Probiotic Ingredients Market – The Era of ‘Customization’
Product innovation has been a regular feature in the food and beverage industry, as manufacturers continue to approach consumer health woes head-on. Since consumers leading a demanding lifestyle put their health concerns on the back burner, probiotic ingredients have been the on-the-go nutrition boosters. With 'capsuled health' taking over the 'health in the plate' ideology, probiotic ingredients sales have remained steady in developed countries, with sales in developing countries complementing overall revenues.
Customization, being the new business adage, comes into play as market players look to consolidate. This has unlocked a free space for probiotic ingredients manufacturers to expend their efforts towards the development of ailment-specific products, thereby implementing a strong customer acquisition strategy. However, the probiotic ingredients market is yet to explore its full potential in developing countries. This, when looked through a manufacturer’s lens, could serve as a crucial business opportunity for expansion, if picked up well with a thoughtful marketing campaign.
Sensing the obvious and the latent potential of the probiotic ingredients market, Transparency Market Research (TMR) carried out extensive research by taking a macroscopic as well as a microscopic view of the landscape. The insights presented in the report can help stakeholders in gaining a better understanding of the market.
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Probiotic Ingredients Market: Expanding Applications Present New Opportunities
Probiotic ingredients market, currently valued at nearly US$ 4,200 Mn in 2018, is on a steady course, however, in some pockets, growth has plateaued as novel, and arguably safer, and alternatives have emerged.
Food and beverage manufacturers are being considerate of the fact that, consumer liking is fickle, and only food products with a blend of health and taste will make it to the table. This has been popularizing the use of probiotic ingredients in almost all the F&B segments, encompassing but not confined to infant nutrition, cultured dairy products, bakery & confectionery, breakfast solutions, and snacks & bars. In the recent past, growing adoption in dietary supplements, personal care & cosmetics, and animal feed in probiotic ingredients, has created new opportunities for manufacturers.
‘Preventive’ rather than ‘reactive’ – consumer sentiment that drove probiotic and functional food sales in the developed world – is also becoming increasingly palpable in many developing countries of Asia Pacific. Average consumer spending on health and wellness products has witnessed an increase, especially among some of the fastest growing economies in the region. Stakeholders have responded by broadening their portfolio, and this has been backed by strategic marketing campaigns focusing on ‘more information less sales’. The surge in demand has been felt all across the supply chain, and ingredient suppliers are witnessing a period of bullishness.
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Probiotic Ingredients Manufacturers Benefitting from Convergence of Food and Pharmaceuticals
In recent times, the convergence of ‘food-pharma’ industry has been directed towards enhancing a consumer’s general health condition. Keeping the consumers at the center, in future, the intersection will blur the point of separation between these differing landscapes. The surge in the consumption of probiotic ingredients-infused food and beverages products as 'one attack to defend health' is being witnessed among consumers, which has encouraged the food and pharma companies to progress towards developing flavorful products. The availability of probiotic ingredients in multiple forms is likely to offer the ease to the food and beverages manufacturers to blend it to further foster product innovation.
Traditionally, probiotic ingredients in the powdered form have acquired a majority of the market share. However, a dramatic shift towards the 'health in a pill' concept and the growth in the consumption of dietary supplements as a ‘preventive measure’ has offered a center stage to capsules. Currently, capsules remain the preferred consumable form of probiotic ingredients. However, the stick pack segment is expected to gain speed with time, and is likely to grow at a significant pace over the course of the forecast period.
For years, probiotic demand has been attributed to favorable consumer ‘perception’. Consumers, without looking too much into the actual health benefits of probiotics, led to a demand boom. However, in the last few years, as scientific evidence has been forthcoming, and usually, unfavorable to probiotic industry, a significant section has now started looking elsewhere. For example, a study published by National Center for Complementary and Integrative Health (NCCIH) shows that a specific type of Lactobacillus remains safe in healthy adults age 65 and older, however, all probiotics would not necessarily be safe for people in this batch of age. ‘Perception’ is now driving consumers away from probiotics, towards products where scientific literature is relatively convincing.
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Probiotic Ingredients Market – Graze-worthy Opportunities on the Greener Meadows of Developing Countries
In the probiotic ingredients market, the business game intensifies as a varied batch of players play to acquire a significant market share. Customization and ailment-specific product development remain the top game plans of manufacturers operating in the dietary supplement landscape. This has led to the increase in the number of marketing and distribution partnership in the probiotics ingredients market.
However, in developing regions such as Asia Pacific, where literature leading to education regarding the benefits of probiotic ingredients is inadequate, players can shift their manufacturing-distributor partnership to the top gear and accelerate with expansion opportunities. Since consumers in such regions exhibit skeptical behavior towards novel products, squeezing profit margins by reducing prices could help manufacturers form their initial base of consumers.
Competition Intensity – Fragmented
The probiotic ingredients market remains fragmented, with numerous partakers at play at varying levels. Chr. Hansen holds a major revenue chunk of the probiotic ingredients market (nearly 15%), with Probi AB and Lallemand following, respectively. The big shots account for approximately 20-22% share of the probiotic ingredients market, with research and development activities being their key differentiating strategy.
With a view towards strengthening the product portfolio, launching novel products and filing patents help them gain the desired exposure in the probiotic ingredients market. For example, Chr. Hansen A/S announced the launch of a uniquely developed multi-strain probiotic product – Galli Pro Fit, which limits the growth of pathogens, improves gut health, and enhances the immunity of poultry animals.
However, the strategies of regional players differ to those of global players. Regional players occupy nearly 33-35% share of the probiotic ingredients market. Sensing the enormous potential of emerging countries, this batch of players diligently work towards expanding their customer base by developing customized products. For instance, Novozymes A/S inaugurated an Innovation and Technology Center in Istanbul to focus on the development of enzymes, to reduce food wastage in the MEA region.
With the adoption of multiple strategies, the probiotic ingredients market is likely to scale new highs by the end of the foreseeable timeframe.
The Analyst Viewpoint
The authors of the report foresee the probiotic ingredients market in bright light through to 2027. Manufacturers who develop customized probiotic ingredients are expected to gain higher sales prospects, as they put end-user industries’ demand at the center. Limited penetration and exposure of probiotic ingredients in emerging countries remains a lucrative opportunity pocket for manufacturers in disguise of a long-standing challenge.
While the food and beverage industry remains a crucial revenue-enabler for the probiotic ingredients market, the personal care and cosmetics industry is likely to encourage manufacturers to dive into the business opportunity and explore the deep-seated opportunities created by consumers’ drift towards organic products. Though the probiotic ingredients market remains out of the radar of any potential threat from any alternatives, the growth of the prebiotic ingredients market could have some sort of impact on its otherwise anticipated pace.
Combination Therapy of Antibiotics and Probiotic Ingredients to Combat Antibiotic Resistance
In today’s era, where medical treatment and technology have reached new heights of success, consumer reliance on antibiotics and allopathic treatment has also reached an ultimate high. However, antibiotics need to be redesigned to combat resistant mutant strains in microorganisms. This scenario has compelled biotechnologists to come up with combination therapies to effectuate the necessary treatment amongst patients. Probiotic ingredients and antibiotic have emerged as a hopeful strategy to tackle the resistance in disease-causing microbes, since developing newer antibiotics is an expensive, lengthy, and potentially dangerous technique.
Probiotic ingredients help replenish the gut with friendly bacteria. To support these positive factors, many consumers, especially in developing regions, have come to terms with the importance and benefits of probiotic ingredients, further fuelling the growth of the probiotic ingredients market. Among the developing regions, BRICS countries have shown high potential within the probiotic ingredients market.
The human gut houses over 400 million different bacterial species, which are generally referred to as friendly bacteria. These friendly bacteria are responsible for maintaining gut health and maintenance of the digestive system. Probiotic ingredients are live microbes that are cultured for human consumption. These probiotic ingredients effectuate an enhanced condition of the gut bacteria, which results in better health.
As such, a healthy balance of intestinal flora and infection control can be achieved by consuming food or food supplement products that contain friendly, live bacteria cultures, commonly referred to as 'probiotics'. In terms of value, the global probiotic ingredients market is expected to reach a market value of nearly US$ 4,500 Mn by the end of 2027, with an expected CAGR of more than 6% over the forecast period. Drivers for the growth of the probiotic ingredients market include the increasing demand for natural products with natural alternatives to synthetic food additives such as probiotic ingredients, growing disposable income of consumers, health benefits associated with probiotic ingredients, and innovation in the health food sector.
Probiotic Ingredients as a Solution for Vaginal and Digestive Tract Infections
According to health organizations such as the National Health Service, vaginal and urinary tract diseases are amongst the most common indications reported in the U.S., in the area of bacterial infections. This problem is prevalent amongst females, and in some countries, women follow a highly conservative approach towards the treatment of these problems. Hence, the consumption of probiotic ingredients offers a feasible and comfortable solution to such individuals. Probiotic ingredients provide a natural and safe remedy for their problems as compared to harsh pharmaceutical treatments. Hence, manufacturers have effectively launched probiotic ingredient products targeting the female demo graph, further boosting the growth of the probiotic ingredients market.
Opportunities in Probiotic Ingredients Market Participants
For consumers to adopt the use of probiotic ingredient-based products, it is important that they realize the complete significance of probiotic ingredients, which is a challenging task for probiotic ingredient manufacturers and marketers alike. Hence, probiotic ingredient marketers must focus on the product positioning of probiotic ingredient-based products to enhance visibility on shelves. This strategy must be implemented at regional levels, due to difference in consumer opinions about probiotic ingredients. In developed regions, consumers are more likely to opt for labelled products that also exhibit a pricy tag. However, in developing regions, consumers look for new products in the regular products aisle. This will ensure the integration of the consumption of probiotic ingredients in the daily lives of consumers.
Probiotic Ingredients Market: Natural Alternatives to Synthetic Additives a Key Strategy
Probiotic ingredients outrun chemical additives in food fortification ingredients due to their natural tag. Even amongst natural ingredients, botanical extracts are often a costlier choice for food manufacturers, and probiotic ingredients present a better option. Probiotic ingredients offer both, cost-competitive and good quality benefits to food manufacturers.
Also, manufacturers are constantly looking for an ingredient revamp in end-use products, and probiotic ingredients are an ideal choice. Developed regions also house a high number of health-conscious people, further propelling the growth of the probiotic ingredients market.
Probiotic Ingredients Market Remains Consolidated among Established Brands
- In 2016, Chr. Hansen A/S signed an agreement with Valio OY to acquire the Finnish company’s LGG business. Under this agreement, the company acquired around 3,200 bacterial strains for enhancing its probiotic ingredients portfolio.
- In 2016, Probi AB acquired Nutraceutix, a U.S.-based nutritional supplement manufacturer. This acquisition enabled the company to expand its footing in the probiotic ingredients market– by expanding its product portfolio and full-scale manufacturing.
- In 2017, BioGaia AB established a subsidiary, BioGaia Pharma AB, for the development of probiotic drugs. The company expanded with this subsidiary in order to enhance its distribution network and its efficiencies, and deliver pipeline products efficiently.
The global probiotic ingredients market is dominated by five key players, who collectively account for approximately ~40% share of the global market. The probiotics market is fragmented, and is mostly in the form of partnerships and business relationships between various players. Chr. Hansen accounts for the highest revenue share of 15.2% of the global probiotics market, followed by Probi AB and Lallemand, respectively.
Probiotic Ingredients Market – Introduction
Transparency Market Research (TMR) recently published a new research report on the probiotic ingredients market, which offers a forecast for the period of 2019-2027. The exclusive study enumerates key insights to equip the stakeholders of the probiotic ingredients market with winning strategies and enable the future growth of their businesses. The report lends an incisive view of the crucial drivers for understanding the shape and size of the probiotic ingredients market, along with latent business opportunities for manufacturers, distributors, and suppliers. The key trends and developments being witnessed in the probiotic ingredients market are also included in this comprehensive study.
This analytical study tracks the macroeconomics as well as microeconomic factors that have a direct or indirect influence on the growth of the probiotic ingredients market over the course of the forecast period. The growth of the probiotic ingredients market is backed up with reliable statistics and data in terms of volume (MT) and value (US$ Mn).
Significant determinants related to the probiotic ingredients market have been estimated in detail in the research report. The comprehensive guide features dynamics, including vital drivers, challenges, restraints, and trends, which aids in determining the future behavior of the probiotic ingredients market. An in-depth analysis of the supply chain of the probiotic ingredients market is also included and discussed in this comprehensive study.
Other crucial aspects pointed in the probiotic ingredients market consist of cost breakdown, pricing, and raw product cost breakdown. Additionally, the forecast factors and forecast scenario have also been enumerated in the study to make the picture of the probiotic ingredients market clearer for readers. The research report offers the Y-o-Y growth of the market based on the volume consumed and the value determined. The report assesses the probiotic ingredients market at both, country as well as regional levels.
An entire chapter of the probiotic ingredients market report is dedicated to the competitive landscape, which helps in understanding the intensity of competition in the probiotic ingredients market. The study evaluates the structure of the probiotic ingredients market, and offers a dashboard view of the key players highlighted in this research report.
Key Questions Answered in the Research Report
- What will be the size of the probiotic ingredients market in 2027?
- Which region will occupy a majority of the share of the probiotic ingredients market during the forecast period?
- What will be the most preferred product type of probiotic ingredients?
- What will be the volume sales of the probiotic ingredients market in 2020?
- Will an investment in the Asia Pacific region be profitable?
- What are the restraints of the probiotic ingredients market?
Our analysts take a systematic research approach to evaluate the growth prospects of the probiotic ingredients market. Primary as well as secondary researches are carried out to draw a conclusion of the probiotic ingredients market. Transparency Market Research (TMR) prepares a comprehensive discussion guide to interview the experts of the industry. Secondary research is carried out by referring to company websites, annual reports, financial reports, and white papers.
TPpaid publications studied for gaining insights into the probiotic ingredients market include Meltwater, Genios, GBI, and Factiva. For conducting primary research, top industry professionals, market heads, and industry players were interviewed. The data obtained through primary and secondary research is then validated, and redundant information is eliminated, to offer precise insights into the probiotic ingredients market.
Probiotic Ingredients Market Segmentation
This detailed study is aimed at arming readers with a 360-degree view of the probiotic ingredients market by analyzing the key segments. The probiotic ingredients market can be fragmented based on end-use industry, end product form, product type, and region. The study analysis each of these segments in detail to offer a deep outlook of the probiotic ingredients industry.
End –Use Industry
Food & Beverages Processing
Personal Care & Cosmetics
End Product Form