB1 billion, and promote health products of Yunnan to become the key

products spreading in South Asia and Southeast Asia, so as to build a good image

of “a Kingdom of Healthcare Products” for Yunnan.

Build a Raw Material Base of Natural Medicine and Health Products

In the next 5 years, Yunnan will make

vigorous efforts in promoting the construction

of the premium raw material base of natural

medicine and health products, lay emphasis

on improving quality and increase efficiency

of the standardized planting (cultivation) base

of Chinese herbal medicines, and strive to

develop new resources and medicinal varieties

in short supply, so as to build Yunnan into

a top raw material of natural medicine and

health products in China. Give prominence

to the advantages and characteristics, build

the “hometown of Yunnan medicine”, attach

importance to the research on seed source



Beverage Companies Step on the “Healthy” Route, Wahaha & Master Kong Taking the Lead

and construct a base of improved varieties,

foster the development of leading enterprises,

upgrade the raw material bases, focus on

promoting the large-scale development of

five traditional Chinese medicine common

varieties including pseudo-ginseng, erigeron

breviscapus, Yunnan Paris polyphylla,

dendrobium nobile and gastrodia elata,

develop varieties with medicine and food

dual purpose, and construct a comprehensive

park of traditional Chinese medicine. As of

2020, maintain about 8 million mu of planting

area and realize a prime operating revenue of

around RMB50 billion.

Construct the R&D and production base

of biological medicine and comprehensive

health products at a faster pace, give high

priority to the development of traditional

Chinese medicine (national herbal medicine),

give strong backing to the enterprises such

as Yuannan Baiyao, KPC Pharmaceuticals

and Longjin Pharmaceutical, build the

Kunming High-Tech Industrial Development

Zone into the largest R&D and production

base of medicine and healthcare products

of Yunnan Province, and construct a R&D

center of national herbal medicine focusing

on the medicine of the Yi, Dai and Tibetan

nationality. Make the existing biotechnological

pharmaceutical enterprises bigger and

stronger, and energetically carry out the R&D

and production of new biological vaccines,

antibody drugs, stem cell-based medicinal

products, biological detection reagent and

blood products as well as new products of

other protide, polypeptide and nucleic acid-

based drugs.

Recently, enterprises such as Coca Cola, Master Kong (Tingyi (Cayman

Islands) Holding Corporation) and Wahaha act vigorously in the area of “being

healthy and nutritious”. The functional beverage market in China is still

unsaturated, and comprehensive health has become the breakthrough point of

these enterprises.

Master Kong Makes Efforts in Developing Instant Nutritious Dairy Products

On February 10, Tingyi (Cayman Islands) Holding Corporation announced

that, Master Kong Beverage Investment (China) Co., Ltd. (hereinafter referred to

as “Master Kong Beverage”) has signed the cooperative agreement with Shanghai

AB Food & Beverages Ltd. (hereinafter referred to as “AB Food”) recently, and


that Master Kong Beverage acquired the

authorization of exclusively producing

and selling the Ovaltine instant malt

nutritious dairy products of AB Food

in the market of mainland China since

May 1 of this year. It is known that

Ovaltine is the “national nutritious

drink” in Switzerland, and the instant

malt nutritious dairy products produced

under the cooperation of AB Food and

Master Kong Beverage is one of the key

production lines of Ovaltine developing

quickly. The milk beverages developed

th i s t ime inc lude on ly Weiquan

lactobacillus beverage which is almost a

relative blank field in China.

Wahaha Promotes Enzyme Drinks

Wahaha launched the first enzyme

drink in China branded “Qingchang

Jiaozhu” (Master of Enzyme) in August

last year, and launched the “Jiaosu”

enzyme drink for females paying

attention to health and pursuing beauty

and a slim figure. Wahaha’s Jiaosu

is positioned as a “fruit & vegetable

enzyme” drink aiming to promote the

digestion function and lighten the burden

of human body, and is currently being

sold in the Micro-shop market by means

of FCL sales at a price of RMB5 /bottle.

In addition, Coca-Cola announced that

it will launch a “healthcare beverage”,

“Coca-Cola plus”, and this beverage

would be put on sale in Japan on March

27 with a standard of 470ml/ bottle and

at a price of JPY158 yen (approximately

RMB9.6). As introduced by Coca-

Cola, the fiber contained in Coca-Cola

plus would contribute to reducing the

absorption of fat, and help to control

the triglyceride level at meals so as

to decrease the risk of suffering from

cardiovascular disease.

Being Healthy and Nutritious Became the Main Trend of the Beverage Industry

Nowadays, there is an increasing

requirement of consumers for natural

and healthy products. Taking vegetable

protein drinks as the example, the

market size of China’s vegetable protein

drinks will reach about RMB73.3

billion by the year 2018, although it

was only RMB25.329 billion in 2013.

“In the future, exploring and satisfying

consumers’ individualized and socialized

requirements and developing their

drinking habits and consciousness will

be the important ways for enterprises

to pursue new profit growth.” Deputy

Secretary-General of China Association

for Quality (CAQ) Li Gaoshuai said.

In past two years, healthy functional

beverage has been growing like a

raging fire in the China market which

attracted numerous large enterprises. At

present, the whole functional beverage

market is not fully saturated, and many

enterprises reached their development

ceilings and thus transferred to the

comprehensive health industry. In the

future, comprehensive health industry

will not merely refer to beverages, but

also become the focus of the entire

fast-moving consumer goods (FMCG)

industry.


China Pharmaceutical Enterprises Transform to Healthcare Products Manufacturing

China pharmaceutical enterprises are

struggling to survive in the competition and

their market space are generally close to the

development ceilings, whereas nutritious

healthcare food still have great development

potentials. Therefore, pharmaceutical

enterprises have widely given attention to

and started to enter the market of healthcare

products.

China has over 200 A-share listed pharmaceutical enterprises and there are

increasing pharmaceutical enterprises setting foot in the field of healthcare products

in recent years. For example, Kangmei Pharmaceutical Co., Ltd. (600518.SH)

announced in May 2015 that it would acquire 74% stock rights of Shenzhen Mckin

Industry Co., Ltd. at the cost of RMB82.73 million, so as to enrich its varieties of

healthcare products and expand its market of terminal consumer goods by means of

integrating Mckin’s products and marketing channels.

Besides, many listed companies have separately disclosed their performance

in the field of healthcare products.

Performance of Partial Listed Pharmaceutical Enterprises in the First Half of 2016

Company Stock code Change of operating revenue

Change of net profit

Relevant business of healthcare products and proportion

Baiyun Mountain 600332 3.60% 8.89% Comprehensive health 43.30%

Kingworld Medicines 01110HK 13.75% 41.20% Healthcare products 18.85%

JZJT 600750 -33.95% 39.29% Healthcare food and others 12.63%

Zhejiang Medicine 600216 23.16% 46.78% Human nutritional supplements 12.41%

Tianmushan Pharmaceutical 600671 17.64% -34.12% Healthcare products 8.03%

Kangmei Pharmaceutical 600518 23.59% 22.91% Healthcare food 4.46%

Jointown Pharmaceutical 600998 24.66% 24.35% Food, healthcare products and

cosmetics 4.43%

Harbin Pharmaceutical 600664 -22.17% 2.09% Healthcare products 4.05%

Joincare 600380 17.50% -4.71% Healthcare products 2.95%

North China Pharmaceutical 600812 -12.00% 24.43% Vitamin and nutritious healthcare

products 2.89%

Neptunus Group 000078 17.86% 44.05% Healthcare products and food 2.84%

Renmintongtai Pharmaceutical 600829 -6.28% 27.99% Healthcare products 0.65%


Jingdong has once again bagged two Australian brands: targeting health care and meat products!

In August 2015, Jingdong established

strategic cooperation with two major

Australian brands, i.e. Blackmores and

Sanger. As a result, Jingdong was in a

position to provide Chinese consumers

Australian vitamins, dietary supplements

and meat pro.

Strategic cooperation agreement signed

between Jingdong and Blackmores

A s t h e n u m b e r o n e d i e t a r y

supplement brand in Australia with a

history of 85 years, Blackmores settled

in Jingdong's global platform in July

2015, and set up a unified Global flagship

store for Chinese consumers. At present,

Blackmores's evening primrose oil has

ranked first on Jingdong platform among

evening primrose oil products.

taste and flavor. In addition, Sanger will

also release new products on Jingdong’s

global purchase platform, including four

major categories, i.e. rib eye, chuck

tender, beef tendon and ribs.

S i n c e 2 0 1 6 , J i n g d o n g h a s

successively put online its Australian

pavilion, French pavilion, South Korea

pavilion, Japanese pavilion and U.S.

pavilion. On the launching ceremony of

Jingdong U.S. pavilion held in New York,

U.S.A., Liu Qiangdong, CEO of Jingdong

Group talked about the development

direction and goal of global purchase

business. In his opinion, the ultimate goal

of global purchase is that Chinese people

will be no longer rushing to buy at the

Fifth Avenue, Madison Square and other

places. Instead, they can buy these things

on Jingdong’s global purchase platform.

In addition, Liu Qiangdong also revealed

that there have already more than 1

million product varieties on Jingdong’s

global purchase platform.

Strategic cooperation agreement

signed between Jingdong and Sanger

As an Australian meat-exporter

founded in 1973, Sanger’s market has

expanded to more than 40 countries and

regions, covering the full range of retail

products such as beef, mutton, pork,

poultry, etc.

As disclosed by Jingdong side, the

strategic cooperation between Jingdong

and Sanger will lead to the selection of

traceable high quality meat products

closer to the source for China consumers,

and the introduction of Australia original

packaging materials, without any sub-

packaging and processing stages, so as to

ensure that merchandises have original


Mannatech established cross-border E-commerce platform in China

Manna tech (MATTEL Dai ly

Health Care Products Co., Ltd.), a global

health solutions provider, announced

the establishment of cross-border

E-commerce platform (MeiTaiChina.com)

in mainland China.

The platform is about to sell

nutrition, health care and other related

products to Chinese consumers through

the adoption of direct-sales model.

Currently, two local modes of payment

Chinese mainland market, Mannatech has

adopted the inviter-awarding mechanism,

i.e. registered user of Mannatech can be

correspondingly rewarded as long as he/

she has invited another user to buy at least

one commodity at the site.

It is reported that Mannatech has

developed 26 markets in the past nearly

20 years. It is indicated in its official

website that Mannatech has entered 25

countries and regions, including China.

have been enabled, i.e. Alipay and

WeChat payment.

Screenshot taken from the official

website of Mannatech China mainland

In order to rapidly expand the

BigStylist, an India beauty care O2O platform, plans to collect $400 million through financing

BigStylist, an India beauty care O2O

platform, plans to collect $400 million

(about RMB 27.6 million) in a new round

of financing and these funds will be used

for the research and development of own-

brand beauty products for this platform.

It is reported in the Hindu Business Line

that the estimated value of BigStylist is

expected to reach 1.5 billion rupees (about

RMB 150 million) after the closure of this

round of financing.

BigStylist was founded in 2015, and

the platform services are currently only

opened to Mumbai and Pune, India. The

In the future, BigStylist will launch

new service items, beauty brands and

some health care products. Furthermore,

the market will also be expanded to

Hyderabad, Ahmedabad and Delhi.

Up to now, the company received

$2 million (about RMB 13.80 million)

from the seed round and Pre-A round of

financing. Since its inception, BigStylist

has received 50 million rupees (about

RMB 5.115 million) of revenues, and it is

expected that the revenues will reach 4.5

billion rupees (about RMB 460 million)

in the next five years.

door-to-door service coverage includes

waxing, facial care, manicure, foot care,

massage, bride makeup, hair coloring,

haircut and so on. The platform provides

three payment methods, i.e. cash payment,

India payment platforms of Paytm and

PayUMoney.

Screenshot taken from the official

website of BigStylist


Marriage of Global and Jamieson promotes a younger health care market?

VIPSHOP holds hands with Blackmores

Jamieson, a Canadian health care

brand recently goes online in Global

for the purpose of expanding mobile

e-commerce market in Chinese mainland.

According to reports, based on the

market characteristics that customer base

of mobile terminal tends to be younger,

Jamieson will make use of the advantage

of Global, expand the e-commerce

market in mainland China through the

“mobile social + convergence marketing”

mode, and provide domestic consumers

wi th nut r i t ional hea l th products

originating in Canada, including grape

VIPSHOP overseas special signed

a strategic cooperation agreement

in Guangzhouwith Blackmores, an

Australian dietary supplement brand. For

this cooperation with VIPSHOP, Zhang

Zujun, general manager from Blackmores,

expresses that VIPSHOP is China’s

first special offer e-commerce platform

in which “refined selection+ shopping

guide” model is adopted. It is hoped that

based e-commerce has formed the word

of mouth marketing via the integration of

friend circle, and the communities sharing

the common consumption characteristics

and habits have become the mainstream

of marketing. Under this circumstance,

Global can ultimately realize the double

promotion of brand public praise and

market sales through the utilization of its

own mobile social features, provision of

assistance to Jamieson in the promotion

of mutual trust between consumers and

brand, and elevation of user stickiness.

platform in South Korea. Subsequently,

VIPSHOP overseas special signed

cooperative agreement with the U. S. &

Foreign Commercial Service (FCS), held

investment fairs in Australia, and signed

cooperative agreement with UK Trade

& Investment (UKTI), with the purpose

of introducing commodities from the

U.S.A. Australia, UK and other places.

seed concentrated compound tablets,

orange-flavored Vitamin C chewable

tablets, vitamin B group B50 and other

hot products.

According to the person in charge

of Jamieson, the socialnomics represents

an important direction of future business

development, and everyone can be not

only a brand consumer, but also a brand

communicator. These characteristics are

consistent with Jamieson’s demands for

advancing towards the mobile terminal.

As indicated by Global, from the

beginning of 2016, social community-

this cooperation can provide Blackmores

products for 100 million members of

VIPSHOP.

Since its overseas special has gone

online in last September, VIPSHOP

has successively signed cooperative

a g r e e m e n t s w i t h K o r e a T r a d e

Promotion Corporation (KOTRA), a

government sector of South Korea, as

well as CAFE24, a famous e-commerce


Beijing Consumers Association: cross-border E-commerce has become a severely-afflicted area for sales of counterfeit health care food products

As indicated by the statistical

data of complaints handled by China

Consumers Association, complaints of

health care food reached 2389 cases, with

quality problems (903 cases) and false

propaganda (436 cases) accounting for the

largest proportion. In addition, complaints

about medical equipment, health care

products, traditional Chinese medicine

and Chinese patent medicines also hold a

higher proportion.

Beijing

Failure to retain an operative

receipts may cause difficult problem for

handling

In Beijing area, as indicated in

the statistics of complaints about food

products during the first half of last

year released by Beijing Consumer

Association, complaints about health

care products ranked first in the food

products-related complaints, accounting

for 9.15% of the total complaints about

food products, and the complaints

about false propaganda accounted for

26.09% of health care product-related

complaints. In this category of complaint,

most elderly consumers are deceived.

By grasping the mentality of paying

attention to health among the elderly, in

the name of health lectures, compulsory

medical examination, guarantee to cure all

represented by online shopping and TV

shopping has also become a field where

consumer complaints are prone to occur.

In 2015, National Consumers Association

accepted 20083 cases of complaints

about remote shopping, accounting for

69.86% of sales and service complaints.

Cross-border online shopping has

become a severely-afflicted area of online

shopping complaints, and proliferation

of counterfeit commodities is one of the

main reasons. As a result, some well-

known health care food manufacturers

and consumers are deeply hurt.

According to Amway (China),

it previously entrusted a third party

inspection and accreditation agency

to carry out sampling and testing of

Amway products sold on China’s

largest e-commerce platform, and the

results show that 46% are counterfeit

products. According to the briefing,

in June 2015, Amway worked with

the Public Security Department from,

Chaonan Dis t r ic t , Shantou Ci ty,

Guangdong Province and cracked

down a den where counterfeit Amway

protein powder are packaged and

distributed. There are 416 finished

products of counterfeit Amway protein

powder are sized at the site, together

with a batch of semi-finished products

and packaging materials. The total

diseases other exaggerated propaganda,

and the utilization of discount, prizes,

gifts and other means, some unscrupulous

operators seize the opportunity to

ballyhoo, peddle health care products and

even pass off ordinary food as health care

food products.

As pointed out by Beijing Consumer

Association, although the complaints and

queries about health care products remain

high, yet there are few cases truly accepted

due to the unclear subject of defendant,

failure to retain operative receipts and other

evidences. Even if cases are accepted, yet it

is very difficult to request a full refund, let

alone compensations, due to the difficulty

in determining the responsibility for the

quality of health care products which tend

to be ineffective, yet have no obvious

harmful effect. By taking the complaints

about exaggerated propaganda and

advertisements in the marketing process

of health care products, it is difficult for

consumers to provide the evidences of

exaggerated advertising, since word of

mouth recommendation and other means

are mostly adopted by merchants.

Nationwide

Counterfeit articles of health

care food products are sold via remote

shopping platform

It is noteworthy that remote shopping


Jamieson health care products settled in Vipshop

Vipshop Global under VIP.com

established strategic cooperation with

Jamieson, a brand of Canadian health care

product, and became its first cross-border

e-commerce strategic partner in china.

Vipshop Global established cooperation

with Jamieson

From June 27, Jamieson products

launched the “Vitamin day” under the

T h e r e s p o n s i b l e o f f i c e r o f

Vipshop Global comments like this,

“As the world’s largest special offer

e-commerce supplier, Vipshop has an

excellent platform resources and high

quality membership. The initiative of

reintroducing well-known Canadian brand

nutrition and health care products with

great reputation will continuously bring

about unexpected shopping experience to

Chinese consumers.”

Jamieson

Vipshop Global channel and adopted

the mode of direct distribution from the

bonded warehouse. According to reports,

founded in 1922, Jamieson is a well-

known Canadian food manufacturer

engaged in the production of vitamins,

minerals, herbs and other dietary

supplements and nutrit ional food

products. Moreover, it is also one of the

world’s three major brands of nutrition

and health care products. Jamieson’s

cross border e-commerce sales channels

comprise Jamieson’s overseas flagship

store, Jingdong global purchase under

Tmall Global (bonded warehouse model

is adopted in the former one, while direct

mail in the latter one).

value involved in this case amounted

to RMB 2.22 million.

[Case]

In last May, 77-year-old aunt Zhao

heard that health care lectures would be held

by the neighborhood organization, and there

would be five famous hospital experts who

provide volunteer medical consultation. For

this reason, she came to a grand hotel to

attend the lectures on schedule. “Experts”

fervently took her blood pressure, pulse,

wrote out a prescription, and also guarantee

the curative effect. The said medical staffs

enthusiastically sent “Medicine” to her

home and charged RMB 2700 before

they left. When she opened the package,

finding that the so called “Medicine” was

merely soft capsule health care products

produced by a biotechnology company.

Unexpectedly, allergy symptoms appeared

in her body after she took such medicine.

Afterwards, she was diagnosed as a rash in

the hospital. When aunt Zhao argued with

the salesmen who sold her this medicine,

that gay persuaded her to go on taking such

medicine. Aunt Zhao was so angry that she

become out of breath. However, such gay

refused to receive phone calls from aunt

Zhao. Finally, thanks to the mediation of

consumer association, the operator called

back the remaining health care products,

and refunded RMB 2250.


CFDA released Detailed Regulations for Health Food Products Registration

In January 2017, the State Food and

Drug Administration (SFDA) issued the

Directory for Raw Materials of Health

Care Food Products (1) and the Directory

for Allowing the Health Care Functions of

Health Care Food Products (1), which laid

the foundation for the implementation of

health food product registration system. In

February 7, SFDA also officially released

Detailed Regulations for Health Food

Products Registration (exposure draft),

including 8 main items and 22 pages. It

provides detailed description of registration

Registration Procedures (as shown in the figure)

work in production enterprises.

These detailed regulations for touch upon several aspects of registration work, including

scope of application, form of registration, contents of registration materials, registration

requirements for domestic health care products, registration requirements for imported health

care products, changes in registration, registration cancellation, information disclosure and so on.

Subject of registration

The production and import of health care food products should be produced in

accordance with laws. Among them, the application for registration of domestic health care

products shall be submitted to the Food and Drug Administration at all provinces, autonomous

regions and municipalities directly under the Central Government. The on-site application

for registration of imported health care products shall be submitted to the administrative

acceptance service department of SFDA.

not be used by the same enterprise. The same name shall not be used in the registration

of health care food products that correspond to different formulas. The same formula

refers to the scenario in which the categories and amount of usage of raw materials and

supplementary materials are all consistent. The same name refers to the scenario in which

product trade name, common name and attribute name are all consistent.

This provision is a great impact on the industry, which means that many OEM

health care product brands will receive a blow. In the health care food industry, OEM

production is very common. In another word, one health care food product with one

Requirements for Registration

Materials

There are five core requirements

listed in these detailed regulations.

Among them, it is stressed in the last

provision that health care food products

with different names that correspond

to the same formula registration shall


registered number of approval may be

packaged into products with multiple

brands and even dozens of brands after

production and prior to sales.

On one hand, this reduced the

difficulty of entry of health care food

brands into the market. On the other hand,

the market order was disturbed by many

non-standard enterprises through the

utilization of OEM production.

Registration Materials for Domestic

Health Care Food Products

Health care food product specification

(template)

Health care food registration

XXX brand XXX(Chinese name)

Raw material:

Supplementary material:

Functional ingredients or signature

ingredient and content:

Commended user:

Commended user:

Healthcare function:

Recommended dosage & edible

method:

Specification:

Storage method:

Quality guarantee period:

Attention:

1. About the formula: The manufacturer

should submit the product formula sheet

automatically generated from the health care

food registration management information

system. The usage amount of raw materials

and supplementary materials refer to the

usage amount required for the production of

1000 minimum preparation units.

The vitamins, minerals and other

nutrients supplemented in health care

food products shall be arranged as per

the sequence of nutrients specified in


Care Food Products. In case several kinds

of chemical compounds are used in the

same kind of nutrient, it is required to

collate as per the size of usage amount.

The raw materials for other products shall

be sequenced as per the Directory for Raw

Materials of Health Care Food Products.

2. About the health care function:

For products complying with the


Care Food Products, health care function

shall be marked according to relevant

provisions. Nutritional supplements

should list out all vitamins or minerals to

be supplemented, with such representation

as “XX supplemented”. For products

containing three or more vitamins or

minerals, it is required to represent

like this “Multivitamins or minerals

supplemented”. However, it is not allowed

to represent in the form of “one or several

kinds of raw materials+ multivitamins

or minerals supplemented”. Health care

food products containing three and more

vitamin B groups can be represented as

“Vitamin B group supplemented”.

3. About the denomination: The

following names can be chosen as

common names for nutrient supplement

products:

(1) Names of all nutrients shall be

listed in accordance with the arrangement

sequences specified in the Directory for Raw

Materials of Health Care Food Products. For

health care food products containing three or

less nutrients, names of all nutrients shall be

used as common names.

(2) For nutrients supplementation

containing three and more Vitamins or

minerals, common names can be called as

“Multivitamins or minerals”. However, it

is not allowed to denominate in the form

of “one or several kinds of raw materials+

multivitamins or minerals “.

(3) For nutrients supplementation

containing three and more B vitamins

(vitamin B1, vitamin B2, vitamin

B6, vitamin B12, niacin, pantothenic

acid, folic acid, etc.), it is required to

denominate them as “Nicotinic acid

Vitamins”.

Regis trat ion Mater ia l s for

Imported Health Care Food Products

In addition to the submission of

relevant materials required for domestic

products, it is also required to submit

the following documents, including

qualification documents of the registration

applicant (i.e. overseas manufacturer

of health care food products) and the

documentary evidence of health care food

products sold in the market for more than

one year. Such qualification documents

and documentary evidence shall be issued

by the competent government authorities

or legal services agency of the country

(region) where products are produced.

Reports to be submitted also include the

safety report on products sold abroad

and crowd consumption, or relevant

original copies of technical regulations or

standards for health care food products

formulated by the country (region) or

international organization where products

are produced.

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