China gives hard-earned thumbs up to Benecol
Gaining approval for novel ingredients in China has been compared to the difficult European Union approval process, and in Raisio’s case the Chinese approval process took several years.
“The tough part has been achieved, we have overcome the regulatory bottleneck,” Raiso chief executive officer, Matti Rihko, told NutraIngredients.com, adding the approval vindicated the quality and quantity of the science backing Benecol ingredients.
While the ingredient has been approved, Benecol must apply for claim approvals for each product Benecol appears in. These are likely to be similar to the EFSA-approved claim that states: “Plant stanol ester has been shown to lower/reduce blood cholesterol. Blood cholesterol lowering may reduce the risk of coronary heart disease”.
Benecol products are worth about €400m in 2007, including revenues earned by licensing partners.
Rihko said traditional European markets were no longer “high-growth areas” for Raisio which had made new markets such as Asia a strategic priority. This year it launched products in India and Indonesia.
Now that it has gained the Chinese approval, Raisio will work with local companies to bring products to market, most likely in 2010.
“The Chinese market is so huge we expect that to work with 2-3 partners,” Rihko observed.
These products will be co-branded with local players and come in formats similar to the Benecol end-product range found in many western markets in the form of spreads, milks, bars, yoghurt drinks, milks and more.
While the product range may be similar to western markets, Rihko said marketing would be tailored to local needs as the company had learnt from a somewhat lackluster response to Benecol in the US.
“It needs a lot of marketing muscle but the messages have to be right. In the US, margarines are seen as an inferior version of butter, whereas in Europe they are a healthy alternative so the marketing needed to be different. We have learnt from these experiences.”
The approval was granted by the Chinese Ministry of Health and means Benecol the ingredient can be added to most foodstuffs. But each application into which Benecol is added must also gain approval.
Rihko said this process was likely to be less laborious than the already gained New Resource Food approval, as it is called.
He said there were only about 27 ingredients about which claims could be made.
Chinese obesity epidemic
Rihko said the Chinese market offered huge potential as more than 300m of its 1.3bn inhabitants had acquired the wealth and eating habits of westerners – and with it rising obesity and cholesterol levels.
“There are 20m people in Beijing alone and in that city the average cholesterol level has increased from 4.5 to 5.5 in recent years,” he said. “That’s higher than in Finland. China may be on the verge of an obesity epidemic.”
Raisio, which had revenue of €422m in 2007, had located several Chinese food companies it wished to work with.