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Sales of dietary supplements in Japan are rocketing, thanks to the power of television. Naoki Miyakawa reveals how product features on certain TV programmes have sparked a sales boom for some lucky companies
It is said that too much television rots the brain, but in Japan, TV programmes are helping educate people about health and diet. The good news for dietary supplements companies is that after watching these programmes, Japanese consumers are rushing to their local stores or Internet sites to buy health foods in great quantities.
These trends have helped the dietary supplements market in Japan reach a total value of around $10 billion a year in sales. Direct selling, comprising mail order and door to door, dominates the market. Supplements sales have grown dramatically in the past five years, rising in value by as much as $7 billion. This level of growth is set to continue, with the supplements market predicted to reach from $17-$20 billion by 2010, thanks to a high awareness of health issues among Japanese consumers.
The fastest-expanding sales channel is mail order, especially TV shopping. Sales through TV shopping channels are worth around $2 billion, accounting for around 10 per cent of the entire mail order market. Half-hour TV programmes on cable and satellite TV stations highlight the benefits of dietary supplements using consumer testimonials. Round-the-clock shopping channels, such as Jupiter Shop Channel and QVC, showcase supplements products in health and beauty categories, along with cosmetics. These types of products now account for around 20 per cent of sales for Jupiter and QVC.
Indeed, the dietary supplements category has grown to be a big money-spinner for TV channels and food manufacturers alike. Supplements featured on the channels have been known to generate $1 million in sales in a single day. With figures like these, it’s no surprise that 20 of the 29 companies that joined the Japan Mail Order Sales Association last year sell dietary supplements.
Laying down the law
Like product labelling and advertisements, health claims made on TV programmes are regulated by various laws. The four major laws relating to dietary supplements in Japan are:
- The Pharmaceutical Affairs Law, which regulates claims of effect and efficacy. The most complex, it covers everyone in the functional foods industry. Unlike the US, statements such as ‘immune support’ and ‘brain enhancement’ are prohibited.
- The Health Promotion Law deals with claims that have an ‘obvious intention to mislead consumers,’ as well as specific product names. Brought into effect in 2003, the law was aimed at regulating the so-called ‘book sales method,’ whereby promotional books, emphasising effect and efficacy by narrative, were published by some supplements distributors.
- The Food Sanitation Law was revised in the summer of 2003, banning sales of products or ingredients that have not been proven safe or could damage health. Two ingredients have since been banned after allegations that they were unsafe: katuk (Sauropus androgynus) and comfrey (Symphytum spp). Both the Health Promotion Law and the revised Food Sanitation Law are specifically targeted at the dietary supplements industry.
- The Law for Preventing Unjustifiable Extra or Unexpected Benefits and Misleading Representations was also revised in 2003 to clarify the definition of ‘rational evidence.’ This means that health claims must be backed up with evidence, including tests by a third party, the result of the investigation and the opinion of a specialist or professional literature.
The scramble for co-Q10
One of the most common causes of death in Japan is cancer, so ingredients for boosting the immune system always sell well. In particular, various types of fungi are popular, including: Agaricus blazei Murill, Phellinus yucatensis, Ganoderma lucidum, maitake, shiitake and new fungi like Inonotus obliquus. Propolis, which is derived from bees, developed a reputation for boosting the immune system and is now worth $500 million. It remains number one in the supplements market followed by Agaricus blazei Murill, which is worth $350 million, Ganoderma lucidum ($200 million) and Phellinus yucatensis ($70 million).
The market for ingredients for the immune system is worth $1 billion, or more than 10 per cent share of the whole dietary supplements market.
The most recent star performer in the Japanese market is co-Q10, which was permitted for use in food in 2001. Initially, it was marketed as a remedy for reducing tiredness among athletes and re-energising the body. However, this approach failed and, two years later, manufacturers began switching the focus of co-Q10 from sport to beauty, partly because clinical trials had shown its antioxidant and anti-wrinkle effects. Sales of supplements containing co-Q10 really took off with a TV programme in September 2004, which lifted the lid on the ingredient’s anti-ageing effects. On the back of this, sales of co-Q10 supplements have doubled from $100 million in 2003 to $200 million in 2004.
Demand for co-Q10 is now outstripping supply in Japan with shortages of the ingredient. This is partly because the raw materials of co-Q10, which are made in Japan, are being exported, mainly to the US. Delivery to domestic customers has not yet caught up with the sudden boom, a situation that will continue into the summer. In some stores, co-Q10 products are sold out as quickly as the advertisements are posted.
It is possible that the serious shortage of raw materials for the ingredient will end the boom. Some companies are being forced to buy back co-Q10 from the US or source raw materials from China, which are usually double the price and not always of the best quality. Inferior co-Q10 supplements were reportedly discovered in Japan in March. They contained a small amount of co-Q10 with other illegal ingredients.
ALA and beyond
Alpha lipoic acid (ALA) is also showing signs of becoming extremely popular. It was permitted for use in food in June 2004 and, like co-Q10, benefited from being the feature of a TV programme, which heralded it as a potent weapon in the fight against middle-age spread. The next day consumers lined up to buy ALA supplements in drugstores.
The media, especially TV, will continue to drive market trends in Japan. L-carnitine was featured on the same programme that made co-Q10 and ALA popular, and industry insiders fully expect it to be the next big thing. L-carnitine is well-recognised for its fat-burning qualities in the US, but this is not so well-known in Japan, for the moment at least.
Naoki Miyakawa is editorial director of Health Business Magazine, established in 1993, which is the leading publication and consulting company in Japan specialising in health, nutritional food, nutritional ingredients and beauty. The company is also the co-producer of Natural Products Expo Japan, May 17-19, Tokyo.
www.health-mag.co.jp
Email: info@health-mag.co.jp
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