Business Opportunities Expanding Through the Functional Claims System for Foods Part 2 ~The Evolution of the U.S. Healthcare Market "20 Years Ahead" and Business Case Studies~ Part 2

On April 1st, Japan's new functional food labeling system came into effect. This major revision, the first in 44 years, raises questions: How will the Japanese market change? How will business opportunities expand? Members of Dentsu Inc. Healthcare Team interviewed experts.

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Japan's functional food labeling system has been developed through extensive consideration, drawing on the U.S. dietary supplement system. Functional labeling was introduced in the U.S. about 20 years ago. How has the U.S. healthcare market transformed since then? What are the similarities and differences with the Japanese market? We asked Takeshi Takeda of Global Nutrition Group, an expert on the global health food market.

In the U.S., doctors take supplements themselves and recommend them to patients

Takizawa: You've compared the functional claims systems in Japan and the U.S. Let's broaden the discussion to market dynamics and communication strategies for health foods. First, could you explain differences in sales channels and product categories?

Takeda: There are significant differences in sales channels between Japan and the US. In Japan, mail order accounts for over half of sales, followed by door-to-door sales at about 26%. Nearly 80% of total sales are non-store-based. In contrast, the US has a higher proportion of sales through natural health food stores. Combined with food, drug, and mass channels like drugstores and supermarkets, about 65% of sales are store-based. Mail order and internet sales combined account for only about 10% (see [Figure 1]).

[Figure 1]

 

Another distinctive feature in the U.S. is the significant proportion of sales by healthcare professionals. These professionals include doctors and pharmacists. In the U.S., supplements are sold in clinics, and it is very common for doctors themselves to take them and recommend them to patients. By specialty, 75% of dermatologists take supplements themselves, and 66% recommend them to patients. Over half of cardiologists take supplements themselves, and more than 70% recommend them to patients. Similarly, over 70% of orthopedic surgeons take supplements themselves, and 90% recommend them to patients. Since over half of these doctors have been taking supplements continuously for 4 to 10 years, they are recommending them to patients based on their own experience of the effects. In Japan, where the new functional claims system has just started, how much support it gains from healthcare professionals by demonstrating scientific evidence will be a very significant point going forward.

Health information sites driving U.S. market expansion

Takizawa: Are there any distinctive characteristics when comparing top-selling supplements in Japan and the US?

Takeda: Exactly. Omega-3 fatty acids in fish oil capsules, in particular, have seen rapid growth since the 2000s. Additionally, the vitamin D market has grown nearly sevenfold in recent years. Driving this growth is the presence of media that communicates functional information. Many U.S. consumers obtain information from online health sites. There are numerous science writers who thoroughly review research papers and then communicate their evaluations in an accessible way.

Takizawa: Perhaps U.S. consumers are accustomed to seeking out and learning from the underlying data and information.

Takeda: Yes. U.S. consumers tend to review various information, understand it, and then use products. This tendency can motivate them to continue taking supplements even if they don't feel the effects immediately. In Japan, however, sufficient information hasn't been provided until now, so there was a strong tendency for people to stop using products if they didn't feel the effects. I think this aspect will likely change going forward.

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What is the Food Functional Claims System?

The Food Functionality Labeling System began in April. This system allows manufacturers to label the functionality of their products "under their own responsibility" by notifying the Consumer Affairs Agency, provided they have scientific data supporting safety and functionality. Functionality-labeled foods will start appearing on store shelves as early as around June.

<Key Points of the New System>
1. Unlike Tokuho (Specific Health Use Foods), the government does not review safety or functionality. The business bears responsibility for the content and explanation of the scientific evidence, ensuring no discrepancy between the evidence and the claims made.
2.Notification to the Consumer Affairs Agency must be made at least 60 days prior to the sales date. Except for certain parts, all submitted materials will be disclosed on the Consumer Affairs Agency's website, allowing other businesses and consumers to verify the content.
3.All food products, including fresh foods, are covered. Therefore, participation is expected not only from food and beverage manufacturers but also from functional ingredient manufacturers, trading companies, farmers, and various other industries.

*Excludes beverages containing alcohol and foods that may lead to excessive intake of lipids or sodium.

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<Key Points of Functional Claims>
Claims can be made about the effects on maintaining or promoting health.
For example, claims can be made for specific body parts, such as "maintains eye health" or "supports quality sleep." However, expressions implying treatment or prevention of diseases, such as "for people with diabetes" or "for people with high blood pressure," or expressions exceeding the scope of health maintenance and promotion, such as "hair growth" or "skin whitening," are not permitted.

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