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THE PROBIOTICS MARKET IN THE AMERICAS: FROM CANADA TO CHILE PROBIOTA AMERICAS 2015

PRESENTED BY MONICA FELDMAN, HEAD OF INDUSTRY RESEARCH

CONSUMER HEALTH

INTRODUCTION

THE RETAIL VALUE OF PROBIOTICS IN THE

AMERICAS AND DRIVERS OF GROWTH

RETAIL INNOVATION – FORMULATION,

DELIVERY, PACKAGING, PRICE AND

MARKETING

THE AMERICAS EVOLVING CONSUMER –

HEALTH AND WELLNESS TRENDS

FUTURE OPPORTUNITIES AND CHALLENGES

ACROSS THE AMERICAS

© Euromonitor International

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Disclaimer

Some of the information in this presentation is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability,

Euromonitor International cannot be held responsible for omissions or errors.

Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses may not totally reflect the companies’ opinions, viewer

discretion is advised.

Scope

INTRODUCTION

All values expressed in this presentation are in US$ terms, using a fixed 2014 exchange rate.

2014 figures are based on part-year estimates.

All historical and forecast data are expressed in constant terms; inflationary effects are excluded.

Consumer Health

US$216.2 billion

Vitamins and Dietary

Supplement

US$88.4 billion

Probiotic supplements

US$3.9 billion

Americas Probiotic

Supplements

US$1.8 billion

Health and Wellness

US$765.3 billion

Fortified Functional

Packaged Foods

US$275 billion

Total Pro/Pre Biotic Yoghurt

US$31.5 billion

Americas Total Pro/Pre Biotic

Yoghurt

US$8.5 billion

Sour Milk Products

US$8.0 billion

Americas Sour Milk Products

US$0.5 billion

Global (Retail Value 2014)

http://www.euromonitor.com/

10.8

billion US$ RETAIL VALUE IN THE AMERICAS 2014

8.4% RETAIL VALUE UP FROM 2013

30.5% EXPECTED GROWTH BY YEAR 2019


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Same continent with striking contrasts

THE RETAIL VALUE OF PROBIOTICS IN THE AMERICAS AND DRIVERS OF GROWTH

North America 354 million consumers 56.6% of Retail Value

Latin America 617 million consumers 43.4% of Retail Value

US$10.8 billion

Retail Value

in 2014



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North America Latin America

29%

71%

Retail Value US$5.6 billion

Probiotic Supplements


4%

96%

Retail Value US$4.7 billion



2014 snapshot of North vs. Latin America markets




7

90

73

50

15

83 80

143

25

73 77

12

39

0

20

40

60

80

100

120

140

160

0

1,000

2,000

3,000

4,000

5,000

6,000

% g

row

th r

ate

20

09

/20

14

US

$ m

illi

on

Probiotics Retail Value Sales and Growth by Relevant Country

2014 % Growth 2009/2014

Top countries in probiotic value


Top three countries hold

85% of retail value share



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Probiotics retail value share by country in 2014 – figures in%


Canada

8.3%

Ecuador

0.2%

Peru

0.4%

Chile

1.9%

Argentina

1.9%

Venezuela

1.3%

Brazil

28.1%

United States

48.3%

Mexico

6.3%

Bolivia

0.2%

Colombia

1.0%



9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

US

$ m

illi

on

North America – Retail Value of Probiotics by Type 2000/2019

Probiotic Supplements Total Pro/Pre Biotic Yoghurt Sour Milk Products

Year 2002

Decisive shift in probiotic

consumption by form

Consumption gap

US$2,404 million 2014

The North American new love for probiotics




10

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

US

$ m

illi

on

Latin America – Retail Value of Probiotics by Type 2000/2019

Probiotic Supplements Total Pro/Pre Biotic Yoghurt Sour Milk Products

Consumption gap

US$4,269 million 2014

Latin America preference for probiotic-rich foods and beverages




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North America US$1,621 million

Latin America US$203 million


North America US$3,653 million

Latin America US$372 million

Pro/Pre Biotic Spoonable

Yoghurt

North America US$372 million

Latin America US$2,842 million

Pro/Pre Biotic Drinking

Yoghurt

Market insights reveal regional options and preferences




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Science support

Specialty

Health claim

Delivery

Drivers of innovation

RETAIL INNOVATION – FORMULATION, DELIVERY, PACKAGING, PRICE AND MARKETING



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Diarrheal

treatment

Digestive health

Oral health

Vaginal health

Skin health

Weight control

Sports endurance

New discoveries to bring new opportunities in the retail space




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Specialty premium

Sparkling drink Segmented by type of consumer

Health benefit specific

Convenient shot Confectionery

New formulations that help differentiate brands




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• Firms teach North American consumers how to make cultures at home

• Cultures available for sale online

North America

• Latin American consumers traditionally have made cultured yoghurt and drinks at home

• Cultures such as are available for sale at open public markets and equivalent merchants to eBay

Latin America

The do-it-yourself approach: Is homemade cultured re-emerging?




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Gastroenterologist recommendation claim

Align – US and Canada

Pharmacist recommendation claim

Florastor - US

Infomercials via ambassadors

Bio-K Plus - Canada

Digestive health improvement

challenge competition

Activia - US

Sponsored editorial content in mass media

Culturelle – US

Healthcare practitioner channel

(HPC)

Thorne Research - US

North America – examples of marketing strategies




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Dr. Barriga tablet game against diarrhea

Floratil - Brazil

Mommy internet Portal

Sinuberase - Mexico

Irritable bowel relief and vaginal health

Bion Transit

Bion Intime - Chile

Digestive health improvement

challenge competition

Activia - Mexico

Endorsement by gastroenterologist

association

Regeneris – Colombia

Segmentation by consumer: Child,

teenagers, and adult

Yakult - Mexico

Latin America – examples marketing strategies




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The number of baby boomers suffering from digestive ailments due to aging keeps increasing

Higher interest of middle-aged adults in maintaining digestive health

Increasing consumer awareness on health and wellness lifestyles

Certification of strains and CFUs

Mass and social media outreach

What drives consumers to purchase probiotics in North America

THE AMERICAS EVOLVING CONSUMER – HEALTH AND WELLNESS TRENDS



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Younger adults are more receptive to health and wellness trends that drive sales of supplements

Strong recommendations from healthcare practitioners in the use of probiotic supplements for treatment

Recommendations from friends and family highly influence the purchase decision of probiotic supplements for health maintenance

Consumer education on probiotic supplements has increased at pharmacies

Supplements of questionable origin still sold in internet exchange sites such as Mercado Libre

What drives consumers to purchase probiotics in Latin America

THE AMERICAS EVOLVING CONSUMER – HEALTH AND WELLNESS TRENDS



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Cannibalizing sales as probiotics applications expand? Foods/beverages vs. dietary supplements

FUTURE OPPORTUNITIES AND CHALLENGES ACROSS THE AMERICAS

Probiotic supplement

Combined supplement with probiotics

Multivitamin with probiotic

Yoghurt

Functional foods and beverages

Fermented foods and beverages

Consumer dilemma:

Why purchase a supplement if my food and/or beverage already contains probiotics?



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Opportunities Challenges

Higher consumer interest on healthy lifestyles

Demographic shift to an adult population who may require products to maintain digestive health

Untapped opportunities in Latin America for probiotic supplements, not foods

Regulation of health claims

Cannibalization of sales

High prices of probiotics supplements

Achievement of positive return on investment (ROI) for new delivery forms and premium formulations

Final thoughts

FUTURE OPPORTUNITIES AND CHALLENGES ACROSS THE AMERICAS


THANK YOU FOR LISTENING Monica Feldman

Head of Industry Research – Consumer Health

[email protected]

Euromonitor International

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Chicago, IL 60604

@euromonitor

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www.youtube.com/Euromonitor

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