Au naturel: Canadian industry looks toward a global opportunity in the functional food and natural health products market.
The functional foods and NHP industries have garnered a great deal of attention and enthusiasm on the part of governments, the agri-food sector, and the research community globally. Most recently, Canada has taken notice.
Canadian companies produce a wide range of functional food and NHP products. Canada's prairie and forested regions offer an abundant source of wild plants and large areas of fertile land that make the country an ideal location for the cultivation of a wide variety of commodity, specialty and medicinal crops. Along with enhancing the nutritive value and functional properties of common crops, there has been a trend in Canada towards value-added processing and the extraction of nutritionally valuable constituents.
Grains such as wheat, oats, and barley are mainstays of the North American diet. These products are high sources of dietary fibre, carbohydrate, and vitamins. Canadian companies such as Saskatoon-based InfraReady Products and Edmonton-based Cevean BioTech, have developed specialized fractionation technologies for the processing of raw materials such as legumes, oats and other cereals into starch, protein and fibre, which are used as functional food additives. In addition, specialty crops such as fenugreek produced by Regina-based company Emerald Seed Products are increasingly being cultivated to meet the demands of manufacturers seeking specific raw materials for functional food and NHP products.
The range of herbs produced by Canadian companies is diverse. Saskatchewan growers, for example, reported production of over 70 different herbs and spices, principally--echinacea, ginseng, garlic, milk thistle, feverfew, goldenseal, St. John's wort, valerian, ginseng, astragalus, and cayenne. Other herbs include seabuckthorn, anise, fireweed, senega root, sarsasparilla, milk thistle, chamomile, yarrow, calendula, and stinging nettle. These herbs are also common across Canada. Canadian companies specialize in the standardization of herb and plant extracts and have developed the extraction, isolation, and purification expertise necessary to manufacture herbal products to pharmaceutical standards. Also, companies have developed and refined analytical methods to verify the potency and bio-activity of herbal extracts and other compounds.
Spice and fruit crops under production across the country include caraway, coriander, mustard, dill, peppermint, cumin, seabuckthorn, blueberry, Saskatoon berry, chokecherry, and buffalo berry. Canadian companies including New Bruswick's Vaccinium Technologies Inc., have developed technologies and expertise in the extraction, characterization, stabilization, modification, and enhancement of the flavonoid constituents of fruits.
Canadian companies such as Montreal-based Institut Rosell-Lallemand produce microorganisms for the dairy, meat, and brewing industries. Microorganisms are also being manufactured as sources of pre and probiotic supplements and food ingredients. NHP and cosmetics derived from elk antler such as elk velvet capsules, powders, and tinctures as well as emu oil, are produced and processed in various parts of Canada.
Expertise in the formulation and manufacturing of single and complex vitamins, minerals, and antioxidants is available from a number of Canadian manufacturers. In addition to consumer brands, Canadian companies also offer full-service contract manufacturing of private label vitamin and mineral supplements as well as herbals, specialty, and combination products.
The Canadian industry is a leader in the development and manufacturing of essential fatty acid (EFA) products from plant and marine sources including evening primrose oil, flaxseed, borage, hemp, and marine animal oils as well as herbal/EFA condition-specific combination products. Companies such as Saskatoon's Bioriginal Food and Science Corp. and Halifax's Ocean Nutrition are producing EFA oils for the global market. Further, Canadian companies have developed specialized encapsulation and other packaging technologies that preserve the integrity and bio-activity of EFA products. Canola, tall and soy sterols and stanols produced by Vancouver-based Forbes Medi-Tech, and flaxseed lignans from Winnipeg-based Pizzey's Milling, are also sold into the health food market in the form of capsules, blended with oil or as part of foods.
The advent of biotechnology has resulted in the development of innovative manufacturing technologies. Canadian companies manufacture recombinant proteins using both plant and animal transgenic expression systems. These systems are used to produce food processing enzymes, seed meal enhancers, and NHP. Recombinant protein technology offers significant potential for the future development of value-added functional food and NHP products.
The food and food ingredient sector is also a very important part of the Canadian nutrition industry. The types of food and food ingredient products produced by Canadian companies are quite diverse and include milk and eggs with increased levels of omega-3 fatty acids, cereals and grains including wheat, oat, barley, and fenugreek products with enhanced amounts of dietary fibre (soluble and insoluble), modified fatty acid vegetable oils, vegetable proteins from soy, canola, hemp, legumes, and fruit products.
The Global market
Current world consumption of NHPs (or dietary supplements in other jurisdictions) and functional foods is estimated to be between $70 and $250 billion annually depending upon the product categories that are included in the statistics. In 2001, the U.S. industry journal Nutrition Business Journal (NBJ) estimated the global market to be approximately $150 billion U.S. NBJ has identified the primary markets for NHP and functional foods as the U.S., Europe, Japan, and Asia which represent 90 percent of global sales. These countries also represent the principal export markets for Canadian products. Since the U.S. is Canada's largest trading partner, it is the easiest market for Canadian nutritional companies to penetrate.
Generally, the largest markets for NHPs and functional foods are countries or regions with greater levels of economic development or more sophisticated economies. These areas are characterized by higher levels of education and greater personal wealth. But the traditional use of herbal remedies is also a factor that impacts consumption by region. Asian countries are large consumers of NHPs and functional foods for cultural reasons, and many of the products we use today have their roots in ancient Chinese medicine.
The Canadian market
Canadian sales figures for functional foods and NHPs are difficult to interpret as much of it is extrapolated from U.S. sales and adjusted downwards. In addition, strict regulations have forced companies to label products either as foods or drugs. Functional food and NHPs may not be accounted for since they overlap into the food processing or pharmaceutical industries. Estimates are that Canadians purchased approximately US$4.2B worth of dietary supplements (defined as NHPs in Canada) and functional food products in 2001. This translates into nearly $140 per capita spending, a 130 percent increase in only four years. Additional data show that while functional food sales in the U.S. represent approximately 4.5 percent of total food sales, Canada's portion of total food sales is only 2.2 percent, representing a significant growth potential for the domestic industry.
In regard to dietary supplements, Canadian sales figures in 2001 were approximately US$0.8B. Whereas supplements account for almost half of the global nutrition industry, within Canada retails sales account for 21 percent of total industry sales. Lower figures are believed to be due to stricter regulations that have historically been present in Canada. Compared to the U.S., Canada is generally considered to be between 12 to 18 months behind in launching new NHP products, again believed to be due to a more restrictive regulatory climate.
The Canadian industry
Globally, Canada's participation in the functional food and NHP (including nutraceuticals) industry is growing and is demonstrated through:
* Increasing agricultural crop production and development of varieties targeted at enhanced human health;
* Development of new technologies that allow for the processing of supplements and ingredients that provide a health benefit;
* The increasing emphasis on clinical validation of functional foods and NHPs;
* The upsurge in entrepreneurial activity establishing new and innovative companies throughout Canada.
The substantial growth of the Canadian functional food and NHP sector reflects the demand for nutritional products based on increasing scientific evidence linking diet to the quality of health. Consumer interest in self-care and alternative medicine is on the rise. According to a recent study conducted for Agriculture and Agri-Food Canada (AAFC), it is estimated that up to CAN1B of farm production value is devoted to supplying the functional foods and NHP sector. This estimate does not include the marine industry, which contributes to the sector through the production of omega-5 fatty acids and other marine-based products.
A significant opportunity exists in Canada for functional food and NHP products to positively impact health care costs. In another study conducted for AAFC, it was noted that lifestyle-related chronic disorders are a major component of increasing health care expenditures in this country. The proportion of disease onset attributable to diet is estimated to be approximately 40 to 50 percent for cardiovascular disorders and diabetes, while 35 to 50 percent of all cancers are directly related to dietary factors. Approximately 20 percent of osteoporosis is diet-related. Strong evidence supports the role of functional foods and NHPs in reducing the prevalence of chronic disease in Canada and providing impressive savings in health care costs without significant overall dietary changes. Based on the degree to which various chronic disorders are diet-related, and using the current direct medical costs of these disorders, the author estimated potential annual savings to the health care system could be in the magnitude of $20 billion per year. Canadian companies are focusing their product research and development, production and wholesaling in the areas of (by priority): general well-being; immune system; vascular and heart health; energy; diabetes and weight control.
There is a growing trend towards marketing NHPs as ingredients in foods. Several recent studies have identified the rapid growth of the industry and the significant potential of functional foods and NHPs to enhance value-added agriculture in the Western Canadian provinces.
The growing demand for functional foods and NHPs to meet consumers' desire to lead healthier lifestyles present significant opportunities for Canadian agricultural and marine-based industries. Canada faces the ongoing challenge of having an abundance of natural resources, but a fragmented regionalized industry spread across a vast border with the U.S. Having the U.S. as our largest trading partner, and we theirs, is both a strength and a weakness when trying to develop more value-added opportunities and to sustain an economically viable industry, under free trade. The relatively high growth rate of various segments of the nutritional market is attracting pharmaceutical, chemical, and food processing companies, which increasingly require good sources of raw materials and ingredients. Global companies are interested in sourcing innovative products. Developing and supplying such products represents a significant opportunity for Canadian companies. Additionally, this country has valuable expertise in several aspects of functional food and NHP research, which provides a foundation to building an industry.
In short, Canada has the potential of being recognized as a global leader in the production and exportation of functional food ands NHP ingredients and products as well as being a model to the world of a healthy nation driven by a philosophy that fosters health and nutrition.
Kelley Fitzpatrick, MSc, is the marketing and research development manager for the Richardson Centre for Functional Foods and Nutraceuticals at the University of Manitoba. She is the founding president of the Saskatchewan Nutraceutical Network (SNN), an organization that she established in early 1998. Under her direction, the SNN, the first network of its kind in Canada, became recognized nationally and internationally as a superior information resource for the Canadian nutraceutical and functional food sector and a leader in industry representation. For more information specific to Canadian companies, visit ats-sea.agr.gc.ca/supply/e3312.htm.
Related Article: Nutraceuticals in a nutshell.
The term "nutraceutical" is used to describe medicinally or nutritionally functional foods. Nutraceuticals have also been called medical foods, designer foods, phytochemicals, functional foods, and nutritional supplements. They include such everyday products as "bio" yogurts and fortified breakfast cereals, as well as vitamins, herbal remedies, and even genetically modified foods and supplements. Many different terms and definitions are used in different countries--which can result in confusion.
The term "nutraceutical" was coined in 1989 by Stephen De Felice, founder and Chair of the Foundation for Innovation in Medicine, an American organization that encourages medical health research. He defined a nutraceutical as a "food, or parts of a food, that provides medical or health benefits, including the prevention and treatment of disease."
In Canada, a nutraceutical is "a product produced from foods but sold in pills, powders (potions), and other medicinal forms not generally associated with food." By comparison, a functional food has been defined as being "similar in appearance to conventional foods ... consumed as part of a usual diet."
In Britain, the Ministry of Agriculture, Fisheries and Food has developed a definition of a functional food as "a food that has a component incorporated into it to give it a specific medical or physiological benefit, other than purely nutritional benefit."
Hence, in both Canada and in Britain, a functional food is essentially a food, but a nutraceutical is an isolated or concentrated form. In America, "medical foods" and "dietary supplements" are regulatory terms, however "nutraceuticals," "functional foods," and other such terms are determined by consultants and marketers, based on consumer trends.
Many of these new products that are being promoted to treat various disease states find their origins in the plant kingdom. This is an obvious choice as many plants produce secondary compounds such as alkaloids to protect themselves from infection and these constituents may be useful in the treatment of human infection. There is also a long history of plant use in many cultures which can be used to identify plants with activity in the treatment of disease.
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|Publication:||Canadian Chemical News|
|Date:||Jan 1, 2004|
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