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Winning the Battle for Consumer Healthcare

Nutraceuticals: The
Front Line of the Battle
for Consumer Health
Nutrition products can be an inexpensive and safe
solution to tackle important unmet health needs.

Nutraceuticals: The Front Line of the Battle for Consumer Health

1
Consumer healthcare has become the battleground where pharmaceutical and consumer goods
firms compete for growth. With more people around the world dying from obesity than starvation,
poor nutrition is now recognized as a major risk factor for chronic diseases. Most health systems
are ill-equipped to deal with this trend.1 Increasingly, patients are being encouraged to take part
in their own treatments, and a consumer market has been developing midway between the
supermarket-based world of consumer goods companies and the scientific, pharmacy-based
world of pharmaceutical firms.2

Evidence suggests that targeted nutrition
might stabilize or even cure disease.
The front lines of this battle are nutritional products that have been proven to help prevent
or cure disease. These “nutraceuticals” present a tantalizing opportunity for breakthroughs
to prevent and manage common health problems, offering consumer-focused solutions to issues
that are currently addressed only by pharmaceutical interventions—or not at all.3 However,
despite being a hot spot for growth, they still suffer from the same challenges as the rest of the
sector, with market growth barely keeping up with the rise in gross domestic product.4
In this paper, the third in our Winning the Battle for Consumer Healthcare series, we delve further
into the nutraceuticals market to understand the opportunities and barriers to growth. We also
look at the successes and challenges faced by both consumer goods and pharmaceutical
companies as they struggle to gain the upper hand in this exciting new market.

Revival of a Very Old Story?
The link between food and health was established long ago. Hippocrates once said, “Let food
be thy medicine and medicine be thy food.” Traditional medicine in Europe, Asia, Africa, and
pre-Columbian America is rife with examples of foods used to prevent and cure disease. Under
the influence of rationalistic Western medicine, however, food has come to be viewed chiefly
as a source of nutrition (that is, energy, protein, and fat) to the exclusion of other purposes. Yet
as changing demographics accelerate the proliferation of chronic diseases, a growing body
of evidence suggests that targeted nutrition using naturally occurring substances might be able
to stabilize or even cure many of the most challenging health problems (see figure 1 on page 3).
Dictionaries aside, searching for an authoritative definition of nutraceuticals is an exercise in
futility. No broadly accepted legal classification exists, and each market research organization
seems to apply its own criteria. At one end of the spectrum are functional foods and beverages,
as well as dietary supplements, aimed primarily at maintaining health.5 At the other, more
	 Source: “Global Burden of Disease Study 2010,” The Lancet 380, no. 9859 (2012): 2053–2260

1

	 For a deeper discussion, see the first paper in this series, Science Versus the Marketers in Consumer Healthcare, at www.atkearney.com.

2

	 The term nutraceutical, a combination of the words nutrition and pharmaceutical, first appears in the literature in the 1980s. MerriamWebster defines it as “a foodstuff (such as a fortified food or a dietary supplement) that is held to provide health or medical benefits
(such as the prevention or cure of disease) in addition to its basic nutritional value.”

3

	 See the second paper in this series, Mobilizing for Action in Consumer Healthcare, at www.atkearney.com.

4

	 A functional food or beverage is one that has been fortified with added or concentrated ingredients to improve health or performance
or to obtain a desired result—and is marketed as such. A dietary supplement, as defined by the U.S. Food and Drug Administration, is a
product taken by mouth that includes vitamins, minerals, herbs or other botanicals, amino acids, or substances such as enzymes,
organ tissues, glandulars, and metabolites.

5

Nutraceuticals: The Front Line of the Battle for Consumer Health

2
medical end of the spectrum are products aimed at people with special nutritional needs. In the
middle is an emerging gray area of products that have a physiological effect to reduce known
risk factors, such as high cholesterol, or appear to slow or prevent the progression of common
diseases (see figure 2).

Figure 1
Many naturally occurring substances show evidence of potential health benefits
Examples of naturally occurring nutraceuticals
Naturally occurring
substances

Select foods containing
the substance

Areas with established or emerging
evidence of benefit

Dietary fiber

Fruits, grains, legumes,
vegetables

• Lipid control
• Arterial hypertension
• Glucose control

• Weight control
• Intestinal motility

Probiotics
(for example, lactobacilli, grampositive cocci, bifidobacteria)

Many naturally fermented foods
(kefir, unpasteurized sauerkraut,
soft cheeses, pickled cucumbers)

• Gastrointestinal
disorders
• Allergies

• Asthma
• Cancer
• Infections

Prebiotics

Chicory roots, bananas,
tomatoes

• Lipid control
• Gastrointestinal
disorders

• Cancer

Polyunsaturated fats

Fatty fishes

• Cardiovascular disease
• Asthma

• Mental health
• Diabetes

Antioxidant vitamins
(vitamin C, vitamin E, carotenoids)

Citrus fruits, peppers, nuts,
seeds, cantaloupe, carrots

• Degenerative disease

Polyphenols

Tea, dry legumes, berries

• Microbial infection
• Neurodegenerative
disease

• Diabetes
• Cancer
• Cardiovascular disease

Note: Inclusion in this figure does not imply that A.T. Kearney endorses the use or potential benefits of any of the substances listed.
Sources: Lipi Das, Eshani Bhaumik, Utpal Raychaudhuri, and Runu Chakraborty, “Role of Nutraceuticals in Human Health,” Journal of Food Science
and Technology 49, no. 2 (2012): 173–183; Office of Dietary Supplements, National Institutes of Health; WebMD

Figure 2
Nutraceuticals play in the continuum between food and pharmaceuticals

Broad definition of nutraceuticals
Food

F
Functional foods and
nutritional supplements
n

Core
nutraceuticals

Medical
nutrition

Target
group

Healthy people seeking
to preserve wellness

People with common
health problems

Patients with special
nutritional needs

Examples

•
•
•
•

• Cholesterol-lowering
products
• Products to slow
progression of diabetes,
dementia, or age-related
muscle loss

• Specialized infant
feeding formulas
• Nutrition solutions for
the frail or chronically ill
• Other clinical nutrition
products

Channels

• Supermarkets
• Internet

• Supermarkets
• Pharmacies
• Internet

• Pharmacies (often
requiring some medical
supervision)

Probiotic yogurts
Weight-loss bars
Isotonic sports drinks
Vitamin and mineral
supplements

P
Pharmaceuticals
c

Source: A.T. Kearney analysis

Nutraceuticals: The Front Line of the Battle for Consumer Health

3
Annual sales in the narrowly defined core nutraceuticals market are approximately $150 billion,
or roughly one fifth the size of global pharmaceutical industry turnover. A broader definition
that includes categories such as infant nutrition, food intolerance products, diabetes control,
medical nutrition, and weight management solutions reveals a market size of about $420 billion
with a projected growth rate of about 7 percent over the next few years (see figure 3).
Growth hampered by misunderstanding the role of nutrition
While 7 percent growth might seem attractive, it is actually quite modest given the category’s
potential. The fundamental barrier to faster growth is consumers’ and health professionals’ poor
understanding of nutrition’s impact on health.
On one hand, many consumers who could benefit from nutritional products are unmotivated
to change their diets and lifestyles to become healthier. For example, nearly 70 percent of all
European Union citizens view themselves as being in “good” or “very good” health, as do three
out of four in the United Kingdom—where more than 30 percent have high blood pressure and
25 percent are obese.6 This leads to a situation where supplements tend to be bought by people
who generally do not need them, but not by those at serious risk of chronic disease who might
actually benefit.
On the other hand, most health professionals are not well-versed in how nutrition can help
manage diseases. Throughout their careers, doctors might only receive a few hours of training

Figure 3
Nutraceutical sales are large and growing
Nutraceutical market size and projected growth
Estimated global market size ($ billion, 2012)
900
Core nutraceuticals

800

Pharmaceuticals

Noncore nutraceuticals
Partially related products

700
600

Unrelated products

Soft drinks

500

Medical nutrition
Bakery products

400

Diabetes nutrition
Cosmeceuticals

300
200
100
0
−2

Food allergy and intolerance products
Weight management
products
Traditional Chinese medicine
Sports nutrition
supplements
Nutricosmetics

Core nutraceuticals
(except nutricosmetics)
Infant nutritrition
0

2

4

6

8

10

12

14

16

18

20

22

24

Projected annual
market growth

(% CAGR, 2012–2015e)

Note: Bubble area represents projected market size in 2015.
Sources: Frost & Sullivan, World Health Organization, Kalorama Information, Infiniti Research, Transparency Market Research, Bourne Partners,
Global Industry Analysts, Government of Canada, MarketsandMarkets, BCC Research, GBI Research; A.T. Kearney analysis

	 High blood pressure estimates refer to England only. Sources: Eurostat, Self-perceived health by sex, age, and labour status (object
name hlth_silc_01; accessed 30 January 2014) for age groups 16+ years old, 2012 data; East of England Public Health Observatory,
Modelled estimate of prevalence of hypertension in England, December 2011; OECD Health Statistics 2013 (accessed 30 January 2014)

6

Nutraceuticals: The Front Line of the Battle for Consumer Health

4
on the role of nutrition, and they are often skeptical about its effectiveness as alternatives or
adjuncts to pharmaceuticals. The same is true of those who care for the elderly, who are rarely
aware of the role that appropriate nutrition can play in maintaining physical and mental health.
Making matters worse is the fact that the evidence base is relatively weak, as the medical
nutrition industry has been slow to recognize the importance of fact-based claims and struggles
to fund the large-scale clinical trials typical of the pharmaceutical industry.

A solid regulatory framework is crucial
for medical credibility, as it ensures highquality products that can be relied on to
do what they say they do.
Another factor hampering growth is the need to combine appropriate nutritional solutions
with broader behavioral change. For example, there are several nutritional solutions for type 2
diabetes, but they are ineffective without reducing caloric intake and exercising to build skeletal
muscle. Some nutraceuticals can prevent or slow the progression of dementia, but social interaction, exercise, and brain training are also important. Understanding how these behavioral
changes interact with nutritional solutions is an emerging field that companies need to understand and rigorously document if they are to be taken seriously.
A final challenge is pricing. While nutraceuticals are generally far less expensive than innovative
medicines, they are difficult to justify compared to generic drugs that often cost less than $1 per
day and can provide effective control for many conditions.
A fragmented and ill-suited regulatory environment
The regulatory status of a product has a huge impact on its potential success. Where consumer
self-pay and reimbursed markets exist side by side, the reimbursed market is invariably far
more attractive in size and margin. In many countries, a product’s eligibility for reimbursement
depends on its regulatory status, which also determines how it can be described, promoted,
and distributed.
Additionally, a solid regulatory framework is crucial for medical credibility, as it ensures highquality products that can be relied on to do what they say they do. There have been a number
of product recalls resulting from the use of unapproved drug ingredients, especially in categories
such as bodybuilding and weight management. At the same time, little attention has been given
to creating a regulatory environment that can foster innovation.
Today, each of the major markets for pharmaceuticals has its own approach to regulation. In the
United States, the Food and Drug Administration treats nutraceuticals as dietary supplements,
focusing mainly on patient safety. China has separate processes to register functional foods
and to import products, and the general regulatory climate is becoming more difficult for new
entrants. There is no consistency at all across Latin America in either classification or approach,
as some countries regulate nutraceuticals as foods and others as drugs. However, Brazil’s
somewhat bureaucratic approach to registration of health claims could emerge as a standard.
In India, regulations are still being developed.
Nutraceuticals: The Front Line of the Battle for Consumer Health

5
Probably the best-developed market for regulation is Europe, where the European Food Safety
Authority (EFSA) has created a positive list of permitted health claims based on individual
ingredients. This has enabled European companies to build a good reputation for quality and
should provide the best environment for innovation. Japan’s approach is similar but less
well-developed, with very few claims allowed.
However, even in Europe the regulatory environment has not really kept up with technology.
Foods for Special Medical Purposes (FSMP) are only for patients who have specific, disease-related
nutritional limitations, thus excluding foods with curative or preventive impact. EFSA-permitted
food claims are limited to individual ingredients rather than combinations of ingredients. In
a bizarre regulatory catch-22, any food that has a clinical effect is no longer a food and becomes
a drug instead. This has led to a set of regulatory requirements that are impractical—and possibly
irrelevant—for nutritional products. As consumer items, they need to include variation in flavor,
consistency, and presentation, without excessive bureaucracy of re-registration. And pharmaceutical-quality manufacturing requirements make them too costly to produce.

Pharmaceutical majors tend to concentrate
on the less scientifically oriented end
of the nutraceuticals spectrum.
Good examples of products that have suffered from these limitations are Souvenaid® to treat
Alzheimer’s disease or Vitaflo® for treating rare metabolic disorders.7 As a result of regulatory
difficulties, products that are relatively cheap and effective are only reaching a fraction of the
people they could help.
As long as these regulatory barriers remain, the sector’s growth will be limited. While it is certainly
in the interests of regulators to get to grips with this new health field, the industry must also be
far more vocal to bring about a positive regulatory environment.

Consumer Goods Already Ahead of the Game
Nutraceuticals, while providing some of the health benefits of pharmaceuticals, are significantly
less expensive to develop and easier to distribute, making them attractive not only to food
companies but also to pharmaceutical and biotechnology firms. For the former, nutraceuticals
offer a chance to break into science-driven, higher-margin products where retailers’ private
labels find it difficult to compete. For the latter, nutraceuticals are a revenue stream to offset
lost sales as drug patents expire and new blockbusters fail to materialize.
For now, food companies are clearly in the lead in this market, accounting for about 90 percent
of nutraceutical sales. They start with an inherent advantage in branding, consumer market
expertise, and access to mass distribution channels, as these areas are crucial to success in
their core business.

	 Souvenaid is a registered trademark of Nutricia, and Vitaflo is a registered trademark of Nestlé Health Science. All trademarks cited
throughout this document remain property of their respective holders and are used for descriptive purposes only.

7

Nutraceuticals: The Front Line of the Battle for Consumer Health

6
However, consumer goods companies face some significant longer-term challenges. They
are generally weaker than pharmaceutical firms in the fields of scientific innovation, regulatory
affairs, and medical market insight, and most would be shocked at the cost of creating robust
clinical evidence to support claims. Consumer companies also typically find it difficult to manage
medicinal product channels such as pharmacies and often lack experience convincing health
professionals about the medical benefits of their products.
For many companies, the approach has been to gradually expand into adjacent areas. For
example, corporations such as Coca-Cola and PepsiCo have been buying up players that
specialize in functional beverages. However, those aiming to play big in the sector recognize
that a consumer health company is quite different from either a consumer or a pharmaceutical
company. They have created new divisions, often populated with people from pharmaceuticals
and healthcare. A good example is Nestlé Health Science, created in 2011 to research and market
personalized nutrition solutions that take into account an individual’s genetic and metabolic
makeup. Another example is Nestlé archrival Danone. Its Nutricia Advanced Medical Nutrition
subsidiary is now Europe’s leading medical nutrition company.
A few consumer companies have sought to form partnerships with pharmaceutical companies.
Coca-Cola and Sanofi have teamed up to sell health drinks at French pharmacies. Sold under
the Beautific® Oenobiol® brand to help strengthen hair and nails, improve skin, lose weight,
and increase vitality, the product line—formulated by Coca-Cola and distributed by Sanofi—is
a pilot to test demand for beverages with beauty claims. Another example is Innéov, a joint
venture of Nestlé and L’Oréal focusing on nutritional concentrates for skin and hair (see sidebar:
Beauty from Within). A further example is the joint venture between Procter & Gamble and
Teva, PGT Healthcare, combining development and commercialization skills of the parent
companies in the market for over-the-counter (OTC) medicines, vitamins, supplements, and
other consumer healthcare products in all markets outside North America. Whether joint
ventures between companies with such different cultures and operating models will
ultimately be successful is yet to be seen.
Suppliers to consumer goods and pharmaceutical companies are also starting to get in on the
game. For example, specialized ingredient manufacturer DSM has a portfolio of own-brand
ingredients to support weight management and reduce the impact of cardiovascular diseases,
and they are increasingly competing for deals to acquire nutraceutical assets.

Beauty from Within
Beauty from the inside out:
This is the ambition of nutricosmetics, nutritional supplements
that support the function and
structure of skin, hair, and nails.
With a global market of about
$2.4 billion, the business is
well-established in Asia and
is gaining traction in Europe
and North America, building
on the premise that lifestyle
can have a deep impact on the
aging process.

A leading European player is
Laboratoires Innéov, a 50/50
joint venture between Nestlé
and L’Oréal that leverages the
companies’ expertise in nutrition
and skin and hair biology. Innéov
provides a range of concentrated
nutritional supplements to meet
beauty needs, such as strength
and volume for hair, skin
prepared for the sun, and
anti-aging skin care. Products
are evaluated by dermatologists

and distributed through pharmacies, where pharmacists can
advise and educate consumers
about nutritional supplements,
their use, and the way they work
in the body. Intense research
about innovative active ingredients and clinical trials provide
the scientific backup to the
products’ claimed efficacy.

Nutraceuticals: The Front Line of the Battle for Consumer Health

7
Pharmaceutical Companies: In Search of Direction?
In contrast to the food industry, the pharmaceutical sector has approached nutraceuticals
with a great deal of ambivalence. Pfizer and Novartis have sold their nutrition businesses,
while the same Pfizer that sold Wyeth Nutrition to Nestlé invested an undisclosed sum to
acquire Danish vitamins company Ferrosan and the U.S. dietary supplements maker Alacer,
reinforcing what was already a billion-dollar line of business. Most other consumer arms of
pharmaceutical companies are focused on OTC, though both Sanofi and GlaxoSmithKline
have recently invested in mineral supplements businesses that could become a steppingstone into medical foods.
With the notable exception of Abbott, which has a deep offer of products in pediatric, adult,
and therapeutic nutrition, pharmaceutical majors playing in the space tend to concentrate their
efforts on the less scientifically oriented end of the spectrum, around functional foods, dietary
supplements, and sports nutrition. This creates a paradox, with pharmaceutical companies
providing more lifestyle products and consumer goods companies more medicalized ones,
leading both sets of players to work in areas where they are most competitively disadvantaged.

Nutraceuticals, when optimally balanced,
can boost pharmaceuticals’ effects.
The main explanation for this paradox, we believe, lies in what the two parties are seeking to
achieve. While specialized nutrition plays much better to pharmaceutical firms’ core strengths
and promises higher margins, its volume (around $40 billion) pales in comparison to the more
consumer-oriented end of the nutraceuticals spectrum, which appeals to pharmaceutical firms
looking for large revenues to replace billion-dollar blockbusters going off patent. However,
consumer goods companies are keen to build their medical credentials and capabilities, with
the aspiration to eventually achieve the higher margins available from “healthy” products across
their consumer portfolio. As a result, they are happier to work with niche products typical
of medical nutrition.
In the future, stricter regulations that raise the bar in terms of scientific data, resources, and
time needed to prove health claims for all types of nutraceuticals should allow pharmaceutical
firms to regain the advantage. Indeed, U.S. authorities have filed complaints against several
food companies that have made unsubstantiated health claims, and since the introduction
of new EU Nutrition and Health Claims Regulations, few functional and disease-risk reduction
claims have been approved. However, pharmaceutical firms cannot merely wait for the regulatory
tide to turn in their favor, as consumer companies are rapidly acquiring the capabilities to
respond to these changes.
Breakthroughs in functional medicine suggest a number of opportunities for pharmaceutical
companies. Functional medicine focuses on uncovering the underlying imbalances at the basis
of the disease process (rather than on merely providing symptomatic relief) and rely on molecular
nutrition for patient-specific solutions. Nutraceuticals can influence how a drug is metabolized
and how the body acts on the drug. When optimally balanced, they can boost pharmaceuticals’
effects, thus opening a huge business opportunity through patented combinations of nutraceuticals and pharmaceuticals.
Nutraceuticals: The Front Line of the Battle for Consumer Health

8
Pharmaceutical companies, then, should think of nutraceuticals as another tool and “delivery
platform” in their arsenal to address health challenges. But it will require a new way of
innovating, adopting a broad view of the management of mild to severe clinical conditions—
from prevention to treatment—with a focus on offering consumers a credible alternative or
complement to medication (see figure 4).

Figure 4
Nutraceuticals will blur the lines between consumer goods and pharmaceuticals
Expanding scope along the consumer-to-patient pathway
Healthy

At risk

Aware

Undergoing
assessment

Facing
deterioration or
complications

Diagnosed
and stable

Consumer goods companies
market nutraceuticals to prevent
or control lifestyle-related diseases.

1 Today

Consumer goods
2 Tomorrow?

Pharmaceuticals

Pharmaceutical companies develop
new delivery platforms to offer
consumer-focused nutraceuticals
to address nascent health problems.
Source: A.T. Kearney analysis

Winning the Battle for Nutraceuticals
Evidence-based nutraceuticals sit at the center of the battle for consumer health, as they are
both medicines and foods. They must address unmet needs along the patient pathway, while
also appealing to consumers as something they want to buy.
One of the most important considerations is channel strategy. The current regulatory
environment forces companies to decide early whether a product will thrive more effectively
as a consumer-driven or a professionally driven proposition. At heart is the nature of the claim.
A hard medical claim will drive the product down a professional route, requiring a professional
evidence-based sales approach, coupled with reimbursement and insurance coverage, to be
successful. However, such a positioning forbids direct patient marketing in most markets.
A softer consumer claim could open up the consumer mass market, but reduces the credibility
of the product among health professionals.
Regardless of the channel strategy, consumer goods and pharmaceuticals players will need
to both draw on their own strengths and borrow heavily from the other industry’s capabilities.
Consumer goods companies already know how to create brand equity and reach the mass
market. They will need to apply that know-how to nutraceuticals, using category approaches
to make their products appealing to consumers and building product franchises that
maximize consumer access and availability.
Nutraceuticals: The Front Line of the Battle for Consumer Health

9
At the same time, there are several lessons to be learned from the pharmaceutical industry:
•	 Think big. Billion-dollar single stock-keeping units are not unusual in the pharmaceutical
sector. Commit to the investments required to win on the big stage.
•	 Realize that science matters. Build robust evidence for clinical efficacy and cost-effectiveness,
and develop proof points for nutritional products used in combination with pharmaceutical
and behavioral therapies.
•	 Build capability in market access and in influencing government and health-system policies
to reshape perceptions of nutraceuticals as valuable tools to address unmet health needs
and provide alternative treatment options.
•	 Establish strong relationships with doctors and pharmacists to convince them of the
value of nutraceuticals, either as reimbursed or consumer-paid products. Recognize that even
in this digital age, professionals still expect a face-to-face sell.
•	 Structure to operate in disparate regulatory environments while maintaining a common
scientific approach.
Pharmaceutical companies bring to the table a deep understanding of treatment pathways,
which will serve them well to position medical nutrition therapy as a means to improve overall
outcomes. Moreover, existing relationships with doctors and pharmacists mean communication
lines are open to begin persuading them to endorse and use nutraceuticals. And the same
health economics capabilities that are applied to support the pharmaceuticals registration
process can be used to create compelling arguments for nutraceuticals based on a comparative
analysis of clinical cost-effectiveness.

An innovative, growing nutraceuticals
sector would serve governments’ interests.
Still, pharmaceutical companies can take many pages from the consumer goods playbook:
•	 Adopt a consumer-centric view of health needs to produce products that are appealing
to consumers in their own right.
•	 Understand how to unlock consumer behavior. Align with people’s aspirations for the
future, not just their concerns over ill health. This means seeing consumers as individuals
rather than “health states” to be addressed.
•	 Take a broader view of innovation to include packaging, presentation, and variants
to improve attractiveness.
•	 Use multiple routes to reach consumers, including mass market and online channels.
•	 Build categories that can retain and generate value long after patents have expired.
However, there is a bigger battle to be won by the industry as a whole: to get nutrition recognized
by both consumers and health professionals as a core component of preventing and treating
disease and living longer, healthier lives.
The pharmaceutical industry, through organizations such as the Pharmaceutical Research and
Manufacturers of America (PhRMA) and the European Federation of Pharmaceutical Industries
Nutraceuticals: The Front Line of the Battle for Consumer Health 10
Figure 5
Policy agenda for nutraceuticals

Action list
Address regulation

• Recognize a new class of nutrition-based products that, either alone or in combination with drugs,
can have a therapeutic effect
• Allow combination products—not just individual ingredients—to be assessed for effect
• Harmonize regulations internationally (for example, building on European approach)

Persuade health
professionals

• Educate health professionals in the use of nutrition for disease prevention and management
to make them:
— More receptive to recommending consumer-based solutions
— Less likely to immediately resort to drugs
— More likely to use nutrition as an adjunct to other therapies

Develop robust
evidence

• Develop new standards of evidence to better understand the effectiveness of nutritional solutions
in large, diverse groups (alone and in combination with other therapies)

Engage authorities

• Convince payers, governments, and public health authorities that nutritional solutions
are an inexpensive and safe means to tackle important unmet health needs

Convince consumers

• Shape consumer attitudes to recognize nutritional solutions as a way to prevent and manage
disease and prolong a healthy life

Source: A.T. Kearney

and Associations (EFPIA), builds dialogue with governments and regulators and seeks to educate
health professionals and consumers. Firms with an interest in nutraceuticals would be wise to join
forces to develop a strong policy agenda that could help the overall market develop effectively
(see figure 5). It is in governments’ interests that the sector innovate and grow, as it offers real
opportunities to address many health needs that are begging for a solution.
Nutraceuticals are one of the most exciting areas of health innovation, offering an inexpensive,
safe, and effective answer for some of today’s most challenging health problems. However,
individual companies, industry, health professionals, and government all need to adapt if these
new solutions are to achieve their full potential.

Authors
Jonathan Anscombe, partner, London
jonathan.anscombe@atkearney.com

Michael Thomas, partner, London
michael.thomas@atkearney.com

Markus Stricker, partner, Zurich
markus.stricker@atkearney.com

Emmanuel Hembert, principal, Zurich
emmanuel.hembert@atkearney.com

Antonella Leone-Kammler,
consultant, Zurich
antonella.leone-kammler@atkearney.com

Nutraceuticals: The Front Line of the Battle for Consumer Health 11
A.T. Kearney is a global team of forward-thinking partners that delivers immediate
impact and growing advantage for its clients. We are passionate problem solvers
who excel in collaborating across borders to co-create and realize elegantly simple,
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Asia Pacific

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Melbourne
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New Delhi
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Shanghai

Singapore
Sydney
Tokyo

Europe

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London
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Munich

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and Africa

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For more information, permission to reprint or translate this work, and all other correspondence,
please email: insight@atkearney.com.
A.T. Kearney Korea LLC is a separate and
independent legal entity operating under
the A.T. Kearney name in Korea.
© 2014, A.T. Kearney, Inc. All rights reserved.

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Nutraceuticals: The Front Line of the Battle for Consumer Health

  • 1. Winning the Battle for Consumer Healthcare Nutraceuticals: The Front Line of the Battle for Consumer Health Nutrition products can be an inexpensive and safe solution to tackle important unmet health needs. Nutraceuticals: The Front Line of the Battle for Consumer Health 1
  • 2. Consumer healthcare has become the battleground where pharmaceutical and consumer goods firms compete for growth. With more people around the world dying from obesity than starvation, poor nutrition is now recognized as a major risk factor for chronic diseases. Most health systems are ill-equipped to deal with this trend.1 Increasingly, patients are being encouraged to take part in their own treatments, and a consumer market has been developing midway between the supermarket-based world of consumer goods companies and the scientific, pharmacy-based world of pharmaceutical firms.2 Evidence suggests that targeted nutrition might stabilize or even cure disease. The front lines of this battle are nutritional products that have been proven to help prevent or cure disease. These “nutraceuticals” present a tantalizing opportunity for breakthroughs to prevent and manage common health problems, offering consumer-focused solutions to issues that are currently addressed only by pharmaceutical interventions—or not at all.3 However, despite being a hot spot for growth, they still suffer from the same challenges as the rest of the sector, with market growth barely keeping up with the rise in gross domestic product.4 In this paper, the third in our Winning the Battle for Consumer Healthcare series, we delve further into the nutraceuticals market to understand the opportunities and barriers to growth. We also look at the successes and challenges faced by both consumer goods and pharmaceutical companies as they struggle to gain the upper hand in this exciting new market. Revival of a Very Old Story? The link between food and health was established long ago. Hippocrates once said, “Let food be thy medicine and medicine be thy food.” Traditional medicine in Europe, Asia, Africa, and pre-Columbian America is rife with examples of foods used to prevent and cure disease. Under the influence of rationalistic Western medicine, however, food has come to be viewed chiefly as a source of nutrition (that is, energy, protein, and fat) to the exclusion of other purposes. Yet as changing demographics accelerate the proliferation of chronic diseases, a growing body of evidence suggests that targeted nutrition using naturally occurring substances might be able to stabilize or even cure many of the most challenging health problems (see figure 1 on page 3). Dictionaries aside, searching for an authoritative definition of nutraceuticals is an exercise in futility. No broadly accepted legal classification exists, and each market research organization seems to apply its own criteria. At one end of the spectrum are functional foods and beverages, as well as dietary supplements, aimed primarily at maintaining health.5 At the other, more Source: “Global Burden of Disease Study 2010,” The Lancet 380, no. 9859 (2012): 2053–2260 1 For a deeper discussion, see the first paper in this series, Science Versus the Marketers in Consumer Healthcare, at www.atkearney.com. 2 The term nutraceutical, a combination of the words nutrition and pharmaceutical, first appears in the literature in the 1980s. MerriamWebster defines it as “a foodstuff (such as a fortified food or a dietary supplement) that is held to provide health or medical benefits (such as the prevention or cure of disease) in addition to its basic nutritional value.” 3 See the second paper in this series, Mobilizing for Action in Consumer Healthcare, at www.atkearney.com. 4 A functional food or beverage is one that has been fortified with added or concentrated ingredients to improve health or performance or to obtain a desired result—and is marketed as such. A dietary supplement, as defined by the U.S. Food and Drug Administration, is a product taken by mouth that includes vitamins, minerals, herbs or other botanicals, amino acids, or substances such as enzymes, organ tissues, glandulars, and metabolites. 5 Nutraceuticals: The Front Line of the Battle for Consumer Health 2
  • 3. medical end of the spectrum are products aimed at people with special nutritional needs. In the middle is an emerging gray area of products that have a physiological effect to reduce known risk factors, such as high cholesterol, or appear to slow or prevent the progression of common diseases (see figure 2). Figure 1 Many naturally occurring substances show evidence of potential health benefits Examples of naturally occurring nutraceuticals Naturally occurring substances Select foods containing the substance Areas with established or emerging evidence of benefit Dietary fiber Fruits, grains, legumes, vegetables • Lipid control • Arterial hypertension • Glucose control • Weight control • Intestinal motility Probiotics (for example, lactobacilli, grampositive cocci, bifidobacteria) Many naturally fermented foods (kefir, unpasteurized sauerkraut, soft cheeses, pickled cucumbers) • Gastrointestinal disorders • Allergies • Asthma • Cancer • Infections Prebiotics Chicory roots, bananas, tomatoes • Lipid control • Gastrointestinal disorders • Cancer Polyunsaturated fats Fatty fishes • Cardiovascular disease • Asthma • Mental health • Diabetes Antioxidant vitamins (vitamin C, vitamin E, carotenoids) Citrus fruits, peppers, nuts, seeds, cantaloupe, carrots • Degenerative disease Polyphenols Tea, dry legumes, berries • Microbial infection • Neurodegenerative disease • Diabetes • Cancer • Cardiovascular disease Note: Inclusion in this figure does not imply that A.T. Kearney endorses the use or potential benefits of any of the substances listed. Sources: Lipi Das, Eshani Bhaumik, Utpal Raychaudhuri, and Runu Chakraborty, “Role of Nutraceuticals in Human Health,” Journal of Food Science and Technology 49, no. 2 (2012): 173–183; Office of Dietary Supplements, National Institutes of Health; WebMD Figure 2 Nutraceuticals play in the continuum between food and pharmaceuticals Broad definition of nutraceuticals Food F Functional foods and nutritional supplements n Core nutraceuticals Medical nutrition Target group Healthy people seeking to preserve wellness People with common health problems Patients with special nutritional needs Examples • • • • • Cholesterol-lowering products • Products to slow progression of diabetes, dementia, or age-related muscle loss • Specialized infant feeding formulas • Nutrition solutions for the frail or chronically ill • Other clinical nutrition products Channels • Supermarkets • Internet • Supermarkets • Pharmacies • Internet • Pharmacies (often requiring some medical supervision) Probiotic yogurts Weight-loss bars Isotonic sports drinks Vitamin and mineral supplements P Pharmaceuticals c Source: A.T. Kearney analysis Nutraceuticals: The Front Line of the Battle for Consumer Health 3
  • 4. Annual sales in the narrowly defined core nutraceuticals market are approximately $150 billion, or roughly one fifth the size of global pharmaceutical industry turnover. A broader definition that includes categories such as infant nutrition, food intolerance products, diabetes control, medical nutrition, and weight management solutions reveals a market size of about $420 billion with a projected growth rate of about 7 percent over the next few years (see figure 3). Growth hampered by misunderstanding the role of nutrition While 7 percent growth might seem attractive, it is actually quite modest given the category’s potential. The fundamental barrier to faster growth is consumers’ and health professionals’ poor understanding of nutrition’s impact on health. On one hand, many consumers who could benefit from nutritional products are unmotivated to change their diets and lifestyles to become healthier. For example, nearly 70 percent of all European Union citizens view themselves as being in “good” or “very good” health, as do three out of four in the United Kingdom—where more than 30 percent have high blood pressure and 25 percent are obese.6 This leads to a situation where supplements tend to be bought by people who generally do not need them, but not by those at serious risk of chronic disease who might actually benefit. On the other hand, most health professionals are not well-versed in how nutrition can help manage diseases. Throughout their careers, doctors might only receive a few hours of training Figure 3 Nutraceutical sales are large and growing Nutraceutical market size and projected growth Estimated global market size ($ billion, 2012) 900 Core nutraceuticals 800 Pharmaceuticals Noncore nutraceuticals Partially related products 700 600 Unrelated products Soft drinks 500 Medical nutrition Bakery products 400 Diabetes nutrition Cosmeceuticals 300 200 100 0 −2 Food allergy and intolerance products Weight management products Traditional Chinese medicine Sports nutrition supplements Nutricosmetics Core nutraceuticals (except nutricosmetics) Infant nutritrition 0 2 4 6 8 10 12 14 16 18 20 22 24 Projected annual market growth (% CAGR, 2012–2015e) Note: Bubble area represents projected market size in 2015. Sources: Frost & Sullivan, World Health Organization, Kalorama Information, Infiniti Research, Transparency Market Research, Bourne Partners, Global Industry Analysts, Government of Canada, MarketsandMarkets, BCC Research, GBI Research; A.T. Kearney analysis High blood pressure estimates refer to England only. Sources: Eurostat, Self-perceived health by sex, age, and labour status (object name hlth_silc_01; accessed 30 January 2014) for age groups 16+ years old, 2012 data; East of England Public Health Observatory, Modelled estimate of prevalence of hypertension in England, December 2011; OECD Health Statistics 2013 (accessed 30 January 2014) 6 Nutraceuticals: The Front Line of the Battle for Consumer Health 4
  • 5. on the role of nutrition, and they are often skeptical about its effectiveness as alternatives or adjuncts to pharmaceuticals. The same is true of those who care for the elderly, who are rarely aware of the role that appropriate nutrition can play in maintaining physical and mental health. Making matters worse is the fact that the evidence base is relatively weak, as the medical nutrition industry has been slow to recognize the importance of fact-based claims and struggles to fund the large-scale clinical trials typical of the pharmaceutical industry. A solid regulatory framework is crucial for medical credibility, as it ensures highquality products that can be relied on to do what they say they do. Another factor hampering growth is the need to combine appropriate nutritional solutions with broader behavioral change. For example, there are several nutritional solutions for type 2 diabetes, but they are ineffective without reducing caloric intake and exercising to build skeletal muscle. Some nutraceuticals can prevent or slow the progression of dementia, but social interaction, exercise, and brain training are also important. Understanding how these behavioral changes interact with nutritional solutions is an emerging field that companies need to understand and rigorously document if they are to be taken seriously. A final challenge is pricing. While nutraceuticals are generally far less expensive than innovative medicines, they are difficult to justify compared to generic drugs that often cost less than $1 per day and can provide effective control for many conditions. A fragmented and ill-suited regulatory environment The regulatory status of a product has a huge impact on its potential success. Where consumer self-pay and reimbursed markets exist side by side, the reimbursed market is invariably far more attractive in size and margin. In many countries, a product’s eligibility for reimbursement depends on its regulatory status, which also determines how it can be described, promoted, and distributed. Additionally, a solid regulatory framework is crucial for medical credibility, as it ensures highquality products that can be relied on to do what they say they do. There have been a number of product recalls resulting from the use of unapproved drug ingredients, especially in categories such as bodybuilding and weight management. At the same time, little attention has been given to creating a regulatory environment that can foster innovation. Today, each of the major markets for pharmaceuticals has its own approach to regulation. In the United States, the Food and Drug Administration treats nutraceuticals as dietary supplements, focusing mainly on patient safety. China has separate processes to register functional foods and to import products, and the general regulatory climate is becoming more difficult for new entrants. There is no consistency at all across Latin America in either classification or approach, as some countries regulate nutraceuticals as foods and others as drugs. However, Brazil’s somewhat bureaucratic approach to registration of health claims could emerge as a standard. In India, regulations are still being developed. Nutraceuticals: The Front Line of the Battle for Consumer Health 5
  • 6. Probably the best-developed market for regulation is Europe, where the European Food Safety Authority (EFSA) has created a positive list of permitted health claims based on individual ingredients. This has enabled European companies to build a good reputation for quality and should provide the best environment for innovation. Japan’s approach is similar but less well-developed, with very few claims allowed. However, even in Europe the regulatory environment has not really kept up with technology. Foods for Special Medical Purposes (FSMP) are only for patients who have specific, disease-related nutritional limitations, thus excluding foods with curative or preventive impact. EFSA-permitted food claims are limited to individual ingredients rather than combinations of ingredients. In a bizarre regulatory catch-22, any food that has a clinical effect is no longer a food and becomes a drug instead. This has led to a set of regulatory requirements that are impractical—and possibly irrelevant—for nutritional products. As consumer items, they need to include variation in flavor, consistency, and presentation, without excessive bureaucracy of re-registration. And pharmaceutical-quality manufacturing requirements make them too costly to produce. Pharmaceutical majors tend to concentrate on the less scientifically oriented end of the nutraceuticals spectrum. Good examples of products that have suffered from these limitations are Souvenaid® to treat Alzheimer’s disease or Vitaflo® for treating rare metabolic disorders.7 As a result of regulatory difficulties, products that are relatively cheap and effective are only reaching a fraction of the people they could help. As long as these regulatory barriers remain, the sector’s growth will be limited. While it is certainly in the interests of regulators to get to grips with this new health field, the industry must also be far more vocal to bring about a positive regulatory environment. Consumer Goods Already Ahead of the Game Nutraceuticals, while providing some of the health benefits of pharmaceuticals, are significantly less expensive to develop and easier to distribute, making them attractive not only to food companies but also to pharmaceutical and biotechnology firms. For the former, nutraceuticals offer a chance to break into science-driven, higher-margin products where retailers’ private labels find it difficult to compete. For the latter, nutraceuticals are a revenue stream to offset lost sales as drug patents expire and new blockbusters fail to materialize. For now, food companies are clearly in the lead in this market, accounting for about 90 percent of nutraceutical sales. They start with an inherent advantage in branding, consumer market expertise, and access to mass distribution channels, as these areas are crucial to success in their core business. Souvenaid is a registered trademark of Nutricia, and Vitaflo is a registered trademark of Nestlé Health Science. All trademarks cited throughout this document remain property of their respective holders and are used for descriptive purposes only. 7 Nutraceuticals: The Front Line of the Battle for Consumer Health 6
  • 7. However, consumer goods companies face some significant longer-term challenges. They are generally weaker than pharmaceutical firms in the fields of scientific innovation, regulatory affairs, and medical market insight, and most would be shocked at the cost of creating robust clinical evidence to support claims. Consumer companies also typically find it difficult to manage medicinal product channels such as pharmacies and often lack experience convincing health professionals about the medical benefits of their products. For many companies, the approach has been to gradually expand into adjacent areas. For example, corporations such as Coca-Cola and PepsiCo have been buying up players that specialize in functional beverages. However, those aiming to play big in the sector recognize that a consumer health company is quite different from either a consumer or a pharmaceutical company. They have created new divisions, often populated with people from pharmaceuticals and healthcare. A good example is Nestlé Health Science, created in 2011 to research and market personalized nutrition solutions that take into account an individual’s genetic and metabolic makeup. Another example is Nestlé archrival Danone. Its Nutricia Advanced Medical Nutrition subsidiary is now Europe’s leading medical nutrition company. A few consumer companies have sought to form partnerships with pharmaceutical companies. Coca-Cola and Sanofi have teamed up to sell health drinks at French pharmacies. Sold under the Beautific® Oenobiol® brand to help strengthen hair and nails, improve skin, lose weight, and increase vitality, the product line—formulated by Coca-Cola and distributed by Sanofi—is a pilot to test demand for beverages with beauty claims. Another example is Innéov, a joint venture of Nestlé and L’Oréal focusing on nutritional concentrates for skin and hair (see sidebar: Beauty from Within). A further example is the joint venture between Procter & Gamble and Teva, PGT Healthcare, combining development and commercialization skills of the parent companies in the market for over-the-counter (OTC) medicines, vitamins, supplements, and other consumer healthcare products in all markets outside North America. Whether joint ventures between companies with such different cultures and operating models will ultimately be successful is yet to be seen. Suppliers to consumer goods and pharmaceutical companies are also starting to get in on the game. For example, specialized ingredient manufacturer DSM has a portfolio of own-brand ingredients to support weight management and reduce the impact of cardiovascular diseases, and they are increasingly competing for deals to acquire nutraceutical assets. Beauty from Within Beauty from the inside out: This is the ambition of nutricosmetics, nutritional supplements that support the function and structure of skin, hair, and nails. With a global market of about $2.4 billion, the business is well-established in Asia and is gaining traction in Europe and North America, building on the premise that lifestyle can have a deep impact on the aging process. A leading European player is Laboratoires Innéov, a 50/50 joint venture between Nestlé and L’Oréal that leverages the companies’ expertise in nutrition and skin and hair biology. Innéov provides a range of concentrated nutritional supplements to meet beauty needs, such as strength and volume for hair, skin prepared for the sun, and anti-aging skin care. Products are evaluated by dermatologists and distributed through pharmacies, where pharmacists can advise and educate consumers about nutritional supplements, their use, and the way they work in the body. Intense research about innovative active ingredients and clinical trials provide the scientific backup to the products’ claimed efficacy. Nutraceuticals: The Front Line of the Battle for Consumer Health 7
  • 8. Pharmaceutical Companies: In Search of Direction? In contrast to the food industry, the pharmaceutical sector has approached nutraceuticals with a great deal of ambivalence. Pfizer and Novartis have sold their nutrition businesses, while the same Pfizer that sold Wyeth Nutrition to Nestlé invested an undisclosed sum to acquire Danish vitamins company Ferrosan and the U.S. dietary supplements maker Alacer, reinforcing what was already a billion-dollar line of business. Most other consumer arms of pharmaceutical companies are focused on OTC, though both Sanofi and GlaxoSmithKline have recently invested in mineral supplements businesses that could become a steppingstone into medical foods. With the notable exception of Abbott, which has a deep offer of products in pediatric, adult, and therapeutic nutrition, pharmaceutical majors playing in the space tend to concentrate their efforts on the less scientifically oriented end of the spectrum, around functional foods, dietary supplements, and sports nutrition. This creates a paradox, with pharmaceutical companies providing more lifestyle products and consumer goods companies more medicalized ones, leading both sets of players to work in areas where they are most competitively disadvantaged. Nutraceuticals, when optimally balanced, can boost pharmaceuticals’ effects. The main explanation for this paradox, we believe, lies in what the two parties are seeking to achieve. While specialized nutrition plays much better to pharmaceutical firms’ core strengths and promises higher margins, its volume (around $40 billion) pales in comparison to the more consumer-oriented end of the nutraceuticals spectrum, which appeals to pharmaceutical firms looking for large revenues to replace billion-dollar blockbusters going off patent. However, consumer goods companies are keen to build their medical credentials and capabilities, with the aspiration to eventually achieve the higher margins available from “healthy” products across their consumer portfolio. As a result, they are happier to work with niche products typical of medical nutrition. In the future, stricter regulations that raise the bar in terms of scientific data, resources, and time needed to prove health claims for all types of nutraceuticals should allow pharmaceutical firms to regain the advantage. Indeed, U.S. authorities have filed complaints against several food companies that have made unsubstantiated health claims, and since the introduction of new EU Nutrition and Health Claims Regulations, few functional and disease-risk reduction claims have been approved. However, pharmaceutical firms cannot merely wait for the regulatory tide to turn in their favor, as consumer companies are rapidly acquiring the capabilities to respond to these changes. Breakthroughs in functional medicine suggest a number of opportunities for pharmaceutical companies. Functional medicine focuses on uncovering the underlying imbalances at the basis of the disease process (rather than on merely providing symptomatic relief) and rely on molecular nutrition for patient-specific solutions. Nutraceuticals can influence how a drug is metabolized and how the body acts on the drug. When optimally balanced, they can boost pharmaceuticals’ effects, thus opening a huge business opportunity through patented combinations of nutraceuticals and pharmaceuticals. Nutraceuticals: The Front Line of the Battle for Consumer Health 8
  • 9. Pharmaceutical companies, then, should think of nutraceuticals as another tool and “delivery platform” in their arsenal to address health challenges. But it will require a new way of innovating, adopting a broad view of the management of mild to severe clinical conditions— from prevention to treatment—with a focus on offering consumers a credible alternative or complement to medication (see figure 4). Figure 4 Nutraceuticals will blur the lines between consumer goods and pharmaceuticals Expanding scope along the consumer-to-patient pathway Healthy At risk Aware Undergoing assessment Facing deterioration or complications Diagnosed and stable Consumer goods companies market nutraceuticals to prevent or control lifestyle-related diseases. 1 Today Consumer goods 2 Tomorrow? Pharmaceuticals Pharmaceutical companies develop new delivery platforms to offer consumer-focused nutraceuticals to address nascent health problems. Source: A.T. Kearney analysis Winning the Battle for Nutraceuticals Evidence-based nutraceuticals sit at the center of the battle for consumer health, as they are both medicines and foods. They must address unmet needs along the patient pathway, while also appealing to consumers as something they want to buy. One of the most important considerations is channel strategy. The current regulatory environment forces companies to decide early whether a product will thrive more effectively as a consumer-driven or a professionally driven proposition. At heart is the nature of the claim. A hard medical claim will drive the product down a professional route, requiring a professional evidence-based sales approach, coupled with reimbursement and insurance coverage, to be successful. However, such a positioning forbids direct patient marketing in most markets. A softer consumer claim could open up the consumer mass market, but reduces the credibility of the product among health professionals. Regardless of the channel strategy, consumer goods and pharmaceuticals players will need to both draw on their own strengths and borrow heavily from the other industry’s capabilities. Consumer goods companies already know how to create brand equity and reach the mass market. They will need to apply that know-how to nutraceuticals, using category approaches to make their products appealing to consumers and building product franchises that maximize consumer access and availability. Nutraceuticals: The Front Line of the Battle for Consumer Health 9
  • 10. At the same time, there are several lessons to be learned from the pharmaceutical industry: • Think big. Billion-dollar single stock-keeping units are not unusual in the pharmaceutical sector. Commit to the investments required to win on the big stage. • Realize that science matters. Build robust evidence for clinical efficacy and cost-effectiveness, and develop proof points for nutritional products used in combination with pharmaceutical and behavioral therapies. • Build capability in market access and in influencing government and health-system policies to reshape perceptions of nutraceuticals as valuable tools to address unmet health needs and provide alternative treatment options. • Establish strong relationships with doctors and pharmacists to convince them of the value of nutraceuticals, either as reimbursed or consumer-paid products. Recognize that even in this digital age, professionals still expect a face-to-face sell. • Structure to operate in disparate regulatory environments while maintaining a common scientific approach. Pharmaceutical companies bring to the table a deep understanding of treatment pathways, which will serve them well to position medical nutrition therapy as a means to improve overall outcomes. Moreover, existing relationships with doctors and pharmacists mean communication lines are open to begin persuading them to endorse and use nutraceuticals. And the same health economics capabilities that are applied to support the pharmaceuticals registration process can be used to create compelling arguments for nutraceuticals based on a comparative analysis of clinical cost-effectiveness. An innovative, growing nutraceuticals sector would serve governments’ interests. Still, pharmaceutical companies can take many pages from the consumer goods playbook: • Adopt a consumer-centric view of health needs to produce products that are appealing to consumers in their own right. • Understand how to unlock consumer behavior. Align with people’s aspirations for the future, not just their concerns over ill health. This means seeing consumers as individuals rather than “health states” to be addressed. • Take a broader view of innovation to include packaging, presentation, and variants to improve attractiveness. • Use multiple routes to reach consumers, including mass market and online channels. • Build categories that can retain and generate value long after patents have expired. However, there is a bigger battle to be won by the industry as a whole: to get nutrition recognized by both consumers and health professionals as a core component of preventing and treating disease and living longer, healthier lives. The pharmaceutical industry, through organizations such as the Pharmaceutical Research and Manufacturers of America (PhRMA) and the European Federation of Pharmaceutical Industries Nutraceuticals: The Front Line of the Battle for Consumer Health 10
  • 11. Figure 5 Policy agenda for nutraceuticals Action list Address regulation • Recognize a new class of nutrition-based products that, either alone or in combination with drugs, can have a therapeutic effect • Allow combination products—not just individual ingredients—to be assessed for effect • Harmonize regulations internationally (for example, building on European approach) Persuade health professionals • Educate health professionals in the use of nutrition for disease prevention and management to make them: — More receptive to recommending consumer-based solutions — Less likely to immediately resort to drugs — More likely to use nutrition as an adjunct to other therapies Develop robust evidence • Develop new standards of evidence to better understand the effectiveness of nutritional solutions in large, diverse groups (alone and in combination with other therapies) Engage authorities • Convince payers, governments, and public health authorities that nutritional solutions are an inexpensive and safe means to tackle important unmet health needs Convince consumers • Shape consumer attitudes to recognize nutritional solutions as a way to prevent and manage disease and prolong a healthy life Source: A.T. Kearney and Associations (EFPIA), builds dialogue with governments and regulators and seeks to educate health professionals and consumers. Firms with an interest in nutraceuticals would be wise to join forces to develop a strong policy agenda that could help the overall market develop effectively (see figure 5). It is in governments’ interests that the sector innovate and grow, as it offers real opportunities to address many health needs that are begging for a solution. Nutraceuticals are one of the most exciting areas of health innovation, offering an inexpensive, safe, and effective answer for some of today’s most challenging health problems. However, individual companies, industry, health professionals, and government all need to adapt if these new solutions are to achieve their full potential. Authors Jonathan Anscombe, partner, London jonathan.anscombe@atkearney.com Michael Thomas, partner, London michael.thomas@atkearney.com Markus Stricker, partner, Zurich markus.stricker@atkearney.com Emmanuel Hembert, principal, Zurich emmanuel.hembert@atkearney.com Antonella Leone-Kammler, consultant, Zurich antonella.leone-kammler@atkearney.com Nutraceuticals: The Front Line of the Battle for Consumer Health 11
  • 12. A.T. Kearney is a global team of forward-thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results. Since 1926, we have been trusted advisors on the most mission-critical issues to the world’s leading organizations across all major industries and service sectors. A.T. Kearney has 58 offices located in major business centers across 40 countries. Americas Atlanta Bogotá Calgary Chicago Dallas Detroit Houston Mexico City New York San Francisco São Paulo Toronto Washington, D.C. Asia Pacific Bangkok Beijing Hong Kong Jakarta Kuala Lumpur Melbourne Mumbai New Delhi Seoul Shanghai Singapore Sydney Tokyo Europe Amsterdam Berlin Brussels Bucharest Budapest Copenhagen Düsseldorf Frankfurt Helsinki Istanbul Kiev Lisbon Ljubljana London Madrid Milan Moscow Munich Oslo Paris Prague Rome Stockholm Stuttgart Vienna Warsaw Zurich Middle East and Africa Abu Dhabi Dubai Johannesburg Manama Riyadh For more information, permission to reprint or translate this work, and all other correspondence, please email: insight@atkearney.com. A.T. Kearney Korea LLC is a separate and independent legal entity operating under the A.T. Kearney name in Korea. © 2014, A.T. Kearney, Inc. All rights reserved. The signature of our namesake and founder, Andrew Thomas Kearney, on the cover of this document represents our pledge to live the values he instilled in our firm and uphold his commitment to ensuring “essential rightness” in all that we do.