Market Overview

The domestic market size of materials for foods labeled with certain nutritional or health functions (as a total of research target, 44 [raw] materials) attained 189,477 million yen for FY2021, up 3.1% from the preceding year, based on the gross merchandise value. Gross merchandise volume for FY2021 also rose to 61,725.5 tonnes (up 3.7% on year-on-year basis).

Despite the sluggish market growth of foods with health claims, which had been a main application for these materials, active development and distribution of foods with health promoting function is expected to boost a rise in demand/gross merchandise volume of the materials in FY2022 as in FY2021. Among the 44 materials, strong demand was witnessed for the substances that ease unwanted health conditions in the new normal, such as mental strain, sleep disorder, and obesity. Moreover, the market of materials that improve immune health, which have been reacknowledged for their importance during the pandemic (such as lactic acid bacteria and propolis) grew steadily. The market of materials that boost the immune system is expanding in particular since 2020, when the Consumer Affairs Agency approved its first food that claim to improve immune health.

Noteworthy Topics

Rise in Demand Expected for Materials Associated with Liver Health and Femcare

Among the materials whose demand was on the decline amidst the COVID-19 crisis, the demand for those that have favorable effects on liver-related health issues are expected to get back on track of growth trajectory from FY2022.

Due to fewer opportunities for drinking out during the pandemic, the distribution volume decreased for “curcuma (ukon/turmeric)”and “liver hydrolysate”, which are highly recognized for their properties that attenuate alcohol-induced liver injury, as well as for “placenta” specifically used as ingredients to recover liver health. Nevertheless, as restrictions have been eased, the demands have been making an upward turn almost to the pre-pandemic level. Further growth is anticipated for the market of substances that enhance liver health.

In addition, the demand for nutrients for women is rising in particular, as femcare is a field that is expected to grow for years to come. This is in response to the needs of women's health and lifestyle, including menopause, as women continue to advance in society. Sales of materials such as “equol”, “soybean isoflavone”, and “heme iron” are expected to rise hereafter.

Future Outlook

Domestic market of foods with health claims is forecasted to grow moderately, while the market of “foods in general” also expects constant development/launch of products with health benefits. As a differentiation strategy, manufacturers of the foods with functional claims have been actively producing products with enhanced benefits derived from compounding multiple nutrition materials into one product.

For the makers of materials for foods labeled with certain nutritional or health functions, the key to further business growth is in regions such as China and Southeast Asia, where the demand is expected to expand for years to come. The makers need to establish/enhance their sales formation. Meanwhile, stable procurement of the raw materials is critical for some materials, because they are affected by the global supply-demand balance, the political risks in producing countries, and the risks of bad weather and natural disasters for the production of naturally-derived products. Therefore, material makers need to build strategies on a long-term perspective, including consideration on decentralization of production areas.

Research Outline