Canada’s nutraceutical industry is worth either $6 billion or 100 times
less than that, depending on who you ask.
Judging the size of an industry is always a bit of a numbers game, but
it’s particularly confusing with the nutraceutical industry because
there are multiple interpretations of what is being measured.
“It really depends on the definition,” said Kelley Fitzpatrick,
president of the Saskatchewan Nutraceutical Network, which estimates
the industry’s value at $60 million.
“We’re narrower in our definition.”
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
Determining how much wheat is sold in a given year or coming up with a
value for the pulse crop industry is a comparatively easy task because
everybody knows what wheat and pulse crops are. It’s not that clear in
the nutraceutical industry.
Some call it the nutrition industry, others call it the nutraceutical
or functional foods business and some simply refer to it as natural
health products.
Even within each of those categories, there are numerous ways to
measure how big the market is.
One number frequently tossed around when people talk about the size of
the industry is $150 billion US in worldwide annual sales.
That’s a deceiving measurement for people who view nutraceuticals as an
offshoot of the herb and spice industry – making capsules, tinctures
and powders from crops like echinacea, St. John’s wort, ginseng and
borage.
Grant Ferrier compiles detailed statistics on the industry for the
Nutrition Business Journal, a California business publication he edits.
He said the $150 billion number represents the whole nutrition
industry, which comprises four segments: supplements, natural and
organic foods, functional foods, and natural personal care and
household items.
Herbal remedies represent a small chunk of the supplement segment.
Ferrier’s journal recently released a set of numbers on the American
and Canadian portions of that $150 billion market.
He told attendees of the fifth annual Saskatchewan Nutraceutical
Network conference the U.S. share of that nutrition market in 2001 was
$53 billion US, with 35 percent of that being functional foods.
Functional foods include enriched cereals, sports drinks like Gatorade
and nutrition bars such as PowerBar. It also encompasses things like
baby foods, prepared meals and fortified snacks.
The next biggest category is supplements, worth $17.7 billion, which
includes vitamins, minerals and herbs. The herb portion of that market
is valued at $4.2 billion.
Sales of organic and natural foods amounted to $11.8 billion in 2001.
It is the fastest growing segment of the nutrition market, with sales
projected to double by 2010.
The last component is natural personal care and household items such as
cosmetics and shampoos. That segment brought in $3.8 billion in 2001.
Ferrier said Canada’s entire nutrition industry was valued at $6.6
billion Cdn during the same time period. The breakdown was similar to
the U.S. with functional foods, supplements and organic sales leading
the way – in that order.
Industry revenue grew six percent in Canada between 2000 and 2001.
Organic and natural foods showed the most promise, with sales
increasing by 10 percent in that time frame, said Ferrier. Sales of
herbs and botanicals in this country amounted to $640 million Cdn in
2001.
But even Ferrier’s thorough analysis met with some skepticism. A fellow
presenter had trouble believing his $19 billion US estimate for the
U.S. functional food market.
Steve Allen, vice-president of new business development with Nestlé
U.S.A. Inc., said his company believes the value of that segment is
closer to $12 billion. Nestlé doesn’t include products like Lean
Cuisine and reduced salt Ritz crackers in its estimate.
“If you go out and pay two bucks for a bottle of Gatorade because you
think it’s going to give you a better performance when you get into the
gym, you’re buying it for its functional value-add,” said Allen.
“If you’re just buying a Ritz cracker because you may be five pounds
overweight – I don’t count that.”
That is just one more example of why it’s difficult to put a finger on
the slippery nutraceutical industry – or whatever it is called.
