Heritage, innovation and growth: marketing probiotics in Asia

By Cyndy A

This article provides an overview of the probiotics market in Asia, where different food cultures require a different strategy from Western countries.

• Australia and Japan are among the largest markets for probiotics, while China and India have experienced heightened awareness of probiotics' health benefits, which drove growth.
• Most Asians perceive swallowing tablets to be associated with treatment for sickness rather than for the maintenance of good health, thus, probiotics that act as food or an addition to food work better in the region.
• Probiotics have a higher chance of success if they are introduced in a format that considers underlying cultural beliefs and does not require a dramatic change in food consumption habits.
• The most important purchase driver in most Asian countries is likely to be affordability: when creating new probiotic products, brands must take cost into account as well as assuring that the product is of good quality, tastes good, and has reliable distribution channels.

In Asia, most people are aware that probiotics are associated with good gut bacteria. While the study of probiotics and the human microbiome are more recent scientific endeavours, Asian families have long been aware of probiotics' benefits thanks to Yakult, the ubiquitous little hourglass-shaped, red-and-cream bottle of fermented milk, and its Yakult ladies. These door-to-door agents have been around for decades all across Asia – from China to Thailand.

Originally from Japan, Yakult has cemented itself in the minds of consumers as the leading voice in probiotic science, thanks to its heritage and huge brand recognition – based on the story of the good gut bacteria triumphing over the bad one and thus contributing to good health. In the process, this catchy story has arguably contributed to the awareness of probiotics' health benefits and to the growth in consumption of probiotics as a health supplement.

Probiotics in Asia

The ongoing urbanisation of Asia, combined with higher disposable incomes and heightened consumer interest in health products, meant that sales of commercial probiotics – usually strains of Lactobacilli and Bifidobacteria – have seen exponential growth. According to the BCC Research (2016), Asia-Pacific leads the compounded annual growth rate for probiotics with an anticipated 8.3% over five years, with a market value potential reaching USD19.2 billion in 20201. Australia and Japan are among the largest markets for probiotics, while China and India have experienced heightened awareness of probiotics' health benefits, which drove growth.

The Food and Agriculture Organisation of the United Nations (FAO) defines probiotics as "live microorganisms that, when administered in adequate amounts, confer a health benefit on the host". This is a characterisation that is globally accepted. Published studies have demonstrated the health effects of probiotics, including improved digestive health, improved immune health – such as the prevention of flu or colds, lowered risk of gut infection, reduction of prevalence and severity of atopic eczema and other allergies – better sports endurance and some links to improved cognitive health.

In the Asia Pacific region, probiotics in the form of dietary supplements, such as yogurt and sour milk products, have a combined retail value of USD17.6 billion as of 2016. The market is expected to grow further in Japan (8%), South Korea (19%) and China (23%) from 2016 to 2021, with Japan taking the top market share in the region (Euromonitor, 2016).

While the trend for consumption is up, data has also indicated a widening gap in the different formats of probiotics sold. It is not surprising that in Asia there is a perceived preference for probiotics embedded in foods. It is after all a country where food is strongly linked to culture, where a similar dish (such as the ubiquitous fragrant rice dish nasi lemak), is claimed to be "owned" by several countries and most foods are prepared fresh and consumed daily. Yogurt or beverages are favoured over dietary supplements in tablet formats, although the latter are expected to have the potential to grow.

Purchase drivers and perceptions

Many dietary supplements imported into Asia from the US and Australia are in tablet form and stored in capped bottles, while some are sold as capsules to be mixed into beverages. While these products may be convenient, they may not be market drivers for the purchase and consumption of probiotics in Asia. It is thought that the sale of these products is mostly confined to niche markets in urban areas, as most Asians still perceive swallowing tablets to be associated with treatment for sickness rather than for the maintenance of good health. Therefore, growing the probiotics market in this region points to a critical need to understand the Asian consumers' palate and the perceptions that drive their consumption.

The importance of food culture, tradition and heritage in Asia dictates that any functional supplement, such as a probiotic supplement, should be consumed as a food or beverage so that it can nourish the body. This idea is associated with the perceived health benefits of the "heaty", "windy" or "cooling" effects that different foods can have on the body to ensure the balance of yin and yang. Arguably therefore, probiotics have a higher chance of success if they are introduced in a format that considers these underlying cultural beliefs and does not require a dramatic change in food consumption habits.

Marketing probiotics to Asian consumers should also take into consideration other consumption drivers including convenience; purchase influencers such as local celebrities or bloggers; incorporating probiotics into existing traditional or new brands; and the use of technology like health apps or websites, to help consumers understand the science behind probiotic products. However, the most important driver in most Asian countries is likely to be affordability. When creating new probiotic products, brands must take cost into account as well as assuring that the product is of good quality, tastes good, has reliable distribution channels, and, importantly, storage that guarantees the viability of the probiotic microorganisms until the use-by date.

Meeting expectations: formula, format and function

There are three important factors to consider when creating a probiotic product that aims to drive market consumption.

First, the right formula must be offered. In Asia, value for money is a way of life for most consumers and more is always perceived or accepted to be better. This is evident in supermarket shelves with packaged foods and beverage featuring food labels that are filled with multiple added ingredients, vitamins and minerals bundled together as a nutritious proposition (such as a widely consumed beverage with an attractively named and designed logo on the packaging, which is a mixture of less glamorous sounding vitamins and minerals including calcium and vitamins B and C). Hence, probiotics formulated with multiple microorganism strains (and high in potency) would be expected to sell better than a product with a single strain of microorganisms.

While multiple strains are more desirable to consumers, the regulatory landscape and detection methodology must keep up with product innovation. The challenge remains for probiotics manufacturers to prove the beneficial effects of multiple strains versus a single strain, and to identify which strains are responsible for each proposed health effect. They must also work closely with regulators to update regulatory standards so that innovations can be commercialised, while protecting the health of consumers. This will mean that regulatory costs and the burden of non-harmonised regulatory requirements, which create higher technical barriers to trade, will need to be carefully weighed against the benefits of offering probiotics at an affordable price. The rise in discerning, health-conscious consumers in Asia is also expected to drive the demand of 'combo' probiotics – where the goodness of probiotics is combined with other healthy ingredients, such as fibre, in a single product.

Second, consumers of probiotics in Asian markets will be driven by the product format. Food manufacturers need to research and develop stable and sustainable probiotic strains that can be delivered in formats such as powders that can be sprinkled and added into familiar local dishes like soups, rice or porridge – as Asians usually start the day with hot dishes rather than cold food. When Asian consumers view probiotics as a part of their daily diet, this awareness and dietary habit could drive probiotics' growth, and the dietary supplements market's as a whole.

Third, as probiotics are generally accepted as beneficial for health across ages, the discerning Asian consumers are expected to look closer into the probiotics' specific functional health claims during purchase. For example, some consumers may consider that herbs represent the best solution to boost immune health as this knowledge has been passed down through generations, while the younger consumers are likely to look for similar health benefits in probiotics as a modern, well-researched remedy. Therefore, an extensively researched probiotic strain built on scientific evidence (and which might be considered an alternative to herb or plant-based remedies) should be made available in formats that consumers consider appropriate and acceptable while communicating its efficacy and efficiency.

As functional health claims are heavily regulated and based on scientific substantiation backed by clinical trials, a responsible probiotics manufacturer will develop deep competency in in vitro, pre-clinical animal and clinical human trials to substantiate health benefits and ensure that the regulatory requirements are met while creating a marketing proposition.

In developing marketing messages, there is a need to consider the trusted channel that consumers look up to before making the decision to consume probiotics. Different consumer segments will respond to different marketing tactics: some will be strongly influenced by social media, while others may be affected by messages conveyed by trusted healthcare professionals such as doctors, the latter being a more effective channel in emerging markets like Vietnam. In other words, the science and claims must be phrased and communicated differently to capture the attention of different types of buyers.

To illustrate this, we use a case study by Ethical Nutrients, from Health World in Australia, one of the most mature and largest dietary supplements markets in Asia Pacific. Ethical Nutrients has a clear mission to help people live happier, healthier lives. For nearly a decade, they have communicated this mission clearly to their consumers by using happy blue bugs to depict friendly gut bacteria for their Inner Health Plus supplements advertising campaigns. The happy bugs portray Inner Health Plus as Australia's leading premium-quality and clinically-tested probiotics, backed by 25 years of scientific research to convince consumers in an easy-to-understand way that not all probiotic strains are the same, as proved by their extensively researched acidophilus, found in their products either alone or in combination with Bifidobacterium lactis.

When one watches Inner Health Plus' advertisements, available on YouTube, it is obvious why the link between the happy bugs and brand recall is strong, as the cheerful characters consistently and clearly portray the company's mission of happier and healthier lives from improving digestive health to supporting immune function in children and adults. Aside from succeeding in conveying dull scientific notions in interesting, crisp 15/30- second clips, the iconic happy bug with its high-pitched voice and friendly smile also manages to appeal to all age groups.

In summary, Asian consumers will buy new innovative products if they have a reason to believe that the product is safe, tasty, nutritious and affordable. As the probiotics market sees increased innovation and customisation of products based on needs, effective communication tailored across ages and audiences and built on a strong scientific foundation will ensure that consumers trust the brands and fuel probiotics growth. As scientific research continues to progress with innovative means to produce higher value probiotics products in different formats in the diverse Asian market, we can expect to see more enduring stories like the Yakult ladies and the Inner Health Plus happy bugs. Stories that evoke childhood memories and let the new narratives of recognisable brands be told to the next generation as probiotics enters into the everyday diets of Asian consumers.

Reference:

1 BCC Research (2016). The Probiotics Market: Ingredients, Supplements, Foods. Downloaded 12 March 2017.

 

About the author

Cyndy Au is Fellow of the Institute on Asian Consumer Insight and Regional Director, Regulatory and Scientific Affairs, Asia Pacific and South Asia for Du Pont Nutrition and Health.

This commentary was published in WARC Exclusive in April 2017.