Botanicals – market growth and whitespace considerations

Welcome to the Vitafoods Insights Monthly Thematic Podcast, where each month we highlight a different topic within the nutraceutical industry. Join us as we explore this month's theme: botanicals. Today's host is Natalia Franca Rocha.

Hello and welcome. I am Natalia Franca Rocha, Senior Content Producer and your host for this episode. Today we will explore botanicals, the Vitafoods Insights thematic topic for September. Looking at the botanical supplements market, Grand View Research valued the market at 27.47 billion US dollars and predicted the market size to grow at a CAGR rate, or a compound annual growth rate of 9.1%, from 2020 to 2028. Some highlighted areas included targeted functionalities such as weight management and muscle repair. Further, consumers prioritise botanicals and herbal supplements by focusing more on preventive care and holistic health benefits with lesser side effects. COVID-19 appears to have driven the increased demand for botanicals, with governments and healthcare specialists advising consumers to adopt botanicals and preventive care measures in their dietary habits. More recently, Future Market Insights valued the botanical supplements market at 55.6 billion US dollars in 2022. They further predict the market to reach 116.7 billion US dollars in the next decade by 2032, with an estimated CAGR growth of 7.7%. Botanicals' robust set of benefits is behind such market growth strength. They further share that, in Europe, 97% of consumers have a positive association and outlook on terms such as botanical or herbal supplements. On top of that, 82% said they trust natural products that help them to maintain a healthy lifestyle. Rich in antioxidants and phenolic compounds, botanicals are more popular than ever. They are gaining strength across various categories such as the gut and digestive health, immunity, sports nutrition, dietary supplements, functional foods & beverages, for example, and pushing innovative products' boundaries. In sports nutrition, consumers seek botanicals for their phenolic compounds, providing them with high antioxidant activity levels. Leading market players include Europe and North America, followed by East and South Asia, Latin America, Oceania, the Middle East & Africa. Market trends vary among regions; for example, in Brazil, botanical-infused flavoured waters and sparkling drinks with botanicals are noted by Future Market Insights as an emerging product category, gaining strength and witnessing incremental growth in the country. On the other hand, in the US, GRAS, Generally recognised as safe certification, is increasing more and more across the country. Regarding delivery formats, powdered botanicals seem to be becoming more popular and desired among consumers. Of course, there are many considerations when considering botanicals and supply chains. The COVID-19 pandemic has led the industry to face a logistical crisis in botanicals sourcing to meet consumer demands. Ajay Patel, founder and CEO of Verdure Sciences, shares with Nutritional Outlook that botanical ingredients "are typically sourced from remote locations, and getting them to collection houses, manufacturers, and ports is a huge challenge." Patel also shares that supplies continue to be straitened. For example, in India, because of the "unpredictable nature of climate change". The pandemic has increased the logistics costs of moving botanicals from point A to B across all points of the supply chain in general, as well as botanical feedstocks. Shipment order delays are also a big issue, especially considering botanicals' storage sensitivity. The supply chain crisis in the botanicals industry has heightened the importance of maintaining good relations across all supply chain stakeholders. Earlier this year, at Expo West show, Sam Zheng from Huisong Pharmaceuticals and Tarun Prajapati from Cultivator Natural Products shares shared more about some of the supply chain consideration constraints in China and India, respectively, with NutraIngredients USA.

Ever since maybe around two years ago, the restrictions haven't really been easy. The supply chain issue in China has been getting greater. There has been a lot less younger people willing to work on the farms for cultivation, and less younger people willing to do the manual labour for the processing, sorting. So that along with inflation and rising energy costs in China has made this point a chain issue much more difficult. And we've seen a lot of botanicals this year with significant price increases. For example, ginseng, which has more government regulation on land use now. The SOC price increases and bilberry, stevia leaf, and quercetin as well. A Chinese herb like Rehmannia, because of natural disasters and speculation prices like that have increased fivefold. Another Chinese medicinal herb is Forsythia. And that one because of changing climate, the frost kills the flowers in the springtime, so there's less pruning and therefore less output.

So there are different parameters, we had to think it over there. One is that the authenticity with back traceability, that is very important for any company who's sourcing, we have to check. The second point is the stock keeping is very important, because we have seen this COVID. We have all passed to the COVID situation and the worst situation was faced by the supply chain, because the transit time was like taking two months, three months, four months or sometimes we never know, and the shipping lines has like prices gone up very high. So it kills all the costings. So, basically every company every part of the supply chain has to be their own restocking system at place for a certain time of period for the sustaining. These are the main parameters, we have to think it out. And that way we all can grow up nicely. Because the climate is getting so frequent, very much changed, so there is some time floods coming, sometime it's a drought. So there is a big challenge coming of many of the botanicals. Like this year, the amla fruit, which is well known for its ascorbic acid, vitamin C, which is very high antioxidant, but this year the harvest is like only 50% because of the climate change, we can see this impact. There's lot of products is getting sometime very bad because of the climate change issues. So we are thinking how to make it more sustained. So we have to be traced it out how we can do the same medicinal plants in a different geographical conditions. So that entire supply chain doesn't get effect more. So we are working on that continuously for the same product. How we can grow in the northern, more northern part, more centred part, and more southern part. If someplace has a drought, or more in the other part can supply and fit the continuous supply chain.

As we can see, a lot is happening globally in the botanical supplement market. Those looking for more in-depth information on botanicals and nutraceuticals, keep an eye out for our thematic panel discussion on the 22nd of September. David Foreman shares more of what to expect.

Hi David foreman here better known around the world as the herbal pharmacist and I'm super excited about our upcoming Vitafoods Botanical panel, in which I am joined by Holly Johnson, the Chief Science Officer for the American herbal products Association, aka AHPA, and Chris Kilham, the medicine Hunter much better known as the medicine Hunter. So we've got three interesting experts on botanicals. And why botanicals? Botanicals are hot. They are truly back from the dead 15-20 years ago, I can remember attending events where they said herbs were dead. And they're not. They're back with a vengeance for many different reasons. Let's face it, botanicals contain many helpful or helpful beneficial compounds, whether it's a vitamin, mineral, fat, protein, carb, or it's those phytochemical compounds. So we see botanicals can work across many different disease states and/or health challenges we'll call it. So you get the benefit from that. We also see an influx of new and exciting technologies that are taking botanicals to a whole other level with unique or patented extraction processes or perhaps modifications so that botanical becomes more soluble so that you can incorporate it into things other than tablets and capsules. And we all know that consumers really do have pill fatigue. We also are going to discuss sourcing potential issues like right now, I know Rhodiola is a big concern as supply because of the war going on in the Ukraine with Russia, because the majority of the world's Rhodiola comes from that region of the world. And what about sustainability? I know this is one of Chris Kilham's real big hot buttons. We had a conversation just recently. So I'm excited for this upcoming Vitafoods Botanical panel. I want to encourage everybody to make sure you check it out and thanks for your time. Have a great day.

Looking ahead, we also have our Botanical industry report coming out on the 29th of September 2022. For more information make sure to check the hyperlinks available in the show notes. Thank you and see you next time.

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