Valued at around $12.9 million (€10.2m) in 2003, the total market for probiotic ingredients in applications for human consumption is currently growing at an estimated rate of 14 percent.
But research consultants Frost & Sullivan say that imminent legislative restrictions are a key concern for probiotics end-users who fear that the proposed health claims regulation, currently in draft form before the European Parliament and Council, could severely impact innovation, promotion and competition.
This regulation could become a law as early as 2005. Its approval is likely to strongly impact the probiotics market by preventing vague or unsubstantiated claims while permitting those backed by science. This creates both challenges as well as considerable opportunity for market participants.
"Most probiotics suppliers already hold a significant body of research highlighting the potential health benefits of their products. Thus, they are likely to have a competitive advantage in a market from which all insufficiently supported claims would be removed," explained Anna Ibbotson, food research manager with Frost & Sullivan.
New legislation will also call for participants to obtain more scientific proof of product efficacy. This is critical for the ultimate benefit of consumers. However, suppliers appear to be divided on the question of who should take responsibility for this issue - the suppliers themselves or the food and supplement manufacturers.
"There is a general acceptance that raising consumer awareness is one of the key challenges facing the probiotics market. Although this is usually considered the responsibility of the finished product manufacturer, supplier companies must be ready and able to support their customers' marketing activities through provision of detailed product and legislative information," argues Ibbotson.
The new analysis also reveals that increased consumer awareness of probiotics and their possible health benefits has been a primary market driver. Large marketing spends of companies such as Danone and Yakult were seen by suppliers as having played a crucial role in enhancing consumer knowledge. Wider consumer choice and growing media interest in probiotics and gut health also helped to improve awareness levels.
There are also new application areas with potential to grow the market further. Probiotics have largely been confined to dairy applications so far, owing to the low stability of the bacteria, with major probiotics applications for human consumption in yoghurts and fermented milk drinks. The European supplements market, although less developed than that in the United States, is however a prospective area of growth, predicts the Frost report.
And efforts to develop other finished products containing probiotics are underway. Manufacturers have identified numerous promising applications including infant formula, fruit juices, cereal, and extensions of existing product lines such as fruit yoghurts.
Animal feed applications will also provide significant opportunities for probiotics, especially after the recent ban on antibiotic growth promoters.
Since the relatively low stability of probiotic bacteria has often negatively influenced consumer perceptions, research institutions and probiotics suppliers are currently attempting to identify more robust and targeted probiotic strains that will help erase consumers' doubts. In doing so, they also hope to boost interest and uptake levels among consumers.
Contact Noel Anderson for further information on this report, 'End-User Analysis of the European Probiotics Market'.