Neutraceutical is used to describe products derived from food sources with extra health benefits in addition to the basic nutritional value found in foods. The term “nutraceutical” started appearing in 1989, a combination of the two words “nutrient” and “pharmaceutical”.
Most often, nutraceuticals are divided into four categories: dietary supplements, functional food, medicinal food, and farmaceuticals.
A dietary supplement represents a product that contains nutrients derived from food products and is often concentrated in liquid, capsule, powder, or pill form.
According to their generally accepted definition, functional food includes whole foods and fortified, enriched, or enhanced dietary components that may reduce the risk of chronic disease and provide a health benefit beyond the traditional nutrients it contains.
Medical food is formulated to be consumed or administered internally. under the supervision of a qualified physician. Its intended use is specific dietary management of a disease or condition for which distinctive nutritional requirements are established by the medical evaluation and based on recognized scientific principles.
Farmaceuticals are medically valuable components produced from modified agricultural crops or animals. The term is a combination of the words “farm” and “pharmaceuticals.” Proponents of this concept are convinced that using crops, and possibly even animals, as pharmaceutical factories is much more cost-effective than conventional methods, with higher revenue for agricultural producers.
In Vietnam, the food supplements industry is growing due to the improving living standards. The functional food segment was the leading category of the nutraceutical market. In 2019, the consumption of dairy products was one of the key growth drivers for the products in the Vietnam market. Ranked second was the functional beverages segment. Energy drinks were the most contributing category in the development of the segment. The remaining contribution in the market belonged to Vitamins and Dietary Supplements. The market developed due to the increase in sports and fitness activities. Vietnamese employees also consumed many energy drinks.
The functional food market of Vietnam in 2015 worthed 1,792 million USD, ranked third in Southeast Asia. Its growth rate was the highest of the SEA countries from 2015 to 2020.
Functional food made its first appearance in Vietnam in the late 90s. Products on the market then were imported ones. In 2000, 13 companies were participating in the functional food market. This number increased to 4000 in 2017, including 836 local firms, account for 60% of the products on the market.
The functional food in Vietnam is distributed through many different channels, including pharmacy, health and beauty retail drugstore, supermarkets, specialty stores, online stores, MLM, hand-carried goods, and other minor channels.
Besides the increase of suppliers, the Vietnamese functional food consumers also grow in number. A report published by The Conference Board Global Consumer Confidence and Nielsen in 2019 showed that Vietnamese consumers were most concerned about healthcare. In 1995, healthcare expenditure per capita was 20 USD in Vietnam. This figure soared to 168.99 USD in 2016, higher than Indonesia, the Philippines, and Myanmar.
According to the Vietnam Association of Functional Food, about 1 million Vietnamese used functional food in 2005, accounted for 1.1% of the population. In 2010, the percentage became 6.6%, with 5.7 million consumers. The most recent research in 2019 showed that consumers of functional food in Vietnam were more than 20 million people, which accounts for 21% of the country’s population.
Nutraceutical products, especially functional food, are a new trend in Vietnam, as Vietnamese consumers are willing to spend more for better healthcare. With the rising standard of living and health consciousness among the people, the market is projected to develop even better in the future. Functional food is expected to continue being the dominant product of the nutraceutical industry. Dairy products are predicted to be the most demanded in the functional food market. Functional beverages are expected to have a sluggish growth. Vitamins and dietary supplements will have the least market share by the end of 2025. Herbal supplements will be the leading segment. It is anticipated that multivitamins will lead the vitamins and minerals market by 2025.
Despite the abundant potential, the nutraceutical industry also faces challenges. The functional food market is developing rapidly and is also becoming difficult to control. Counterfeit products made their way into the market, effected negatively on the consumers’ health. The authorities have taken actions to strengthen control of the market, but there are still unauthentic nutraceutical products on the market.
References: news-medical.net, B&Company, kenresearch
Compiled by VietnamCredit