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Supplements
A key international Markets Update
Rory Mahony
Rory Mahony
37th
year in Natural products
industry
Started with phyto pharmaceuticals
(Dr. Madaus) International area management
Worked in Subsidiaries, South
Africa, Spain, USA (Worked in OTC laxative
market and started Euromed in USA).
1996 – 2015 Nature’s Way, shareholder
representative, General Manager, SVP
International, Canada, Professional
2016 consultant: Strategy, Integration,
National and international commerce
4 Questions
• Which country has the oldest
average age?
– Brazil, Germany, Japan, Egypt
• How many people reside in the 22
top VMS markets?
– 2.9 Billion, 3.6 Billion, 4.5 Billion, 5.1
Billion
4 Questions
• Where does Western Europe
spend the most?
– Weight Management, OTC, VMS,
Sports nutrition?
• If the world is divided into 4
regions, which is the largest VDS
market?
– The Americas, Middle East & Africa,
Europe, Asia
Data Used
Data Limitations
• Euromonitor – Multi source data collection including reports from in country experts. Sales figures are prices to end user (RSP). Includes multi channels retail, direct (MLM, Catalogue, internet)
• Nicholas Hall - proprietary data base built like IMS. Sales at manufacturers prices. Focus on brick and mortar sales
• Data is limited – Hard to assess internet, large vendor data (WalMart, Costco not readily available)
Themes
• The world today
• Where is the VMS market today?
• How will it change by 2020?
• Considerations before venturing
abroad
Geographical world
Population World
Population grows
less than 2% per year
2
3
4
5
6
7
8
World Population
YTD Population net increase
33 Million
2
3
4
5
6
7
8
World Population
7.4 Billion
1951 2016
2.6 Billion
Where the VMS Population*
is located *economist
(VMS Markets)
0
200
400
600
800
1,000
1,200
1,400
1,600
22 Countries. Population 5.1 Billion
> 1 Billion population
> 100 Million – 350 Million
> 50 Million to 100 Million
The World today
• Population continues to grow
• Economies are stagnating
World Economy
• Oil price affecting:
– Nigeria, Brazil, Venezuela, Russia, Mexico,
Canada, Indonesia,
– Middle East
• EU recovery slow
• US demand engine moderate
• China GDP growth slowing
• India benefits from lower oil prices
The World today
• Population continues to grow
• Economies are stagnating
• Populations aging
Median age*
in the most populated VMS countries
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Americas Asia Europe M. East / Africa
22 Countries. Population 5.1 Billion * Economist
The World today
• Population continues to grow
• Economies are stagnating
• Populations aging
• Crisis in the Middle East
– War or insurgency in Iraq, Afghanistan, Yemen, Libya, Turkey (Kurdistan).
– Refugee crisis affecting Europe
24 190
53 55 17
198
101 0.6
66
2 3
0.4
50
7 37
173 25 24
6
206
44
5 33 4 9 0.5 31 10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Asia Pacific Australasia Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
% a
lloca
tio
n t
o a
ll co
nsu
mer
hea
lth
per
yea
r
Values in US$
Consumer Health Per Household Expenditure in US$ (2015)
OTC Sports Nutrition VDS Weight Management
How much did consumers spend on consumer health in 2015?
CH2016 RELEVANT INSIGHTS
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Asia Pacific Australasia Eastern Europe
Latin America Middle East and Africa
North America
Western Europe
Region - % Retail Value Split by Top Six Channels in 2015
Grocery Retailers Mixed Retailers Chemists/Pharmacies
Drugstores/parapharmacies Internet Retailing Direct Selling
One world with key regional differences in retailing channels
CH2016 RELEVANT INSIGHTS
Geographic distribution of
$87.9B VMS Market Euromonitor 2015 rsp
USA China
Japan
South
Korea
Italy
Taiwan
Germany
Australia
Thailand
Brazil
Russia
Indonesia
India
United
Kingdom
Canada
25%
$22B
50%
$44B
75%
$66B
Mexico
France
Rest
62 countries
12.1% share
Degree of regulatory difficulty Low Moderate High
100%
$88B
Major Regions 2015 $87.9B
41.5
32.7
12.4
1.4
Asia
Americas
Europe
Middle
East/Africa
Euromonitor 2015 rsp
2020
• Grow to $104B
• China takes share from leaders
• Thailand, Indonesia, Russia and
Pakistan also forecast to take
share
Euromonitor 2015 rsp
In 2020 – $104.6B
2015
2020 0.0
10.0
20.0
30.0
40.0
50.0
60.0
Asia Americas
Europe Middle
East/Africa
Euromonitor 2015 rsp
VMS per capita in largest
population countries
0.00
20.00
40.00
60.00
80.00
100.00
120.00
> 100 Million – 350 Million
> 50 Million to 100 Million
$ p.a.
> 1 Billion population
2015 Euromonitor / Economist population
Highest per capita VMS
0.00
20.00
40.00
60.00
80.00
100.00
120.00
$ p.a.
> 1 Billion population
> 100 Million – 350 Million
> 50 Million to 100 Million
> 1 Million to 50 Million
< 10 Million
2015 Euromonitor / Economist population
Where the action is
VMS
Major Categories
Non Herbal/Traditional DS
Multi vitamins
Herbal/Traditional DS
Single Vitamins
Tonics & Bottled
Nutritive Drinks
Other Herbal/Traditional DS
Fish Oils/ Omega Fatty Acids
Pediatric Vitamins & DS
Combination Non Herbal/Tradition DS
Major Categories by Region
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Americas
Asia
Europe
ME/Africa
Euromonitor 2015 $ Mn
Multivitamin Sales
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
Americas
Asia
Europe
ME/Africa
Euromonitor 2015 $ Mn
Single Vitamin Sales
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
$ Mn
Americas
Asia
Europe
ME/Africa
Euromonitor 2015
Calcium
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
$ Mn
Americas
Asia
Europe
ME/Africa
Euromonitor 2015
Probiotic Supplements
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
Americas
Asia
Europe
ME/Africa
Euromonitor 2015
$ Mn
Fish Oils/ Omega Fatty Acids
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
Americas
Asia
Europe
ME/ Africa
Euromonitor 2015 $ Mn
Minerals Supplements
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
Euromonitor 2015
$ Mn
Americas
Asia
Europe
ME/Africa
Co-Enzyme Q10
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
Americas
Asia
Europe
ME/Africa
Euromonitor 2015
$ Mn
Combination Non Herbal &
Traditional DS
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1,000.0
Euromonitor 2015
$ Mn
Americas
Asia
Europe
ME/Africa
Eye Health Supplements
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
$ Mn Euromonitor 2015
Americas
Asia
Europe
ME/Africa
Glucosamine
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
Euromonitor 2015
$ Mn
Americas
Asia
Europe
ME/Africa
Protein Supplements
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
$ Mn Euromonitor 2015
Americas
Asia
Europe
ME/Africa
Paediatric VDS
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
$ Mn Euromonitor 2015
Americas
Asia
Europe
ME/Africa
Supplement Nutrition Drinks
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
$ Mn
Euromonitor 2015
Americas
Asia
Europe
ME/Africa
No Dominant World Brands
eg Fish oils Country 2013 project
2015 $Mn
Leading
Company
% Share in
Market
USA 1,150.8 Nordic Naturals 21.5
China 340.8 Amway 26.4
Japan 259.8 Shaklee 8.4
Australia 225.5 Blackmores 19.5
Venezuela 199.1 Lab Behrens 13.5
United Kingdom 196.6 NBTY 15.0
Canada 158.2 Jameson 28.2
S. Korea 130.8 Amway 22.4
Norway 105.2 Orkla Group 46.4
Finland 104.2 Orkla Group 19.6
Germany 67.8 MCM Klosterfrau 53.5
Taiwan 64.8 Amway Corp 12.0
Sweden 62.3 Pfizer 16.5
Russia 56.4 Queisser Pharm 22.3
Italy 45.4 Roeder 14.7
What shapes future retailing trends in consumer health?
REGULATORY TRENDS RETAILER ACTIVITY NICHE CHANNELS
Forecasting retailing trends
CH2016 RELEVANT INSIGHTS
0
20
40
60
80
100
120
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
% g
row
th 2
00
9/2
01
4
US$
mill
ion
World – Retailing Channel Evolution 2010/2015
2010 2015 % growth 2010/2015
Considerations for entering
a foreign market
Export ?
Select
Country
Product
USP
Production
Capacity
Modify
Product?
Channel
Regulations
Pricing
Model
Transport
Costs
Customs
Sales tax
Health/
FDA
In Market
Structure
Ownership
TM
IP
Economy
Political
Stability
Corruption
Agency
or
Own
Bulk?
# of Days to start Business
0
20
40
60
80
100
120
140
160
Corruption Rank
0
20
40
60
80
100
120
140
160
180
Least Corruption Moderate Corruption Most Corruption
Where to Sell?
• North America
– USA: largest market, growth slowing, CPG companies investing – Clorox, P&G, Pfizer, Bayer
– Canada: smaller population, older population established regulation, dynamic small companies. National language English. Just next door.
– Mexico: Larger/younger population, pharmaceutical based regulations, growing economy. Just next door
Where to Sell?
• BRICs – Brazil: Large, young population. High tarrifs and taxes,
difficult regulatory environment. In country distribution costly. Economy weak, Politically uncertain.
– Russia: Large, aging population. Weak Economy, politically isolated. Corruption. Complicated regulations for business and VMS.
– India: Very large population. Economy growing fast but starting from low base. Low price market.
– China: The rules keep changing. Very large population. Dynamic (if slowing) economy. Vibrant internet and direct selling channels. Favors established players. Costly to establish sales infrastructure. So big need to strategize priorities
Where to Sell?
• Large Growing Markets
– Indonesia:
– Philippines:
– Thailand:
– South Africa:
Where to Sell?
High per capita VMS consumption
– HongKong, China 111.2 – Taiwan 87.6 – USA 85.2 – South Korea 73.4 – Japan 71.8 – Norway 70.8 – Australia 67.0 – Finland 66.0 – Singapore 65.1 – New Zealand 45.3 – Canada 37.9 – Italy 35.8 – Switzerland 32.3 – Sweden 31.6 – Belgium 30.6 – Singapore
In Summary
• The Opportunity is large.
• Asia is now the largest market and will continue to be so due to young populations and growing economies.
• Regulations will continue to differ from country to country.
• The world is growing. It may look very different in 2050
The Future Population
END
28
22
14
13
19
19
12
14
7
11
19
21
14
13
6
12
11
10
9 5
8 14
5
12
10
13
9
16
10
10
13
13
8
6
8
0% 20% 40% 60% 80% 100%
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
Dietary Supplement by Health Positioning Top Five by Region – % Retail Value 2015
General Health
Bone
Immune System
Beauty
Women's Health
Joint
Heart Health
Digestive Health
Sexual Health
Energy
Other
The top health benefits consumers seek in supplementation
CH2016 RELEVANT INSIGHTS
0% 20% 40% 60% 80% 100%
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
Multivitamins by Positioning 2015 Regional % RSP
Women Men Elderly
Pregnancy Teenagers Other
0% 20% 40% 60% 80% 100%
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
Tonics and Nutritive Drinks 2015 Positioning Regional % RSP
General Health Energy Beauty Others
Big polarization in the segmentation of multivitamins and tonics
CH2016 RELEVANT INSIGHTS
• The demand for products to prevent diseases is expected to outpace the growth of OTC drugs for treatments.
• Sports nutrition is the fastest growing category at 16% in the 2010-2015 period, yet only represents 3% of global retail value. In contrast, vitamins and dietary supplements grew 11% and comprised 42% of global consumer health sales. 0
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
US$
mill
ion
World – Retail Value Sales by Main Category 2010-2020
OTC VDS Weight Management Sports Nutrition
47%
5%
6%
42%
Consumers opting for nutritional supplements for wellbeing
CH2016 RELEVANT INSIGHTS
The World today
• Population continues to grow
Considerations for entering
a foreign market
Export
Select
Country
Product
USP Production
Capacity
Modify
Product?
Channel
Regulations
Pricing
Model
Transport
Costs
Customs
Sales tax
FDA
Population grows less than 2% per year
2E+09
4E+09
6E+09
8E+09
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
World Population
Population is growing
2E+09
4E+09
6E+09
8E+09
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
World Population
7.4 Billion
2.6 Billion
1951 2016
YTD Net increase 33 million
Where the
action is
