APAC Regulatory Shifts & Consumer Spending Reshape Supplement Strategy
August data reveals divergent consumer spending in China, strategic growth targets for Blackmores by Kirin, and critical regulatory updates across Asia-Pacific impacting formulation and market access.
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Singapore, Singapore — 05 September 2023
Analysis of August 2023 market intelligence reveals critical shifts across the Asia-Pacific supplement industry, demanding agile responses from manufacturers and brand owners. Chinese consumers are prioritising health supplements despite an overall economic slowdown, a trend noted by industry experts as spending remains robust compared to other discretionary categories like luxury goods and apparel. This resilience provides a targeted opportunity for brands focusing on the Chinese market, provided product offerings align with evolving demand signals.
Major players are recalibrating strategies. Kirin, the Japanese conglomerate, has set aggressive targets for its Australian acquisition, Blackmores, aiming for ¥100 billion (US$687 million) in revenue and a net operating profit margin of 15% or more by 2030. This signals a clear intent for inorganic growth and market dominance in the VMS sector, particularly in Australia and broader APAC. Simultaneously, Haleon reported a 0.5% decline in VMS revenue in the US for the first half of 2023, largely offset by growth in the Asia Pacific and European markets, underscoring the regional importance of APAC for large multinational portfolios.
Regulatory environments are in flux. ASEAN's harmonisation of traditional medicines and health supplements standards has faced further delays, though experts advise early adoption of these standards for companies eyeing Southeast Asian markets to preempt future compliance issues. Taiwan's Food and Drug Administration (TFDA) is moving to establish consumption limits and usage warnings for Ashwagandha and seven other botanicals used as food ingredients, directly impacting formulation and labelling. South Korea's Ministry of Food and Drug Safety (MFDS) is reviewing regulations for nine functional raw materials, including oat fibre and CoQ10, covering daily intake, consumption warnings, and heavy metal limits. These regulatory updates necessitate proactive engagement from brands and manufacturers to ensure uninterrupted market access and compliance.
What this means for Taiwan
Brand owners and manufacturers targeting the Taiwan market must immediately review their product portfolios containing Ashwagandha and seven other specified botanicals. Reformulation windows will be tight as the TFDA establishes new consumption limits and usage warnings; non-compliant products risk market withdrawal or significant relabelling costs. Procurement teams should anticipate potential supply chain disruptions or price volatility for these botanicals as demand shifts and compliance measures are implemented. This regulatory action also creates an opportunity for brands with compliant, differentiated offerings to gain market share as competitors adapt.
What to watch next
- Monitor the official publication date and specific consumption limits from the Taiwan FDA regarding Ashwagandha and other botanicals, expected in Q4 2023.
- Observe Kirin's mid-term financial reporting for Blackmores, specifically progress towards the ¥100 billion revenue target and 15% profit margin, likely within 12-18 months.
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